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THURSDAY, JUNE 10, 2021
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AG’s Office in ‘inexcusable’ blunder on $1.5m freeze By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
A
N “inexcusable” blunder by the Attorney General’s Office and its US counterparts has resulted in the Court of Appeal refusing to refreeze the alleged $1.5m proceeds from an international fraud. Appeal justice Milton Evans, in a unanimous May 27, 2021, ruling backed by his two fellow justices, blasted Bahamian prosecutors for failing to resolve “inconsistency in the evidence” supporting claims against several defendants who include flamboyant “philanthropist”, Rudolph Kermit King, and a local “non-profit” group.
• Court of Appeal slams ‘material non-disclosure’ • In case involving ‘philanthropist’ Rudolph King • Discrepancy’s ‘potential to destroy’ fraud claim The failure to resolve discrepancies over the date when a US bank account was closed resulted in “a material non-disclosure” to both the Supreme Court and Court of Appeal that was now “too late to cure”, Justice Evans determined, especially given that this fact “had the potential to destroy” the entire basis for the case against Mr King, Celebrating Women International and the others. Damian Gomez QC, representing the former DAMIEN GOMEZ QC
RUDOLPH KERMIT KING
SEE PAGE 5
Airline pricing causes tourist ‘deterrent’ fear
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
THE Bahamas Hotel and Tourism Association’s (BHTA) president yesterday voiced concerns that high airline ticket prices, especially at peak weekends and holidays, “could be a deterrent” for travel to this nation. Robert Sands told Tribune Business that tourism demand outstripping airlift capacity was “a good problem to have” as The Bahamas seeks to rebuild its major industry following COVID-19’s devastation, with the desire to travel to this destination “growing quicker than some airlines can adjust”. He spoke out after other tourism executives interpreted $650 weekend round-trip costs between Nassau and Florida as a
• Demand ‘rising quicker than airlines can adjust’ • BHTA chief brands it as ‘nice problem to have’ • ‘Value for money’ critical on Florida routes
ROBERT SANDS
KERRY FOUNTAIN
sign that pent-up demand for The Bahamas may be exceeding the airline industry’s capacity as key source markets, especially the US, maintain the pace of their COVID-19 vaccination roll-outs. Kerry Fountain, the Out
Island Promotion Board’s executive director, told this newspaper: “I have to fly to Nassau for a funeral this weekend, but I can tell you air fares for Nassau are already high. This means to me there is a huge demand and we may not have
Bahamas ‘can’t lose sight’ of real G7 goal By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
THE Bahamas “cannot lose sight of the fact” that G-7 members and other high-tax European states want “to wipe out” international financial centres (IFC) such as this nation, a prominent accountant warned yesterday. Craig A “Tony” Gomez, the Baker Tilly Gomez managing partner, told Tribune Business that The Bahamas needed to keep that objective in mind when determining how it will respond to
CRAIG “TONY” GOMEZ the Group of Seven (G-7) finance ministers’ agreement on a minimum 15 percent global corporate tax rate. He added that the weekend announcement was
SEE PAGE 6
Cruise port chief eyes health visa efficiency gains By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
NASSAU Cruise Port’s top executive says “there is an opportunity to create greater efficiencies” with the COVID-19 related health questionnaires and documents that cruise passengers must complete. Michael Maura told Tribune Business that The Bahamas’ own health travel visa should be incorporated with the cruise lines’ medical forms to ensure that passengers do not have to provide the same information twice when visiting this
MICHAEL MAURA nation for home porting or on transient cruises. “I do believe there is an opportunity to create greater efficiencies in the health documentation,” he explained. “By that I mean
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enough seats because the prices are alarmingly high. “I’m coming in on a JetBlue flight costing $450 one-way, and on Sunday I’m flying on Bahamasair, travelling on two airlines because of availability. The one-way ticket there is $200. You’re talking $650 for a two-way ticket. I’m complaining because we have to pay out of pocket, but it signifies we have more demand than supply, and signifies more people are travelling. I can live with it.” His assessment was echoed by Mr Sands, who said: “I am concerned that
SEE PAGE 5
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$2bn pension liability ‘blows everything up’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net AN ex-Cabinet minister yesterday warned “we blow everything up” if an estimated $2bn in unfunded civil service pension liabilities is added to the national debt, adding: “We never thought judgment day would come.” Dr Duane Sands, former minister of health, told Tribune Business that “we have to do a lot of things right” if The Bahamas is to extract itself from an economic and sovereign debt crisis that has been both accelerated and worsened by a combination of Hurricane Dorian and COVID-19. Speaking after giving a sobering budget debate contribution in the House of Assembly, he argued that the government, all politicians and the Bahamian people must “call a spade a spade” and take ownership of the problems that threaten to engulf the country if not rapidly addressed. Arguing that austerity measures will be less painful if The Bahamas “takes control of its own destiny” rather than letting them be managed by the likes of the International Monetary Fund (IMF), Dr Sands said this nation will now have to abandon the near-50 year practice of borrowing to cover government deficits that it has employed since independence. The Elizabeth MP, acknowledging that many Bahamians were likely unaware of how their living standards, disposable incomes and quality of life stand to be affected by the measures the government will take to address its fiscal woes, also conceded that the country has effectively mortgaged its future for several generations to come as a result of the debt taken
DR DUANE SANDS on both pre-COVID and during the pandemic. Confirming that his budget debate contribution had delivered this message “in not so many words”, Dr Sands said The Bahamas cannot afford to ignore the fact that it is “in deep, deep trouble” due to the condition of both the economy and the public finances. “It’s scary, but it’s real. It’s factual,” Dr Sands told this newspaper of the country’s economic and fiscal outlook. “The first thing is that we’ve got to claim it, and if we don’t claim it we will never start. We’ve got to call a spade a spade. We cannot pretend things aren’t what they are. We never thought judgment day would come. It’s going to be an awful lot of work. It’s going to be awkward, uncomfortable things politically to dig ourselves out of this mess. “I don’t think we had much choice with this Budget. You have got to set the stage that the belt tightening comes, that we address these issues that we have kind of swept under the rug for so long. Hope is not a fiscal strategy. Something as simple as looking at the unfunded pension liabilities. We ain’t talking about that. If we put that on the books it blows everything up.” The government’s finances, which project that the direct national debt will hit $10.386bn by end-June 2022, are calculated on a
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PAGE 2, Thursday, June 10, 2021
SALVAGE REFORMS TO PUBLIC PROCUREMENT
BY DANIEL FERGUSON IN my last article I neglected to define what public procurement is.
Public procurement refers to the purchase by governments and state-owned enterprises (SOEs) of goods, services and works. As public procurement accounts for a substantial portion of taxpayer monies, governments are expected to carry it out efficiently and using best international practices. This is critical for ensuring high quality service delivery and
THE TRIBUNE safeguarding the public interest. I did, though, touch briefly on the government’s new e-procurement system, otherwise known as the e-Procurement Supplier Registry. This system is vital to achieving the Public Procurement Bill’s goals, as it was designed to bring greater efficiency and transparency to the public sector procurement process through all contracts being sourced online across all agencies. An economic and financing analysis performed by the Inter-American Development Bank (IDB), covering the period from 2015 to
2019, found that the government can save approximately $394,163 per hour if a procurement officer was to conduct 60 tendering process annually using the new system to evaluate bids. Can you imagine the savings if every government agency were to do so? The government would have to borrow much less in its annual budget. Shedding traditional practices may be hard, however. During his budget debate contribution on Wednesday, June 2, Jeff Lloyd, minister of education, practically bragged that nearly $40m was spent by the government on school repairs and that an additional $20m will be added for their continuation. Were these contracts tendered via the e-procurement supplier registry or the print media? Who were these contractors? The public presently has no idea. The government, though, should be congratulated for mandating the use of the e-Procurement Supplier Registry. I wish to thank the three hard working e-Procurement help desk representatives who provide support and have trained hundreds of vendors and buyers on the use of the system. Yet, despite their hard work, their salaries are still that of a minimum wage, and after five years they are still not permanent and pensionable. What a shame. The e-procurement system, unfortunately, is now in danger of losing its true intent and value. Why? • The employment of a local IT system development manager was critical for the future development of the system. The public financial management reform project’s leadership was warned it was not wise to have an international consultant residing in Cambodia acting as a systems administrator. They failed to take this advice. Hence there is no dedicated systems administrator assigned to manage its day-to-day operations, further exacerbating other issues.
• One of the most important issues is that the functionality of the system is presently not aligned with certain aspects of the Public Procurement Bill, as the Ministry of Finance has not engaged in any discussion with the developers. This process, and change to the system, would take up to five months to complete. • The training site designed to train government purchasing officers has been non-operational since March, so training was halted. This will have a devastating effect on the government’s goal to have all agencies use the system by September. The training site has to also be aligned with the Bill, and without this taking place any training will be useless. • The Public Hospitals Authority is requesting integration with their systems to avoid duplication of efforts. • Connectivity with the Department of Inland Revenue (DIR) and National Insurance Board (NIB) systems needs to be established to obtain automatic details that verify bidders on contracts and whether they are tax compliant. It is my understanding that the Ministry of Finance is scrambling to form a committee of seven to ten persons to out these fires, but is having trouble sourcing qualified or certified public procurement specialists. Two procurement consultants with the institutional knowledge and professional experience are no longer there, making it very difficult for these fires to be extinguished. The Public Financial Management Project Implementation Unit (PIU), which is responsible for overseeing these reform activities, was established in 2017 and had a tenstrong staff including four component co-ordinators. Each of the latter was responsible for one of performance monitoring; national statistics; public financial management; and a public procurement system. One of its main purposes roles was to manage the $33m project loan from
the IDB, and to provide the necessary resources to the above-mentioned co-ordinators. However, the Public Financial Management Project Implementation Unit has suffered some major setbacks, with just one-anda-half years remaining to completion of its task. Currently there is but one component co-ordinator left and two full-time staff. An international procurement consultant employed by the Government of The Bahamas stated in his final report: “The fast turnaround of the public financial management/ public management reform project PIU’s procurement specialist position, and the procurement priorities determined by the project manager not always in sync with the strategic plan and consultant’s recommendations, have also hindered the implementation of component four activities. These two factors have caused delay or cancellation of key component four activities or support activities.” This statement is powerful yet the Ministry has failed to act. It is in the best interest of the Ministry of Finance to salvage what activities are left to complete the procurement reform, and assign it to a qualified local procurement consultant to co-ordinate its completion. NB: Daniel Ferguson, a retired chief petty officer with the Royal Bahamas Defence Force (RBDF), is a former procurement officer in the Ministry Health and Ministry of Finance, and former component co-ordinator for the Inter-American Development Bank (IDB) sponsored public financial management reform project, in particular the public procurement reform. He led the drafting team for the development of the Public Procurement Bill 2021, and public procurement regulations. He is a chartered member of the Chartered Institute of Procurement and Supply, with over 25 years of experience in public procurement.
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Thursday, June 10, 2021, PAGE 3
Spanish Wells chief hails ‘great day for democracy’ By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net
Cruises coming to their island. The minister added: “We spoke to them, and this is the position they articulated to us, so we will look for another location either in Eleuthera or another island.” Spanish Wells was selected by Crystal Cruises as an alternative to Harbour Island, which had itself previously rejected being chosen as a port-of-call on the cruise line’s seven night voyages around The Bahamas that are set to begin on July 3, using Nassau and Bimini as home ports. Exuma, San Salvador and Long Island have also been chosen as stops. With the cruise line just under three weeks away from the initial sailing, it has again been left with having to fill a northern Bahamas
void that was left first by Harbour Island, and now Spanish Wells. Mr D’Aguilar, though, said the Spanish Wells situation will not delay Crystal Cruises’ plans as it already has Bimini, Long Island, Exuma and San Salvador “sorted” and it needs to add just one more stop. He promised to “move with haste to make that happen”. Crystal Cruises earlier this week sought to reassure Spanish Wells residents that its passengers will not overwhelm the community during their weekly call, while also pledging that its vessel will not harm Egg Island’s environment. Kevin Jones, chief strategy officer for Crystal’s parent, Genting Americas, and the cruise line’s corporate manager, told Tribune Business via an e-mailed
Cascarilla ‘game changer’: Project receives 100 acres
plan to protect the cascarilla resource from over-harvesting. She added: “CARDI has provided continued technical support for the implementation of this project. Baseline data collected by CARDI on the socioeconomic background of persons showed that more than 87 percent of persons on the island of Acklins are dependent on the cascarilla industry for their livelihoods.” As a result of this dependency, Dr Singh said CARDI has “co-ordinated the training of five persons in oil extraction”. She acknowledged that Bahamian farmers are currently not getting any “value added” from the processing of cascarilla, which the project is intended to change. Cascarilla oil is used for the perfume market primarily, said Garnell Pelecanos, strategic advisor to the Ministry of Agriculture and Marine Resources. She added that this is the main cascarilla byproduct that the project is focusing on as it can yield Bahamian processors “100 times more than what they are getting for the bark”.
SPANISH Wells’ chief councillor yesterday said it was a “great day for democracy” after a Cabinet minister said Crystal Cruises would look for an alternative port-of-call on its upcoming seven-night Bahamas cruises. Robert Roberts told Tribune Business that while he was elated the cruise line had altered its plans, he did not want to discourage Crystal Cruises from exploring other opportunities. He reiterated, though, that opposition to being used as a ‘port of call’ stemmed from the fact Spanish Wells has worked for more than ten years to develop its own tourism niche that could be undermined by cruise ship
CRYSTAL Cruises looks for new port again passenger arrivals. Mr Roberts added: “Central Eleuthera is kind of hard to get into if they were able to get into Governor’s Harbour. I don’t know if they could, but if they could it would open up a world of opportunity for their guests because if you go south from Governor’s Harbour you have the golf courses, and you have the Glass Window Bridge and other sights with restaurants and boutique stores.” He spoke out after Dionsio D’Aguilar, minister of tourism and aviation, told another media house that the people of Spanish Wells “simply were not interested” in Crystal
By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net AN Acklins co-operative is to receive more than 100 crown land acres to facilitate a $1.4m “game changer” in developing a cascarilla industry in The Bahamas. Michael Pintard, minister of agriculture and marine resources, yesterday said the Prime Minister’s Office has approved the grant of 105 acres in the Selvyn Hill, and a further five acres in Spring Point, to the Acklins Islanders Cooperative Society Ltd (AICS). The land will be used to grow cascarilla trees and the construction of a processing plant to turn their bark into finished product. The crown land grants support what Mr Pintard referred to as the Pine Islands Pilot Project. He said: “The research elements of industrialisation of
MICHAEL PINTARD cascarilla are being funded through the Global Environment Facility’s (GEF) Pine Islands, forest and mangrove innovation and integration programme. “This programme combines the GEF, along with cash contributions from the Government of The Bahamas and in kind contributions from our agencies. The pro rata share of the funds for pilot two of the programme, cascarilla bark cultivation and processing of cascarilla oil, and under component three
‘sustainable livelihood’, is roughly $1.41m. This amount includes $422,000 cash from the GEF, $200,000 cash from The Bahamas government and $792,000 of ‘in kind’ contributions from our stakeholders. The project is a multiagency effort between the Ministry of Agriculture and Marine Resources; the Bahamas Agricultural and Industrial Corporation (BAIC) as executing agency charged with managing the effort; the Department of Forestry; the Department of Cooperatives; the BEST Commission; Bahamas Development Bank; the Bahamas Agricultural and Marine Sciences Institute (BAMSI); AICS and the Caribbean Agriculture and Research Development Institute (CARDI). Dr Michele Singh, CARDI’s representative in The Bahamas, said it was vital that Acklins have in place a management
response that the cruise line would transport passengers to the north Eleuthera community via “staggered” tenders that would be limited to “fewer than 100 people” so that the number of visitors to Spanish Wells would be restricted. And, pledging that there will be no dredging to facilitate the Crystal Serenity anchoring at Egg Island, he said all the anchorage positions had been approved working in collaboration with local ports facilities teams. “We are reiterating to stakeholders that there would be absolutely no dredging. Crystal Serenity is helmed by Captain Birger Vorland, a 17-year veteran of Crystal who has more than 45 years of mariner experience. The Captain and the bridge officers utilise electronic charts as
well as local yachting charts, and would use radar and sonar technology to monitor our position at all times,” said Mr Jones. As for passenger movements, he added: “Our plan would be to spread guests around the islands by staggering tour shore excursions’ departure times throughout the morning and afternoon, thus controlling the number of guests on the islands at any given time. “Guests going ashore would be limited by the capacity and frequency of the tenders. Tenders would be limited to fewer than 100 people. We would never have two tenders ashore at the same time, and we would control the speed of the tender operations so there is a limited flow of guests arriving on an island at any given time.”
PAGE 4, Thursday, June 10, 2021
THE TRIBUNE
LIQUOR DISTRIBUTOR AND BRAND TEAM WITH BNT THE Bahamian Brewery and Beverage Company, and the beer brand it distributes, have teamed with the Bahamas National Trust (BNT) for a campaign against plastic pollution in Bahamian waters. “Upon entering the local market we immediately began exploring the ways through which we could promote the brand’s message of oceanic sustainability,” said Elena Gonzalez, sales and marketing manager for AB InBev, Corona’s parent company. The campaign’s launch coincides with World Oceans Day, which is commemorated annually on June 8. “As a brand born at the beach and deeply connected with nature, Corona has a responsibility to do all it can to be an ally to our environment and our oceans,” said Felipe Ambra, its global vice-president of marketing.
CORONA says it is now the first global beverage brand with a net-zero plastic footprint. Corona, in collaboration with the BNT, launched a campaign designed to raise awareness about the dangers of plastic pollution in Bahamian waters. Pictured are a Bahamian mangrove, left, and Corona beer. Photos: BNT/ Barefoot Marketing Under the theme The Ocean: Life and Livelihoods, the BNT and its corporate partner will focus on way to preserve and protect
The Bahamas’ oceanic resources. “This partnership with Corona beer is very important because it shows the significant role corporate
organisations can play in helping to preserve our environment,” said BNT executive director, Eric Carey. “This planet belongs to all of us, and it’s all of our responsibility to take care of it. “We hope that through this partnership we can continue to raise awareness of the importance of our oceans, encourage people to become members of the BNT, and also raise funds that can help us carry out our mission to protect natural areas. We also hope to clean up and restore vital mangrove ecosystems.” Corona and the
Bahamian Brewery have this week launched a campaign that will see $1 from the sale of every sixpack of Corona donated to the BNT. Those funds will go directly towards the management of national parks and marine protected areas in The Bahamas. “At present, the BNT is responsible for the management of over 2.2m acres of land and sea through its national park service,” said Mr Carey. “More than 85 percent of these protected areas are coastal and marine environments, which is why the support of corporate Bahamas is so
incredibly important.” “As a responsible corporate partner we’re always looking for ways to support initiatives that can benefit the country as a whole,” said Bahamian Brewery and Beverage Company’s executive marketing manager, Wellington Seymour. “We applaud the BNT’s commitment to preserving our mangroves, seagrass and coral reefs through science, education and natural resource management, and we celebrate Corona’s commitment to helping preserve our Bahamian way of life.”
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AG’s Office in ‘inexcusable’ blunder on $1.5m freeze FROM PAGE ONE
two defendants, was first to expose the contradictory evidence involving the Atlanta-based account at Sun Trust Bank when he filed a March 16, 2021, objection to the bid by the Attorney General’s Office to overturn Justice Cheryl Grant-Thompson’s initial Supreme Court verdict that removed the restraining order on the $1.5m. In his submissions, Mr Gomez noted that the instructions sent to the Attorney General’s Office by US federal prosecutors detailed that the Sun Trust account had been closed on January 23, 2015. This date was almost 12 months prior to the December 11, 2015, to January 9, 2016, period when the $1.5m was alleged to have been transferred from that facility to two Nassau-based accounts with Royal Bank of Canada (RBC). The former minister of state for legal affairs pointed out that, if the January 23, 2015, date was accurate, it would have been impossible to transfer the $1.5m as alleged to the RBC account since the Sun Trust facility was long closed. As a result, Mr Gomez asserted there was “no nexus between the alleged offence” and the $1.5m. That sum had subsequently been transferred from RBC to a CIBC FirstCaribbean
International Bank (Bahamas) account belonging to attorney Monique Gomez’s law firm, where it was being held on behalf of Celebrating Women International in a client account. Other documents held by the Attorney General’s Office showed the closure date for the Sun Trust account as being January 2016, but the discrepancy was never raised or cleared up during multiple Supreme Court hearings or before the Court of Appeal prior to it finding that Celebrating Women International should be added as a named defendant. Appeal justice Evans wrote that the nondisclosure allegations concerning the Sun Trust Bank account’s closure date had “exercised our mind” at the Court of Appeal, adding that “it has potentially serious ramifications”. He noted that Shaka Serville, lead prosecutor representing the Attorney General’s Office (and the US as requesting state), had sought to explain away the January 2015 date as “a typographical error”. He argued that this date appeared only once in the evidence, and there were multiple documents to show the actual closure data was January 2016. Appeal justice Evans, though, said that if the January 23, 2015, date was not an error “it goes to the root” of the Attorney General’s
Office’s case. He added that Mr Serville accepted that, in failing to pick up the discrepancy, there had not been full and frank disclosure of all material facts to the Bahamian court. Describing Mr Serville’s case as arguing that the nondisclosure was “innocent”, Appeal justice Evans wrote: “This submission on its face appears to be reasonable. However, there are two concerns. Firstly, in order to determine that a typographical error occurred and to correct the same would require the input of the person who prepared the documents.” However, no such person had provided evidence to the Court of Appeal to enable it to determine which date was the correct one. “There is no doubt in my mind that the appellant had a duty to disclose the issue relative to the date of the closure of the bank account at Sun Trust Bank. This they did not do,” Appeal justice Evans wrote. “This fact is exacerbated by the fact it was not disclosed to the trial judge during the trial and, even more fundamentally, there is no evidence that it was disclosed to the court during the application for the restraint order....... “In these circumstances I do not see how this court can ignore what I consider to be a material non-disclosure,” Appeal Justice Evans continued. “The material which was not disclosed had
the potential to destroy the substratum of the appellant’s [Attorney General’s Office] application under the Mutual Legal Assistance (Criminal Matters) Act. “It was incumbent on the appellant to resolve this issue at the earliest possible opportunity. It must be assumed that the appellant read the documents submitted by the requesting state [the US] in their entirety before commencing the proceedings. “It must also be assumed that the officials of the requesting state read the documents before submitting them with their request for assistance. As such the failure to recognise the inconsistency in the evidence is inexcusable.” Appeal justice Evans said it “would not be proper” to allow the Attorney General’s Office to introduce fresh evidence at this stage, and added: “I accept Mr Gomez’s submission that it is now too late to attempt to cure this non-disclosure. The appellant must suffer the consequences of what flows from the lapse of duty to give full and frank disclosure.” Those consequences include the removal of Celebrating Women International as a defendant, together with the Court of Appeal declining to reinstate the restraining order that froze the $1.5m in the Monique V A Gomez & Company law firm’s
Airline pricing causes tourist ‘deterrent’ fear FROM PAGE ONE
the level of [airline] pricing is currently where it’s at. As we continue to add additional airlift, where the loads are not as high we’ll see more price elasticity. We have to believe the airlines are yield managing. They’ve been through a difficult, hard time, and what they’re doing is yield managing. “That is not working to our advantage at this point in time, and price sensitivities can be a deterrent to pent-up demand and persons wanting to travel to a particular destination. We’ve seen some of that, particularly at weekends and peak holiday weekends, but we’re beginning to see some levelling off of the rates. “The demand, certainly peak demand weekends and prime time dates, is growing quicker than some of the airlines can adjust to put on additional capacity. They’re working with us. It’s a continual work in progress. In a way, and I don’t say this tongue in cheek, it’s a good problem to have,” Mr Sands continued. “It’s obviously something where we want to have value for money coming to the destination, especially if they are coming from Florida. It shouldn’t be more expensive to fly to Nassau from Florida than it is from New York.” Mr Sands said the start of cruise line home porting in The Bahamas means “the management of airlift into the destination is going
to have to be closely monitored as a result of this new sector”. Noting that airlines engage in “tier pricing in terms of availability on planes”, he added that a bulk booking of seats for passengers flying into Nassau to meet the vessel or leaving after disembarkation could both drive up ticket prices and reduce capacity for stopover visitors unless the issue was addressed. And, with Canada still barring direct airlift to The Bahamas and other destinations, the BHTA president said there were “a number of COVID-19 related issues
still impacting demand” into The Bahamas. “We’re always looking for incremental airlift into the marketplace, but as demand increases so will the number of airline seats, and we see week-over-week, month-over-month the introduction of additional airlift into the destination,” Mr Sands added. “Once we adjust to the demand continuing to increase, and airlift continues to flow, we’ll see the impact on pricing structures at certain gateways to The Bahamas. I’m not aware of any instances where persons cannot get flights. We continue to add to the pool of
A BAHAMIAN BUSINESS
HERE TO HELP
airlift coming into the destination. We’re nowhere near where we used to be, and as we grow the tourism business so airlift will increase at the same time.” Mr Sands pointed to the recent returns of both British Airways, from London, and Copa Airlines out of its Panama gateway to Latin America, as signs that airlift is returning as demand for Bahamas vacations increases.
Thursday, June 10, 2021, PAGE 5 client account. The only part of the appeal by the Attorney General’s Office to survive was its challenge to the damages awarded against it by the Supreme Court for breaches of Mr King’s and Celebrating Women International’s constitutional rights. Celebrating Women International and its unnamed “beneficial owners and sole directors” had claimed they were “victims” of the $1.5m asset freeze, and that RBC had cancelled their banking relationship and accounts as a result. However, the Court of Appeal declined to take any action on this issue. The non-profit’s website contains numerous photographs featuring Patricia Minnis, the prime minister’s wife, and thengovernor general Lady Pindling, along with other members of Nassau high society at various dinners and award ceremonies. One photograph on its home page, of a book signing at Government House involving Princess Michael of Kent, from the UK, appears to capture Mr King standing directly behind Lady Pindling, but that that does not necessarily prove a connection between him and Celebrity Women International and no evidence has been produced to support such an assertion. The Attorney General’s Office had sought to overturn the October 23, 2019, ruling by Justice GrantThompson where she discharged the restraining order placed on funds in the two RBC accounts, which were in the names of Jonathan Reid, David Valdez-Lopez, Anthony Albert Allens, Greg Harry Smith, Celebrating Women International and CWI International.
The restraining order had been obtained at the behest of the US attorney for Washington state’s western district, as part of a probe into a scheme that defrauded Boeing, the giant aircraft and defence manufacturer. In its appeal, the Attorney General’s Office argued that no evidence had been presented to show the funds were derived from “legitimate” activities and the judge had failed to consider the removal of the freeze may “completely dissipate the funds”. It also alleged that the judge had failed to distinguish between the US Mutual Legal Assistance Treaty (MLAT) request and “domestic police criminal proceedings”, basing her ruling on the latter and not the pleadings before her. Justice Grant-Thompson also found “the nexus.... between the fraudulent funds in the Boeing scheme from Sun Trust Bank and the Celebrating Women International account at RBC was tenuous at best”. However, the Attorney General’s Office said there was a clear paper trail showing the funds moving from the Sun Trust account in Atlanta to the RBC accounts in the name of Celebrating Women International over the 2016 New Year period. Justice Grant-Thompson also found that the alleged fraud’s perpetrator had not been identified, and that the whole affair was a fishing expedition. However, the Attorney General’s Office argued the US had “provided bank statements in the name of Celebrating Women International, in whose bank account Boeing’s funds were deposited, albeit the identity of the beneficial owner was elusive”.
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PAGE 6, Thursday, June 10, 2021
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$2bn pension liability ‘blows everything up’ FROM PAGE ONE cash basis. They have yet to switch to accrualbased accounting, which measures future spending commitments that have yet to be incurred and, as a result, the true extent of The Bahamas’ liabilities is not measured or disclosed annually. Among the items not covered by the national debt are the government’s unfunded public sector pension liabilities, which are currently financed like a pay-as-you-go scheme via an annual budget allocation. The amount provided for this in the 2021-2022 budget is $116.1m, which is projected to increase by more than $119m in 2023-2024.
Bahamas ‘can’t lose sight’ of real G7 goal FROM PAGE ONE
likely to impact rival IFCs such as Bermuda, the Cayman Islands and British Virgin Islands (BVI) more as they have gone after precisely the type of multinational revenue/profit offshoring that is the G-7’s prime target. The Bahamas, by contrast, has largely focused on private wealth management via structures that typically use
Previous research by the KPMG accounting firm projected that these unfunded liabilities will likely be around $2bn at this stage which, when added to the national debt, would take it well over $12bn by endJune 2022. Marlon Johnson, the Ministry of Finance’s acting financial secretary, said the government was now collating information from various government departments and agencies to help create recommendations for addressing the issue. But the International Monetary Fund (IMF), as recently as its 2018 Article IV report on The Bahamas, warned that the current system - where civil servants contribute nothing to
funding their retirement - is “unsustainable”. The Washington DCbased fund listed civil service pensions, together with the public sector’s wage bill and loss-making stateowned enterprises (SOEs), as three key reforms that the government must target if it is to reverse The Bahamas’ fiscal decline - and that was before both Hurricane Dorian and the COVID-19 pandemic. “The civil servants’ pension system is unsustainable,” the IMF warned two years’ ago. “Government employees draw pensions at retirement without contributing to the system while employed. Staff analysis in the 2016 Article IV Staff report noted that accrued government pension liabilities totaled $1.5bn in 2012, and would rise to $3.7bn by 2030 as the population ages.” The IMF called for reforms that involve “moving to a contributory regime in the near
term, and to a definedcontribution scheme in the medium-term”. This would require civil servants to contribute a portion of their salary to funding their retirement, rather than having this financed 100 percent by the taxpayer through the budget - as is done currently. And a presentation delivered by KPMG in 2013, the early years of the last Christie administration, estimated the unfunded, “pay-as-you-go”, civil service pension liabilities at around $1.5bn. These liabilities were set to increase to $2.5bn by 2022, and $4.1bn by 2032, unless reforms were enacted - and this is still yet to happen. Dr Sands, meanwhile, backed the government’s position that The Bahamas must focus on stronger economic growth as the primary solution for its present crisis since austerity measures - new and/or increased taxes, and spending cuts
- would not be enough by themselves. “We have to grow our economy, and the way we do that is making sure we take out a lot of the blockages to successful businesses or removing the things that cause businesses to fail prematurely,” he added. “The whole anti-Immigration issue. There’s a level of immigrant expertise, and I’m not talking about menial skills; I’m talking special, specialist skills. We in The Bahamas have a problem with that, and we have to move beyond that if we are going to thrive. “I’m about 60 years-old, and I’ve watched this thing wax and wane. Sometimes we’re in deep trouble, and then things get better, but right now we’re in deep, deep trouble. You raise a very important question: Does the average Bahamian believe anything I said today? Probably not, because we have made it seem that all we need to do is pick the right
guy and we’ll be OK,” Dr Sands continued. “There are people who believe that if you don’t have it, borrow it. Not for much longer, that’s for sure.” With the government set to pay more than $512m in debt servicing costs alone during the 2021-2022 fiscal year, and repay some $900m in principal to investors, Dr Sands suggested that these two obligations alone amounted to 50 percent of the budget when combined. “We cannot pay it back without substantial growth,” he added, “and that means we have to do a lot of things right. We have got to be innovative, we have got to be creative and whatever product we have has to be world class. “If we’re going to stick with tourism it has to be world class; not so-so, not middle of the road. World class. In some instances our tourism product has dropped. We have got to do it right all the time, every time.”
corporate vehicles as passive investment entities, leaving it less vulnerable to the 15 percent minimum global corporate tax proposal. However, Mr Gomez suggested the main impact might be to choke off any future business or investment flows that The Bahamas might seek to attract from multinational entities and corporate players. He indicated that the G-7 proposal, if it is adopted as a global standard, could mean there is little advantage to using this nation’s
present “no tax” platform if revenues/profits are still ultimately subjected to a 15 percent levy. “You’re going after international jurisdictions that house multinational corporate entities. I don’t know if The Bahamas has a significant amount of that business,” Mr Gomez explained. “But when multinationals in one jurisdiction start to restructure, it impacts their thinking on every country that operates in that orbit. “While The Bahamas may
not be well known or popular for multinational companies, once these types of companies start to strategise or rethink it’s going to impact any business The Bahamas could have got from a multinational entity.” Urging The Bahamas not to ignore the bigger picture goals that many G-7 nations have harboured for two decades, Mr Gomez added: “We cannot lose sight of the fact the stated intent remains the same among G-7, G-20 countries. It remains to wipe out so-called tax havens. “Countries and domiciles regarded as tax havens, that remains the same strategy there. But our primary business is private wealth management, and The Bahamas is not a primary centre for multinationals. It’s the institutions which The Bahamas has not really attracted over the years.” Mr Gomez also questioned how the G-7 proposal will impact the likes of Barbados, with its network of double tax treaties. These ensure that Barbados-domiciled companies are taxed at the island’s lower rate rather than at higher home country rates when profits and revenues are repatriated,
which is why so many Canadian companies have based their Caribbean headquarters there, but the 15 percent minimum rate would seem to trample all over these agreements. Much work remains to be done to bring the G-7’s 15 percent minimum global corporate tax into effect. Few details on how it will work in practice have yet to be released, and there were multiple signs yesterday that global unity is already fraying and will be difficult to achieve. Republican congressmen and Senators in the US have branded the proposal as “crazy” and threatened to block its passage through the legislature. Pat Toomey, a Republican senator from Pennsylvania, was reported by the UK’s Guardian newspaper as saying: “Certainly the whole fact that they had to try to persuade all these other countries to make sure they raise their taxes is a confession of the damage we’re doing to our own country.” And Republican senator John Barrasso, of Wyoming, called the plan “anti-competitive, anti-US, and harmful for us as we try to continue to grow the economy at a
time when we’re coming out of a pandemic”. The Bahamian government, in its response to the G-7 move, pledged it will not be bullied by the 15 percent minimum global corporate tax deal. The Ministry of Finance, in a statement, said it was assessing whether there are any consequences for The Bahamas’ domestic tax system and international financial services industry. It added that this country “reasserts its sovereign right to determine the tax structure best suited for the ongoing development of the country” in response to the pronouncement by the world’s most powerful economies that they have reached agreement on how to combat tax avoidance by major multinationals - especially those in the socalled “digital” economy. “The Ministry of Finance is conducting an assessment of the impact of these proposals and what implications they may have for the domestic tax regime of The Bahamas,” it said in response to the G-7 announcement. “The Bahamas reasserts its sovereign right to determine the tax structure best suited for the ongoing development of the country.”
PUBLIC NOTICE
MARKET REPORT
INTENT TO CHANGE NAME BY DEED POLL
www.bisxbahamas.com
WEDNESDAY, 9 JUNE 2021
BISX ALL SHARE INDEX:
CLOSE
CHANGE
1970.06
18.75
%CHANGE
YTD
YTD%
0.96 -122.40
-5.85
(242) 323-2330 (242) 323-2320
BISX LISTED & TRADED SECURITIES 52WK HI 5.80 33.95 1.50 2.90 1.78 6.00 6.96 3.60 6.00 4.01 6.16 12.00 2.75 7.50 10.71 9.01 14.60 4.25 8.97 16.00
52WK LOW 3.13 22.65 1.46 1.62 1.44 5.00 6.00 2.70 4.25 2.75 5.00 9.75 2.10 4.90 9.50 8.00 13.00 3.42 8.00 15.20
PREFERENCE SHARES 1.00
1.00
1000.00 1000.00 1000.00 1000.00
1000.00 1000.00 1000.00 1000.00
1.00 10.00 1.00
1.00 10.00 0.90
SECURITY AML Foods Limited APD Limited Benchmark Bahamas First Holdings Limited Bank of Bahamas Bahamas Property Fund Bahamas Waste Cable Bahamas Commonwealth Brewery Commonwealth Bank Colina Holdings CIBC FirstCaribbean Bank Consolidated Water BDRs Doctor's Hospital Emera Incorporated Famguard Fidelity Bank Bahamas Limited Focol Finco J. S. Johnson
SYMBOL AML APD BBL BFH BOB BPF BWL CAB CBB CBL CHL CIB CWCB DHS EMAB FAM FBB FCL FIN JSJ
LAST CLOSE 5.49 32.12 1.50 2.61 1.44 6.00 6.96 3.53 4.27 2.89 5.95 9.75 2.54 7.35 11.44 9.01 14.00 3.99 8.19 15.50
CLOSE 5.79 39.95 1.50 2.61 1.44 6.00 6.96 3.53 4.27 2.89 5.95 9.75 2.52 7.35 11.52 9.01 14.00 3.99 8.19 15.50
1.00 1000.00 1000.00 1000.00 1000.00 1.00 10.00 1.00
1.00 1000.00 1000.00 1000.00 1000.00 1.00 10.00 1.00
SYMBOL FBB22 BFHB
LAST SALE 100.00 100.00
CLOSE 100.00 100.00
CHANGE 0.00 0.00
BAH29 BG0107 BG0207 BG0130 BG0230 BG0307 BG0330 BG0407 BSBGRS900283 BSBGRS980244 BSBGR1271497 BSBGR1341407 BSBGR1341506
107.31 100.00 100.00 100.00 100.00 100.00 100.00 100.00 101.19 100.22 100.00 100.00 100.00
107.31 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.14 100.46 100.00 100.00 100.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (1.05) 0.24 0.00 0.00 0.00
Bahamas First Holdings Preference Cable Bahamas Series 6 Cable Bahamas Series 8 Cable Bahamas Series 9 Cable Bahamas Series 10 Colina Holdings Class A Fidelity Bank Bahamas Class A Focol Class B
BFHP CAB6 CAB8 CAB9 CAB10 CHLA FBBA FCLB
CORPORATE DEBT - (percentage pricing) 52WK HI 100.00 100.00
52WK LOW 100.00 100.00
115.92 100.00 100.00 100.00 100.00 100.00 100.00 102.00 100.14 100.46 100.00 100.00 100.00
104.79 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.14 100.46 100.00 100.00 100.00
52WK HI 2.43 4.44 2.16 202.18 190.86 1.69 1.81 1.78 1.16 8.58 10.26 7.35 14.59 12.84 10.31 10.00 10.43 14.89
52WK LOW 2.11 3.30 1.68 164.74 116.70 1.67 1.73 1.75 1.03 6.41 7.62 5.66 8.65 10.54 9.57 9.88 8.45 11.20
SECURITY Fidelity Bank (Note 22 Series B+) Bahamas First Holdings Limited
BAHAMAS GOVERNMENT STOCK - (percentage pricing)
MUTUAL FUNDS
MARKET TERMS
Bahamas Note 6.95 (2029) BGS: 2014-12-7Y BGS: 2015-1-7Y BGS: 2014-12-30Y BGS: 2015-1-30Y BGS: 2015-6-7Y BGS: 2015-6-30Y BGS: 2015-10-7Y BGRS FL BGRS90028 BGRS FL BGRS98024 BGRS FX BGR127149 BGRS FX BGR134140 BGRS FX BGR134150
FUND CFAL Bond Fund CFAL Balanced Fund CFAL Money Market Fund CFAL Global Bond Fund CFAL Global Equity Fund Leno Financial Conservative Fund Leno Financial Aggressive Fund Leno Financial Balanced Fund Leno Financial Global Bond Fund Royal Fidelity Bahamas Opportunities Fund - Secured Balanced Fund Royal Fidelity Bahamas Opportunities Fund - Targeted Equity Fund Royal Fidelity Bahamas Opportunities Fund - Prime Income Fund Royal Fidelity Int'l Fund - Equities Sub Fund Royal Fidelity Int'l Fund - High Yield Fund Royal Fidelity Int'l Fund - Alternative Strategies Fund Colonial Bahamas Fund Class D Colonial Bahamas Fund Class E Colonial Bahamas Fund Class F
BISX ALL SHARE INDEX - 19 Dec 02 = 1,000.00 52wk-Hi - Highest closing price in last 52 weeks 52wk-Low - Lowest closing price in last 52 weeks Previous Close - Previous day's weighted price for daily volume Today's Close - Current day's weighted price for daily volume Change - Change in closing price from day to day Daily Vol. - Number of total shares traded today DIV $ - Dividends per share paid in the last 12 months P/E - Closing price divided by the last 12 month earnings
CHANGE 0.30 7.83 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (0.02) 0.00 0.08 0.00 0.00 0.00 0.00 0.00
VOLUME 1,257 1,000
500
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
EPS$ 0.239 0.932 0.000 0.110 0.070 1.760 0.369 -0.438 0.140 0.184 0.449 0.722 0.102 0.467 0.646 0.728 0.816 0.203 0.939 0.631 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
VOLUME
2,750 1,000
NAV 2.43 4.44 2.16 202.18 190.86 1.69 1.75 1.76 1.03 8.58 10.14 7.35 14.59 12.64 9.99 N/A 10.43 14.89
DIV$ 0.170 1.260 0.020 0.030 0.000 0.000 0.260 0.000 0.000 0.120 0.220 0.720 0.434 0.060 0.328 0.240 0.540 0.120 0.200 0.610 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
P/E 24.2 42.9 N/M N/M N/M N/M 18.9 -8.1 30.5 15.7 13.3 13.5 24.7 15.7 17.8 12.4 17.2 19.7 8.7 24.6
YIELD 2.94% 3.15% 1.33% 1.15% 0.00% 0.00% 3.74% 0.00% 0.00% 4.15% 3.70% 7.38% 17.22% 0.82% 2.85% 2.66% 3.86% 3.01% 2.44% 3.94%
0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
0.00% 0.00% 0.00% 0.00% 0.00% 6.25% 7.00% 6.50%
INTEREST Prime + 1.75% 6.25%
19-Oct-2022 30-Sep-2025
6.95% 4.50% 4.50% 6.25% 6.25% 4.50% 6.25% 4.25% 4.39% 4.28% 5.50% 5.35% 5.69%
20-Nov-2029 15-Dec-2021 30-Jul-2022 15-Dec-2044 30-Jul-2045 26-Jun-2022 26-Jun-2045 15-Oct-2022 10-Dec-2028 26-Jul-2024 5-Jan-2049 17-Jan-2040 17-Jan-1950
YTD% 12 MTH% 1.47% 4.26% 0.20% 0.87% 0.95% 2.82% 0.14% 5.02% 3.25% 31.13% 0.91% 0.68% -2.55% -3.02% -0.27% -0.27% -2.20% -7.62% 1.14% 4.22% 1.09% 3.04% 1.01% 4.65% 4.93% 42.27% -1.56% 0.80% -0.60% -4.90% N/A N/A 3.00% 25.60% 7.90% 48.70%
MATURITY
NAV Date
30-Apr-2021 30-Apr-2021 30-Apr-2021 31-Mar-2021 31-Mar-2021 30-Apr-2021 30-Apr-2021 30-Apr-2021 30-Apr-2021 28-Mar-2021 28-Mar-2021 28-Mar-2021 28-Mar-2021 28-Mar-2021 28-Mar-2021 31-Mar-2021 31-Mar-2021 31-Mar-2021
YIELD - last 12 month dividends divided by closing price Bid $ - Buying price of Colina and Fidelity Ask $ - Selling price of Colina and fidelity Last Price - Last traded over-the-counter price Weekly Vol. - Trading volume of the prior week EPS $ - A company's reported earnings per share for the last 12 mths NAV - Net Asset Value N/M - Not Meaningful
TO TRADE CALL: CFAL 242-502-7010 | ROYALFIDELITY 242-356-7764 | CORALISLE 242-502-7525 | LENO 242-396-3225 | BENCHMARK 242-326-7333
The Public is hereby advised that I, KETLYNE BRAVE of #22 Ford Close off Carmichael Road, P.O. Box SP-61792 and NELSOON LOUVERTURE of 1534 NW 5th Avenue, Pompano Beach, Florida, 33060, New Providence, The Bahamas. Parents of GABRIELLA VANESSA METAYER A minor intend to change my child’s name to GABRIELLA VANESSA LOUVERTURE If there are any objections to this change of name by Deed Poll, you may write such objections to the Deputy Chief Passport Officer, P.O. Box N-742, Nassau, Bahamas no later than thirty (30) days after the date of publication of this notice. LEGAL NOTICE OF INTENT TO CHANGE NAME BY DEED POLL TAKE NOTICE that by a Deed Poll dated the 31st day of May, 2021 and now about to be lodged for recording in the Registry of Records of in the Commonwealth of The Bahamas, LANA JOE of #80 Albertha Drive, Sunrise Subdivision in the City of Freeport in the Island of Grand Bahama one of the Islands of the Commonwealth of The Bahamas, mother and legal guardian of JAZARIA LALIQUE JOE natural born citizen of the Commonwealth of The Bahamas renounced and abandoned the surname of JOE on behalf of the said JAZARIA LALIQUE GIBSON.
NOTICE
NOTICE is hereby given that GIVESON GELIN, of #108 Mount Vernon Drive, New Providence, The Bahamas is applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 3rd day of June 2021 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.
NOTICE
NOTICE is hereby given that DE’VONTER DESSARY LEE THOMPSON, of #78 Coral Lakes, SS-19884, New Providence, The Bahamas is applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 3rd day of June 2021 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.
THE TRIBUNE
Thursday, June 10, 2021, PAGE 7
Cruise port chief eyes health visa efficiency gains
NASSAU Cruise Port. FROM PAGE ONE when persons have to fill out cruise industry questionnaires they also complete Bahamas health travel visas, so that they only go through that process once and that information is transmitted to the cruise line, Ministry of Tourism and Ministry of Health. “If they have to do it for the cruise lines, incorporate what The Bahamas requires, and if you’re doing it for The
Bahamas, incorporate what the cruise lines want so that people are not uploading the same information twice just to take a vacation.” Through such a system, Mr Maura argued that The Bahamas and cruise industry can eliminate waste and duplication on health protocols, and improve consumer convenience. Mr Maura said at the weekend that the cruise port was “99 percent done” on the work required to accommodate Royal Caribbean
and Crystal Cruises’ home porting, which subsequently saw the former’s Adventure of the Seas vessel arrive on Tuesday ahead of its first seven-night voyage. “It’s all coming together,” Mr Maura said. “We did a dry run with the luggage scanners yesterday, where the team brought two to three suitcases through. We had 50 suitcases running through the system.” He added that the former two-storey Port Department building is already “more than half-way” demolished, and said: “The two-storey portion of the building is the first part to be demolished,
and we have additional folks coming in from the US with specialist equipment to work with local contractors to bring down the tower.” Speaking to the possibilities that home porting may create for the Bahamian economy, Mr Maura added: “I’ve heard of a few Bahamians who will be sailing aboard Adventure of the Seas on this trip, and I’m sure there will be many more of us who will take advantage of this incredible opportunity,” Mr Maura said. “This is our time to shine and to put Nassau on the map as a home porting
FINANCING FOR VIABLE PROJECTS Energy, Tourism, Maritime, and Agriculture Sectors. $2 million and above. Must Provide Executive Summary, with three years financials, management and marketing capabilities, and collateral offered. Serious borrowers only. Infrastructure projects based on PPP’s also wanted SERIOUS INQUIRIES ONLY.
Telephone: (242) 698-0634 / (242) 815-9118 Email us at inquiries@bahamasbusinessnetwork.com
destination of choice. We will do so with immense pride, making the Bahamian people proud and making our guests and cruise line partners excited that they chose to start and end their cruise in Nassau. This is the beginning of an incredible voyage for us all.” He continued: “We couldn’t be happier. This vessel and all the hope that this first voyage will carry out
to sea on Saturday have been a long time in the making. “We are very appreciative that Royal Caribbean has chosen to partner with us, with the Ministry of Tourism, and all our industry partners to make this home port launch from Nassau possible. As you can imagine, we are all extremely excited and working overtime to ensure that this launch is successful.”
PAGE 8, Thursday, June 10, 2021
THE TRIBUNE BRITAIN’s Minister for the Cabinet Office of the United Kingdom, David Frost, right, speaks to his EU counterpart Maros Sefcovic, during a meeting, in London yesterday. The UK has called upon the European Union to show pragmatism and “common sense”, as the two sides meet to resolve differences over the deal that was supposed to keep trade flowing in Northern Ireland after Brexit. Photo: Eddie Mulholland/AP
EU warns of retaliation as post-Brexit talks with UK stall LONDON Associated Press A TOP European Union official said yesterday that Britain could face retaliatory tariffs or other sanctions after talks failed to resolve an increasingly heated dispute over implementation of their post-Brexit trade deal in Northern Ireland. Maros Sefcovic, the EU’s chief negotiator, said the relationship between the two sides had reached a “crossroads” amid the UK’s continued failure to live up to its obligations under the Brexit agreement. “Trust, which should be at the heart of every partnership, needs to be restored,” Sefcovic told reporters after the talks.
“That is the EU approach and the EU preference. If the UK were to take further unilateral action over the coming weeks, the EU will not be shy in reacting swiftly, firmly and resolutely to ensure that the UK abides by its international law obligations.” Sefcovic met with his British counterpart, David Frost, amid rising tensions over provisions of the Brexit deal that essentially created a regulatory border between Northern Ireland and the rest of the United Kingdom. That angered many pro-British residents of the territory who reject anything that threatens their status as part of the UK. The so-called Northern Ireland protocol was
designed to protect the peace process there by ensuring that trade with the Republic of Ireland continued to flow freely after Britain left the EU. To do so, the protocol required Britain to conduct regulatory checks on some goods shipped to the region from other parts of the UK. Britain earlier this year unilaterally delayed some of those inspections, saying it needed more time to put systems in place to carry out the required checks. The EU threatened legal action over what it saw as a breach of Britain’s international obligations. Now the UK government is considering further delays and the EU is ramping up its response.
Frost called for “pragmatic solutions” to bridge the divide. “What the EU is insisting on is we should operate the protocol in an extremely purist way,” Frost said separately. “The reality is that it’s a very balanced document that’s designed to support the peace process and deal with the very sensitive politics in Northern Ireland.” Sefcovic said the bloc was ready to compromise. For example, he said, the EU has offered to amend the rules to ensure they don’t slow the delivery of medicines and to make it easier to send guide dogs and used cars to Northern Ireland. The bloc has also offered a deal that would do away
with most checks if Britain agreed to align its rules on animal and plant health with EU regulations. Such an arrangement, similar to the EU’s trade deal with Switzerland, could be implemented on a temporary basis to give Britain more time to come up with a permanent solution, Sefcovic said. But he also said the EU was growing frustrated as Britain delays the implementation of rules it agreed to 18 months ago. “Our patience, really, is growing very, very thin,” Sefcovic said. Behind the dispute is the unique situation of Northern Ireland, where more than 3,000 people were killed during three decades of violence between those who support unification with the Republic of Ireland and those who seek to maintain ties to the UK. The 1998 Good Friday Agreement, which brought peace to region, was underpinned by the fact that both the UK and Ireland were members of the EU. That made it possible for trade to flow freely between Ireland and Northern Ireland, stimulating economic growth and creating jobs on both sides of the border. In an effort to keep the border open, the EU and the UK agreed that Northern Ireland would remain part of the European single market after Brexit. But that meant EU rules on issues such as food safety would still apply in Northern Ireland and there would have to be checks on some goods shipped into the region from England, Scotland and Wales.
The divorce deal, which took effect Jan 1, included a number of grace periods that gave Britain time to put in place new systems for checking goods coming into Northern Ireland to ensure they complied with EU rules. Those grace periods are now ending. Now, the two sides are sparring over the rules governing chilled meats, raising the specter of what British newspapers are calling a “sausage war”. British officials are considering extending the grace period covering chilled meets to prevent the EU from blocking shipments of products such as sausages and ground beef on July 1. The issue has attracted the attention of US President Joe Biden, who will meet with EU officials and British Prime Minister Boris Johnson this weekend, when leaders of the Group of Seven richest democracies meet in Cornwall. Aware of the central role his country played in brokering the Good Friday Agreement, Biden has warned that the US won’t sign a trade deal with Britain if Brexit undermines the peace deal. Johnson said yesterday that any solution to the dispute must protect the unity of the UK. “What we want to do is make sure that we can have a solution that guarantees the peace process, protects the peace process, but also guarantees the economic and territorial integrity of the whole United Kingdom,” he told reporters in Cornwall.
THE TRIBUNE
Thursday, June 10, 2021, PAGE 9
For infrastructure deal, Biden eyes ‘multiple paths forward’ WASHINGTON Associated Press PRESIDENT Joe Biden is pursuing “multiple paths forward” as he looks to muscle his big infrastructure package through Congress — dialing up lawmakers from both parties in search of a bipartisan deal while imploring Democrats to be ready to go it alone if necessary. It’s an approach that shows the political perils ahead for the White House and anxious Democrats eager to make gains on their agenda, but also the potential routes to a $1tnplus investment package that would be a signature accomplishment for the president and his party in power. In one fell swoop this week, Biden cut off talks with a core group of Republican senators when it became clear there was no bridging the divide between their differing views on the size of an infrastructure investment; started new talks with a bipartisan group of ten senators working on a deal; and welcomed a $1.2tn bipartisan effort from a group in the House. At the same time, before leaving for his first overseas trip to Europe, Biden instructed Democratic leaders in Congress to prepare the groundwork to pass some or all of the ambitious package on their own if there is no deal to be made with Republican lawmakers this summer. “His view is that there are multiple paths forward,” said White House press secretary Jen Psaki. The legislative road ahead promises long days and nights of talks, as lawmakers and the administration grind out the details of what would be the most sweeping domestic infrastructure investment in years. It showcases an almost forgotten skill in Washington, the art of negotiation, even as the prospects for a final deal remain seriously in doubt. The current thinking is that it could very well take all approaches to secure a deal: Perhaps Biden can reach a bipartisan accord on the more traditional roads and bridges projects, and then he will need to depend on a party-line vote for the child care centers, veterans hospitals and family-friendly tax policies he wants in the face of Republican resistance. Yesterday, some of the
CAN MAKE A DIFFERENCE IN THE LIVES OF THE CHILDREN AT RANFURLY
T SEN BILL CASSIDY, R-La, attends a Senate Veterans’ Affairs Committee hearing on improving the VA’s infrastructure, at the Capitol in Washington yesterday. Since President Joe Biden ended talks with a group of Republican senators on his infrastructure agenda this week, he has reached out to other senators from both parties, including Sen Cassidy, in a new effort toward bipartisan compromise. Photo: J Scott Applewhite/AP group of ten senators — five Democrats and five Republicans — who met late Tuesday over pizza huddled again trying to shape the bipartisan backbone of a more traditional infrastructure plan. “We’re continuing to refine a proposal that can get support from both sides of the aisle,” said Sen Rob Portman, R-Ohio. Portman has been leading the effort with Democratic Sen Kyrsten Sinema of Arizona for months and is now drawing in other senators to swap ideas and assess support. Sen Mitt Romney, R-Utah, has put the group’s membership at 20 senators and told reporters the group would keep at it until it reaches a deal — or a dead end. With the narrowly split House and the 50-50 Senate, the White House faces political challenges pushing its priorities through Congress with Democratic votes alone. Most legislation requires 60 votes to advance in the Senate, meaning at least ten Republicans would be needed to push past a filibuster. Democrats are preparing to use special budget reconciliation rules that allow legislation to be approved with a 51-vote threshold in the Senate, if needed. Biden’s party holds a slight majority in the Senate because Vice President Kamala Harris can break a tie. Talks broke down between Biden and the lead Republican negotiator, Sen Shelley Moore Capito of West Virginia, after the senators offered a $928bn proposal, which included about $330bn in new spending — but not as much as Biden’s proposed $1.7tn. They could not agree on how to pay for the new spending. Biden has
proposed raising the corporate tax rate from 21% to 28%, a nonstarter for Republicans, and the president rejected the GOP senators’ suggestion of tapping unspent COVID-19 aid money to fund the new infrastructure. Biden, in a fresh round of calls with Sinema and the new group, including Republican Sen Bill Cassidy of Louisiana, encouraged the senators to keep working toward a deal. It’s unclear how much the new group of senators is willing to spend on infrastructure and how it plans to pay for the legislation — pitfalls that doomed the earlier Republican-only effort with Biden. Romney told reporters there would be no new taxes. Also uncertain is how much support the group of senators is getting from its broader leadership and fellow rank-and-file lawmakers that would be essential for any eventual deal’s passage. Senate Majority Leader Chuck Schumer, D-NY, this week embraced Biden’s multipronged strategy. Senate Minority Leader Mitch McConnell, R-Ky, has decried the end of talks with Republicans and been less vocal about the senators’ new effort. The Biden administration views the infrastructure talks with Republicans as having shown signs of common ground, despite the breakup this week with one group. Brian Deese, director of the White House National Economic Council, said yesterday that lawmakers in both parties see the broader need to invest in supply chains, domestic manufacturing, research and development and highspeed internet.
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Thursday, June 10, 2021, PAGE 11
US drops Trump order targeting TikTok, plans its own review WASHINGTON Associated Press THE White House dropped Trump-era executive orders intended to ban the popular apps TikTok and WeChat and will conduct its own review aimed at identifying national security risks with software applications tied to China, officials said Wednesday. A new executive order directs the Commerce Department to undertake what officials describe as an “evidence-based” analysis of transactions involving apps that are manufactured or supplied or controlled by China. Officials are particularly concerned about apps that collect users’ personal data or have connections to Chinese military or intelligence activities. In revoking some of President Donald Trump’s blanket-style orders against Chinese tech companies and replacing them with a narrower approach, the Biden administration has not actually weighed in yet on whether TikTok and other apps pose a danger to Americans. But a senior administration official said Wednesday that the Trump actions weren’t “always implemented in the soundest fashion” and the aim of the review is to set up clear criteria to evaluate specific data security and privacy risks for each app. He said that could lead to a range of potential future actions on an app-by-app basis. “We want to take a tailored, tough approach here,” he said. The department will also make recommendations on how to further protect Americans’ genetic and personal health information,
ICONS for the smartphone apps TikTok and WeChat are seen on a smartphone screen. Officials say the White House has dropped Trump-era executive orders that attempted to ban the popular apps TikTok and WeChat and will conduct its own review aimed at identifying national security risks with software applications tied to China. A new executive order directs the Commerce Department to undertake what officials describe as an “evidence-based” analysis of transactions involving apps that are manufactured or supplied or controlled by China. Officials are particularly concerned about apps that collect users’ personal data or have connections to Chinese military or intelligence activities. Photo: Mark Schiefelbein/AP and will address the risks of certain software apps connected to China or other adversaries, according to senior administration officials. TikTok yesterday declined to comment. WeChat did not respond to a request for comment. The Trump administration’s attempted bans didn’t hold up legally as courts blocked them, and also “ran up against this critique that they were mimicking China’s Great Firewall,” said Samm Sacks, a fellow at Yale Law School’s Paul Tsai China Center. “What the Biden administration wants to do is maintain an open, secure internet that doesn’t take a page from Beijing’s playbook, while addressing legitimate risk.” The Biden administration’s move reflects ongoing
concern that Americans’ personal data could be exposed by popular apps tied to China, a chief US economic and political rival. The White House and Congress have both taken action to address Beijing’s technological advancement. The Biden administration last week expanded a Trump-era list of Chinese companies that Americans can’t invest in because of purported links to the Chinese military and surveillance. Companies on the list include China’s state-owned telecommunications companies, telecom equipment maker Huawei and Chinese oil company China National Offshore Oil Corp. On Tuesday, the Senate passed a bill that aims to boost US semiconductor production and the
BIDEN MOVES TO RESTORE CLEANWATER SAFEGUARDS ENDED BY TRUMP WASHINGTON Associated Press
THE Biden administration began legal action yesterday to repeal a Trump-era rule that ended federal protections for hundreds of thousands of small streams, wetlands and other waterways, leaving them more vulnerable to pollution from development, industry and farms. The rule — sometimes referred to as “waters of the United States” or WOTUS — narrowed the types of waterways that qualify for federal protection under the Clean Water Act. It was one of hundreds of rollbacks of environmental and public health regulations under President Donald Trump, who said the rules imposed unnecessary burdens on business. The Trump-era rule, finalised last year, was long sought by builders, oil and gas developers, farmers and others who complained about federal overreach that they said stretched into gullies, creeks and ravines on farmland and other private property. Environmental groups and public health advocates said the rollback approved under Trump has allowed businesses to dump pollutants into unprotected waterways and fill in some wetlands, threatening public water supplies downstream and harming wildlife and habitat. The Trumpera rule resulted in a 25% reduction in the number of streams and wetlands that are afforded federal protection, said Jaime Pinkham, acting assistant Army secretary for civil works. The water rule has been a point of contention for decades. The Environmental Protection Agency administrator, Michael Regan, has pledged to issue a new rule that protects water quality while not overly burdening small farmers. President Joe Biden ordered a review of the Trump rule as part of a broader executive action
on climate change during his first week in office. Yesterday’s legal filing by the Justice Department begins that process as the EPA and Department of the Army formally request repeal of the Trump-era rule. “Today’s action reflects the agencies’ intent to initiate a new rulemaking process that restores the protections in place prior to the 2015 WOTUS implementation, and anticipates developing a new rule’’ that defines what waters are considered to be under federal jurisdiction, the EPA said in a statement. “We are committed to establishing a durable definition of ‘waters of the United States’ based on Supreme Court precedent and drawing from current and previous regulations ... so we can better protect our nation’s waters, foster economic growth and support thriving communities,’’ Regan said. The Army and EPA “will develop a rule that is informed by our technical expertise, is straightforward to implement by our agencies ... and is shaped by the lived experience of local communities,” Pinkham said. A review conducted by the Biden administration determined that the Trump rule is significantly reducing clean water protections, particularly in arid states such as New Mexico and Arizona, where a large number of streams now lack federal jurisdiction. At least 333 projects that would have required Clean Water Act permits no longer need federal approval, the agencies said. The Trump-era rule removed protections from several public lakes, including Lake Keowee in South Carolina, a reservoir that provides drinking water for nearly 400,000 people, according to the Southern Environmental Law Center, an advocacy group. The rule also removed Army Corps of Engineers jurisdiction from about 400 acres of wetlands where a
titanium mine is planned near Georgia’s Okefenokee Swamp, the group said. The law centre and other environmental groups hailed the EPA action and urged officials to move quickly to restore longstanding protections for critical drinking water sources.
development of artificial intelligence and other technology in the face of growing international competition. The bill would also ban the federal government’s use of Chinese-made drones. The new executive order should lead to a framework for protecting Americans’ data from China, rather than targeting specific companies, and could pressure Congress to enact a datasecurity law in the years ahead, said Paul Triolo, a tech policy expert at the Eurasia Group consultancy. Biden also yesterday revoked a Trump order from January that had banned transactions with digital wallets Alipay and WeChat Pay and six lesserknown Chinese apps over unspecified data security concerns. Courts had blocked the Trump administration’s efforts last year to ban TikTok, a video app widely popular with young people, and the main WeChat messaging service. But a
national-security review of TikTok by a government group called the Committee on Foreign Investment in the United States, or CFIUS, is ongoing. CFIUS had set deadlines for TikTok to divest its US operations, but such a sale never happened. Last year, the Trump administration brokered a deal that would have had US corporations Oracle and Walmart take a large stake in the app on national security grounds. Oracle didn’t returned requests for comment yesterday. Walmart declined to comment. The Biden administration earlier this year sought to delay its legal defense of Trump’s attempts to ban TikTok and WeChat as it reviewed national security threats posed by Chinese technology companies. The US Court of Appeals for the District of Columbia Circuit has put on hold a case challenging Trump’s TikTok divestment order. A cybersecurity and privacy analysis of TikTok
published in March by the internet watchdog group Citizen Lab found no evidence of malicious behavior and said TikTok’s practices of collecting personal data and tracking users’ behavior were no worse than other major social platforms such as Facebook. “Our research shows that there is no overt data transmission to the Chinese government by TikTok,” the report said. It added that TikTok’s service did not contact any servers within China, but it was still theoretically possible that servers outside China could later transfer user data to China-based servers. Citizen Lab, based at the University of Toronto, also described a “plausible” though speculative scenario in which the Chinese government could use one of its national security laws to force TikTok’s parent company, ByteDance, to turn over user data, but said there’s no evidence China has yet exerted such pressure on the company.
PAGE 12, Thursday, June 10, 2021
THE TRIBUNE
Bruised but unbowed, meme stock investors are back for more By STAN CHOE Associated Press AFTER feeling the thrill of victory early this year by singlehandedly causing GameStop’s stock to soar — only to get crushed when it quickly crashed back to earth — armies of smaller-pocketed and novice investors are back for more. These undaunted investors have resuscitated GameStop shares back above $300, up from $40 in February after plunging from a peak of $347. They’re also hauling new stocks onto the bandwagon they say is heading for the moon, including the lesser-known health insurance company Clover Health Investments. This second wave of leaps for meme stocks are just as staggering — the movie theater chain AMC Entertainment soared to $62 last week from $2 early this year — and once again professional Wall Street is calling the gains illogical. Many of these professionals had predicted the phenomenon of regular, small-fry investors piling into a stock en masse and sending it incredibly higher would fizzle out, particularly after they felt the pain of losing some money. Instead, the frenzy has endured and shows how powerful these investors remain, at least for now. They’re armed with social media where they can convince others to champion the same stocks. They also have zero-fee trading apps that allow many to buy stock options, which can offer bigger gains at a smaller upfront cost than buying a share of stock, in exchange for potentially bigger percentage losses. “They’ll do surprising things if given the tools,” said Hossein Azari, CEO of cmorq, a company that helps
AN AMC movie cinema in Garland, Texas. GameStop and other meme stocks, such as AMC, are soaring again. Much of professional Wall Street said earlier in the year that the phenomenon would likely fizzle out in time, particularly after the smaller-pocketed and novice investors behind it felt the pain of losing their money. AMC Entertainment has set records recently. Photo: LM Otero/AP customers get into cryptocurrencies and advocates for a new world of “decentralised finance”. Azari sees it all stemming from people feeling left out as they watched wealthy investors and firms suck up the majority of the economy’s gains in recent years. Now they see a way to get some for themselves. “They are not out there trying to prove anything,” he said. “They just want to kind of materialise the American dream for themselves.” Some of the meme-stock buyers believe fervently in the financial futures of the companies they’re backing. Others say on social media posts that they’re merely looking to cash in on whatever the next hot stock is. Most say that as long as other like-minded investors stick together and hold the stock, they’ll protect each other and the stock’s price.
Malcolm Ethridge, a financial adviser with CIC Wealth outside Washington, DC, said a range of his clients want to talk about meme stocks, as well as cryptocurrencies. Ethridge also says it’s not only younger investors pushing up meme stocks — he’s gotten just as many requests from his clients who are retirees. “I think in most cases, though, they really just wanted a professional to tell them why it wasn’t a good idea to get involved just so that they could stop feeling like they were missing out,” he said. This resurgence for meme stocks is a little different from the earlier supernova. For one, it hasn’t dragged down the broader stock market. Back in January, the mania helped knock down the S&P 500 to its worst day in months. That was a result of fears that some hedge
funds would have to sell big, unrelated stocks to raise cash to cover losses they were taking after betting that GameStop would fall. Several of today’s memestock winners do have chunks of their shares sold “short”, where investors have made trades to profit if the price falls, but not to the same degree as in January. At GameStop, roughly one in five of its shares available to trade has been sold short, for example. Earlier this year, more than 100% of them effectively were, with some getting shorted multiple times. The buying activity this time around also seems less fervent. Trading in call options, which can give a buyer the right to buy 100 shares of stock at a set price at a later date, surged to a two-month high recently. But it’s still below the heights set in January.
Over the last year, trading activity for call options on single stocks has tended to move up and down with how restricted the economy has been by the pandemic, according to Deutsche Bank strategists. When people have been leaving their houses more often, call option trading has tended to fall off, which makes the last few weeks a notable exception. So, if getting burned by plunging prices for meme stocks once before didn’t stop them, and the possibility of doing things other than trading options while sitting on a couch hasn’t so far, what could slow the phenomenon? Regulators and politicians in Washington have been discussing some options, though nothing’s come out of it yet. Gary Gensler, chair of the Securities and Exchange
Commission, gave a speech yesterday where he once again criticised “gamified” investing. Many trading apps use features that encourage customers to make trades more often. That brings in more revenue for the apps but some research also suggests it leads to lower returns for the average investor. Gensler said he’s asked the SEC’s staff to gather public input on the topic. He also said he’s asked the staff for recommendations on changes to rules that govern the stock market’s plumbing and how trading apps route retail investors’ orders, to make sure they’re getting the best execution. GameStop separately said late yesterday that the SEC’s staff is conducting an investigation into the trading activity in its stock and those of other companies. GameStop, which received a request for documents on May 26, said it doesn’t expect the inquiry to adversely hurt the company. The SEC and other regulators could look for ways to force trading apps to offer more warnings to customers in hopes of slowing them down, said John Coffee, a professor of law at Columbia University. They could start with making it clearer that trading options can be riskier than buying actual shares of a stock. Coffee is skeptical GameStop, AMC and others can hold onto their lofty prices, which would need profits to explode higher extremely quickly to look rational according to traditional models used by financial analysts. That means he’s worried many retail investors may be setting themselves up for big losses in their zeal to ride the meme-stock wave.
THE TRIBUNE
Thursday, June 10, 2021, PAGE 13
Have an Echo device? Amazon may help itself to your Wi-Fi NEW YORK Associated Press DO you own an Amazon smart device? If so, odds are good that the company is already sharing your internet connection with your neighbors unless you’ve specifically told it not to. On Tuesday, the company launched a program that forces users of many Echo smart speakers and Ring security cameras to automatically share a small portion of their home wireless bandwidth with neighbors. The only way to stop it is to turn it off yourself. Amazon says the program, called Amazon Sidewalk, is a way to make sure lights, smart locks and other gadgets outside the home and out of reach of a Wi-Fi connection stay working. But some experts warn that the technology is so new that privacy and security risks remain unclear. And almost no one seems happy that Amazon forced consumers into Amazon Sidewalk — or that many people may not know they can opt out of it. DID AMAZON TELL CUSTOMERS THIS WAS HAPPENING? Amazon says it sent emails to customers last month and in November that Sidewalk was coming. The company says you’ll also get a notification when you set up gadgets that work with Sidewalk. HOW CAN I STOP THIS? Once you know about it, it’s relatively straightforward, if not exactly simple, to opt out of Sidewalk. Echo users can go into the Alexa app, tap “More” in the lower right hand corner, then tap “Settings,” then “Account Settings,” where they’ll find a section for Amazon Sidewalk and a button to disable it. In the Ring app, go to “Control Center” and then tap “Sidewalk.”
WHY IS AMAZON DOING THIS? The idea behind Sidewalk is to integrate residential wireless connections into a “mesh network” that can extend coverage to areas home Wi-Fi can’t reach. Amazon’s Echo and Ring devices band together to create a this network by grabbing a slice of bandwidth from each cooperative home network. That can extend the range of devices designed to work with Sidewalk so they’ll stay connected even when away from your home network. One example of such a device is Tile, a tracking device that can be placed on keys or a dog’s collar. If your dog goes missing in a neighborhood where Sidewalk is working, it might turn up quickly via Tile. Other products that work with Sidewalk include smart locks that can be controlled by phone and wearable devices that can track people with dementia who may wander. Amazon expects additional devices, including outdoor lights and motion detectors, will work with Sidewalk before long. HOW DOES IT WORK? Amazon is tapping into a variety of radio technologies, including one called LoRa for its long range and better known for industrial and business applications such as keeping track of cattle roaming through pasturelands. “The goal here is not to create coverage for a single home,” said Marc Pegulu of chipmaker Semtech, which is partnering with Amazon on the technology. “It’s kind of a shared network, a community shared network.” Among other things, devices connected to the shared network can supposedly search for the best signal in a way that can preserve their battery life. Thomas Clausen, a computer science professor at France’s École Polytechnique, says that the network Amazon is creating could be a good thing provided
GameStop names Amazon veteran as CEO; sales accelerate NEW YORK Associated Press GAMESTOP, the videogame retailer whose manic stock movements captivated Wall Street this year, said yesterday that it’s brought on a pair of Amazon veterans as its new chief executive and chief financial officer to aid in its much anticipated digital turnaround. Matt Furlong, who most recently oversaw Amazon’s Australia business and spent nine years with the company, will start as CEO on June 21. GameStop also said that Mike Recupero, who most recently was CFO of Amazon’s North American consumer business, will begin as chief financial officer on July 12. GameStop’s stock has been on a wild rocket ride, soaring more than 1,500% this year as waves of smaller-pocketed investors piled in on hopes that it can transform itself into an e-commerce powerhouse after sales at its brick-andmortar stores faltered. GameStop said yesterday that the Securities and Exchange Commission’s staff is conducting an investigation into the trading activity in its stock and shares of other companies. GameStop said it doesn’t expect the inquiry to hurt it. Investors have pinned much of their hope on Ryan Cohen, a major investor who co-founded Chewy, the online seller of pet supplies. GameStop said yesterday that it’s still losing money, posting a net loss of $66.8m for the three months through May 1. But that’s not as bad as the $165.7m loss from a year earlier, and its sales of $1.28bn was stronger than the $1.16bn that analysts expected.
Sales grew 25% even as the company closed some of its stores. GameStop became the face of the “meme stock” craze early this year, when a fanatical band of smallerpocketed and novice investors encouraged each other to pile in. That helped trigger a “short squeeze”, which sent the stock flying. Professional investors had sold much of GameStop’s stock “short”, essentially making bets that would profit if its price were to fall. They were skeptical GameStop had a bright future given the migration of video-game sales toward online channels and away from GameStop’s stores. But after the stock began rising sharply, those short sellers had to buy GameStop shares to get out of their bets, which created a feedback loop further goosing the share price. The stock set a record closing high of $347.51 in late January, but it sank back below $41 within a few weeks. It’s since climbed again and closed yesterday at $302.56. GameStop reaped the benefits of that surge by selling stock earlier this year to raise nearly $552m. That helped the company end its latest quarter with $770.8m in cash and restricted cash. GameStop said it plans to use its increased financial strength to accelerate its transformation. It already has eliminated all its longterm debt. GameStop didn’t provide an earnings forecast and it said it believes sales growth is the best way to measure its performance. The company said sales in May rose about 27% above last year. GameStop’s stock slipped 7% in trading after the market’s close.
DAVID LIMP, senior vice president of Devices and Services at Amazon, displays a new Echo, left, and an Echo Plus during an event announcing several new Amazon products by the company in Seattle. yesterday, Amazon launched a programme that forces users of many Echo smart speakers and Ring security cameras to automatically share a small portion of their wireless bandwidth with neighbours. The only way to stop it is to turn it off yourself. AP Photo: Elaine Thompson/AP that it’s open and accessible, because it would make it easier and cheaper to use internet-connected devices and sensors and spark new innovations. “But of course, when a behemoth like Amazon, or Apple or Google or Microsoft, create a platform, they also can end up controlling the platform and that can stifle innovation,” he says. WHAT ARE THE RISKS? Hackers could potentially infiltrate home networks via Sidewalk, said Eric Null, a policy manager at digital rights group Access Now. If that happens, Null said hackers could observe everything you do, take over your devices or access your files to steal information. “It’s only a matter of time before someone’s network gets hacked and data gets breached,” said Null. William Tong, Connecticut’s attorney general, warned consumers this week that the program was “uncharted territory” and
that people should opt-out of Sidewalk unless they are sure their privacy and security will be protected. “Wireless networks are already notoriously vulnerable to hacks and breaches,” Tong wrote in a statement. “Families need better information and more time before giving away a portion of their bandwidth to this new system.” WHAT DOES AMAZON SAY? When asked about privacy and security concerns, an Amazon spokesman said he couldn’t respond to “hypothetical situations.” The company didn’t respond to a request to make an executive available for an interview, but said that data that flows through its network has three-layers of encryption that’s meant to to keep hackers from seeing it. Samir Jain, director of policy at the Center for Democracy and Technology, said Amazon’s efforts to encrypt data was a good
step. But Jain said that it’s hard to identify security vulnerabilities until a new technology is deployed in the real world. WHICH DEVICES WANT TO SHARE MY INTERNET? Echo devices that share network bandwidth via Sidewalk include the third generation and newer versions of the Echo, Echo Dot, Echo Dot for Kids and the Echo Dot with Clock. The Echo Show 5, 8, 10; the second generation of the Echo Show; Echo Spot; Echo Plus; Echo Studio; Echo Input; Echo Flex. Sidewalk-enabled Ring devices include the Ring Floodlight Cam; Ring Spotlight Cam Wired; and Ring Spotlight Cam Mount. DOES AMAZON HAVE BIGGER AMBITIONS? Amazon has explained Sidewalk in the context of consumer devices such as cameras and speakers. But it could also one day integrate the technology into
its core business: delivering goods. For example, the company could embed tiny internet-connected devices into cardboard packages to help track them, said Clausen of École Polytechnique. “Having integration of alarm systems, presence detection of whether or not people are there, will potentially allow Amazon to create more efficient delivery schedules and fewer re-deliveries,” he says. That could be one application Amazon is thinking about, he added.
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THE TRIBUNE
Thursday, June 10, 2021, PAGE 15
US INDEXES END LOWER; MORE VOLATILITY FOR ONLINE FAVORITES Associated Press
A SLIDE in banks and industrial companies nudged stocks on Wall Street to modest losses yesterday after an early gain faded in the last half-hour of trading. Stocks championed by hordes of online retail investors, the “meme” stocks as they have become known, were volatile once again. The S&P 500 slipped 0.2%, erasing its meager gain from a day earlier. The benchmark index’s modest moves this week have it on track for its first weekly loss in three weeks. The Dow Jones Industrial Average gave up 0.4%, while the
Nasdaq held up somewhat better, ending down just 0.1%. Treasury yields slipped. The yield on the ten-year Treasury fell to 1.49% from 1.52% late Tuesday. The falling yields broadly weighed down banks, which rely on higher yields to charge more lucrative interest on loans. JPMorgan and Citigroup fell 1.2%. Several health care companies made solid gains. Merck rose 2.3% after announcing a supply agreement with the US and Canada for a potential COVID-19 treatment. AbbVie gained 1.5% after announcing a collaboration with Caraway Therapeutics
to make treatments for Parkinson’s disease and other neurodegenerative disorders. All told, the S&P 500 fell 7.71 points to 4,219.55. The Dow lost 152.68 points to 34,447.14, while the Nasdaq Composite gave up an early gain, shedding 13.16 points to 13,911.75. The tech-heavy index was lifted by the same Big Tech companies that have pushed it generally higher for the last 18 months. Microsoft rose 0.4% and Amazon added 0.5%. Small company stocks, which have outgained the broader market this year, also fell. The Russell 2000 index gave up 16.63 points, or 0.7%, to 2,327.13.
Investors continue to focus a significant amount of attention on inflation. China’s producer price index, which measures prices of raw goods and services, jumped 9% from a year earlier in May, the fastest increase since 2008 and above analysts’ forecasts. Surging prices for oil and other commodities and manufacturing components such as semiconductors were the main factor behind the jump in producer prices there. Aside from surging prices of raw materials, fuel and other items needed for manufacturing, factories are struggling to keep up with demand as the pandemic
recedes in many places. That has pushed up prices of everything from food to household staples. Investors will get closely watched US inflation data today and how it might impact ultra-low interest rates and other market-supporting policies. The market has been relatively constrained over the last several days and investors have parsed any data to judge whether rising inflation will be temporary, as the Federal Reserve thinks, or more permanent. The Labor Department’s release of the consumer price index today will add to that discussion, particularly since
THE WEATHER REPORT
5-Day Forecast
TODAY
ORLANDO
High: 95° F/35° C Low: 75° F/24° C
TAMPA
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MONDAY
Mostly sunny and pleasant
Mainly clear
Pleasant with sunshine
Sunny and beautiful
Beautiful with some sun
Cloudy with a thunderstorm in spots
High: 87°
Low: 76°
High: 87° Low: 77°
High: 87° Low: 77°
High: 87° Low: 77°
High: 88° Low: 78°
AccuWeather RealFeel
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96° F
82° F
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99°-83° F
99°-84° F
98°-87° F
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High: 83° F/28° C Low: 77° F/25° C
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High: 89° F/32° C Low: 77° F/25° C
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High: 88° F/31° C Low: 79° F/26° C
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TONIGHT
High: 92° F/33° C Low: 80° F/27° C
High: 86° F/30° C Low: 76° F/24° C
MIAMI
High: 89° F/32° C Low: 78° F/26° C
4-8 knots
KEY WEST
High: 87° F/31° C Low: 80° F/27° C
ELEUTHERA
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High: 87° F/31° C Low: 76° F/24° C
Forecasts and graphics provided by AccuWeather, Inc. ©2021
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tiDes For nassau Low
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Today
8:33 a.m. 8:58 p.m.
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Ht.(ft.) 2.2 2.9
2:49 a.m. 2:33 p.m.
0.2 0.0
Friday
9:12 a.m. 9:36 p.m.
2.2 2.9
3:28 a.m. 3:10 p.m.
0.2 0.1
Saturday
9:52 a.m. 10:14 p.m.
2.2 2.9
4:08 a.m. 3:49 p.m.
0.2 0.1
Sunday
10:32 a.m. 10:54 p.m.
2.1 2.9
4:47 a.m. 4:29 p.m.
0.3 0.2
Monday
11:15 a.m. 11:36 p.m.
2.2 2.9
5:28 a.m. 5:12 p.m.
0.3 0.3
Tuesday
12:02 p.m. -----
2.2 -----
6:11 a.m. 6:00 p.m.
0.3 0.4
Wednesday 12:21 a.m. 12:54 p.m.
2.8 2.3
6:56 a.m. 6:55 p.m.
0.3 0.5
sun anD moon Sunrise Sunset
6:19 a.m. 7:59 p.m.
Moonrise Moonset
6:21 a.m. 8:26 p.m.
New
First
Full
Last
Jun. 10
Jun. 17
Jun. 24
Jul. 1
CAT ISLAND
E
W
High: 83° F/28° C Low: 76° F/24° C
N
S
E
W
7-14 knots
S
7-14 knots Shown is today’s weather. Temperatures are today’s highs and tonight’s lows.
Statistics are for Nassau through 2 p.m. yesterday Temperature High ................................................... 88° F/31° C Low .................................................... 75° F/24° C Normal high ....................................... 87° F/30° C Normal low ........................................ 74° F/23° C Last year’s high ................................. 91° F/33° C Last year’s low ................................... 79° F/26° C Precipitation As of 2 p.m. yesterday ................................. 0.00” Year to date ................................................. 5.53” Normal year to date ..................................... 9.97”
High: 84° F/29° C Low: 77° F/25° C
it comes shortly before the Federal Reserve’s next meeting on interest rate policy next week. “Is it transitory, or is the Fed behind the curve?” said Sal Bruno, chief investment officer at IndexIQ. “That is going to be a lot of the discussion tomorrow with people reading into which way we’re going.” Elsewhere in the market, volatility in stocks embraced by investors using online forums like Reddit continued for another day yesterday. Clover Health fell 23.6% while AMC Entertainment sank 10.4%. Wendy’s sank 12.7% after soaring 25.9% a day earlier.
ANDROS
SAN SALVADOR
GREAT EXUMA
High: 84° F/29° C Low: 77° F/25° C
High: 84° F/29° C Low: 77° F/25° C
N
High: 85° F/29° C Low: 78° F/26° C
E
W S
LONG ISLAND
tracking map
High: 84° F/29° C Low: 77° F/25° C
7-14 knots
MAYAGUANA High: 84° F/29° C Low: 78° F/26° C
Shown is today’s weather. Temperatures
CROOKED ISLAND / ACKLINS
are today’s highs and tonight’s lows.
RAGGED ISLAND High: 83° F/28° C Low: 78° F/26° C
H
High: 84° F/29° C Low: 77° F/25° C
GREAT INAGUA High: 85° F/29° C Low: 78° F/26° C
N E
W
N E
W
S
S
8-16 knots
8-16 knots
marine Forecast ABACO ANDROS CAT ISLAND CROOKED ISLAND ELEUTHERA FREEPORT GREAT EXUMA GREAT INAGUA LONG ISLAND MAYAGUANA NASSAU RAGGED ISLAND SAN SALVADOR
Today: Friday: Today: Friday: Today: Friday: Today: Friday: Today: Friday: Today: Friday: Today: Friday: Today: Friday: Today: Friday: Today: Friday: Today: Friday: Today: Friday: Today: Friday:
WINDS SE at 6-12 Knots S at 4-8 Knots E at 7-14 Knots ESE at 6-12 Knots E at 7-14 Knots ESE at 6-12 Knots E at 8-16 Knots E at 7-14 Knots ESE at 6-12 Knots SE at 6-12 Knots SE at 4-8 Knots S at 6-12 Knots E at 7-14 Knots ESE at 7-14 Knots E at 8-16 Knots E at 7-14 Knots E at 8-16 Knots E at 7-14 Knots E at 7-14 Knots E at 7-14 Knots E at 6-12 Knots SE at 6-12 Knots E at 8-16 Knots E at 7-14 Knots E at 7-14 Knots ESE at 6-12 Knots
WAVES 2-4 Feet 2-4 Feet 0-1 Feet 0-1 Feet 2-4 Feet 2-4 Feet 2-4 Feet 2-4 Feet 2-4 Feet 2-4 Feet 1-2 Feet 1-2 Feet 1-2 Feet 0-1 Feet 2-4 Feet 1-3 Feet 2-4 Feet 1-3 Feet 3-6 Feet 3-5 Feet 1-2 Feet 1-2 Feet 2-4 Feet 1-3 Feet 1-2 Feet 1-2 Feet
VISIBILITY 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 8 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 7 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 8 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles
WATER TEMPS. 82° F 82° F 83° F 84° F 81° F 81° F 81° F 82° F 81° F 82° F 81° F 81° F 82° F 83° F 82° F 82° F 84° F 84° F 81° F 81° F 82° F 82° F 82° F 82° F 81° F 81° F