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FortuneHBO’s ‘The Apollo’ Chronicles the Theater’s Struggles and TriumphsElon Musk Quit Twitter—and It Lasted All of Three DaysNBA Launches Streaming Service, Making Games More AffordableThe 10 Best U.S. Cities for Women in TechPeloton Is Pedaling Furiously, But It’s Not Enough to Impress InvestorsLooking for Growth, Spain’s Santander Acquires Stake in High-Rising Fintech StartupWould the Stock Market Crash if Elizabeth Warren Becomes President? Here’s What History SaysWhat Companies Can Learn From the U.S. Government’s Use of Artificial IntelligenceGoldman Sachs Jumps on the ‘Profit Matters’ BandwagonHere’s What’s Good and Bad About Apple’s New Beats Solo Pro HeadphonesFrom an Income Tax Ban to Democracy Dollars, These Are the Ballot Measures to Watch This Election DayConsumers Say They Want More Sustainable Products. Now They Have the Receipts to Prove ItHas the Trade War Actually Hurt Tech?Airbnb Agrees to Provide Host Records to Hawaii’s Department of TaxationFemale Founders and Employees Are Facing a Gender Equity GapGoldman Sachs Lost Millions on WeWork and Uber. Now, the CEO Is Talking Up the ‘Path to Profitability’Climate Change In the Corner OfficeIs Your Company an Innovator? These 5 Traits Make the DifferenceWhy a Rush of Chinese Companies Are Planning U.S. IPOs This FallInnovative Tech Offers a Better Solution to Aircraft Pollution Than Boycotting FlightsCorporate Earnings Are Up. Markets Are Up. And Yet Analysts Keep Saying the R-WordFrom Luxury Watches to Broiler Hens, Companies Around the Globe Say Hong Kong Protests Are Hurting ThemCollaborate or Isolate? The U.S. Tech World Is Watching China’s Advances in A.I.—WarilyUber Eats’ Hungry New Strategy: Dominate or ExitBill Gates Commits $10 Million More for Alzheimer’s Research to ‘Part the Cloud’For the Diamond Industry, Things Are RoughA Digital Dollar for a Strong United States Financial SystemSearching for a Buying Opportunity in the Stock Market? Don’t Wait For a RecessionHouse Impeachment Inquiry Transcripts Read Like a Political ThrillerTrump Formally Begins U.S. Withdrawal From Paris Climate Agreement in Latest Effort to Roll Back Regulations

https://fortune.com Fortune 500 Daily & Breaking Business News Tue, 05 Nov 2019 17:40:40 +0000 en-US hourly 1 https://wordpress.org/?v=5.2.4 164653900 https://fortune.com/2019/11/05/hbo-the-apollo-documentary-roger-ross-williams/ Tue, 05 Nov 2019 17:30:59 +0000

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When the Apollo Theater team approached filmmaker Roger Ross Williams about making a documentary about the legendary Harlem venue, he was stunned. Not because they asked him—after all, he won an Oscar for his 2010 short film Music by Prudence and was nominated again for the 2016 documentary Life, Animated—but because the project hadn’t been made already.

“I couldn’t believe that there hasn’t been a documentary about the Apollo,” he tells Fortune. “It’s got 85 glorious years of the history of black entertainment and all the incredible talent that was birthed on that stage and [the fact that] there hasn’t been a documentary was shocking.”

Ross, who regularly attended the theater’s famed Amateur Night as an NYU student, gladly took on the “huge, huge, huge task” of telling the theater’s story and the end result, The Apollo, debuts on HBO Wednesday. With archival video, photographs, and documents—much of it discovered in the theater’s basement—he traces the Apollo’s origins from its 1934 opening as an integrated theater, through its years in disrepair and bankruptcy, to its current day status as a thriving New York State-owned nonprofit.

The timing of the filming worked out perfectly for Ross, who felt he needed a “hook” to show, rather than tell, why the Apollo is so crucially emblematic to black America today. That came in a 2017 stage adaptation of Ta-Nehesi Coates’s National Book Award winner Between the World and Me, a production featuring an ensemble cast reading passages, accompanied by a live band and projected visuals.

Between the World and Me at the Apollo — Ta-Nehisi Coates’ “Between the World and Me” at the Apollo.

“It was important not to just have a sort of history lesson but to actually connect that history to what is going on right now in America, and nothing did that better,” says Williams. “The Apollo is the only place that piece could have been performed—Ta-Nehesi was very clear on that. I said, ‘This is it. This is the way we engage young people.’ [It shows] that we still have a long way to go in our struggle in this country and the Apollo is a place to express that, to be in dialogue about our struggle, past, present, and future.”

The making of that show is intertwined with some of the most notable moments in music history, such as 17-year-old Ella Fitzgerald winning one of the earliest Amateur Nights in 1934, when she showed up to perform as a dancer but, intimidated by another act’s skills, opted to sing instead. There’s Billie Holiday singing “Strange Fruit,” when the song about lynching was largely banned by radio. There’s James Brown’s many legendary concerts on that stage and being publicly mourned on it, a young Lauryn Hill struggling at Amateur Night, Chris Rock recording one of his stand-up specials, even Barack Obama singing Al Green. As Williams says, it’s a concert venue, a town hall, and a church, all rolled into one.

What’s especially striking in the film, though, is to see how close the Apollo came to death with its 1981 bankruptcy. “The Apollo has had many lives,” says Jonelle Procope, the theater’s president and CEO. “In the ‘60s and ‘70s, when the civil rights movement achieved one of its goals, which was to open up opportunities for the entertainment community to appear in venues downtown and across the country, the Apollo suffered as a result of it. It only has 1,534 seats, so the business model no longer worked as a commercial establishment.”

Thankfully, the theater received federal landmark status, with the state purchasing it 1991 and allowing it to be run as a nonprofit, opening the way for people like Procope and businessman and philanthropist Richard Parsons to restore it, physically and as an institution.

The Apollo continues to grow, with many recent developments that aren’t captured in the film. “It’s always been the jewel in the crown of the theaters on 125th Street and right now, we are about to expand for the first time in our 85-year history,” Procope says.

In addition to the main room, which has hosted concerts by the likes of Paul McCartney, Bruce Springsteen, and Lady Gaga in recent years, there will be two more theaters, with 199- and 99-seat capacities, plus a cultural space, condominiums, and a hotel. Coates is now the Apollo’s first-ever Master Artist-in-Residence, with programming in development for the next several years.

"The Apollo" - 2019 Tribeca Film Festival — Roger Ross Williams, President and Chief Executive Officer of the Apollo Theater Jonelle Procope, Smokey Robinson and Co-founder, CEO, and executive chair of Tribeca Enterprises Jane Rosenthal attend the “The Apollo” screening during the 2019 Tribeca Film Festival at The Apollo Theater on April 24, 2019 in New York City.

“There really is no performing arts center in the country that focuses on the African-American narrative, so that’s who we want to be,” Procope says. “What you see on the Apollo stage now is more like art programming, very varied. We still have Amateur Night, our Music Café for musicians who are a little under the radar, a comedy club, and we opened our season with a conversation between Ta-Nehesi and Oprah about his first novel, The Water Dancer. We really have a momentum. The wind is at our back and it’s really exciting.”

Williams’s The Apollo is just the latest part in that momentum, his way of showing how, in so many ways, the theater and the country have changed yet stayed the same, always looking toward the future while never forgetting the hardships of the past and present.

“I really want the film to show not just what’s happened on that stage, but how what has happened on that stage is reflected in the Harlem community and in the country,” Williams says. “That stage has always been the place that we express who we are, where we are as black people in America. Because of Jonelle, Richard, and the Apollo leadership, it’ll live forever. I really believe that the spirits of all the people who performed there would never let the Apollo die. The history it carries, the sweat in the floorboards of that stage, it can never be extinguished.”

‘Gorgeous economics’

Still, Peloton executives tried to work out some rationale as to their current unprofitable state, and cash burn. “For us, profitability is a managed outcome,” CEO John Foley said on a call with analysts. “We’ve said this before—our bike business is profitable, and because of our gorgeous unit economics … it will continue to be profitable.” And, what’s more, Foley declared, “If we pull back on growth we could be profitable tomorrow.”

After all, Peloton’s Foley even told Fortune in September that the company’s plan was to “prioritize growth over profitability”—something that, in the year of massive and arguably unsuccessful IPOs, unnerves investors. The company is currently in investment mode, expanding its international footprint in Germany, focusing on Tread, and even announcing the acquisition of Tonic Fitness Technology, a Taiwan-based bike manufacturing partner to control their supply chain.

Notwithstanding the pricey capital investments, some analysts can still see Peloton pedaling toward profitability in the future. “Hardware sales and existing subscribers are helping subsidize growth investments,” Raymond James’ Patterson writes.

The exercise-equipment maker has had a rocky start as a public company. Peloton traded down a whopping 11% on its first trading day in September, as investors have increasingly grown skeptical of high valuation, unprofitable companies (think Uber, Lyft, and once upon a time, WeWork). And as yet another cash-burning, tech-ish company to come to market this year, investors have increasingly zeroed in on Peloton’s path to profitability—or lack thereof.

Nick Einhorn, vice president of research at Renaissance Capital, told Fortune in September that “in general, investors have become a little less risk-tolerant in recent months.” Einhorn said there were “some questions about the long-term prospects [of Peloton].” The company’s stock is still trading down around 15% from its first day trading in September as of Monday’s close. And shares were down an additional 6% in early trading on Tuesday.

Yet since Peloton’s debut, the stock has been met with overwhelming bullishness from the Street. In fact, according to Bloomberg data, Peloton holds a 95% consensus “buy” rating, with only a 5% “hold” recommendation at a roughly $30 price target.

Promise of growth

“SMEs are becoming increasingly global, and Santander is the best positioned bank to play a leading role to help them access global trade finance,” said Ana Botín, Santander’s group executive chairman in a statement. “By partnering with Ebury, Santander will deliver faster and more efficient products and services for SMEs, previously only accessible to larger corporates.”

That’s all well and good, but the sweet spot of the partnership may be hinged on the nearer-term promise of growth, a rarity for Europe’s banks. Ebury has generated consistent average annual revenue growth of 40 percent in the last three years, the companies said in a joint statement.

The deal, expected to close in the first half of 2020, could contribute €100 million in revenue to Santander by next year, said a market source close to the deal. A Santander spokesman confirmed that Ebury anticipates reaching break-even status in 2021. The companies also note that Santander, for the deal, is eyeing return on invested capital (RoIC) higher than 25% by 2024.

Ebury’s value proposition may be a bright spot for Santander. It claims to serve more than four million SME clients worldwide, with more than 200,000 of them doing business internationally. Santander last week reported that while third quarter income rose 6 percent year-over-year to €12.47 billion, its net profit took a big hit from a €1.49 billion charge to its U.K. business, which struggled with Brexit issues and other regulatory charges. The bank posted quarterly net profit of €501 million, a 75 percent decline from the year-ago period.

Radical moves

This latest bank-fintech matchup may open the door for still more tie-up opportunities around Europe and beyond.

“As growth slows, banks across the globe need to urgently consider a suite of radical organic or inorganic moves before we hit a downturn,” read a key takeaway from McKinsey & Company’s global banking annual review, published last month. “For challenged banks, the sense of urgency is particularly acute given their weak earnings and capital position; banks in this group need to radically rethink their business models. If they are to survive, they will need to gain scale quickly within the markets they currently serve.”

The McKinsey report goes on to say that “potentially high-value mergers” could shorten the distance to achieve that goal. Possibilities may include the merger of organizations with overlapping franchises where more than 20 to 30 percent of combined costs can be taken out, and deals where parties combine complementary assets, such as a marrying of customer and brand experience with strong technology platforms.

The latter scenario seems to be what drew Santander in Ebury’s direction.

“Combining a big bank with nimble Fintech means we can offer our clients the best of both worlds: They can benefit from our technology and high-quality service safe in the knowledge that they are counterparty to one of the world’s most important financial institutions,” said Juan Lobato and Salvador García, co-founders of Ebury.

Under the terms of the transaction, £70 million of the £350 million investment (roughly €80 million) will be new primary equity to support Ebury’s plans to enter new markets in Latin America and Asia, the companies said. Besides the accelerated leap into new markets and the growth that is predicted to come with it, Santander’s execution risk is reduced by buying existing technology, a spokesman said.

Ebury, which has 900 employees working in 22 offices globally, raised more than $134 million since inception in 2009. The company processed £16.7 billion in payments for its 43,000 clients in 2018.

Texas Might Constitutionally Ban Individual Income Tax

Texas is one of seven states, including Alaska, Florida, Nevada, South Dakota, Washington, and Wyoming, that do not levy an income tax on its residents. Texas never has imposed an income tax, and if Proposition 4 passes, it likely never will.

Proposition 4 aims to edit the Texas State Constitution so that the legislation is banned from taxing the “net incomes of individuals.” The constitution already makes it difficult to enact such a tax: currently any attempt to implement an income tax must be put to vote before the citizens, and if approved, revenue from the tax must go toward education.

Under Proposition 4, this language would be replaced with an outright ban, meaning any future legislation wishing to enact an income tax would have to do so with a constitutional amendment requiring a two-thirds majority in both chambers. Proposition 4 narrowly achieved the two-thirds it needed to reach the ballot earlier this year.

Proponents of the Proposition 4, led in part by Rep. Jeff Leach (R-Texas), argue the amendment would solidify the state’s commitment to welcoming business. Opponents say the measure unnecessarily ties the hands of future legislations. They’re also wary the amendment’s language—which uses the term “individual” instead of “natural persons” without clarification—could be used to exempt corporations from taxes, as well.

Teachers’ associations in Texas oppose the measure because it eliminates the guarantee that if an income tax were to be implemented in the future, the funds would go to education. On the other hand, a University of Texas/Texas Tribune poll found in March that 71% of Texas voters say the state should not consider creation of an income tax if money is needed to raise money for schools—60% said they’d rather legalize marijuana and tax that instead.

San Francisco Could Reverse City Law Banning Vaping Products

If Proposition C on the San Francisco ballot passes, the sale of electronic cigarettes and other nicotine vapor products in the city would be permitted under certain regulations. Juul, the most well-known vaping product company, is based in San Francisco and was the main sponsor of the proposition.

The measure would reverse a city law that suspended the sale or shipment of such products within city limits until they are authorized by the FDA, starting in January 2020. Since an outbreak of vaping-related illness and deaths, several states have enacted similar bans targeting flavored e-cigarettes.

Under the regulations outlined by Proposition C, the advertisement of vaping products to minors would be prohibited in San Francisco. Retailers of vaping products would have to scan photo IDs to ensure the customer is at least 21 years old, limit the number of products sold per transaction, and train their employees twice a year. Larger online retailers would have to obtain a permit from the city, with the fees going toward youth education programs warning of the effects of nicotine and vaping.

Proponents of the measure say the new regulations will keep vaping products out of kids’ hands while allowing responsible adults to use the devices as an alternative to combustible cigarettes. Opponents—including San Francisco’s mayor—argue Proposition C is Juul’s attempt to protect its bottom line.

According to Ballotpedia, Juul loaned $15.5 million to the Coalition for Reasonable Vaping Regulation, the organization behind Proposition C. After a review of company policy, however, CEO K.C. Crosthwait announced in late September that Juul would cease active support for Proposition C. The Coalition for Reasonable Vaping Regulation suspended its Yes on C campaign shortly thereafter, but the measure remains on the November 5 ballot.

Albuquerque Might Use ‘Democracy Dollars’ to Strengthen Publicly Financed Candidates

Albuquerque, New Mexico may become the second city after Seattle to implement “Democracy Dollars.” The system allows voters to donate $25 government vouchers to a qualified candidate of their choosing, lessening the strength of wealthy private donors.

Albuquerque Democracy Dollars, the group leading Proposition 2, says giving each resident a $25 voucher for political donation will help make the political donor pool as diverse as the city. A 2017 study found that while 41% of Albuquerque residents are white and 48% are Hispanic, the donor pool in Albuquerque is 70% white and 23% Hispanic.

Moreover, 70% of Albuquerque voted for the Open and Ethical Election public financing code in 2005, meaning the majority of voters want to get big money out of politics.

According to Albuquerque Democracy Dollars, no new taxes would be needed for the voucher program because much of the Open and Ethical Election funds have gone unused—particularly since the Supreme Court shut down the program’s attempt to match privately funded candidates’ donations in 2011.

The amount of Democracy Dollars a candidate can receive would be capped at the same level as their initial amounts under Proposition 2. Proposition 1 on the ballot aims to raise the limits on how much seed money a candidate can collect, allowing each candidate to receive another $150 per person and another $2,000 from themselves, as long as they follow certain rules.

The Albuquerque Journal editorial board argued the Open and Ethical Elections Fund will be exhausted in one or two election cycles, meaning more taxes will be necessary. They also said the system does little to help small-name candidates qualify for public financing in the first place, negating the goal of having “average folks” run for office.

A Seattle Councilwoman Aiming to Boost Amazon’s Taxes Could Be Reelected

Kshama Sawant has been representing her district in Seattle City Hall for two terms as a member of the Socialist Alternative Party, and Amazon wants her out. The tech giant has donated $1.45 million to the Seattle Metropolitan Chamber of Commerce, a group that’s endorsed Sawant’s opponent: businessman and Pridefest leader Egan Orion.

Two members of the Seattle city council expressed outrage at this and endorsed Sawant after initially distancing themselves in the primary. Amazon’s spending has been criticized by 2020 candidates Bernie Sanders and Elizabeth Warren, as well.

Sawant was one of two council members who retained their support of a per-employee “head tax” targeting big businesses last year after Amazon pushed back. The rest of the council voted to repeal the tax, which was intended to raise millions for programs to address homelessness.

Local leaders of Seattle and its county declared a state of emergency over homelessness in 2015. Sawant has made rent control one of her leading issues, arguing this and “a massive expansion of social housing (publicly-owned affordable housing) funded by taxing Amazon and other big businesses” could abate the crisis.

Amazon, which employs more than 50,000 at its Seattle headquarters, has attempted to replace taxation with action: it’s made space for family homeless shelter Mary’s Place within one of its new buildings, creating a temporary home for up to 275 individuals.

Seattle voters will decide Tuesday whether they want to give Sawant another change to take on big tech.

Europe’s Experiment

While central bankers argue they support the economy, the burden on commercial banks is mounting and the industry is warning about detrimental long-term side effects. Solomon, who took over at the helm of Goldman Sachs a little more than a year ago, also questioned their economic benefit.

“When we look back on negative rates, I think when the book’s written, it’s not going to look like a great experiment,” he said. “Growth in this part of the world has been lagging and negative rates have not allowed an acceleration of that growth in my opinion.”

The losses on the equity investments last quarter add to headwinds for Solomon, 57. Shares of Goldman Sachs, which celebrates its 150th anniversary this year, have trailed peers as investors await the fallout from a global corruption scandal involving Malaysia’s investment fund 1MDB. The CEO has also struggled to revive the trading unit, and pleaded for patience with a fledgling consumer business started by his predecessor.

Solomon is tightening the bank’s partnership ranks and installing new leaders across divisions. He has promised to lay out a vision for the firm’s future at the firm’s inaugural investor day in January that could serve as a catalyst for its stock, though he cautioned on Tuesday that shareholders shouldn’t expect a shift in strategy.

“We’ve got very, very good businesses that we’re very proud of and we’d like to evolve those businesses a little bit,” Solomon said. “I wouldn’t expect any big reveal.”

The art of lowballing

John Butters, senior earnings analyst at Factset, combed through the 355 companies in the S&P 500 that reported through last week. He found that 76% of them had reported a positive EPS surprise while 61% had reported a positive revenue surprise.

That’s a strong showing of better-than-forecast financials, but maybe not quite as stellar as it seems at first blush. “Over the past 5 years, 72% of S&P 500 companies have beaten EPS estimates while 59% have beaten revenue estimates,” Butters says.

It’s not clear why well more than half of companies prove so adept, quarter after quarter, at posting results above Wall Street’s forecasts. Many companies have been buying back shares at a record pace, which can lift the EPS figure by lowering the number of shares outstanding. But Butters says that Factset’s EPS figures are weighted to factor out the impact of buybacks.

It’s more likely to do with the well-worn customs of Wall Street. Companies have learned that if they lowball their earnings guidance, they might enjoy a brief rise in their share price when they handily jump over the bar of expectations. Research analysts rely on this guidance in setting their own estimates.

Companies also have more flexibility in controlling the bottom line, which makes it easier to deliver an earnings surprise than a revenue surprise. Revenue is typically subject to strict reporting requirements, and, for multinationals at least, can fluctuate on something they have little control of—big swings in the dollar. But companies can improve profits by reducing their operating costs or excluding one-time charges from their GAAP earnings.

Still, it’s welcome news that there have been a higher-than-average percentage of companies delivering earnings surprises this quarter. That speaks to the continued health of many companies during a quarter when trade tensions were rising, overseas economies were struggling, and corporate executives were growing pessimistic about the U.S. economy.

Earnings recession?

Not all the news is good. Companies may be beating Wall Street estimates, but overall earnings in the S&P 500 may have been down in the third quarter. Based on earnings reported so far, and on estimates for those yet to report, Factset says third-quarter earnings could fall 2.7% from a year ago. That would mark the first time earnings have shrunk for three straight quarters since late 2015 and early 2016.

What’s more, expectations for earnings in the current quarter—a big one for many companies since it includes the busy holiday season—are now expected to decline 0.4%. A little more than a month ago, the forecast was for 2.4% earnings growth. In that sense, the predictions of an “earnings recession” may actually prove to be true.

Given that economic data has been showing U.S. manufacturing activity contracting in recent months, investors are finding it encouraging that so many companies are reporting better earnings than expected. Stocks of companies that have impressed investors with their earnings reports are up. Apple has risen 6% since its strong earnings, while JPMorgan and Tesla are up 11% and 25%, respectively. And, on Monday, the Dow, S&P 500 and Nasdaq Composite all hit record highs, though it seemed to be driven more by U.S.-China trade deal talks than company earnings.

The flip side is that companies that disappoint investors, whether through lower-than-expected earnings or other bad news, are getting sold off. On Monday alone, Uber fell as much as 9% in after-hours trading following its earnings report, while Under Armour plunged 19% and Shake Shack tumbled 16%.

“For the companies that have beaten expectations, the market response has been very positive, and yet the ones that have disappointed have really been beaten up,” Seema Shah, chief strategist at Principal Global Advisors said on Bloomberg Radio. “There’s still a lot of caution out there. I don’t think this is the end. I think that in Q4 you could see further weakness in earnings.”

All in all, most U.S. companies are weathering the current earning season pretty well. But three months from now, they’ll have to report earnings all over again, while jumping over whatever estimates Wall Street sets for them in the interim.

Open and global

Scientists and entrepreneurs in the A.I. sector have expressed a desire for collaboration over competition.

“As a scientist, I always find that it’s unfortunate when there are technology embargoes or these kind of obstacles to technical exchange,” says Pascale Fung, director of the Centre for A.I. Research at the Hong Kong University of Science and Technology.

“In terms of A.I. research, it’s all open and global. Everybody publishes their paper, a lot of source codes are public, a lot of research is publicly available,” Fung says, adding that U.S. visa restrictions on Chinese students and scientists have a much larger effect on research than trade embargoes.

“Science has no borders, that’s what we really believe in.” Fung says.

Jennifer Zhu Scott, a Hong Kong-based investor in A.I. and blockchain, says China and the U.S. bring different strengths to the table. China has “an enormous amount of data and a huge market”—a big leg up in A.I. since machine learning algorithms depend on data to hone implementation—while the U.S. attracts talent from across the world.

An Oct. 29 report from the Stanford-New America DigiChina Project called the U.S. a “massive net importer” of A.I. talent which the report said gives the U.S. an advantage in basic A.I. research, an area China struggles with because of “brain drain”—nearly three-quarters of Chinese A.I. researchers go overseas after training in China, according to one estimate.

Zhu worries that the current political climate, including increasing U.S. suspicion of Chinese and Chinese American scientists, may lead to “a huge talent loss for the U.S.”

“When it comes to data there should be a very clear boundary in terms of […] national security [for both sides], but beyond that, once we figure out where the boundary is, the two countries have to collaborate,” Zhu says.

Zhu says an escalating “tech balkanization” could also have negative environmental effects—disruptions in the global supply chain, like export controls that ban U.S. chips from being sold to Chinese firms, not only do financial damage but may also lead to less efficiency and more waste.

“For me it’s [about] collaboration rather than competition,” says Ray Yang of Marathon Venture Partners, a China-based venture capital firm that focuses on healthcare-sector applications of A.I., robotics, and big data.

He gives the example of GE Healthcare, which launched its Edison A.I. platform in China in September and partnered with five Chinese digital healthcare companies to do so. “[GE] would never have the capability to get enough data […] without the collaboration with local partners.” Yang says.

But, Yang adds, he has noticed a trend among tech-focused venture capital firms in China—they are starting to look to Europe instead of the U.S. for new investment opportunities, “surely because of the situation right now.”

New insights surface into duration of Ukraine scandal

Yovanovitch also offered significant new threads of information—including the potential that Trump was directly involved in a phone call with Giuliani, the president’s personal lawyer, and the Ukrainians dating back to January 2018—while pushing back on Republican questions suggesting she harbored opposition to Trump.

She had been recalled from Kyiv before the July 25 phone call between Trump and Ukrainian President Volodymyr Zelensky, at the center of the impeachment inquiry but was “surprised and dismayed” by what she understood from the transcript of the call.

Yovanovitch told investigators she was shocked to learn Trump had called her “bad news” in the phone call, adding she felt threatened and perplexed by his remark she was “going to go through some things.” The diplomat added she worried her job and pension could be at risk, but “so far” she wasn’t concerned about her personal safety, although “a number of my friends are very concerned.”

Yovanovitch was recalled from Kyiv as Giuliani pressed Ukrainian officials to investigate baseless corruption allegations against Democrat Joe Biden and his son Hunter, who was involved with Burisma, a gas company there.

Giuliani’s role in Ukraine was central to Yovanovitch’s testimony. She said she was aware of an interest by Giuliani and his associates in investigating Biden and Burisma “with a view to finding things that could be possibly damaging to a Presidential run,” as well as investigating the 2016 election and theories of Ukraine interference instead of Russian interference.

Asked directly if Giuliani was promoting investigations on Burisma and Biden, Yovanovitch said, “It wasn’t entirely clear to me what was going on.”

More directly, she drew a link between Giuliani and two businessmen—Lev Parnas and Igor Fruman—who have been indicted in the U.S. on charges stemming from campaign donations they made to U.S. politicians with foreign money—as part of the campaign to oust her. She understood they were looking to expand their business interests in Ukraine “and that they needed a better ambassador to sort of facilitate their business’ efforts here.”

Former Ukraine prosecutor “was looking to hurt me in the U.S.”

Yovanovitch said she was told by Ukrainian officials last November or December that Giuliani, the president’s personal lawyer, was in touch with Ukraine’s former top prosecutor, Yuri Lutsenko, “and that they had plans, and that they were going to, you know, do things, including to me.”

She said she was told Lutsenko “was looking to hurt me in the U.S.”

At one point in April, Yovanovitch said she received a call from Carol Perez, a top foreign service official, at around 1 a.m. Ukraine time, abruptly telling her she needed to immediately fly back to Washington. Yovanovitch said when she asked why, Perez told her, “I don’t know, but this is about your security. You need to come home immediately. You need to come home on the next plane.”

Yovanovitch said she didn’t think Perez meant it was to protect her physical security. Instead, Yovanovitch said, Perez told her it was for “my well-being, people were concerned.”

The diplomat said she sought advice from Gordon Sondland, Trump’s ambassador to the European Union, after an article appeared in The Hill newspaper about Giuliani’s complaints against her and Sondland told her, “‘You need to go big or go home,” advising her to “tweet out there that you support the president.”

Yovanovitch said she felt she could not follow that advice.

Yovanovitch defends her professionalism

The former envoy stressed to investigators she was not disloyal to the president.

“I have heard the allegation in the media that I supposedly told our embassy team to ignore the President’s orders since he was going to be impeached,” she said. “That allegation is false.”

She answered “no” when asked point blank if she’d ever “badmouthed” Trump in Ukraine, and said she felt U.S. policy in Ukraine “actually got stronger” because of Trump’s decision to provide lethal assistance to the country, military aid that later was held up by the White House as it pushed for investigations into Trump’s political foes.

Under friendly questioning from Democratic Rep. Sean Patrick Maloney of New York, Yovanovitch said she considered herself good at her job and had been there more than three years and her bosses at the State Department wanted to extend her tour.

“It seems to me they threw you to the wolves. Is that what happened?” Maloney asked.

Yovanovitch replied: “Well, clearly, they didn’t want me in Ukraine anymore.”

Long hours into her testimony, Yovanovitch was asked why she was such “a thorn in their side” that Giuliani and others wanted her fired.

“Honestly,” she said, “it’s a mystery to me.”

Yovanovitch, still employed by the State Department, is doing a fellowship at Georgetown University.

Yovanovitch told the investigators the campaign against her, which included an article retweeted by Donald Trump Jr., undermined her ability to serve as a “credible” ambassador and she wanted Secretary of State Mike Pompeo to issue a statement defending her. But no statement was issued.

McKinley’s concerns about State Department politicization

The impeachment panels also released testimony Monday from Michael McKinley, a former senior adviser to Pompeo.

McKinley, a 37-year veteran career diplomat, testified he decided to resign from his post as a senior adviser to Pompeo after his repeated efforts to get the State Department to issue a statement of support for Yovanovitch after the transcript of the Trump-Zelensky phone call was released. “To see the impugning of somebody I know to be a serious, committed colleague in the manner that it was done raised alarm bells for me,” he said.

McKinley said he was already concerned about politicization at the State Department and the refusal to publicly back Yovanovitch convinced him it was time to leave. (Read a copy of McKinley’s House impeachment inquiry testimony here.)

“To see the emerging information on the engagement of our missions to procure negative political information for domestic purposes, combined with the failure I saw in the building to provide support for our professional cadre in a particularly trying time, I think the combination was a pretty good reason to decide enough, that I had no longer a useful role to play,” he said.

House Intelligence Committee Chairman Adam Schiff says the panels are releasing the transcripts so “the American public will begin to see for themselves.”

Republicans have called for the release of the transcripts as Democrats have held the initial interviews in private, though Republican lawmakers have been present for those closed-door meetings.

Power Plants:

The Environmental Protection Agency in June repealed sweeping Obama-era curbs on greenhouse gas emissions from power plants and replaced them with requirements for modest upgrades at individual sites.

The Trump administration said its replacement rule is projected to reduce carbon dioxide emissions in 2030 by about 11 million short tons over what would happen without Obama’s so-called Clean Power Plan in place. In part, that’s because utilities and electric companies have moved more rapidly than expected to use natural gas and renewables, displacing heavier-emitting coal-fired power.

Public health groups, at least six cities and more than 20 states are battling the rule change in federal court.

The Interior Department also resumed selling leases to extract coal from federal land, canceling an Obama-era moratorium on the sales and an underlying review of possible changes to factor climate change consequences into coal leasing decisions.

Automobiles:

The Transportation Department and Environmental Protection Agency are working to dial back requirements governing automobile fuel economy and greenhouse gas emissions charted under Obama in concert with carmakers and California.

In August 2018, the agencies proposed capping those requirements at a 37-mile-per-gallon fleetwide average after 2020, rather than allowing current regulation increases to roughly 50 miles per gallon by 2025. Now, after lobbying by automakers, agency officials have tentatively decided to soften the proposal by requiring 1.5% annual increases in auto efficiency fleetwide.

The possible changes alarm environmentalists because automobiles are among the biggest sources of greenhouse gas emissions.

The EPA, meanwhile, has challenged California’s authority to set more stringent requirements limiting greenhouse gas emissions from auto tailpipes than what the federal government requires — mandates that are followed by other states.

Light bulbs:

The Energy Department is easing efficiency standards for some household appliances that help lower power consumption — and the greenhouse gas emissions tied to producing that electricity.

In September, the agency finalized a regulation rolling back energy-use requirements for billions of the most commonly used light bulbs. The standards, which had been scheduled to take effect in January 2020, applied to light bulbs commonly used in recessed lighting, track lighting, bathroom vanities and decorative fixtures.

Oil wells:

The Trump administration is moving on multiple fronts to ease requirements for stemming oil and gas well emissions of a powerful greenhouse gas known as methane.

The Interior Department already eliminated key requirements governing oil and gas wells on public land, including requirements for capturing more methane at the sites instead of venting or burning it off. It also stripped away a requirement that energy companies working on public land regularly search for leaks.

And now the EPA is seeking to abandon regulations designed to stop methane leaks from wells on private land too.

Broader changes:

The Trump administration is unraveling a web of policies that forced federal agencies to consider climate change, while stripping states of power to keep their own carbon dioxide emissions in check.

Trump regulators, for example, have directed agencies to stop using an Obama-era estimate of the “social cost of carbon” to assess the potential economic damage from climate change, which had been used to justify a slew of environmental policies.

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City	% women	Pay gap
1. Washington, D.C.	39%	95%
2. Baltimore, Md.	31%	93%
3. Philadelphia, Pa.	30%	97%
4. Houston, Texas	26%	99%
5. Arlington, Va.	33%	87%
6. Albuquerque, N.M.	30%	95%
7. Kansas City, Mo.	29%	89%
8. Durham, N.C.	29%	88%
9. Long Beach, Calif.	22%	115%
10. St. Paul, Minn.	28%	90%

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