Sunday, June 4, 2023

FirstFT: Trump Organization and top executive charged with fraud


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Donald Trump’s family business and its longtime chief financial officer, Allen Weisselberg, have been charged with criminal fraud by New York prosecutors.

The charges were laid out in a 15-count indictment unsealed in a Manhattan court yesterday, marking a decisive turn in an almost three-year investigation of Trump’s business by Cyrus Vance, the Manhattan district attorney, in tandem with New York state attorney-general Letitia James.

They allege that Weisselberg and other top Trump Organization executives arranged to conceal part of their income from the government by having the company pay their rent, tuition, car leases and other “off the books” benefits that were never reported to tax authorities.

Weisselberg, 73, who surrendered to authorities early yesterday morning, was led into a crowded courtroom in handcuffs hours later, where he entered a plea of not guilty during a brief arraignment hearing. His lawyer said he would “fight these charges”.

Six more stories in the news

2. Alibaba founders secure loans from global banks backed by company stock Chinese billionaires Jack Ma and Joe Tsai have pledged chunks of their combined $35bn stake in ecommerce group Alibaba in exchange for significant loans from western investment banks. The share pledges were made to banks including UBS, Credit Suisse and Goldman Sachs, according to documents seen by the Financial Times. 

2. Global minimum corporate tax rate agreed The world’s leading economies have signed up to a plan to force multinational companies to pay a global minimum corporate tax rate of at least 15 per cent following intense negotiations at the OECD in Paris. The rules should be put in place next year and implemented in 2023.

3. Robinhood targets valuation of at least $40bn in IPO The online brokerage associated with the surge in day trading by retail investors is targeting a valuation of $40bn or more in its initial public offering, said people familiar with the plans, as the company published its fundraising prospectus yesterday. Here are its five most revealing numbers.

4. US Supreme Court upholds Arizona voting laws In a 6-3 decision, Supreme Court justices upheld two Arizona voting laws that opponents said discriminated against racial minorities. The decision may make it more difficult to bring challenges to voting restrictions being enacted in states across the US.

5. HK police officer stabbed as city marks Communist party anniversary A Hong Kong man died after stabbing a police officer and then himself in a case the city’s security chief described as “a lone wolf terrorist attack”. The attack, on the day China’s Communist party marked the centenary of its founding, left the police officer in a serious condition. Chinese stocks, meanwhile, suffered their worst day in three months.

6. Richard Branson poised to beat Jeff Bezos into space Sir Richard Branson has vowed to beat Jeff Bezos to space, confirming plans to bring forward his first trip aboard a Virgin Galactic spaceship to July 11. Meanwhile, Bezos’s space company Blue Origin announced yesterday that 82-year-old Wally Funk would be accompanying the Amazon founder, his brother and an as yet unidentified individual on their July 20 flight.

Coronavirus digest

  • The EU has launched a new app that will allow citizens who have proof of vaccination, a negative Covid-19 test or can show recovery from the virus, to travel across the 27-member states.

  • Lambda, the Covid-19 variant which was first detected in Peru and has spread to 27 countries, is worrying officials in Latin America because of its “unusual” set of mutations.

  • Indonesia is set to tighten distancing measures to counter record numbers of Covid-19 cases, as experts warn the country is on the brink of a “catastrophe”.

For the latest coronavirus news, sign up for our Coronavirus Business Update newsletter.

The day ahead

US employment data US job gains are set to pick up in June, as the world’s largest economy continues to heal from the Covid-19 shock and hiring catches up with the unrelenting demand for workers. The data, which will be released by the Bureau of Labor Statistics, comes at a critical juncture for the American economy. Don’t freak out if the job numbers are not great, says Robert Armstrong in today’s edition of the Unhedged email.

Johnson-Merkel meeting The UK prime minister will urge his German counterpart to help reopen the rest of Europe to British visitors when they meet today. Angela Merkel is making her 22nd, and what is expected to be her final visit to the UK as German Chancellor, before she steps down in September.

Euro 2020 quarter-finals Thanks largely to the duo of Jorginho and Marco Verratti, Italy heads into its quarter-final against Belgium as favourite to win. The Danish team’s journey through the tournament without star player Christian Eriksen has revived memories of its 1992 victory. Follow our Euro 2020 coverage here and sign up to Scoreboard for weekly updates on the business of sport.

FT Alphaville is to host its first Markets Live on Twitter Spaces at 4pm UK time, with a view to holding it three times a week once everyone is back at their desks in September.

What else we’re reading

The housing challenge facing central banks House prices are rising across the world at a hair-raising pace. The causes are well-rehearsed: richer workers saving money at home have been attracted by properties with a lot more outdoor space. Central bankers have played a role by lowering interest rates and buying up assets in a bid to keep financial markets functioning and workers employed. But ultimately governments must take responsibility for solving the housing puzzle, writes the FT’s editorial board.

Britain’s private schools lose their grip on Oxbridge The anger of wealthy, mostly white parents about losing the advantages they expected to be able to buy their children by sending them to the top schools is part of a broader pattern of status anxiety among some sections of the British and American upper classes. It is out of step with reality, writes Brooke Masters.

‘Home in the World’ by Amartya Sen — citizen of everywhere The economist and human rights campaigner spoke with the FT’s Edward Luce about his new book, his early life and his long battle for a fairer world. At 87, Sen’s mind remains as sharp as when he won the Nobel memorial prize in economics in 1998. But his body is painfully frail.

It feels lonelier at the top with everyone working from home Bob, the imaginary chief executive of Global Cryptobank, driven to distraction by his empty office, writes in an all-staff memo: “I have started to wonder what is the point of my job.”

FT Film: How the 20-year war changed Afghanistan An Afghan photojournalist, former politician, young musician, Nato interpreter, female film-maker, and a student whose mother was assassinated, reveal the impact of war . . . as US troops pull out and the Taliban gains ground.

Q&A: the Chinese Communist party at 100

Xi Jinping marked the centennial of the Chinese Communist party’s founding yesterday with a nationalistic address in Beijing. Ahead of the anniversary, James Kynge, the FT’s global China editor, wrote about the party’s longtime struggle to reconcile growth and stability. We asked him a few questions about the deeper meaning of the centenary.

A screen in Beijing’s Tiananmen Square broadcasts a speech by President Xi Jinping during celebrations to mark the founding of the Chinese Communist party © Wang Zhao/AFP via Getty Images
A screen in Beijing’s Tiananmen Square broadcasts a speech by President Xi Jinping during celebrations to mark the founding of the Chinese Communist party © Wang Zhao/AFP via Getty Images

What’s the significance of the 100th anniversary of the party for President Xi Jinping? 
For Xi personally, this represents a public affirmation of his rule and that of the Chinese Communist party, which he leads. These set-piece events may appear stilted to the west but in China they play very well. Reactions to a huge parade in central Beijing in 2019 to celebrate the 70th anniversary of the founding of the People’s Republic of China was greeted by Chinese inside the country and overseas with a surge of genuine pride.

How is Xi using the centenary to shape China’s image at home and internationally? 
Defiance. Nationalism. Pride. These are the emotions that Xi knows will stir the crowds and they were the touchstones for his speech in Tiananmen Square on Thursday. He warned foreigners that any infringements on China’s sovereignty would be met by a “great wall of steel”. He added that China would not tolerate “sanctimonious preaching” from outsiders. He said unification with Taiwan remained an “unshakeable commitment” of the CCP.

What will the CCP’s biggest challenges be in the next 100 years?
One obvious one will be the succession after Xi. He shows no sign of grooming a successor and has abolished presidential term limits, setting himself up to rule until he dies. Another challenge will be making good on China’s territorial ambitions — taking over Taiwan, by force if necessary — and enforcing its claims to most of the South China Sea and a series of disputed territories. Suppressing free speech among a 400m-strong middle class will also require constant attention.

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