fortune--2020-05-14--Calls for ‘green’ economic recovery plans are growing louder—except from the GOP

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South Korea, the world’s seventh largest emitter of greenhouse gas, became the first nation to hold a presidential election under the cloud of COVID-19. The April vote was a landslide for the incumbent Democratic Party (DPK), buoyed by its stellar handling of the coronavirus outbreak.
Analysts say the win was an implicit seal of approval for the DPK’s own Green New Deal, proposed in March. The DPK’s proposal—which includes phasing out coal investments, investing in renewables and implementing a carbon tax—could make South Korea the first country in East Asia to commit to net-zero carbon emissions by 2050.
It might be easy to forget with everything else going on, but the U.S. is due a presidential election this year, too. Already, the climate has emerged as a key campaign issue, but the subject has become entangled with the economic pain wrought by the pandemic.
According to the New York Times, senior Republicans are arguing that the current restrictions and imminent recession are previews of life under a Green New Deal—as proposed by Rep. Alexandria Ocasio-Cortez (D–N.Y.) and Sen. Edward Marky (D–Mass.) last year.
The argument supposes that a Green New Deal would take jobs from carbon emitting industries—like airlines, mines, and others currently struggling to adapt to reduced demand in a COVID-19 world—forcing the country into recession.
The objection offers little consideration of how spending on sustainable industries would create jobs that offer longterm economic growth. Investor Agenda, a group that includes CERES and BlackRock, recently warned recovery plans that omit environmental considerations could “expose investors and national economies to escalating financial, health and social risks in the coming years.”
Outside the U.S., other governments are taking keenly to the notion of green recovery schemes, pledging funding that will pull economies out of the coronavirus crisis and mitigate the worst effects of the other ongoing crisis: climate change.
Ministers from over half the European Union member states have called for the European Green Deal—the EU’s general policy for sustainable growth—to be fully incorporated into any pandemic recovery scheme, writing: “We should withstand the temptations of short-term solutions in response to the present crisis that risk locking the EU in a fossil fuel economy for decades to come.”
Today, New Zealand, which has gone three days with zero new cases of COVID-19, allocated $600 million of its $30 billion recovery budget to build “nature-based jobs” in pest control and conservation. It doesn’t seem like much, but the country’s Green Party called the funding “a win.”
It’s worth noting that New Zealand isn’t even among the top 20 emitters of greenhouse gases. The U.S. is the world’s second largest polluter. A global green recovery needs to have the U.S. on board.
Eamon Barrett
eamon.barrett@fortune.com
CARBON COPY
Woodshed
Legal & General Investment Management (LGIM), the U.K.’s largest asset holder, said it would oppose the re-election of ExxonMobil CEO Darren Woods at the U.S. oil group’s AGM later this month. Exxon has faced pressure over its weak climate change commitments from activist shareholders. Financial Times
Renew
The U.S. is on track to produce more electricity from renewable sources than from coal for the first time ever, according to projections from the U.S. Energy Information Agency (EIA). Declining costs of renewables like wind and solar, plus the pandemic-induced dip in energy demands, could help renewables leapfrog coal. New York Times
Peak oil
The head of the International Energy Agency thinks oil demand will remain below pre-pandemic levels for at least a year. BP’s new CEO Bernard Looney says there’s a risk oil demand will never return, as changes implemented to tackle COVID-19—such as a switch to working from home—could outlast the pandemic. “Could it be peak oil? Possible. Possibly. I would not write that off.” Financial Times
Dirty money
Norway’s $1 trillion sovereign wealth fund, the world’s largest, has excluded 12 commodities stocks from its portfolio for enviro-ethical reasons. Norway’s Government Pension Fund—itself seeded by oil money—has blacklisted Glencore, Anglo American, RWE, and others for their use of coal. Four Canadian oil and gas firms were also cut due to high greenhouse gas emissions. Reuters
IN CASE YOU MISSED IT
As lockdowns decimate energy demand, renewables come out ahead of coal by Katherine Dunn
The coronavirus is driving a mental health crisis. Tech can help tackle it by David Feinberg
The coronavirus crisis has accelerated the shift to stakeholder capitalism by Bill George
Working from home during coronavirus is going so well that this Fortune 100 company is going to keep doing it—permanently by Lee Clifford
The coronavirus pandemic is creating a ‘double double shift’ for women. Employers must help by Sheryl Sandberg and Rachel Thomas
CLOSING NUMBER
600,000
That's how many jobs the U.S. clean energy sector has lost since the virus struck, according to a report by BW Research. Shelter-in-place orders have halted the production of solar panels, electric vehicles and other clean tech, forcing the sector to shed 17% of its workforce. The number of job losses are more than twice the number of roles created since 2017. BW Research expects that figure to rise to 850,000 by the end of June.


fortune--2020-05-14--Fortune 500 CEO survey: How are America’s biggest companies dealing with the coronavirus pandemic?

Companies are rolling back ‘ hazard pay ’ for essential workers—even as risks remain

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CEOs of the Fortune 500, surveyed in the last two weeks of April, believe it will be years before the effects of COVID-19 are purged from the U.S. economy. Only 27% expect their workers to fully return to their usual workplaces this year. A majority believe it will be the first quarter of 2022 before overall economic activity returns to levels reached before the pandemic, and another 27% don’t expect that until the first quarter of 2023. Most say business travel at their company will never return to levels reached before the crisis. Despite the economic impact, three-fourths believe the crisis will force their companies to accelerate their technological transformation.
Fortune 500 CEO Poll conducted 4/23-5/4. Risk question provided by survey sponsor, Zurich North America Insurance. A version of this article appears in the June/July 2020 issue of Fortune with the headline “The CEO Outlook”


fortune--2020-05-14--‘Highly uncertain:’ fears of a slow economic recovery sink global markets

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Good morning. It’s a wash of red on the screens as global markets react to Jerome Powell’s bleak warning yesterday of an “uncertain” recovery. Investors are also bracing for more grim jobless numbers out before the opening bell.
Let’s take a closer look.
Markets update
Asia
The major indices are all trading lower , led down by Japan’s Nikkei at -1.7% .
, led down by Japan’s at . Chinese investors are on the lookout for the first wave of convertible-bond defaults , a sign of a funding bubble forming in high-growth stocks.
, a sign of a funding bubble forming in high-growth stocks. The COVID-19 pandemic could wipe out $8.5 trillion from global GDP and push 130 million people around the world into extreme poverty by the end of the decade, a new UN report concludes.
Europe
European bourses sunk out of the gate. The benchmark Stoxx Europe 600 began the day down more than 1% with similar falls on London’s FTSE and Germany’s Dax .
bourses sunk out of the gate. The began the day down more than with similar falls on and . The eurozone needs an “ambitious” reinvestment plan to stave off a deep recession , European Commission president Ursula Von der Leyen detailed yesterday. She left out one key detail though: a price tag for that plan.
needs an “ambitious” reinvestment plan to stave off a , European Commission president Ursula Von der Leyen detailed yesterday. She left out one key detail though: a price tag for that plan. After much squabbling, Italian lawmakers finally agreed to a €55 billion stimulus package to help struggling families and businesses. It’s long on promise (i.e., state aid to pay for babysitters and tax breaks for home repairs), but it’s riddled with red tape.
U.S.
The Dow , S&P 500 and Nasdaq look set to drop at the open, extending yesterday’s losses.
, and look set to drop at the open, extending yesterday’s losses. U.S. indices had one of their worst sessions in weeks after Fed Chairman Jerome Powell warned that “the path ahead is both highly uncertain and subject to significant downside risks .”
warned that “the path ahead is both and subject to .” It’s Thursday, jobless claims day. The consensus estimate is that a further 2.5 million will have filed for unemployment in the past week. Goldman Sachs now sees the unemployment rate peaking at a staggering 25%, a big revision from the merely awful 15% rate it calculated last month.
Elsewhere
Gold is up.
is up. As is the dollar .
. Crude too is climbing. Brent is again hovering just under $30/barrel.
Let my people go
Nobody likes lockdown. It’s doing a job on the economy, and, perhaps worse, it’s messing with our mental wellbeing, health officials say. Employers too are sounding the alarm.
But despite the many legal battles and state house protests to overturn stay-at-home orders playing out in the U.S., Americans are still wary of resuming normal activities—going to the movies, dining out, flying—any time soon.
Consider this latest piece of Gallup data, a poll conducted before the White House’s top disease expert, Dr. Anthony Fauci, testified about the dangers of prematurely easing lockdown measures. Two-thirds of Americans, Gallup found, believe it is “very important” that each of the following four “specific conditions is met before they are willing to return to their normal activities.”
The conditions include:
mandatory quarantine for anyone who tests positive for the virus
improved medical treatments for COVID-19
a significant reduction in the number of new cases or deaths from the disease
and the availability of a vaccine.
From where I sit, I see little to no progress on meeting each of the four conditions above. Some—vaccines—could take more than a year.
Today’s chart (from Gallup) details the level of caution, broken down by political party. For such a divided country, there’s a fair bit of agreement about the merits of the go-slow approach.
States, not to mention countries around the world, are easing lockdown measures day by day. It will be a gradual process. You know what else will be a gradual process? Restoring public confidence in the economy.
***
Have a nice day everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
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Today's reads
We can be HEROES. What kind of goodies can be found in the $3 trillion House bill—the HEROES Act? Fortune's Rey Mashayekhi goes through the full list here. The package is getting a lot of attention, but it will hit serious resistance once it lands in the Senate.
Most vulnerable stocks. Nearly half of the S&P 500 are down by at least 20%, and that makes this group particularly vulnerable to activist investors who want to seize larger controls and push through big changes. The same thing happened during the global financial crisis. Ryan Derosseau details in Fortune the stocks most susceptible to activist intervention, and what that could mean for your portfolio.
(Some of these stories require a subscription to access. There is a 50% discount for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.)
Market candy
Fast food, quick buck?
Want fries with that? Fast-food chains from McDonald's to Shake Shack so far are weathering the pandemic better than most food businesses—and that's despite a run on red meat and store closures. Charley Grant in the Wall Street Journal's Heard on the Street column looks at these outperforming stocks, and how they're scoring healthy gains while others are withering.


fortune--2020-05-14--Trump names 2 new heads of ‘Operation Warp Speed,’ the effort to develop coronavirus vaccine

President Donald Trump plans to name Moncef Slaoui, the former head of GlaxoSmithKline Plc’s vaccines division, and Gustave Perna, a four-star U.S. general, to lead a Manhattan Project-style effort to develop a vaccine for the novel coronavirus, two people familiar with the matter said.
Slaoui, 60, and Perna will oversee the initiative known as Operation Warp Speed, according to the people, who spoke on condition of anonymity ahead of an announcement expected later Wednesday. Slaoui will work on a volunteer basis.
The Trump administration project seeks to produce 300 million doses of a Covid-19 vaccine by the end of the year, hastening development by simultaneously testing many different candidates and beginning production before they’ve completed clinical trials.
The program will pull together private pharmaceutical companies, government agencies and the military to try to cut the development time for a vaccine by as much as eight months, according to two people familiar with the matter. Slaoui will serve as the program’s chief adviser while Perna will work as the chief operating officer, the people said.
In 2017, Slaoui retired from Glaxo, where he had worked for almost 30 years. The London-based company credits him with overseeing a vaccines pipeline that produced Rotarix, used to prevent diarrhea in infants, and Cervarix, to protect against a viral infection that can lead to cervical cancer.
Perna has since 2016 served as the 19th Commander of the U.S. Army Materiel Command, which manages the service’s supply chain worldwide. He was previously the Army’s deputy chief of staff and oversaw policies and procedures for the service’s logistics.
Slaoui will leave the board of Moderna Inc., one of the leading U.S. companies developing a vaccine, as well as other boards he sits on, said a person familiar with the matter. The person asked not to be identified because the departure hasn’t been made public yet.
Slaoui has been a Moderna board member since 2017, and in that role earned $490,000, including $65,000 in cash and $425,000 in options awards, according to a corporate filing.
Last month he joined the board of Lonza Group AG, a Swiss medical company that has contracted with Moderna to manufacture its vaccine. He’s also on the board of SutroVax Inc., a closely held vaccine developer.
A representative for Moderna declined to comment.
He’s a partner at the venture capital firm Medicxi, and is on the board of the Human Vaccines Project, a nonprofit enterprise that attempts to accelerate vaccine development by better understanding the immune system, and has said it will try and accelerate work on a coronavirus inoculation.
Slaoui earned a doctorate in molecular biology and immunology from the Université Libre de Bruxelles in Belgium, according to a 2017 press release from Moderna. He completed his postdoctoral studies at Harvard Medical School and Tufts University School of Medicine.


fortune--2020-05-14--Congress is ignoring the best solution for troubled companies: bankruptcy

COVID-19 is forcing Coach and Kate Spade to pick up the e-commerce pace

During the COVID-19 pandemic, Congress has moved quickly to get trillions of dollars of emergency relief to consumers, small businesses, and large firms. These efforts aim to rescue millions of American consumers and businesses from insolvency.
It is troubling, though, that the federal government is ignoring the law that already exists for cushioning the blows associated with financial distress: the bankruptcy system. In its strategy to provide relief and stimulus, the government is in effect offering roadside emergency assistance when the infrastructure and expertise of a hospital is easily accessible.
Sen. Patty Murray recently told Politico, “It is not time to say to a family, a business, a government agency, anywhere, to go bankrupt.” This sentiment is echoed in CARES ACT initiatives that present a choice between federal government rescue and bankruptcy. Aversion to bankruptcy likely motivated the law’s exclusion of bankrupt firms from its loan program for midsize businesses. Even worse, the Small Business Administration (SBA) has taken the position that Paycheck Protection Program (PPP) loans can’t be made to debtors in bankruptcy because doing so “would present an unacceptably high risk of an unauthorized use of funds or non-repayment of unforgiven loans.”
To be sure, the CARES Act does not completely ignore the bankruptcy system—it expands small businesses’ access to bankruptcy courts—but crucial parts of the law embrace a mistaken view that government support is preferable to bankruptcy.
In this respect, Congress and the SBA are wrong. Today’s federal bankruptcy system is the product of a more than 40-year investment by Congress, lawyers, judges, and consultants to build a legal framework for reorganizing distressed businesses.
Our bankruptcy system is globally recognized as one of the most effective components of the American economy, and it’s emulated elsewhere. We are, and historically have been, better at reorganizing distressed firms than other major economies are. This mature legal infrastructure is informed by decades of practice and has proven capable of reorganizing companies as large as General Motors and as small as a corner restaurant.
Instead of building a new rescue system that operates outside and exclusive of existing bankruptcy law, the government should recognize that it already has a set of experts in financial distress in its bankruptcy judiciary and put that expertise to work.
Concerned with transparency? The bankruptcy system has established public disclosure requirements that would reveal, for example, the sources and terms of new funding. Concerned about companies implementing fundamental changes too quickly? While companies scale down operations and shed assets, bankruptcy judges are empowered to oversee the process and make sure employees and creditors are treated fairly. Concerned about protecting taxpayers? Bankruptcy judges are the only judges who can compel companies to prioritize paying back government loans over existing creditors’.
To be sure, the nation’s roughly 350 bankruptcy judges cannot oversee the scale of emergency lending and spending that the federal government has engaged in. This can be improved. As we wrote in a letter to congressional leadership last week, Congress should bolster the capacity of the bankruptcy system by expanding the size of the bankruptcy bench and increasing funding for bankruptcy courts’ operations and staffing.
Regardless of Congress, bankruptcy judges are finding ways to help struggling businesses. For example, judges have allowed Pier 1 Imports and Modell’s to pause their bankruptcy liquidation operations until the public health emergency abates. And a bankruptcy judge in Texas overrode the SBA in ordering a local bank to review the PPP application of an emergency services company that had filed for Chapter 11.
The bankruptcy system offers another important benefit: Because it entails such a detailed restructuring process, bankruptcy forces companies to think hard about how they’ve been doing things and whether it makes sense to continue doing them that way. Cash infusions from programs like those in the CARES Act, on the other hand, are only designed to keep businesses’ heads above water. That’s all that some companies need, but for others that were already struggling before the crisis hit, such as J.Crew and Neiman Marcus, bankruptcy can encourage them to focus on their long-term health.
Our existing bankruptcy system isn’t only crucial for helping companies move past their immediate crisis of zero revenue and illiquidity, it will also be essential in helping entire industries adapt to a prolonged period of uncertainty created by the coronavirus pandemic.
Jared A. Ellias is a professor of law at the University of California Hastings College of the Law.
George Triantis is the Charles J. Meyers professor of law and business at Stanford Law School.


fortune--2020-05-14--The NYSE trading floor will partially reopen after Memorial Day

The New York Stock Exchange will partially reopen its normally crowded trading floor later this month after closing it in late March due to the coronavirus.
Stacey Cunningham, president of the NYSE, said Thursday the trading floor will reopen to a subset of brokers the day after the Memorial Day holiday.
The brokers that are allowed to return will have to wear protective masks and follow social-distancing requirements, Cunningham said in a commentary published in The Wall Street Journal.
Employees of large companies that normally crowd the NYSE trading floor as they oversee the action will largely continue to work remotely, as they have been since March 23, when the NYSE shifted to all-electronic trading as a precautionary step after two people tested positive for COVID-19.
Several thousand brokers and others used to crowd the trading floor of the NYSE as recently as the 1990s. But in the years since, the rise of electronic trading grew to dominate the action on Wall Street. These days, there are about 500 floor traders at the NYSE.


fortune--2020-05-14--COVID-19 is forcing Coach and Kate Spade to pick up the e-commerce pace

‘ Frozen ’ musical will not come back to Broadway when theaters reopen

By the end of this week, Tapestry, the company that owns Coach, Kate Spade, and Stuart Weitzman, will be welcoming customers back at 300 of its U.S. and Canada stores.
But in yet another example of how the coronavirus pandemic looks to permanently shift more retail online, those stores will be open primarily for in-store or curbside retrieval of orders place online rather than for having shoppers coming in and browse, especially during this time of social distancing.
Tapestry only got about 10% of sales online before the pandemic broke out, but CEO Jide Zeitlin wants the company to expand that dramatically and be less dependent on its physical stores. “It’s about having more equilibrium between the physical and the digital,” he tells Fortune.
It’s also about keeping pace with the broader market. According to Bain & Co, online sales represented 12% of the global luxury personal goods market last year and will hit 25% next year.
The partial reopening of just under half its North American store fleet for Tapestry could not come soon enough. At the height of the store closures last month, 90% of its stores worldwide were closed. And in March, global sales were down 40% even with North American and European stores open the first half of the month. (Tapestry gets about 10% of sales at department stores like Macy’s and Nordstrom, which have also been closed.)
So a bigger e-commerce business is imperative for Tapestry, which even heading into the COVID-19 crisis had been struggling to turn around its Kate Spade and Stuart Weitzman businesses. Its main business, Coach, generates about 70% of company sales.
Zeitlin also hinted that the company would consider shrinking its store base over time by not renewing some leases and perhaps closing some stores.
“We will continue to hold our stores to a very high standard. We will optimize our store base over time,” he says.
One of his top lieutenants said on conference call two weeks ago that Tapestry would hold any store making the cut to a “much higher level of profitability” than before COVID-19, and the company is “engaged in constructive dialogue with all of our major landlords in the U.S.”
In the meantime, while there is only so much e-commerce can do to replace store sales in short order, Zeitlin sees even modest reopenings as essential to getting business going again, pointing to the gradual but certain ramp up of business in China and South Korea, where stores are now all open again.
“There is not a simple on-off switch when you all of sudden go from all of your stores being closed to all being open,” says Zeitlin.
Zeitlin says stores—the good ones—will remain central to Tapestry. And he is looking into things like online appointments for stores for crowd control reasons. At the same time, he dismisses the idea that Coach and the other brands could lose a lot of impulse buying from people popping in on an improvised visit. “What may appear to be a spontaneous purchase when someone comes into the store has been informed by a lot of research online beforehand,” he says.


fortune--2020-05-14--‘Frozen’ musical will not come back to Broadway when theaters reopen

The big budget musical “Frozen” will not reopen when Broadway theaters restart, marking the first time an established show has been felled by the coronavirus pandemic.
The Disney show opened in March 2018 and placed among the top five Broadway productions for both gross and attendance over both years it ran, often pulling in over $1 million, and even $2 million a week.
Until now, only shows that were waiting to officially open have announced postponements or cancellations. Disney still has “The Lion King” and “Aladdin” on Broadway and five productions of “Frozen” worldwide.
Actors’ Equity Association, which represents 51,000 actors and stage managers, reacted with dismay to the news and urged New York and national politicians to rescue the arts sector.
“Today’s news should be an all hands-on-deck moment for Gov. (Mario) Cuomo, Mayor (Bill) De Blasio and Congress,” said Mary McColl, executive director. “The arts and entertainment sector drives the economy of New York, just like it does in cities and towns across the country. Decisions made in the days and weeks ahead will shape the future of the arts sector for years to come. Public officials at all levels must think much more boldly about supporting the arts or our entire economy will be slower to recover.”
Disney Theatrical gets no corporate subsidy from the Walt Disney Company and its stage shows must be financially self-sustaining.
Although an exact date for performances to resume on Broadway has yet to be determined, Broadway producers are now offering refunds and exchanges for tickets purchased for shows through Sept. 6.
Broadway performances were suspended on March 12 after Cuomo imposed a ban on gatherings of 500 or more people. There were 31 productions running, including eight new shows in previews and another eight shows in rehearsals preparing for the spring season.
Some shows like an upcoming revival of Neil Simon’s “Plaza Suite” starring Matthew Broderick and Sarah Jessica Parker, as well as a musical about Michael Jackson, have pushed their production to next year.
Other shows scheduled to open this spring have abandoned their plans, including “Hangmen” and a revival of Edward Albee’s “Who’s Afraid of Virginia Woolf?”


fortune--2020-05-14--Privacy groups: TikTok is violating children’s privacy

Privacy watchdogs say that the popular TikTok video app is violating a children’s privacy law and putting kids at risk.
A coalition of 20 groups, including Campaign for a Commercial-Free Childhood and the Center for Digital Democracy, filed a complaint Thursday with the Federal Trade Commission saying that TikTok is collecting personal information of kids under 13 without their parents’ consent.
TikTok, owned by Chinese company ByteDance, has exploded in popularity with young people thanks to its goofy, lighthearted feel and ease of use.
At the same time, it’s drawn scrutiny from U.S. officials concerned about national-security risks due to its Chinese ownership and its popularity with kids.
TikTok paid a $5.7 million fine to the FTC in 2019 over collecting personal information from kids under 13, a violation of the federal Children’s Online Privacy Protection Act. It revamped its app with a restricted mode for younger users.
But the privacy groups say it’s easy for kids to use TikTok without parental consent. Kids can sign up with a fake birth date to use the full, adult version of the app, “putting them at risk for both TikTok’s commercial data uses and inappropriate contact from adults,” the groups said in a joint news release.
TikTok uses the data it collects from users, like their location, what’s in their messages and what videos they watch, to figure out what new videos to show them and for targeted advertising.
The privacy groups asked the FTC to investigate and fine TikTok. The commission said it received the complaint but had no comment on it.
In an emailed statement, TikTok said it takes privacy seriously and is committed to ensuring the app is a safe and entertaining community for users.


fortune--2020-05-14--As probe into Senate stock sales heats up, Richard Burr steps down as Senate Intel Committee chair

Sen. Richard Burr (R-N.C.) has stepped down as chair of the Senate Intelligence Committee amid reports that federal authorities have escalated an investigation into alleged insider trading.
Burr temporarily resigned from his chairmanship, which he’s held since 2015, on Thursday morning after the Los Angeles Times reported that FBI agents had executed a search warrant on his residence and seized his cell phone. The publication also reported that the FBI had recently served a warrant on Apple in order to obtain information from Burr’s iCloud account.
In a statement, Burr said he would step aside as committee chair “until this investigation is resolved.”
“The work the Intelligence Committee and its members do is too important to risk hindering in any way,” he said. “I believe this step is necessary to allow the committee to continue its essential work free of external distractions.”
Representatives for the FBI, Department of Justice, and Securities and Exchange Commission all declined to comment on the investigation.
Burr is among several members of Congress who have faced scrutiny for stock trades executed in the wake of private Senate briefings earlier this year on the threat posed by the coronavirus pandemic. Under the STOCK Act of 2012, members of Congress are prohibited from using nonpublic information gained through their positions to trade stocks.
In addition to Burr, Sen. Kelly Loeffler (R-Ga.)—who is married to New York Stock Exchange chairman Jeffrey Sprecher—has also drawn scrutiny for stock trades made by her and her husband in the wake of Senate committee briefings. While representatives for Loeffler did not return a request for comment, a spokesperson for Loeffler told the Washington Post that “no search warrant has been served” on the Georgia senator.
Loeffler’s office subsequently released a statement late Thursday revealing that she had provided “documents and information” on her stock holdings to the Department of Justice, SEC, and Senate Ethics Committee.
“The documents and information demonstrated [Loeffler] and her husband’s lack of involvement in their managed accounts, as well as the details of those accounts,” Loeffler’s office said.
Likewise, a spokesperson for Sen. Dianne Feinstein (D-Calif.) confirmed reports that Feinstein had been questioned by the FBI and turned over documents relating to stock trades made by her husband, investment banker Richard Blum.
“Senator Feinstein was asked some basic questions by law enforcement about her husband’s stock transactions,” the Feinstein spokesperson told Fortune. “She was happy to voluntarily answer those questions to set the record straight and provided additional documents to show she had no involvement in her husband’s transactions. There have been no follow up actions on this issue.”
Whereas Loeffler and Feinstein claim to have had no knowledge of stock trades made on their behalf or by their spouses, Burr has acknowledged that he was behind dozens of transactions worth up to $1.7 million in early February—several weeks before markets globally went into free fall as the pandemic’s economic toll became clear. Additionally, Burr’s brother-in-law, Gerald Fauth, sold up to $280,000 worth of stocks on the same day as Burr, ProPublica reported earlier this month.
Burr has denied that he used nonpublic information gained through his position to inform his stock trades, claiming he “relied solely on public news reports to guide my decision” and calling for a Senate ethics investigation in the interest of “full transparency.” He has also denied coordinating trades with his brother-in-law.
The investigation into Burr, and potentially other members of Congress, is the biggest test yet for the STOCK Act, which has been deployed sparingly since its passage in 2012. The bill sought to close a loophole that effectively exempted members of Congress from SEC insider trading laws.
Burr’s current term in the Senate expires in 2022. Prior to the insider trading controversy, he had indicated that he does not plan to seek reelection.
Update, May 14, 2020: This article has been updated to include comment from representatives for Sen. Loeffler, Sen. Feinstein, the FBI, the Department of Justice, and the SEC.
More politics coverage from Fortune:
—Why charging members of Congress with insider trading is so fraught
—Saving lives vs. saving the economy is a false tradeoff, economists say
—Trump’s demand that China pay coronavirus reparations evokes an ugly history
—McConnell focuses Senate on conservative judge appointments rather than the coronavirus
—Real unemployment rate soars past 24.9%—and the U.S. has now lost 33.5 million jobs
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
—WATCH: Fortune’s top 10 heroes of the coronavirus pandemic
Subscribe to How to Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic


fortune--2020-05-14--How selling $133 million worth of face masks in April helps Etsy long term

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In the early morning of April 2, as Josh Silverman started his workday, the Etsy chief executive was amazed to see a sudden surge in traffic to the handcraft e-commerce site on a run-of-the-mill Thursday.
One thing in particular was driving traffic: Searches for “face masks” rose 100-fold in a matter of hours that morning, hitting nine searches a second at one point.
While Etsy’s sellers had been offering face masks for several weeks since the start of the COVID-19 pandemic, media reports surfaced that morning suggesting that the U.S. government was going to change its stance and recommend Americans wear face masks in public settings to help contain the spread.
“It happened like an explosion. It was instant,” Silverman tells Fortune. Some sellers were moving the entire previous month’s orders in just an hour. But the surge in searches didn’t come without challenges.
For one thing, he wanted to be sure that sellers could fill those orders, lest it lead to a bad experience for someone new to the site, losing Etsy a chance to make a good first impression.
What’s more, when Silverman typed “face masks” into the search engine, results were yielding a lot of Halloween masks and other irrelevant products. “That’s not what anyone thinks of as face masks in this moment,” he says.
By 8:30 a.m. that morning, he and his team were doing triage by hand of the top 5,000 top results, an immediate fixing of its algorithms. They placed vendors who really sold cloth face masks first in the ranking and redirected shoppers to the sites of sellers who confirmed they could handle the orders as a way to redistribute demand, thereby retraining its search engine.
Over the next 48 hours, Etsy recruited more sellers to make masks, helping them figure out how to get more fabric and set up their shops quickly. “In a short time, we stood up a midsize company within Etsy,” says Silverman.
The contoured face mask made by Infusion on Etsy is a made-to-order bestseller. Courtesy of infusion/Etsy
This was all much more labor intensive than how Etsy would normally operate. But the payoff was undeniable: In April, Etsy sold 12 million masks worth $133 million, or one-sixth of its monthly tally, and Silverman says demand is holding up well.
What’s more, sales on the Etsy site of items other than masks rose 79% last month, despite a drop in wedding-themed gifts during what is normally a peak time for that category. Etsy was already doing well, though not quite that well: In the first quarter of 2020, sellers sold $1.35 billion worth of goods on its sites, up 32.2% from a year earlier.
A bonanza of new customers
There’s an important, longer-term upside for Etsy: In April alone, it won over 4 million new customers and got back 2.5 million others who hadn’t used the site in at least a year. (At the start of 2020, it had 46.4 million active buyers and 2.7 million sellers.)
Wall Street has noticed. Shares hit a 52-week low on March 16, coincidentally when the lockdown started in major cities like New York as investors worried about the coming economic downturn. But in the two months since, Etsy shares have risen 157%, making the company worth almost $10 billion.
Silverman admits he was not sure how people were going to behave as lockdowns began. But he thinks people wanting to support independent businesses and buy one-of-kind items—or at least those that are not mass-produced—has a lot to do with Etsy’s success.
And the influx of new shoppers has been a rare opportunity for Etsy to wow new customers. “It was important that it be a good experience,” says Silverman.
Initial data suggests many are sticking around: Some 32% of new customers who bought a mask last month bought another item within two weeks. And Silverman says on-time shipment statistics and call-center volume suggest the customer experience has been good.
Wall Street analysts seem to agree with the thesis that Etsy will hang on to its new customers once lockdowns end and other retailers reopen their stores. “Even for the existing buyers, they may be exposed to the variety and selection of products available, which could induce them to come to the platform and buy more than just once a year,” Deutsche Bank analyst Kunal Madhukar wrote in a research note.
Since Silverman took the helm three years ago, he has sought to professionalize a site that often felt like a flea market. That has included vastly improving its search function—something he says is hard, considering that Etsy sells 60 million unique items at any given time. And occasionally it has meant friction with sellers, either from higher fees or pushing them to offer fast shipping.
But at a time when eBay has floundered and “re-commerce” sites are on the rise, Etsy wants to take advantage of every chance it gets to attract new customers who might not have thought of it much, especially as shopping behavior is in flux.
“For anything you need, the habit for so many people is Amazon, Amazon, Amazon,” Silverman says. “If I could just get them to pause for a split second and think to themselves, ‘Where else could I get something similar?,’ Etsy is going to come to mind a lot of the time.”
And millions of mask buyers are now at least more aware of Etsy.


fortune--2020-05-14--Apple latest virtual reality acquisition fuels speculation about a future VR headset

Apple confirmed it acquired NextVR, a startup that provides sports and other content for virtual-reality headsets.
The acquisition may help Apple’s development of VR and AR headsets with accompanying software and content. NextVR supplies content to several existing VR headsets, including Facebook’s Oculus and devices from Sony Corp., HTC and Lenovo.
NextVR has deals with sports leagues including the National Basketball Association and entertainment networks such as Fox Sports. The startup also has expertise in live streaming in virtual reality, which could also be useful for live concerts and games.
The Newport Beach, Calif.-based startup officially shut down this week, saying on its website that it is “heading in a new direction.” Apple said it buys smaller technology companies from time to time, and generally does not discuss its purpose or plans. It didn’t disclose a purchase price, but website 9to5Mac reported in April that Apple was in talks to buy NextVR for about $100 million.
The deal is at least the third for Apple this year, following the purchase of Voysis, an Irish startup that focuses on voice technology, and Dark Sky, a popular weather app.


fortune--2020-05-14--Antibody testing’s chicken and egg problem

Good afternoon, readers.
Here in New York City, a free COVID-19 antibody testing program could reach up to 140,000 residents between now and June. That doubles the figure of tests to be conducted in the coronavirus pandemic’s epicenter: Another 140,000 are allocated for frontline and essential workers.
But COVID antibody testing is, to put it lightly, complicated. It comes with a series of contradictions and balancing acts for ensuring access to these tests—which will be critical for reopening the economy and understanding the novel coronavirus’ underlying nature—and making sure the ones people are taking aren’t giving us bogus information.
I spoke with senior government officials, pharmaceutical experts, and academics who specialize in biostatistics to parse exactly what the state of antibody testing is and the challenges which lie ahead.
As you might guess—it’s complicated. Such testing is important because it can tell us more about who has already contracted the coronavirus but recovered, even if they were asymptomatic for COVID-19. But that process will take time since health care institutions will need to learn through experience how accurate the dozen antibody tests which have been granted emergency authorization are, and what they tell us about how long someone may be immune to COVID-19.
Originally, the Food and Drug Administration (FDA) was willing to give companies developing antibody tests a bit more leeway since access to such diagnostics is important. The agency has since revised guidance to ensure quality control. It amounts to a chicken and egg dilemma of ensuring widespread testing while simultaneously boosting the most effective products.
Companies like Roche and Abbott Laboratories have made bold claims about their own antibody blood tests’ accuracy (Roche, for instance, says its test has a 100% rate of correctly identifying people who have antibodies and a more than 99.8% rate of correctly identifying people who don’t.) Previous tests, including ones that were being hawked even without emergency authorization, have had decidedly mixed results, according to a slew of researchers from UC Berkeley, UCSF, and others.
The science itself is complicated enough. The effects on society at large? Even more so.
“Antibody tests give us a bigger picture of the range of disease,” says Natalie Dean, a professor and biostatistician at the University of Florida. “They’re especially useful for identifying high-risk groups. [They] let us see at the highest-risk occupations such as factories where people are in close quarters. But you have to piece these things together from a bunch of different sources.”
How well we can “piece these things together” may take months or even years to determine, and likely require an all-hands data-sharing approach between traditional corporate rivals and government agencies.
Read on for the day’s news, and we’ll see you again next week.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
Government boosts payment rates for telephone health visits as demand grows. Demand for health care services that don't have to be done at an actual, well, hospital has spiked during the coronavirus outbreak. And the Centers for Medicare & Medicaid Services (CMS) has taken note. The agency is boosting the number of telehealth services eligible for enhanced payments as hospitals and clinicians see a steep drop in traditional medical visits, including for behavior health and patient education. (Medical Economics)
INDICATIONS
Allogene stock spikes on lymphoma drug data. Shares of biotech Allogene spiked more than 32% in Thursday trading as initial data for its experimental blood cancer treatment sent investors into a tizzy. The therapy, ALLO-501, is in a class of cancer therapies called CAR-T, which involves re-engineering patients' immune cells to kill off cancerous invaders. But what makes this treatment special is that it's an "off-the-shelf" variety of CAR-T. You see, usually, you would need to extract a patient's cells individually in order to make an engineered cancer-killer with CAR-T, which is an expensive and complicated manufacturing process. An "off-the-shelf" approach may mean you could make these treatments without the need for one-by-one personalization.
Sanofi will give the U.S. first rights to experimental coronavirus vaccine, but CEO clarifies. French drug giant Sanofi came under scrutiny from its own home country's government when CEO Paul Hudson said that U.S. patients might get first dibs on a coronavirus vaccine candidate being developed in America. On Thursday, Hudson clarified that he believes any vaccine should be available to people across the globe. “My comments are around whether we continue to make sure we are in a similar position in Europe [to build vaccine manufacturing capacity],” he said. “It was never a choice. We need to get vaccines to everybody around the world.” (Reuters)
A COVID-19 vaccine may take until the end of 2021. Speaking of COVID vaccines—there's been talk from some corners of government and the medical industry that we could hopefully have one available within 12 or 18 months, if not earlier. Novartis CEO Vas Narasimhan is striking a more cautious tone, writing in an op-ed that a more realistic timeline is 18 months to two years. A vaccine will be essential for public health and a return to normal. (Bloomberg)
THE BIG PICTURE
Outbreak spurs UnitedHealthcare to get back into ACA marketplaces as job losses mount. With more than 30 million Americans out of work amid the coronavirus pandemic, insurance giant UnitedHealth is working its way back into the Affordable Care Act's individual insurance marketplaces. The country's largest health insurer had previously said it would exit nearly three dozen markets; but as millions lose their jobs (and along with them, their employer-provided health insurance), UnitedHealth says it's planning to get back into Maryland's Obamacare market and expanding its footprint elsewhere. (Politico)
REQUIRED READING
Real jobless rate soars to Great Depression levels, by Lance Lambert
Fortune 500 CEO survey: How America's biggest companies are dealing with the pandemic, by Alan Murray
4 takeaways from the House Democrats' new $3 trillion stimulus bill, by Nicole Goodkind & Sy Mukherjee
Who pays for the pandemic when insurance companies refuse, by Jeff John Roberts
Sign up for other Fortune newsletters.


fortune--2020-05-14--Peacock announces original programming tied to its national launch in July

NBCUniversal’s Peacock is moving full speed ahead with its July national launch, which will include several original series, according to an announcement by the streamer Thursday.
Viewers will be able to watch the first season of Brave New World, based on the Aldous Huxley novel of the same name, as well as thriller The Capture, and The Intelligence, a workplace comedy featuring “a kind of weedier, geekier, more bureaucratic version of [the U.K.’s] MI5 and MI6.” Sports programming includes documentary In Deep With Ryan Lochte, as well as Lost Speedways, a series created and hosted by Dale Earnhardt Jr.
Psych 2: Lassie Come Home, a movie sequel to the USA Network comedy series and Psych: The Movie, will also be available at launch. Kids’ programming will feature a Curious George animated series, plus Cleopatra in Space and Where’s Waldo?, both from DreamWorks.
The new series will be accompanied by previously established series in the NBCUniversal library, which include comedies like Parks and Recreation and Law & Order: SVU, as well as blockbuster movies, highlights from late-night shows and news programs, and more. A premium version of the service is already available as a preview to Comcast Xfinity X1 and Flex customers, while the national launch is set for July 15.
The announcement of Peacock’s original slate comes as TV and film production has stalled amid the coronavirus pandemic, which led to questions about how much new programming would actually be available in time for the service’s launch. Another new streamer, HBO Max, which officially debuts May 27, has already announced two waves of original programming that will roll out over the next couple of months.


fortune--2020-05-14--‘Snowpiercer’ showrunner, production designer: We didn’t want ‘carbon copy’ of movie

After years in development, a change in showrunners, and moving back and forth between cable network homes before it ever aired, the Snowpiercer TV adaptation will finally hit our screens this weekend when its first season debuts on TNT.
The series, starring Jennifer Connelly and Daveed Diggs, is based on the 2013 film of the same name by Bong Joon Ho, as well as its predecessor, 1982 French graphic novel Le Transperceneige. But as showrunner Graeme Manson (Orphan Black) and season one production designer Barry Robison point out, the show has its own strong identity.
Both are fans of the film; Manson admits that “like most people,” it’s how he became familiar with the story. Bong, who has an executive producer credit, even came to the set a couple of times during the first season, Manson says, adding that “he gave his blessing to my rewritten pilot.”
But the graphic novel, which Manson describes as “full of imagination and humor, and flights of fancy and levels of philosophy,” served as a more of a springboard for building the world seen in the series.
“I got a really strong directive from Graeme and [director James Hawes] and TNT and the studio that they didn’t want a carbon copy of the movie. And neither did I,” Robison tells Fortune, adding that in addition to his own “vivid imagination,” he turned to the original source. “What really struck me by going back into the graphic novel was just the robustness of the design itself, and my ability to be able to interpret the postapocalyptic world.”
Daveed Diggs (left) and Jennifer Connelly with Sam Otto and Alison Wright in the background. The TNT adaptation of “Snowpiercer” premieres May 17. Justina Mintz—TNT
The TV series takes place seven years after the planet has become a frozen wasteland, while surviving humans ride a nonstop train that travels around the globe. The time frame is compressed compared with the film, which is set 14 years after the devastation of the planet. The show’s timeline “left enough space that everybody would still be grieving, that people would be holding on to the things that mattered in an old society and right at the sort of cusp of casting off some of those things and questioning the way we got on,” Manson explains.
And because this iteration of Snowpiercer is a long-form drama, there are opportunities to explore the characters—who are not the same as those seen in the film—more deeply. The train has a clear class system, from the formally designated first, second, and third classes all the way to the tail—the least desirable, lowest-class section for unticketed passengers.
“Rather than like the movie, beginning on the end of the train with the ‘tailies’ and moving relentlessly forward until we reach the engine, we spend time with all the classes, and we get to know the society of the train equally throughout in all its imbalance,” Manson says.
The distinctions in class are also more clearly illustrated in the set design. To come up with each section’s appearance, Robison mapped out the train, which consists of 1,001 cars. The concept of border cars, hindering movement between different parts of the train, was established. “We wanted it dark and claustrophobic in the tail. We wanted it somewhat neutral and dull in the third class into second,” Robison says, adding that the first class has more of a “heavenly” feeling. “And then throughout these cars where you’ve got no light in the tail, smaller windows in the second class…it’s not unlike a ship, if you really want to think about it.”
There’s also the “night car,” which Manson describes as “the cabaret of the train.”
“It’s sort of a safe space—it’s the exact middle of the train. It’s like a neutral territory,” he says.
Lena Hall (left) and Connelly in the night car. Justina Mintz—TNT
It was also Robison’s favorite set because he “was able to bend reality without it being obvious.”
“It’s a very successful design, as is the first-class dining room. There’s a lot of information crammed into those very small sets,” Robison says.
The team had about 10 physical train cars to work with, says Robison, who enjoyed the challenge of designing sets he described as around 12 feet wide by 45 feet long. A few—like the night car—were fixed sets, while others were changed around as the story required.
“We were in four stages in Vancouver that were all linked together, so the cars were constantly moving, almost on a daily basis, as shooting was going,” he says, adding that the effects team helped make it possible to see different train cars moving through doorways.
A lot of research went into making the train and the environment on the show feel realistic. “We contacted Canadian Rail, and needless to say, they loved it. The few pieces of advice I remember them giving us was that the train had to be robust—the exterior absolutely had to be robust and thickly plated,” Robison says.
But the design also had to be TV-friendly.
“There are times when characters go outside the train,” Robison says, adding that the source material had a concept that just wouldn’t work on-screen. “I think in the graphic novel, you’re in a heavy suit, and then you’re, like, in a lead helmet with two round eyes. Well, you can’t see Jennifer Connelly, and that’s no good.”
Manson (left) pictured behind the scenes on the “Snowpiercer” set. Justina Mintz—TNT
Manson is excited for the project to finally debut, “particularly for the cast” as “it’s been a long time coming.”
Even though the dystopian tale is premiering during the global coronavirus crisis, which also disrupted work on the second season, he thinks the show will resonate with viewers. “People are watching a lot of sci-fi and postapocalyptic sci-fi,” he says, while pointing out that the story isn’t one-note. Though it tackles deeper themes like inequality, he describes Snowpiercer as “a mashup of tones and styles.”
“It’s got black humor; it’s got musical numbers,” he says. “But above all, it’s an action-adventure.”
Snowpiercer premieres on TNT Sunday, May 17, at 9 p.m. ET.
More must-read stories from Fortune:
—In jazz, acting, and The Eddy, André Holland listens for “the notes you don’t play”
—How the film industry is planning for its post-pandemic return
—How CBS legal drama All Rise made its virtual coronavirus episode
—The Last Dance director is racing to finish episodes
—Billions creators on releasing season five of the New York drama in uncertain times


fortune--2020-05-14--Why satellite communications company Intelsat filed for bankruptcy

Intelsat, one of the leading satellite communications companies in the world, filed for bankruptcy on Wednesday. But ultimately the Chapter 11 filing should help the company collect billions of dollars for selling airwave licenses it owns that can be used for 5G wireless service.
In a move that had been telegraphed for weeks, Intelsat said in its filing that it couldn’t afford to service its heavy debt load while also paying hundreds of millions of dollars to transition its network to new technology to allow for a federal auction of some of its airwave licenses. The Federal Communications Commission in February adopted a plan to sell off some of the airwaves held by Intelsat and its peers to wireless carriers that need the spectrum for 5G, but the satellite companies first need to make costly alterations to their operations.
Shares of Intelsat, which traded over $25 as recently as November, dropped to 79 cents on Wednesday before regular trading was suspended on the New York Stock Exchange due to the bankruptcy filing.
Intelsat carries almost $15 billion of debt, a legacy of multiple private equity owners over the past decade who loaded up the company’s balance sheet to make acquisitions and pay dividends. A month ago, it missed a bond payment and hired bankruptcy lawyers and advisers in preparation for making a Chapter 11 filing.
Most U.S. broadcast and cable TV providers rely on Intelsat to distribute their programming across the country via its satellite network. Intelsat also provides communications service to planes, boats, and other remote travelers, a business that has taken a hit during the coronavirus pandemic. Intelsat obtained a $1 billion debtor-in-possession loan to continue its operations and fund the FCC-required transition while its Chapter 11 case moves forward.
In an unusual statement for a bankrupt company, Intelsat CEO Stephen Spengler tried to position the Chapter 11 filing as a victory. “This is a transformational moment in the history of our company,” Spengler said in a statement on Thursday. “This will position us to invest and pursue our strategic growth objectives, build on our strengths, and serve the mission-critical needs of our customers with additional resources and wind in our sails.”
That’s likely because Intelsat stands to collect almost $5 billion from the FCC’s auction of airwaves known as the C-Band. The auction is scheduled to begin in December but could be delayed by the pandemic.
The list of equity investors in Intelsat filed with the bankruptcy court in Virginia included famed hedge fund manager David Tepper’s firm Appaloosa holding a 7% stake. Tepper’s firm has also bought Intelsat bonds and could turn a profit in the end, depending on how the satellite company weathers the FCC auction and bankruptcy process.
Intelsat is one of several companies in the satellite sector to declare bankruptcy during the economic crash caused by the coronavirus. In March, OneWeb, the Internet-from-space service backed by SoftBank, filed for bankruptcy, saying it could not find financing due to the pandemic. The company’s assets, including 74 satellites already in orbit, are now up for sale with rumored interest from Amazon, among others. And Australian satellite service company Speedcast International filed for bankruptcy last month.


fortune--2020-05-14--Takeaways from the Seattle business community’s Back to Work toolkit

Seattle has been roundly applauded for its collaborative, science-driven, and generally quite effective response to COVID-19. (By Fortune as well—a feature published in April highlights the coming together of the region’s public and private sectors, largely through the organization Challenge Seattle.)
Now, the community is working to bring the same cooperative approach to Seattle’s reopening. While timing decisions are, of course, driven by state, county, and city leadership, the city’s business and nonprofit sectors have been hustling to assist in ways that they hope will help guarantee the process’s success: gathering and sharing reopening best practices and strategies from the likes of Starbucks, Costco, Microsoft, and a couple dozen others.
In late April, a webinar for Seattle’s business community on that topic drew 700 virtual attendees. Two days later, the associated website with accompanying resources—a Back to Work Toolkit, which includes reopening checklists, COVID-relevant work signage (social distancing reminders, how not to wear a face mask, etc.), and a link to a Washington-based supplier of personal protective equipment (PPE)—had been visited more than 8,000 times.
“We wanted to provide turn-by-turn directions, the hard stuff,” says Katie Drucker, head of business development and partnerships for Madrona Venture Group, a Seattle-based venture capital firm that has taken the lead on the effort.
“People want to know questions like, Should we take temperatures when people get to the office, or should they do it at home? Do you close your conference rooms, or do you let people in? All those details take a lot of time for a company to figure out if you don’t have the resources of a large enterprise,” she says. “We said, let’s just solve it and lay out the best practices that we can find. Let’s give out all the regulations. Let’s give out templates and posters and make it so detailed that it saves everybody time.”
Working in partnership with area companies as well as the Chambers of Commerce of Seattle and neighboring Bellevue, Drucker estimates the team at Madrona spent more than 300 hours—including three successive weekends—on the project. Much of that time was spent in conversation with local government leaders and business executives, many of whom had valuable reopening insight from their operations in China or as “essential” businesses that have been running throughout the pandemic. Drucker was amazed by the generosity and willingness of high-powered business leaders to get on the phone and talk, at length, about the minutiae of pandemic-related decision-making. “The ROI on this,” says Drucker, “will be every hour we saved forward.”
A VC firm may not seem like the obvious lead for such an effort, but Drucker says it was a natural fit for Madrona, an early-stage tech investor whose bets have seeded Amazon, Redfin, Rover, and dozens of other startups over its 25 years. The firm’s current portfolio includes 80 companies, all of which are working through the business challenges presented by the pandemic. Before Drucker and her team started the reopening project in early April, they had been in overdrive trying to assist portfolio companies in understanding and accessing relief through the federal CARES Act. Madrona is also a member of Challenge Seattle, an organization that engages the area’s largest companies in addressing the region’s challenges. The group, helmed by former Washington State governor Chris Gregoire, has been instrumental in aligning the public and private sectors on the city’s pandemic response and reopening strategy.
While developed with the Seattle-area business community in mind, Madrona’s back-to-work toolkit offers detailed, practical guidance for companies elsewhere, too, says Drucker. She notes that while local, state, and federal regulations all provide a standard that businesses have to meet in reopening, many companies will want to reach a higher bar to ensure the safety of employees and operations. They recommended companies create their own reopening task forces to stay on top of the many issues presented by the situation.
The group’s top finding was clear: Two-way communication is key for companies now. Employers need to be listening to employees, not just talking to them in this moment; they also have to get to know and understand their employees like never before, noted Madrona’s director of talent, Shannon Anderson, on the webinar. Employee fears and ambitions, not to mention factors like childcare, transportation, and health issues, will all figure into an employee’s ability to return to work. (Based on their interviews, they recommended bringing back employees in waves.) The team highlighted as a best practice something that Amazon does—taking a “daily pulse” of its workforce by asking them to respond to one question.
Drucker’s team heard many concerns about the availability of PPE for workers and that being a challenge for businesses looking to reopen, so the team identified a Washington-based supplier, Bess International, that could provide surgical masks and gloves at scale. The company agreed to prioritize orders from Washington State customers. (Though it varied by industry, many they interviewed recommended giving employees a fresh surgical mask each day.)
The group also offered advice—much of it provided from real estate firm CBRE—on how to adjust office space to accommodate the new social distancing norms as well as how frequently to clean spaces. Training employees on pandemic office etiquette (wiping down desks and phones, for example) and leveraging technology to help ensure safety in the new environment were also recommended.
Though they tried, Drucker and her team didn’t have all the answers. “The area of greatest ambiguity right now in some ways mirrors our society as a whole,” she says, noting the challenge businesses are most grappling with is, “I can protect my space and maybe the people in my space, but what happens in the out-there?”
She hopes the Seattle business community will unite around the use of a common method or an app—maybe a homegrown one—that will help in the testing, tracking, and tracing effort that many say is necessary to prevent spread of the disease. “A public-private partnership is where that really needs to be defined,” Drucker adds.
There are signs she won’t have to wait long for that. After Fortune spoke with Drucker, Washington Gov. Jay Inslee announced on May 12 the state was working with the University of Washington on an app to assist with contact tracing efforts.


fortune--2020-05-14--When will we get back to normal?

When will we get back to normal?

This is the web version of Term Sheet, Fortune’s newsletter about deals and dealmakers. Sign up here.
Increasingly, health experts believe it could take years before a cure emerges. The World Health Organization recently warned that it could take up to 5 years before things go back to “normal.”
Business leaders are also taking on the view that the pandemic will last longer than previously thought. About 38% of Fortune 500 leaders surveyed between late April and early May think their employees will return to work by June 2021. Some 58% believe economic activity won’t return to pre-pandemic levels until the first quarter of 2022. Another majority, 52.4%, think employees will never travel as much again.
The bottom line—folks are settling into a new world order.
Oh, by the way—Jerome Powell is getting love in the pandemic. Some 84% of CEOs think the Fed chair has done a great job of handling the crisis, compared to 22.9% who say the same of President Donald Trump. Read more.
PPP problems: Got a loan via the Payments Protection Program that’s below $2 million? You can keep the money. Probably.
The SBA gave companies until May 14 to return Paycheck Protection Program funding if they didn’t need it, amid news reports of well-capitalized companies such as Shake Shack and Potbelly receiving funds.
But who should actually return the funding? On Wednesday, a day before the deadline, the SBA updated guidance around what companies would be scrutinized for taking PPP funding, saying that businesses receiving less than $2 million of the forgivable loan will automatically clear the hurdle.
“SBA has determined that this safe harbor is appropriate because borrowers with loans below this threshold are generally less likely to have had access to adequate sources of liquidity in the current economic environment,” the guidance read, noting that further clarification is coming.
It’s an interesting guideline—the SBA previously said that publicly traded companies would likely be ineligible for forgiveness, though many have acquired loans below the $2 million threshold, per analysis by FactSquared. And across the 407 PPP loans sought by public companies, just 61 have been returned, based on public filings.
That said, it’s not a total free for all. While the SBA may gloss over companies with loans lower than $2 million, the Department of Justice can make its own calls on which cases to pursue. Earlier this month, the DoJ charged two New England businessmen with fraudulently seeking $438,000 from the program. But undoubtedly, regulators will use the biggest and flashiest of loans to set an example.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- Waymo, the self driving startup backed by Alphabet, raised $750 million in additional outside funding, bringing total external investments to $3 billion. T. Rowe Price Associates, Perry Creek Capital, Fidelity Management & Research Company and others participated.
- CloudWalk Technology, a Chinese facial recognition company, raised 1.8 billion yuan ($254 million) in funding from funds tied to the Chinese government. Investors include China Internet Industry Fund, Shanghai-based Guosheng Group, Nansha Financial Holdings and Industrial and Commercial Bank of China. Read more.
- Quizlet, a San Francisco-based flash cards platform, raised $30 million in Series C funding. General Atlantic led the round, valuing the business at $1 billion. Read more.
- Expel, a Herndon, Va.-based cybersecurity company, raised $50 million in Series D funding. CapitalG led the round and was joined by existing investors including Battery Ventures, Greycroft, Index Ventures, Paladin Capital Group and Scale Venture Partners. Read more.
- QurAlis Corporation, a Cambridge, Mass.-based biotech company focused on neurologic diseases, raised $42 million in Series A funding. LS Polaris Innovation Fund and Droia Ventures led the round, and were joined by investors including Mission BioCapital, INKEF Capital and the Dementia Discovery Fund.
- Semperis, a New York-based cybersecurity firm for enterprises, raised $40 million in Series B funding. Insight Partners led the round.
- Anyfin, a Stockholm-based loan refinancing startup, raised $30 million in Series B funding. EQT Ventures led the round, and was joined by investors including Accel, Northzone and Global Founders Capital.
- FortressIQ, a San Francisco-based firm focused on AI in strategic business initiatives, raised $30 million in Series B funding. M12 led the round, and was joined by investors including Tiger Global Management, Boldstart Ventures, Comcast Ventures, Eniac Ventures, and Lightspeed Venture Partners.
- ANNA, a U.K.-based mobile-first fintech for small and medium businesses and freelancers, raised $21 million in funding from the ABHH Group. Read more.
- FalconX, a San Francisco-based digital asset trading platform, raised $17 million in funding. Investors include Accel, Accomplice VC, Coinbase Ventures, Fenbushi Capital, Flybridge Capital Partners, Lightspeed Venture Partners, Avon Ventures, and a venture capital fund affiliated with Fidelity Investments.
- Workvivo, an Ireland-based employee communications platform, raised $16 million in Series A funding. Tiger Global led the round, and was joined by investors including Frontline Ventures and Enterprise Ireland.
- Dathena, a Singapore-based company AI-based data protection startup, raised $12 million in Series A funding. Jungle Ventures led the round, and was joined by investors including Caphorn and SEEDS Capital.
- Traitify, a Baltimore-based visual personality assessment SaaS platform, raised $12 million in funding. JMI Holdings led the round.
- Meru Health, a San Mateo-based mental health startup, raised $8.1 million in Series A funding. The Foundry Group led the round, and was joined by investors including Slack and Bold Capital.
- Intello Labs, an Indian fresh produce supply chain startup, raised $5.9 million in Series A funding. Saama Capital led the round, and was joined by investors including investors Omnivore and Nexus Venture Partners.
- ConverseNow Technologies, an Austin, Texas-based startup for personalizing restaurant orders on high-volume voice channels using AI, raised $3.3 million in seed funding. Bala Investments led the round, and was joined by investors including LiveOak Venture Partners, Tensility Venture Partners, Knoll Ventures, 2048 Ventures, Bridge Investments and Connexus A1 Fund.
- FeaturePeek, a San Francisco-based front-end review process company, raised $1.8 million in seed funding from Matrix Partners and angel investors.
- Transect, a San Antonio-based company focused on environmental risk for energy, infrastructure, and real estate companies, raised $1.5 million in seed funding. Blue Bear Capital led the round, and was joined by investors including Holt Ventures and Gary Horn.
- Prodoscore, an Irvine, Calif.-based employee visibility software, raised a Series A funding led the round by Troy Carter. Financial terms weren't disclosed.
PRIVATE EQUITY
- Permira is selling 25 million shares worth $1.1 billion in TeamViewer, a German software company. The deal cuts its stake from 51.5% to 39%. Read more.
- Atlantic Street Capital invested in Zips Car Wash, a Little Rock, Ar.-based tunnel car wash operators in the U.S. Financial terms weren't disclosed.
- Ardian agreed to acquire Swissbit Holding, a Bronschhofen, Switzerland-based maker of SD and microSD cards and other storage devices. Financial terms weren't disclosed.
- Hub International, a portfolio company of Hellman & Friedman and Altas Partners, acquired Vestas Financial Services Firm, a Quebec-based insurance provider. Financial terms weren't disclosed.
- Thompson Street Capital acquired PKWARE, a Milwaukee, Wis.-based provider of data security software solutions. Financial terms weren't disclosed.
vRising Point Capital acquired Conco Holding, a Verona, Penn.-based company serving refineries and power plants. Financial terms weren't disclosed.
OTHERS
- Kustomer agreed to acquire Reply.ai, a customer service automation company. Financial terms weren't disclosed.
- VMWare Carbon Black will acquire Octarine, a San Francisco-based security platform for Kubernetes applications. Financial terms weren't disclosed.
BANKRUPTCIES AND BREAKUPS
- California Resources Corp, an oil and gas company, is in talks with lenders for a financing package of up to $600 million to take it through bankruptcy proceedings, per the Wall Street Journal. Read more.
- Sustainable Restaurant Holdings, a Portland, Ore.-based operator of restaurants including Bamboo Sushi and QuickFish, filed for bankruptcy. Bain Capital backs the firm. Read more.
- Intelsat SA (NYSE:I), a McLean, Va.-based satellite operator, filed for bankruptcy protection.
IPOS
- Legend Biotech, a Somerset, N.J.-based cell therapy oncology biotech spinning out of GenScript, filed for an $100 million IPO. It posted revenue of $57.3 million in 2019 and a loss of $133 million. It plans to list on the Nasdaq as “LEGN.” Read more.
- Allpark, a Brazilian parking company, will raise 345 million reais ($59 million) in an IPO in the country valuing the firm at 2 billion reais ($340 million). Read more.
EXITS
- SCP Private Equity acquired TM Lewin, a U.K.-based menswear chain, from Bain Capital. Financial terms weren't disclosed. Read more.
- CyberArk acquired Idaptive, a Santa Clara, Calif.-based cyber identity protection provider, from Thoma Bravo. Financial terms weren't disclosed.
- iCapital Network agreed to acquire Artivest, a New York-based investment platform. Aquiline Capital Partners, Genstar Capital, KKR, and Thiel Capital backed Artivest. Financial terms weren't disclosed.
F+FS
- Cathay Innovation raised $550 million for their second venture capital fund. Cathay Capital Private Equity also announced the closing of its $850 million midcap fund.
- Ripple Ventures held an initial close on its $10 million USD Opportunity Fund .
PEOPLE
- SparkLabs Global Ventures named Jessica Jackley, co-founder of nonprofit microlending platform Kiva, as a general partner. Jackley was previously a venture partner.


fortune--2020-05-14--Eleventh-hour SBA guidance provides leniency for businesses deciding whether or not to return PPP lo

Eleventh-hour SBA guidance provides leniency for businesses deciding whether or not to return PPP loans

Businesses were down to the wire deciding whether or not they should return loans from the embattled Small Business Administration’s Paycheck Protection Program, as recent guidelines about having to prove their need for loans prompted many to proactively return them. But in the eleventh hour on Wednesday, new guidance from the SBA should calm some businesses’ fears over future liability or legal consequences even if they didn’t need the loans.
According to newly-released guidance from the SBA and Treasury on Wednesday, businesses that accepted PPP loans they didn’t need (based on the certification requirement) will be able to repay the money without facing further action, and loans under $2 million likely won’t be targeted for review. Previously, Treasury Secretary Steven Mnuchin stated that firms would be held “criminally liable” if they failed to meet the PPP’s terms.
Many businesses (large and small) have been wrestling with returning or keeping their loans for weeks. As late as Tuesday night, Pamela Zell, who runs a financial planning firm in Missouri, was still debating whether to keep or return her $68,000 PPP loan.
Guidance from the SBA in recent weeks about having to demonstrate the necessity of the loan she received concerned Zell—After all, she never had to lay off any employees beforehand, despite revenues slowly ticking down each month. Zell says the changing guidelines have been a frustrating ordeal: “I feel like they’re throwing this stuff at us so quickly, and oh, by the way, we’re all still trying to run businesses as well.” But she decided following the new guidance on Wednesday, she’s keeping her loan.
Plenty of other businesses have been in the same boat in recent days.
So far, Minnesota-based regional bank Sunrise Banks has had four loans returned, CEO David Reiling tells Fortune, only one of which was for over $2 million. Meanwhile, others like Heather Bain, a CPA and chair of the Small Business Committee for the Institute of Management Accountants, tells Fortune several of her clients had already returned the loans because many thought “the risk is too high,” she says. They had been “looking at the cost to defend the position,” and for some, it wasn’t worth it, she says.
Concerns over certifying necessity
When the now-$669 billion PPP was first launched, a central requirement for businesses applying for loans was that they certify that economic uncertainty “makes this loan request necessary to support the ongoing operations of the Applicant” amid the coronavirus pandemic.
However, guidelines surrounding exactly who is eligible and how to certify necessity have caused confusion. After the first round of funding ran dry, the public was surprised that many large chains and public companies, including Shake Shack and the Los Angeles Lakers, got PPP loans. (Both have since returned their loans). Such loans drew the ire of Mnuchin, who recently told the Wall Street Journal, “Some of these companies should be apologizing. The owners should be apologizing that they took this, not just giving the money back.”
Following the public company backlash, guidelines came in the form of an FAQ on April 23, in which the SBA noted that certifying necessity must take “into account [the borrowers’] current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business,” stating it would be “unlikely” for public companies to be able to make these required certifications. Mnuchin also announced any loan over $2 million would be audited.
When does the PPP safe harbor expire?
As a result, the administration is now giving businesses a safe harbor, or amnesty period, until May 18 (extended from May 14 and from May 7 before), to return the funds in full—in which case they will be “deemed by the SBA to have made the required certification in good faith.” However, the “safe harbor” guidance issued by the SBA on Wednesday states that companies (including their affiliates) who accepted loans under $2 million will automatically be determined to have made the required certification of necessity in good faith because they’re less likely to have access to such sources of liquidity.
In other words, “if a borrower received a PPP loan under $2 million and was otherwise eligible, but uncomfortable with the needs-based certification, [they] should now be comfortable keeping the loan and applying proceeds as directed under the PPP,” says Ken Logsdon, a partner at law firm Dorsey & Whitney.
The SBA will still review all loans over $2 million (and possibly others as well) to ensure businesses met the certification requirements for needing the loan, and if they are found ineligible, the borrower’s loan won’t be forgiven and they will be required to return the loan without any further action, per the new guidance.
Do public companies have to return PPP loans?
Despite a spate of negative press, many public companies still have not returned loans as of Wednesday afternoon. So far, of the over 400 public companies who received PPP loans, some $400 million has been returned from 60 loans as of Wednesday, according to Washington, D.C.–based data analytics firm FactSquared. Meanwhile, other public companies disclosed as recently as Tuesday that they accepted PPP loans, according to financial filings, and did not indicate they would return them. One such public company, AstroNova Inc, which specializes in data visualization technology and specialty printers, announced in a filing Tuesday the company had accepted a roughly $4 million PPP loan, days before the previous May 14 deadline for return. The company did not immediately respond to Fortune‘s request for comment on whether the company intended to return the loan before the deadline.
The SBA guidelines don’t explicitly prohibit public companies from keeping loans, but the guidance has stated that due to access to capital markets and “other sources of liquidity,” it is “unlikely” they’d be able to clear that good-faith certification bar—notably for loans over $2 million.
What does ‘other sources of liquidity’ mean?
Many attorneys and small businesses have also been confused by vague guidelines for the program from the onset.
One provision in the original SBA guidelines waived the “credit elsewhere” test proving small businesses couldn’t receive the loans anywhere else. But amid recent new guidance regarding certifications, attorneys and small businesses have been scratching their heads about the phrase “other sources of liquidity.” Some companies had even filed lawsuits against the Treasury and SBA claiming the new guidance was unlawful based on that original standard.
In recent weeks, Lodgson has seen a lot of companies “second-guessing” their analysis after the new guidance (FAQ 31) was published. Many have wondered if personal finances would be brought into question as “other sources of liquidity.” New guidance still doesn’t shed more light on exactly what will be considered adequate other sources of liquidity.
Now, the new SBA guidance suggests loans under $2 million likely won’t be immediately subject to this scrutiny (the SBA said the safe harbor was “appropriate because borrowers with loans below this threshold are generally less likely to have had access to adequate sources of liquidity in the current economic environment than borrowers that obtained larger loans”). However, companies with loans over $2 million still face these reviews.
What should businesses know about their loans now?
The problem was, “you have uncertainty with regard to not only the definition, but what the enforcement mechanisms are going to look like later,” says Derek Cohen, a partner at law firm Goodwin’s white collar defense group. The fear many businesses had was running afoul of the False Claims Act, which could subject them to penalties as much as three times the amount of the loan “if it was determined that they knowingly or recklessly filed a false certification in regards to their application,” adds Cohen. From a legal standpoint, Cohen notes that demonstrating somebody “acted in bad faith” would have been difficult to prosecute amid a lack of clarity and some subjectivity involved in the analysis. Now, the new guidance suggests that for loans under $2 million and based solely on the needs certification, facing a False Claims Act charge “seems very unlikely,” Logsdon says. Even if loans over $2 million are found to be ineligible, the guidance suggests businesses will have to repay the loans, but won’t face legal consequences.
However, Logsdon points out the safe harbor in the newly-issued guidance only applies to the needs-based certification—it won’t “act as a cure for other deficiencies.” In other words, anything nefarious is likely fair game.
Cohen notes any criminal cases will likely be addressing “just brazen fraud.” In fact, one such case has already surfaced. The Justice Department is charging two businessmen in Rhode Island who received PPP loans with fraud, alleging they falsely claimed employees they don’t have on their application.
To wit, it appears firms with loans over $2 million will still be held to the guidance in FAQ 31, which includes examining “other sources of liquidity.” In that sense, attorneys and CPAs point out that having an undrawn revolving credit facility might prove a viable option for liquidity that the SBA could look at and determine the loan wasn’t necessary, while others like lines of credit that couldn’t be drawn on further at risk of breaking covenants and falling out of compliance could be compelling evidence the loan was needed.
Anne Railton, a partner at Goodwin focusing on white collar criminal defense and government civil investigations, notes the “prudent course for all borrowers” has been to reassess the necessity of the loan in light of the latest SBA guidance.
Some believe the new guidelines are a positive development that are going to “ease a lot of that anxiety” over keeping loans, Paul Merski of the Independent Community Bankers of America, told Bloomberg Wednesday.
Yet with guidance coming late on the eve of the previous deadline, those like Logsdon were unsure whether the safe harbor period would actually scoop up the right businesses: “I suspect there [have been] many companies out there that probably were intended to receive the PPP loan and [were] … too discouraged due to recent events and [decided] to send it back unfortunately.”
More must-read finance coverage from Fortune:
—Saving lives vs. saving the economy is a false tradeoff, economists say
—Real unemployment rate soars past 24.9%—and the U.S. has now lost 33.5 million jobs
—17% of unemployed workers aren’t looking for work—and that’s warping the official unemployment rate
—Does Apple’s stock buyback strategy make sense in this market?
—Goldman Sachs doubts there will be a Round 3 of PPP loans for small businesses
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Why the banks were ready for the financial impact of coronavirus
Subscribe to How To Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic


fortune--2020-05-14--Nvidia introduces new graphics chips aimed at speeding A.I. apps

With Intel and AMD elbowing into its niche, Nvidia introduced a new line of graphics chips aimed at winning the title of fastest processors for running artificial intelligence programs.
Although the company gained prominence by selling some of the fastest graphics cards for playing video games, it has refocused, along with the market, to the more lucrative niche of running A.I. apps in corporate and cloud data centers. Last year, Nvidia sold almost $3 billion in data center chips, representing slightly more than one-quarter of its total sales.
But that market is growing increasingly competitive. Advanced Micro Devices has debuted new data center chips while Intel plans to start selling its own graphic chips sometime next year.
A.I. apps are all the rage as cloud computing centers run by Amazon and others increasingly are used to run programs recognizing speech or images, making diagnoses from medical tests, and seeking to learn from patterns in other big data sets.
The lead product in Nvidia’s new Ampere lineup, the A100, packs 54 billion transistors onto a single chip. The company says it can run A.I. programs that train using deep learning, like speech and image-recognition apps, at a speed of 312 trillion operations per second, or 20 times as fast as its three-year-old Volta line. That means not only could it save customers money by running their A.I. training programs more quickly, it could also enable new and even more complicated A.I. apps that weren’t practical on older, slower chips.
For more general high-performance computing tasks, the A100 can hit almost 20 trillion operations per second, about 2.5 times as fast as Nvidia’s older chips.
Nvidia CEO Jensen Huang said all of the major cloud service providers, including Amazon, Google, and Microsoft, had already agreed to install the new chips in their servers. “Everybody was instantaneously lined up,” he said on a call with reporters on Wednesday. Although data centers previously relied mostly on the same kinds of processors found in PCs, companies have found that using graphics chips accelerates many kinds of tasks such as A.I., he noted. “Data center acceleration is now conventional wisdom…It’s common sense,” Huang said.
Another key aspect of Nvidia’s new chips is a faster technology for connecting multiple graphics chips together and connecting to storage systems, a critical function in huge data centers made up of thousands of servers. Last month, Nvidia completed its $7 billion acquisition of Mellanox Technologies, which develops high-speed data connections for networking server and cloud computers.
Even before the arrival of the newest chips, Nvidia has been pounding its rivals in the stock market. Nvidia’s shares have gained 32% so far this year, beating AMD’s 14% rise and Intel’s 4% drop.


fortune--2020-05-14--3 million more unemployment claims as real jobless rate soars to Great Depression levels

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More than 2.98 million Americans filed initial unemployment claims in the week ending May 9, according to the U.S. Department of Labor. That brings the total unemployment claims over the past eight weeks to 36.5 million.
The almost 3 million jobless claims represents the sixth consecutive weekly drop in claims, but were down from 3.2 million the week prior. However, it is still more than four times higher than the previous pre-pandemic record from October 1982 of 695,000 claims. That former record has been topped for eight weeks straight.
Over the past week, Connecticut and Georgia lead the nation with 298,680 and 241,387 claims, respectively.
The 14.7% unemployment rate released by the U.S. Bureau of Labor Statistics only represents the period tracked through mid-April. Since then, another 10 million Americans have claimed unemployment benefits. When those 10 million are added to the already 23.1 million unemployed Americans in the latest jobs reports, it brings the total unemployed over 33 million. That would be a real unemployment rate of 21.1%—compared to the Great Depression peak of 25.6%.
But not all of these Americans claiming unemployment benefits will get added into the official unemployment rate: Only out-of-work Americans who are searching for new positions are categorized as unemployed and in the labor force. And many jobless workers are choosing to wait out the virus and stay-at-home order before starting their search.


fortune--2020-05-14--Could changing workplaces to respond to coronavirus pave the way for more sexual harassment?

Good morning, Broadsheet readers! Coronavirus is feminine according to the Académie Française, Google workers say the company is rolling back diversity and inclusion programs, and Anita Hill connects coronavirus safety precautions in entertainment to safety from sexual harassment. Have a solid Thursday.
– Safety first. I don’t know about you, but hearing from Anita Hill always makes makes me feel a little better about the world. Maybe it’s the calm and analytical way she approaches her subject (she is a lawyer, after all), her sly sense of humor, or just the fact that she’s survived and thrived through so much. Whatever the reason, when I see her byline, I click.
In her latest, an op-ed in Variety, Hill writes about Hollywood’s response to the coronavirus. As the entertainment industry ponders coming back to work, it’s considering new safety measures, including “the presence of masks, hand sanitizer and thermometers, along with boxed meals, single-use makeup and delayed crowd filming.” Hill’s on board with such changes, but there’s more to be done, she writes: “There is an important opportunity to redefine what ‘safe’ working conditions mean for workers in Hollywood.”
Doing so would mean thinking more holistically, and addressing issues of sexual harassment, racism, and ageism as well as physical health. Hill makes a number of concrete suggestions for how Hollywood might embrace this broader idea of worker safety as it reshapes its industry, including making sure there are people on set or other work locations dedicated to ensuring that anti-discrimination and harassment policies are followed, and committing to keep current diversity programs (often the first things cut during hard financial times) in place.
Hill’s focus in the op-ed is the entertainment industry, but the ideas she’s exploring resonate more broadly. How will issues of workplace sexual harassment and discrimination change as we move toward a new normal? It’s not just those in Hollywood who will likely find themselves working in more isolated settings and informal settings (think smaller groups or perhaps more one-on-ones) and who may have less frequent contact with their boss or other workplace supporters—the very people they’d turn to if something felt off.
Employers have a lot to think about right now, as they wrestle with how and when (and even if) they should bring their employees back to work. And while few would argue that keeping people as safe as possible from the virus is a top concern, that shouldn’t mean others—including harassment and discrimination—go unconsidered.
Kristen Bellstrom
kristen.bellstrom@fortune.com
@kayelbee
Today’s Broadsheet was produced by Emma Hinchliffe.
ALSO IN THE HEADLINES
- Coronavirus and the chancellor. The coronavirus crisis has "thrown open" the race to succeed Angela Merkel as German chancellor (her original succession plan, which would have had Annegret Kramp-Karrenbauer follow in her footsteps, fell apart in February). Once longshot candidate Markus Söder's virus response in Bavaria has put him back in the running. Financial Times
- So long, Sojourn. A number of current and former Googlers tell NBC News that the company has cut back on diversity and inclusion programs—including ending Sojourn, a program aimed at navigating conversations about race and inequality—in what they describe as an effort to shield the company from conservative backlash. Google disputed the allegation that the company has scaled back these efforts, and says it cancelled Sojourn because it was too difficult to scale globally. NBCNews
- Rest in power. Rep Maxine Waters revealed that her sister, Velma Moody, died of the coronavirus. Moody, 86, lived at an assisted care facility in St. Louis. "It is one of the most painful things that I've ever had to experience," Waters said. She had spoken about her sister's condition on the House floor while fighting for the coronavirus relief package. CNN
- Lasting legacy. The Supreme Court is expected to rule as soon as this week on a case that could decide whether LGBTQ workers are covered by anti-discrimination law. Aimee Stephens, the transgender woman whose firing after she came out as trans at work is at the center of the case, died at 59 on Tuesday. She was the first transgender person to have her civil rights case heard by the Supreme Court. CNN
MOVERS AND SHAKERS: Apple said Wednesday that Cynthia Hogan, VP of public policy and government affairs, is leaving. Former Bridgewater CFO Nella Domenici joins the board of Change Healthcare. Wellcome Leap hired former U.S. Defense Advanced Research Projects Agency director Regina E. Dugan as CEO.
IN CASE YOU MISSED IT
-Top 10. Elizabeth Warren and California Rep. Ro Khanna write about 10 worker protections—including "truly universal paid sick leave and family and medical leave"—that they believe should be included in the government's next COVID-19 aid package. CNN
- Life coach. Cynthia Usui has a specialty: helping Japanese housewives get back into the workforce. Usui coaches women on how to rebuild their careers after time away—and she worries that many of these women will lose the gains they have made in Japanese business because of the coronavirus pandemic. Financial Times
- Won't you be her neighbor? After the past two months, Nextdoor CEO Sarah Friar doesn't have to "explain to people anymore why their neighbors are important." She talks about the evolving role of the neighborhood-based social network here: Wall Street Journal
- La Covid. Does coronavirus have a gender? According to the gatekeepers of the French language, it's feminine. Many in France had been referring to the virus as "le Covid;" the Académie Française has intervened to clarify that they would prefer "la Covid" because the French equivalent of "disease" would be the feminine maladie. Guardian
ON MY RADAR
Niecy Nash is the hardest working woman in Hollywood Zora
Of course Charli XCX invented the quarantine album Vulture
What it's like to have a miscarriage while in quarantine Oprah Magazine
PARTING WORDS
"I think right now that’s the way it’s supposed to be."
-Melissa DeRosa, New York's secretary to the governor, on her current lack of work-life balance