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Westlake Legal Group > Appointments and Executive Changes (Page 6)

In Firing Central Bank Chief, Turkey’s Leader Trades Credibility for Growth

Westlake Legal Group 06turkeybank-facebookJumbo In Firing Central Bank Chief, Turkey’s Leader Trades Credibility for Growth US Dollar (Currency) Turkey Politics and Government Interest Rates Inflation (Economics) Erdogan, Recep Tayyip Economic Conditions and Trends Currency Banking and Financial Institutions Appointments and Executive Changes

LONDON — Turkey’s president, Recep Tayyip Erdogan, abruptly fired the central bank chief on Saturday, dealing a new blow to the institution’s credibility while threatening to intensify the nation’s wrenching economic crisis.

The move, made in the early hours of the day by presidential decree, was the latest evidence of Mr. Erdogan’s unequivocal dedication to economic expansion at any cost.

He has long expressed irritation over Turkey’s elevated interest rates — currently at 24 percent — which make money harder to borrow, constraining the breakneck development that has been his hallmark.

Most economists assert that interest rates ought to be higher still, given the perilous state of the Turkish economy and the weakness of its currency, the lira.

During the course of his 16-year tenure, Mr. Erdogan has pressured banks to lend aggressively in support of his signature infrastructure projects, including a grandiose new Istanbul airport and a kingdom’s worth of high-rise towers. In recent years, international investors have grown spooked by the resulting debts, pulling their money out of the country and sending the lira plummeting.

Over the last two years, the lira has surrendered some 40 percent of its value against the dollar, sending prices of imported goods soaring. Ordinary people are paying more for food and fuel. Businesses are stuck with higher costs for raw materials.

In the face of that crisis, the central bank has lifted interest rates to increase the returns for investors who keep their money inside Turkey, halting the plunge in the currency.

That has infuriated Mr. Erdogan. Assailing economic orthodoxy, he has claimed that high interest rates actually cause inflation, which is like blaming obesity on cutting too much sugar from the diet.

By firing Murat Cetinkaya — who has headed the central bank since April 2016 — and replacing him with his deputy, Murat Uysal, the president has effectively proclaimed that development will go on, with interest rates probably headed down.

In blaming his central bank for sabotaging his designs, Mr. Erdogan finds himself in powerful company. President Trump has intensified his attacks on his own central bank governor, Jerome H. Powell, asserting that high interest rates have made America less great than it could be.

India’s prime minister has attacked the independence of the central bank, prompting resignations, while undermining international faith in the veracity of official statistics.

For Turkish companies now confronting vast debts, lower interest rates should, in theory, shrink their debt burden, or at least make it cheaper to borrow more and defer any reckoning. Yet in reality, a great deal of Turkish debt is in dollars. Lower interest rates are likely to push down the value of the lira, which has the effect of magnifying dollar debts for companies that earn revenues in lira.

Mr. Erdogan has a penchant for decisive action, and these days are especially challenging for him. The economy fell into recession last year, resuming modest growth this year on the strength of spending unleashed by Mr. Erdogan ahead of national elections.

His stature was significantly weakened last month as his ruling party was thumped in a mayoral election in Istanbul. That result reflected voter anger over his imperious ways — especially his violent crackdown on dissent — as well as the growing perception that Turkey’s economy has drifted into danger.

That left Mr. Erdogan staring at two unpalatable options. He could accept higher interest rates to choke off inflation along with its attendant slowdown in growth, or stay true to form and keep the credit flowing. That would spur more economic expansion, but at the expense of Turkey’s credibility in the international marketplace, and further straining faith in the currency.

Most analysts assumed they knew how the story would go.

“I struggle to see how all of the sudden Turkish economic policymaking is going to turn more orthodox and transparent,” Nafez Zouk, chief emerging markets economist at Oxford Economics in London, said last month. “You just keep kicking the can down the road. We will see rate cuts this year.”

How much farther does this road go? That question is increasingly under discussion in Turkey’s power centers.

In Istanbul, Mr. Erdogan’s cronies in the construction business have been nourished by the president’s resolute devotion to growth. But in the rest of the business world, a sense of fatigue and dismay is increasingly palpable. Many accuse Mr. Erdogan of taking a sound economy — a nation of 80 million people, its population relatively young and skilled, its middle class growing — and turning it into a land avoided by global investors.

“There’s no more institutions,” said Can Akcay, managing partner of Les Partenaires Ottomans, a real estate development company in Istanbul. “They have been totally nullified by the president. Nobody’s going to invest here unless the system is reformed. But there’s no way to reform unless we get rid of this guy.”

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Buy Low-Tops, Sell High-Tops: StockX Sneaker Exchange Is Worth $1 Billion

Nic Wilkins started selling parts of his sneaker collection online two years ago as a way to make some extra cash in college. The hobby took off and this year, he expects to move 10,000 pairs of shoes. His anticipated take is a 25 percent profit from over $1 million in sales.

The main website enabling Mr. Wilkins’ now full-time business? StockX, a site that treats coveted consumer goods like sneakers as tradable commodities.

Sneaker collecting and trading “just keeps growing,” said Mr. Wilkins, a 24-year-old San Francisco resident who recently hired a business partner to manage his shoe inventory at a warehouse in upstate New York. “It is absolutely wild.”

StockX is part of a burgeoning group of online marketplaces that have turned resales of sneakers into a kind of currency — and an increasingly big business. Other sites like GOAT Group, Stadium Goods and Bump, which also resell sneakers, streetwear and other goods, have raised more than $200 million in venture capital funding. On Wednesday, StockX said it had hired a new chief executive to expand its business and garnered a fresh $110 million in financing that values it at more than $1 billion.

The rise of these online marketplaces is now pushing sneaker retailers and brands to rethink the potential of resale sites — once deemed a quirky niche for enthusiasts — as serious distribution channels. In February, Foot Locker invested $100 million in GOAT Group and said the companies would “combine efforts across digital and physical retail platforms.” And the luxury site Farfetch acquired the LVMH-backed Stadium Goods for $250 million in December.

ImageWestlake Legal Group merlin_156972759_4d93b789-280e-4077-ba8c-279a96e4b804-articleLarge Buy Low-Tops, Sell High-Tops: StockX Sneaker Exchange Is Worth $1 Billion Venture Capital StockX Sneakers Shopping and Retail Scott Cutler Luber, Josh E-Commerce Computers and the Internet Appointments and Executive Changes

StockX grew out of Campless, a website that tracked sneaker resale prices on eBay.CreditNick Hagen for The New York Times

The fervor for sneakers has been fueled by “sneakerheads” and others who regard the shoes as investment assets. All told, the market for resale sneakers and streetwear in North America is projected to reach $6 billion by 2025 from $2 billion today, according to Cowen, an investment bank.

“The internet and eBay made reselling into a cottage industry,” said Matt Powell, an analyst at NPD Group. “Platforms like StockX made it into a business.”

For sneaker brands like Nike and Adidas, sites like StockX add a twist to the ecosystem around their most desired shoes, like Jordans and Yeezys. So far, the companies have taken a hands-off stance to the online marketplaces, with Nike’s chief financial officer saying in March that the company was not focused on reselling and had no partnership plans or business strategy for it.

But while the sneaker brands are not capturing any resale revenue, they benefit indirectly because that market generates buzz for them. So they carefully — and secretively — manage the supply of their hottest items, leading to wild spikes in resale prices, said John Kernan, a research analyst at Cowen.

“Keeping Jordans or Yeezys in cool markets, with demand far outstripping supply, is making them more relevant in the mass market,” Mr. Kernan said.

A pair of customized sneakers made from the jerseys of the Chicago Bulls are part of Mr. Luber’s extensive sneaker collection.CreditBrittany Greeson for The New York Times

Nike teased the resale market last November when it released a pair of $160 Jordan 1s that bore a message: Their tongues said “WEAR ME,” their toeboxes said “PLEASE CREASE,” and their midsoles said “NOT FOR RESALE.” In a few cases, shop owners required buyers to wear the shoes out of the store, a move that damaged their resale potential since most of the resale sites sell unworn sneakers. But the attention only fueled demand: The Jordan 1s immediately appeared on StockX and have sold for prices as high as $1,000.

Nike declined to comment.

Scott Cutler, the new chief executive of StockX, said more brands would eventually have to pay attention to resellers. “Nike, Adidas, Louis Vuitton, Gucci, Rolex, whatever it is, they’re certainly not ignoring marketplaces and are not naïve to the fact that their distribution channels are evolving,” he said.

StockX grew out of Campless, a website that Josh Luber, a former I.B.M. consultant, built in 2012 to track sneaker resale prices on eBay. After Mr. Luber delivered a popular TED Talk titled “Why sneakers are a great investment,” Dan Gilbert, owner of the Cleveland Cavaliers, and a co-founder, Greg Schwarz, acquired Campless.

Scott Cutler previously worked for eBay, StubHub and the New York Stock Exchange.CreditNick Hagen for The New York Times

Campless eventually transformed itself into StockX, a marketplace to buy and sell sneakers. From the beginning, it also positioned itself as a “stock market of things.”

On StockX, that played out with buyers bidding on items or purchasing them for the lowest asking price from sellers. Once a bid was accepted, sellers shipped their items to one of StockX’s four authentication centers, which makes sure the shoes are not fake brands and then sends them to the buyer. StockX makes money by charging sellers a transaction fee. The company said its revenue more than doubled in the last year, with gross product sales topping $100 million a month. It has expanded into streetwear and luxury goods like handbags and has more than 800 employees.

The site does not carry user profiles and ratings, but includes detailed sales and pricing history for each item, making it more like a stock market than eBay. In total, StockX has raised $160 million, with its newest investors including General Atlantic, DST Global and GGV Capital.

One customer has been Usman Hasib, a 32-year-old in Houston. A sneaker collector since he was 13, Mr. Hasib has used StockX to amass 56 pairs of shoes worth around $25,000, according to StockX’s “portfolio” tracker. He rarely sells his purchases.

“I try to wear a different one every day,” he said.

When Mr. Hasib recently was unable to score Nike’s Off-White Jordan 1 sneakers in retail stores, he paid around $1,050 for a pair on StockX. Prices later surged to nearly $3,000 on the site. “It literally is like playing a stock market,” he said.

A StockX executive showed sneakerheads and small-business owners a custom sneaker during a tour of the offices in April last year.CreditBrittany Greeson for The New York Times

Mr. Cutler, who previously worked at eBay, StubHub and the New York Stock Exchange, became an adviser to StockX in 2016. That was when he read about the company’s plans to create a Big Board for commerce and products, modeled after marketplaces like eBay and StubHub. So he decided to offer his help.

“I immediately reached out and said, ‘Interestingly enough, I am the one person on the Earth that knows all of those companies intimately well,’” he said.

He said StockX planned to use the new $110 million in capital to expand internationally and push into selling newly released products.

Mr. Luber, StockX’s founder, said he was stepping down as chief executive but would continue to be the company’s public face. In a phone call from Paris, where StockX was involved in Fashion Week, he said he now had an even bigger vision than dropping new Jordans on StockX: He wants to replace static retail prices — an “antiquated concept,” he said — with a stock market style of shopping. In this setup, shoppers place bids on new items and prices are determined entirely by supply and demand.

Mr. Luber said he recognized the concept might initially be a stretch. “To tell all these brands that our idea is to get rid of retail prices is crazy, but that’s the slow, big idea behind it,” he said.

Mr. Luber has installed a ticker tracking the value of different shoes within StockX’s ecosystem. CreditNick Hagen for The New York Times

StockX is already moving ahead with the notion. In January, it held an “I.P.O.” — that’s initial product offering — for a limited run of slide sandals created by Ben Baller, a celebrity jewelry designer. The company used a complicated Dutch auction to determine which bidders got to buy the sandals and at what price. It resulted in an average price of $210 a pair — three times as much as they would have cost at retail, but lower than the majority of the bids.

After the release, other brands inquired about similar deals. StockX now has half a dozen such releases in the works with other designers, Mr. Luber said. “It’s not going to be an overnight thing, but it is absolutely logical,” he said.

In the meantime, StockX is expanding further into secondhand sales of luxury goods such as handbags and watches, an area currently topped by The RealReal, a San Francisco start-up that plans to go public later this week.

Mr. Wilkins, the power seller of sneakers, said he doesn’t plan to trade the shoes forever, but “right now it’s awesome income.”

There is one drawback, he acknowledged. Once his hobby became a business, he lost interest in getting the hottest shoes for himself. “The more and more you sell shoes, the more and more you dislike shoes,” he said.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Buy Low-Tops, Sell High-Tops: A Sneaker Exchange Is Worth $1 Billion

Nic Wilkins started selling parts of his sneaker collection online two years ago as a way to make some extra cash in college. The hobby took off and this year, he expects to move 10,000 pairs of shoes. His anticipated take is a 25 percent profit from over $1 million in sales.

The main website enabling Mr. Wilkins’ now full-time business? StockX, a site that treats coveted consumer goods like sneakers as tradable commodities.

Sneaker collecting and trading “just keeps growing,” said Mr. Wilkins, a 24-year-old San Francisco resident who recently hired a business partner to manage his shoe inventory at a warehouse in upstate New York. “It is absolutely wild.”

StockX is part of a burgeoning group of online marketplaces that have turned resales of sneakers into a kind of currency — and an increasingly big business. Other sites like GOAT Group, Stadium Goods and Bump, which also resell sneakers, streetwear and other goods, have raised more than $200 million in venture capital funding. On Wednesday, StockX said it had hired a new chief executive to expand its business and garnered a fresh $110 million in financing that values it at more than $1 billion.

The rise of these online marketplaces is now pushing sneaker retailers and brands to rethink the potential of resale sites — once deemed a quirky niche for enthusiasts — as serious distribution channels. In February, Foot Locker invested $100 million in GOAT Group and said the companies would “combine efforts across digital and physical retail platforms.” And the luxury site Farfetch acquired the LVMH-backed Stadium Goods for $250 million in December.

ImageWestlake Legal Group merlin_156972759_4d93b789-280e-4077-ba8c-279a96e4b804-articleLarge Buy Low-Tops, Sell High-Tops: A Sneaker Exchange Is Worth $1 Billion Venture Capital StockX Sneakers Shopping and Retail Scott Cutler Luber, Josh E-Commerce Computers and the Internet Appointments and Executive Changes

StockX grew out of Campless, a website that tracked sneaker resale prices on eBay.CreditNick Hagen for The New York Times

The fervor for sneakers has been fueled by “sneakerheads” and others who regard the shoes as investment assets. All told, the market for resale sneakers and streetwear in North America is projected to reach $6 billion by 2025 from $2 billion today, according to Cowen, an investment bank.

“The internet and eBay made reselling into a cottage industry,” said Matt Powell, an analyst at NPD Group. “Platforms like StockX made it into a business.”

For sneaker brands like Nike and Adidas, sites like StockX add a twist to the ecosystem around their most desired shoes, like Jordans and Yeezys. So far, the companies have taken a hands-off stance to the online marketplaces, with Nike’s chief financial officer saying in March that the company was not focused on reselling and had no partnership plans or business strategy for it.

But while the sneaker brands are not capturing any resale revenue, they benefit indirectly because that market generates buzz for them. So they carefully — and secretively — manage the supply of their hottest items, leading to wild spikes in resale prices, said John Kernan, a research analyst at Cowen.

“Keeping Jordans or Yeezys in cool markets, with demand far outstripping supply, is making them more relevant in the mass market,” Mr. Kernan said.

A pair of customized sneakers made from the jerseys of the Chicago Bulls are part of Mr. Luber’s extensive sneaker collection.CreditBrittany Greeson for The New York Times

Nike teased the resale market last November when it released a pair of $160 Jordan 1s that bore a message: Their tongues said “WEAR ME,” their toeboxes said “PLEASE CREASE,” and their midsoles said “NOT FOR RESALE.” In a few cases, shop owners required buyers to wear the shoes out of the store, a move that damaged their resale potential since most of the resale sites sell unworn sneakers. But the attention only fueled demand: The Jordan 1s immediately appeared on StockX and have sold for prices as high as $1,000.

Nike declined to comment.

Scott Cutler, the new chief executive of StockX, said more brands would eventually have to pay attention to resellers. “Nike, Adidas, Louis Vuitton, Gucci, Rolex, whatever it is, they’re certainly not ignoring marketplaces and are not naïve to the fact that their distribution channels are evolving,” he said.

StockX grew out of Campless, a website that Josh Luber, a former I.B.M. consultant, built in 2012 to track sneaker resale prices on eBay. After Mr. Luber delivered a popular TED Talk titled “Why sneakers are a great investment,” Dan Gilbert, owner of the Cleveland Cavaliers, and a co-founder, Greg Schwarz, acquired Campless.

Scott Cutler previously worked for eBay, StubHub and the New York Stock Exchange.CreditNick Hagen for The New York Times

Campless eventually transformed itself into StockX, a marketplace to buy and sell sneakers. From the beginning, it also positioned itself as a “stock market of things.”

On StockX, that played out with buyers bidding on items or purchasing them for the lowest asking price from sellers. Once a bid was accepted, sellers shipped their items to one of StockX’s four authentication centers, which makes sure the shoes are not fake brands and then sends them to the buyer. StockX makes money by charging sellers a transaction fee. The company said its revenue more than doubled in the last year, with gross product sales topping $100 million a month. It has expanded into streetwear and luxury goods like handbags and has more than 800 employees.

The site does not carry user profiles and ratings, but includes detailed sales and pricing history for each item, making it more like a stock market than eBay. In total, StockX has raised $160 million, with its newest investors including General Atlantic, DST Global and GGV Capital.

One customer has been Usman Hasib, a 32-year-old in Houston. A sneaker collector since he was 13, Mr. Hasib has used StockX to amass 56 pairs of shoes worth around $25,000, according to StockX’s “portfolio” tracker. He rarely sells his purchases.

“I try to wear a different one every day,” he said.

When Mr. Hasib recently was unable to score Nike’s Off-White Jordan 1 sneakers in retail stores, he paid around $1,050 for a pair on StockX. Prices later surged to nearly $3,000 on the site. “It literally is like playing a stock market,” he said.

A StockX executive showed sneakerheads and small-business owners a custom sneaker during a tour of the offices in April last year.CreditBrittany Greeson for The New York Times

Mr. Cutler, who previously worked at eBay, StubHub and the New York Stock Exchange, became an adviser to StockX in 2016. That was when he read about the company’s plans to create a Big Board for commerce and products, modeled after marketplaces like eBay and StubHub. So he decided to offer his help.

“I immediately reached out and said, ‘Interestingly enough, I am the one person on the Earth that knows all of those companies intimately well,’” he said.

He said StockX planned to use the new $110 million in capital to expand internationally and push into selling newly released products.

Mr. Luber, StockX’s founder, said he was stepping down as chief executive but would continue to be the company’s public face. In a phone call from Paris, where StockX was involved in Fashion Week, he said he now had an even bigger vision than dropping new Jordans on StockX: He wants to replace static retail prices — an “antiquated concept,” he said — with a stock market style of shopping. In this setup, shoppers place bids on new items and prices are determined entirely by supply and demand.

Mr. Luber said he recognized the concept might initially be a stretch. “To tell all these brands that our idea is to get rid of retail prices is crazy, but that’s the slow, big idea behind it,” he said.

Mr. Luber has installed a ticker tracking the value of different shoes within StockX’s ecosystem. CreditNick Hagen for The New York Times

StockX is already moving ahead with the notion. In January, it held an “I.P.O.” — that’s initial product offering — for a limited run of slide sandals created by Ben Baller, a celebrity jewelry designer. The company used a complicated Dutch auction to determine which bidders got to buy the sandals and at what price. It resulted in an average price of $210 a pair — three times as much as they would have cost at retail, but lower than the majority of the bids.

After the release, other brands inquired about similar deals. StockX now has half a dozen such releases in the works with other designers, Mr. Luber said. “It’s not going to be an overnight thing, but it is absolutely logical,” he said.

In the meantime, StockX is expanding further into secondhand sales of luxury goods such as handbags and watches, an area currently topped by The RealReal, a San Francisco start-up that plans to go public later this week.

Mr. Wilkins, the power seller of sneakers, said he doesn’t plan to trade the shoes forever, but “right now it’s awesome income.”

There is one drawback, he acknowledged. Once his hobby became a business, he lost interest in getting the hottest shoes for himself. “The more and more you sell shoes, the more and more you dislike shoes,” he said.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

‘We’re in a Dark Place’: Children Returned to Troubled Texas Border Facility

CLINT, Tex. — At the squat, sand-colored concrete border station in Texas that has become the center of debate over President Trump’s immigration policies, a chaotic shuffle of migrant children continued on Tuesday as more than 100 were moved back into a facility that days earlier had been emptied in the midst of criticism that young detainees there were hungry, crying and unwashed.

The transfer came just days after 249 children originally housed at the station in Clint, Tex., had been moved to other facilities to relieve overcrowding. The continuing movement of children and confusion over housing of the Border Patrol’s youngest detainees pointed to an increasingly disorganized situation along the southern border and an agency struggling to maintain minimal humanitarian standards amid an unprecedented influx of migrant families.

[Read here for the story behind a photo of two migrants found dead in the Rio Grande.]

“We’ve dipped far below the standard of care into the realms of just utter darkness,” said State Representative Terry Canales of Texas, a Democrat who contacted Border Patrol officials to ask what he and his staff could do to help. “We’re in a dark place as a nation, and it just breaks my heart.”

In Clint, a farm town about 20 miles southeast of El Paso with fewer than 1,000 residents, there was consternation and dismay among residents at reports from lawyers who visited the border station recently, who said they found that children as young as 5 months old had been housed with filthy clothes, dirty diapers and inadequate food.

“Almost like a concentration camp,” said Juan Martinez, who works at the Pride Fitness gym in Clint and heard about what was happening at the nearby station from news reports. “I mean, they’re not killing them, but they’re treating them like animals. They need basic hygiene.”

From across the country, donations of diapers and other supplies began flowing in — though Customs and Border Protection agents said they could not accept outside supplies and initially refused the growing stockpile. More than a dozen people drove into South Texas from as far away as the West Coast to deliver aid and launch protests.

“It’s about getting people aware and creating a space for people to be outraged,” said Kris Brockmann, who traveled 17 hours from Palo Alto, Calif., to protest outside a Border Patrol facility near Clint on Tuesday night.

The Clint facility houses only a fraction of the tens of thousands of migrants who have been crossing the border each month, mostly Central American families fleeing poverty and violence in their homelands. But the lawyers’ observations of the conditions there, shared with journalists last week, offered a rare view into a system that has been deteriorating for the most part out of sight of the public.

The Department of Homeland Security’s inspector general has recently reported on facilities that it found to be dangerously overcrowded, where there was standing room only, and where lights had been kept on 24 hours a day in rooms where people had been left to sleep on concrete floors. But reporters have rarely been allowed into the facilities to document the conditions first hand.

Mr. Trump refused to take responsibility for the conditions facing migrant children and families at border facilities. “You know, they were built by President Obama, they are really not designed so much for children,” Mr. Trump said in an interview in the Oval Office on Tuesday. “But you know, children can be there because we have no choice because of the laws, the laws are so bad.”

ImageWestlake Legal Group merlin_156695199_14514b9b-6239-4e77-8a03-26884c5734ee-articleLarge ‘We’re in a Dark Place’: Children Returned to Troubled Texas Border Facility Texas Sanders, John P Immigration Detention Immigration and Emigration Customs and Border Protection (US) Clint (Tex) Children and Childhood Appointments and Executive Changes

John Sanders, the acting commissioner of Customs and Border Protection, left, is expected to step down in the coming weeks.CreditJ. Scott Applewhite/Associated Press

Asked if his administration’s policies were to blame, Mr. Trump said the conditions existed because Democrats in Congress would not agree to policy changes that would stanch the flow of migrants across the border. “All I can say is that if they change the law, you wouldn’t have it,” Mr. Trump said. “The cartels are making the money, are they using children’s — it’s virtual slavery. And if we could get a change, a very simple change it would go so quickly, so easily with the Democrats, we would be able to solve that problem very easily.”

The station in Clint was built in 2012. It was meant to temporarily house adults, not children, and not for a month at a time, as has happened under the Trump administration.

Local Democratic lawmakers on Tuesday were demanding an immediate improvement to conditions for detainees along the border, with Representative Joaquin Castro, a Democrat from Texas who is chairman of the Congressional Hispanic Caucus, announcing that the caucus would lead an inspection of the facility at Clint next week.

Amid the outrage over the conditions at Clint, the acting commissioner of Customs and Border Protection, John Sanders, announced he would step down in early July as the government’s primary border enforcement executive, the latest in a series of personnel changes within the federal border enforcement agencies that have come down since April, when Mr. Trump asked Kirstjen Nielsen to resign from her position as homeland security secretary.

[Read more: Customs and Border Protection’s acting chief will step down.]

A C.B.P. spokesman said that the agency was able to return 100 children to Clint because the previous overcrowding had been alleviated, but he also said that no additional resources were being provided to them. He disputed the accounts of the lawyers, including some from the nation’s top law schools, who after a court-ordered visit to the facility earlier this month said they had observed children who had not been allowed to shower in nearly a month, and were so hungry that it had been hard for them to sleep through the night.

They found children as young as 8 caring for infants they didn’t know, and toddlers who had relieved themselves in their clothes because they had not been put in diapers.

[Read about the conditions migrant children were held in at Clint.

“I personally don’t believe these allegations,” the Customs and Border Protection official, who spoke on the condition he not be identified, told reporters.

Volunteers who began trying to deliver donated supplies to the facility in Clint starting over the weekend were originally turned away and told that outside donations would not be accepted. A C.B.P. spokesman on Tuesday followed up, telling reporters that the agency was reviewing its donations policy to see if it could legally accept any supplies from the outside — though he also disputed the idea that any needed supplies were running low.

Mr. Canales, the Democratic state representative, said his office had been contacted by more than 1,000 people in the last week who were looking for ways to help the children in Clint.

As evening approached on Tuesday, activists from places including California, New York and Washington, D.C., began their demonstration.

“I’ve become increasingly aware of the enormous pipeline from Central America and all of the things that make it unlivable there,” said Heather Hadlock, a professor of musicology at Stanford University in California. ”Those things are not trivial or optional.”

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Migrant Children Moved Back to Troubled Texas Border Facility

CLINT, Tex. — At the squat, sand-colored concrete border station in Texas that has become the center of debate over President Trump’s immigration policies, a chaotic shuffle of migrant children continued on Tuesday as more than 100 were moved back into a facility that days earlier had been emptied in the midst of criticism that young detainees there were hungry, crying and unwashed.

The station in Clint, Tex., sits in the middle of a farm town of fewer than 1,000 residents, framed by high fencing and a tall communications tower. In recent weeks, it has become a temporary home to hundreds of migrant children as the government has run out of space to place the large numbers of migrants continuing to flow into the country from Central America.

Lawyers who visited the facility said they found it stretched beyond its capacity, with hundreds of minor detainees having gone for weeks without access to showers, clean clothing or sufficient food.

But in a press call on Tuesday, a Customs and Border Protection official said that the agency was able to send about 100 children back to the station because overcrowding there had been alleviated. The official disputed the lawyers’ accounts of conditions at the facility, insisting that migrant detainees housed by the agency were given access to periodic showers and were offered unlimited snacks throughout the day.

The continuing movement of children and confusion over the situation at Clint demonstrated the increasingly disorganized situation along the southern border and the government’s struggle to maintain minimal humanitarian standards amid an unprecedented influx of migrant families that only recently has begun to show any signs of slowing.

The agency’s acting commissioner, John Sanders, will step down in early July as the government’s primary border enforcement executive, a federal official said Tuesday, a development that comes as the agency faces continuing public fury over the treatment of detained migrant children.

[Read more: Customs and Border Protection’s acting chief will step down.]

Mr. Sanders announced his resignation in an email to colleagues shortly after it was reported by journalists. He has led the agency since Mr. Trump tapped the former Customs and Border Protection commissioner, Kevin McAleenan, to replace Kirstjen Nielsen as homeland security secretary. Mr. Sanders specialized in developing technology for national security initiatives and previously served as the chief technology officer for the Transportation Security Administration.

ImageWestlake Legal Group merlin_156695199_14514b9b-6239-4e77-8a03-26884c5734ee-articleLarge Migrant Children Moved Back to Troubled Texas Border Facility Texas Sanders, John P Immigration Detention Immigration and Emigration Customs and Border Protection (US) Clint (Tex) Children and Childhood Appointments and Executive Changes

John Sanders, the acting commissioner of Customs and Border Protection, left, is expected to step down in the coming weeks.CreditJ. Scott Applewhite/Associated Press

The official who confirmed his resignation, who requested anonymity because he was not authorized to discuss the matter, said it was not clear whether the impending resignation was connected to recent criticism over the agency’s management of a large influx of migrant families along the border.

That assertion from Customs and Border Protection that children were being well cared for ran contrary to what the lawyers, from some of the nation’s top law schools, said they were told by children. During a court-ordered visit to the facility earlier this month, some children said they had not been allowed to shower in nearly a month, and were so hungry that it had been hard for them to sleep through the night.

[Read about the conditions migrant children were held in at Clint.

“I personally don’t believe these allegations,” the Customs and Border Protection official, who spoke on the condition he not be identified, told reporters.

The lawyers’ accounts prompted a significant public backlash, after which all but 30 of the roughly 300 children who were being housed in Clint were transferred elsewhere. Some 249 were placed in a shelter network for children run by the Department of Health and Human Services’ Office of Refugee Resettlement, while others were moved to a tent facility in El Paso run by Customs and Border Protection.

But on Tuesday, the C.B.P. official said that those moves had alleviated overcrowding in Clint, and allowed for the return of more than 100 children there. The spokesman said that no additional resources had been provided to the children who were sent back.

After the lawyers’ accounts about Clint were made public, volunteers from around the country began to mobilize, hoping to deliver supplies such as diapers, soap and food to the facility. But those who arrived there were not allowed in and their donations were not accepted, according to local media reports.

On the call with reporters on Tuesday, the Customs and Border Protection official said that the agency was reviewing its policy for accepting outside donations, but the official also disputed the idea that supplies were running low.

“We are looking at the possibility of using some of those donations going forward but those items, it’s important to note, are available now,” the official said.

Federal officials had previously told the office of Representative Terry Canales, a Democrat from Texas who requested a list of needed supplies, that the agency would not be able to accept outside donations, according to Curtis Smith, Mr. Canales’s chief of staff.

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Migrant Children Moved Back to Troubled Border Facility in Texas

CLINT, Tex. — At the squat, sand-colored concrete border station in Texas that has become the center of debate over President Trump’s immigration policies, a chaotic shuffle of migrant children continued on Tuesday as more than 100 were moved back into a facility that days earlier had been emptied in the midst of criticism that young detainees there were hungry, crying and unwashed.

The station in Clint, Tex., sits in the middle of a farm town of fewer than 1,000 residents, framed by high fencing and a tall communications tower. In recent weeks, it has become a temporary home to hundreds of migrant children as the government has run out of space to place the large numbers of migrants continuing to flow into the country from Central America.

Lawyers who visited the facility said they found it stretched beyond its capacity, with hundreds of minor detainees having gone for weeks without access to showers, clean clothing or sufficient food.

But in a press call on Tuesday, a Customs and Border Protection official said that the agency was able to send about 100 children back to the station because overcrowding there had been alleviated. The official disputed the lawyers’ accounts of conditions at the facility, insisting that migrant detainees housed by the agency were given access to periodic showers and were offered unlimited snacks throughout the day.

The continuing movement of children and confusion over the situation at Clint demonstrated the increasingly disorganized situation along the southern border and the government’s struggle to maintain minimal humanitarian standards amid an unprecedented influx of migrant families that only recently has begun to show any signs of slowing.

The agency’s acting commissioner, John Sanders, will step down in early July as the government’s primary border enforcement executive, a federal official said Tuesday, a development that comes as the agency faces continuing public fury over the treatment of detained migrant children.

[Read more: Customs and Border Protection’s acting chief will step down.]

Mr. Sanders announced his resignation in an email to colleagues shortly after it was reported by journalists. He has led the agency since Mr. Trump tapped the former Customs and Border Protection commissioner, Kevin McAleenan, to replace Kirstjen Nielsen as homeland security secretary. Mr. Sanders specialized in developing technology for national security initiatives and previously served as the chief technology officer for the Transportation Security Administration.

ImageWestlake Legal Group merlin_156695199_14514b9b-6239-4e77-8a03-26884c5734ee-articleLarge Migrant Children Moved Back to Troubled Border Facility in Texas Texas Sanders, John P Immigration Detention Immigration and Emigration Customs and Border Protection (US) Clint (Tex) Children and Childhood Appointments and Executive Changes

John Sanders, the acting commissioner of Customs and Border Protection, left, is expected to step down in the coming weeks.CreditJ. Scott Applewhite/Associated Press

The official who confirmed his resignation, who requested anonymity because he was not authorized to discuss the matter, said it was not clear whether the impending resignation was connected to recent criticism over the agency’s management of a large influx of migrant families along the border.

That assertion from Customs and Border Protection that children were being well cared for ran contrary to what the lawyers, from some of the nation’s top law schools, said they were told by children. During a court-ordered visit to the facility earlier this month, some children said they had not been allowed to shower in nearly a month, and were so hungry that it had been hard for them to sleep through the night.

[Read about the conditions migrant children were held in at Clint.

“I personally don’t believe these allegations,” the Customs and Border Protection official, who spoke on the condition he not be identified, told reporters.

The lawyers’ accounts prompted a significant public backlash, after which all but 30 of the roughly 300 children who were being housed in Clint were transferred elsewhere. Some 249 were placed in a shelter network for children run by the Department of Health and Human Services’ Office of Refugee Resettlement, while others were moved to a tent facility in El Paso run by Customs and Border Protection.

But on Tuesday, the C.B.P. official said that those moves had alleviated overcrowding in Clint, and allowed for the return of more than 100 children there. The spokesman said that no additional resources had been provided to the children who were sent back.

After the lawyers’ accounts about Clint were made public, volunteers from around the country began to mobilize, hoping to deliver supplies such as diapers, soap and food to the facility. But those who arrived there were not allowed in and their donations were not accepted, according to local media reports.

On the call with reporters on Tuesday, the Customs and Border Protection official said that the agency was reviewing its policy for accepting outside donations, but the official also disputed the idea that supplies were running low.

“We are looking at the possibility of using some of those donations going forward but those items, it’s important to note, are available now,” the official said.

Federal officials had previously told the office of Representative Terry Canales, a Democrat from Texas who requested a list of needed supplies, that the agency would not be able to accept outside donations, according to Curtis Smith, Mr. Canales’s chief of staff.

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Kenneth Lerer Steps Down as BuzzFeed Chairman

Westlake Legal Group c2230103a3804fdeb4a3483745c0fc87-facebookJumbo Kenneth Lerer Steps Down as BuzzFeed Chairman Peretti, Jonah H News and News Media Lerer, Kenneth Layoffs and Job Reductions Huffington Post Google Inc BuzzFeed Inc Axios Media Inc Appointments and Executive Changes

Kenneth Lerer, a prolific investor who helped found HuffPost, has stepped down as chairman of BuzzFeed, the viral-happy website that has lately experienced turbulence after a sharp rise in prominence.

Mr. Lerer’s departure, which was first reported by Axios on Tuesday, was confirmed by two people with knowledge of the matter who declined to speak publicly. Mr. Lerer’s investment fund has not altered its stake in BuzzFeed, the people said.

A BuzzFeed spokesman declined to comment.

The immediate implications of Mr. Lerer’s departure for BuzzFeed were unclear. Jonah Peretti, the site’s founder and chief executive, has been BuzzFeed’s principal leader of late.

BuzzFeed has struggled in the past few years after a period of significant growth. The bumpy ride has coincided with a broader reckoning for digital media outlets confronting challenging trends, including the increasing dominance of Google and Facebook in the online advertising market.

In January, BuzzFeed laid off 15 percent of its staff, including dozens of journalists at its money-losing but prestigious news division.

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A Plan to Mine the Minnesota Wilderness Hit a Dead End. Then Trump Became President.

ELY, Minn. — In the waning months of the Obama administration, a Chilean conglomerate was losing a fight with the United States government over a copper mine that it wanted to build near a pristine wilderness area in Minnesota.

The election of President Trump, with his business-friendly bent, turned out to be a game-changer for the project.

Beginning in the early weeks of Mr. Trump’s presidency, the administration worked at a high level to remove roadblocks to the proposed mine, government emails and calendars show, overruling concerns that it could harm the Boundary Waters, a vast landscape of federally protected lakes and forests along the border with Canada.

Executives with the mining company, Antofagasta, discussed the project with senior administration officials, including the White House’s top energy adviser, the emails show. Even before an interior secretary was appointed to the new administration, the department moved to re-examine leases critical to the mine, eventually restoring those that the Obama administration had declined to renew. And the Forest Service called off an environmental review that could have restricted mining, even though the agriculture secretary had told Congress that the review would proceed.

An Interior Department spokesman said it simply worked to rectify “a flawed decision rushed out the door” before Mr. Trump took office. Several senior department officials with previous administrations, however, said they were surprised by the swift change of course for the little-known Minnesota project, which was not a focal point of Mr. Trump’s presidential campaign.

For the family of the billionaire Andrónico Luksic, which controls the Chilean conglomerate, the policy reversals could provide a big boost to its mining business. Since the change in administration, the Antofagasta subsidiary Twin Metals Minnesota has significantly ramped up its lobbying in Washington, according to federal disclosures, spending $900,000.

ImageWestlake Legal Group 00CLI-HOUSE-luksic-articleLarge A Plan to Mine the Minnesota Wilderness Hit a Dead End. Then Trump Became President. Zinke, Ryan (1961- ) Wilderness Areas Wetlands washington dc United States Politics and Government Trump, Ivanka Trump, Donald J Tidwell, Thomas L Renting and Leasing (Real Estate) Minnesota Mines and Mining Lobbying and Lobbyists Kushner, Jared Kushner, Charles Interior Department Greenhouse Gas Emissions Global Warming Forests and Forestry Forest Service environment Chile Carbon Dioxide Banco de Chile Bachelet, Michelle Appointments and Executive Changes

Andrónico Luksic’s plan for a copper mine in Minnesota was blocked by President Barack Obama. His fortunes have since shifted.CreditMartin Bernetti/Agence France-Presse — Getty Images

Ivanka Trump, left, and Jared Kushner, second from left, two of the president’s closest advisers.CreditAlex Wong/Getty Images

But the mining project’s breakthrough, already unpopular with environmentalists, has drawn additional scrutiny and criticism because of an unusual connection between Mr. Luksic and two of Mr. Trump’s family members.

Just before Mr. Trump took office, Mr. Luksic added a personal investment to his portfolio: a $5.5 million house in Washington. Mr. Luksic bought the house with the intention of renting it to a wealthy new arrival to Mr. Trump’s Washington, according to Rodrigo Terré, chairman of Mr. Luksic’s family investment office, which handled the purchase.

The idea worked. Even before the purchase was final, real estate agents had lined up renters: Jared Kushner and Ivanka Trump.

The rental arrangement has been a point of concern for ethics experts and groups opposed to mining near the Boundary Waters, and has focused national attention, particularly among some Democrats in Congress, on an otherwise local debate.

The Wall Street Journal first reported about the house in March 2017. At that time, Twin Metals was suing the federal government over the mining leases, but the Trump administration’s direction on the mine since then had only begun to take shape.

In recent months, the scrutiny has grown. In March, Representative Raúl M. Grijalva, the Arizona Democrat who is chairman of the House Natural Resources Committee, wrote a letter with other lawmakers to the interior and agriculture secretaries raising significant concerns about the proposed mine.

The letter said the two departments’ actions “blatantly ignored scientific and economic evidence.” It also mentioned the “interesting coincidence” surrounding the rental of the Luksic house to Mr. Trump’s relatives. Separately, a group in Minnesota opposed to the mining, Save the Boundary Waters, has called the rental arrangement “deeply troubling” and has seized on it to cast doubt on the administration’s actions.

The White House and representatives for the couple declined to answer questions about whether the rental deal had been reviewed by ethics officials. “Both Mr. Kushner and Ms. Trump follow the ethics advice they received when they entered government service,” said Peter Mirijanian, a spokesman for Mr. Kushner’s lawyer, Abbe Lowell.

Mr. Terré called the lease a simple real estate transaction that happened to involve the incoming president’s family. “I do not believe there was anything unethical or inappropriate about this business transaction,” he said.

Both Mr. Mirijanian and Mr. Terré said the rental was not related to the Minnesota mine. “There is no correlation in any way,” Mr. Mirijanian said. They were “two entirely unrelated matters” and tying them together was “based on unfounded rumors and speculation,” Mr. Terré said.

An Interior Department spokeswoman said that neither Mr. Kushner nor Ms. Trump been involved in discussions about the mine.

Nonetheless, several ethics experts said they would have cautioned Mr. Kushner and Ms. Trump against renting the home, given the Luksic family’s business before the administration.

“There may be nothing wrong,” said Arthur Andrew Lopez, a federal government ethics official for two decades who is now a professor at Indiana University’s Kelley School of Business. “But it doesn’t look good.”

Antofagasta hopes to mine on the edge of the Boundary Waters, which encompasses more than a million acres of lakes and forest.CreditTim Gruber for The New York Times

The Boundary Waters hold a special place in American geography: More than a million acres of lakes and forests provide a rich habitat for thousands of species, including the gray wolf and Canada lynx. But below the surface and beyond lies richness of another sort, an estimated four billion tons of copper and nickel ore — believed to be one of the world’s largest undeveloped mineral deposits.

The mining giant controlled by the Luksic family, Antofagasta, took full control of the project in 2015, and its executives have called it the company’s “most advanced international opportunity.” Antofagasta, which is publicly traded in London, is poised to benefit from the growing use of copper in renewable-energy technologies like wind and solar. It lists Mr. Luksic as a board member, and his younger brother, Jean-Paul Luksic, as chairman.

The company has spent more than $450 million so far on the project, run by the subsidiary, Twin Metals Minnesota. It says the project will generate hundreds of mining jobs.

The promise of employment resonates in Minnesota’s Iron Range, which has lost a quarter of its mining jobs since 2000. “The mining industry brings a tsunami effect for the community with regard to jobs, schools, everything,” said Andrea Zupancich, the mayor of Babbitt, a town of 1,500 near the proposed mine.

Antofagasta’s environmental record, however, has raised concerns. In Chile, the company’s Los Pelambres copper mine has suffered toxic spills, according to environmental groups. The company said the mine had experienced only “minor incidents involving limited spills” which were not toxic, and said it was proud of its environmental record.

In a 2016 analysis, Thomas Tidwell, who was then chief of the United States Forest Service, warned of risks to the Boundary Waters from the proposed Twin Metals mine, including the leaching of harmful metals. Mining, he concluded, risked “serious and irreplaceable harm to this unique, iconic, and irreplaceable wilderness.”

Twin Metals called the analysis “riddled with errors” and said “environmental risks will be properly managed.”

Still, the fears have divided nearby residents. “In the summer, we drink out of this water,” said Susan Schurke, who runs Wintergreen Northern Wear, an outdoor clothing company. “Once that’s tainted, it’s over. How can we risk that?”

When the Obama administration moved to block the project in 2016, Twin Metals sued. The company said in a statement then that the administration’s move threatened jobs and would “hinder access to one of the world’s largest sources of copper, nickel and platinum — resources of strategic importance to the U.S. economy and national defense.”

Just as the mining company’s hopes appeared to be on the ropes, it got a welcome surprise: Mr. Trump’s election, and the promise of a pro-industry agenda.

“In 100 years, this water is going to be far more valuable a resource here than copper,” Sullen Sack, a wilderness educator, said.CreditTim Gruber for The New York Times
A map of the Boundary Waters at Ely Outfitting Company in Ely, Minn.CreditTim Gruber for The New York Times The region has lost a quarter of its mining jobs since 2000.CreditTim Gruber for The New York Times

With a new administration on its way to Washington, Mr. Luksic contacted a real estate broker he knew for help with an investment idea: buying residential properties in Washington, including a luxury home, to rent out.

With the help of the broker, Rodrigo Valderrama, Mr. Luksic’s family investment office, which through corporate entities owns a portfolio of real estate in the United States, bought two condominiums in the capital. One was never rented and the other was later sold at a loss.

As for the luxury home, Mr. Valderrama spent weeks touring homes and alerting brokers that he had an interested client. One house he saw was on Tracy Place, in the Kalorama neighborhood, being handled by the real estate firm Washington Fine Properties.

Ms. Trump and Mr. Kushner were using the same firm for their hunt for a house to rent. With Mr. Kushner’s parents tagging along, they saw the six-bedroom, 7,000-square-foot Kalorama home as well.

In the space of a week, Mr. Luksic’s representatives agreed to buy the house and closed on the all-cash transaction, while their would-be tenants waited for the purchase to be complete.

The two sides, working through brokers, agreed on rent of $15,000 per month. Mr. Terré described it as being in the “high range” for the area, which some real estate agents confirmed. Still, that rent was significantly lower than what the couple had discussed paying for another more expensive house, according to interviews.

The home rented by Jared Kushner and Ivanka Trump in the Kalorama neighborhood of Washington.CreditTom Brenner for The New York Times

Mr. Terré said both sides were aware of each others’ identities before the rental deal was finalized. “We disclosed our name and the name of my boss,” he said in a telephone interview. Mr. Mirijanian said the couple had decided to lease the home before knowing the landlord’s identity. He did not directly respond to questions about whether they learned of that identity before signing the lease.

Mr. Luksic has written on Twitter that he does not know Mr. Trump or any member of his family, and only met Mr. Trump briefly at a New England Patriots football game years ago. Mr. Terré said Mr. Luksic “has not had any interactions with the Trump White House.”

Critics of the Luksic family say they were suspicious of the Washington investments because of Mr. Luksic’s past in Chile, where he has faced claims of attempts to win favor with the family of a former Chilean president. The Luksic family, one of the world’s wealthiest, has interests spanning banking, manufacturing, energy, shipping and beer.

Mr. Luksic came under fire for meeting with the son and daughter-in-law of Michelle Bachelet, who was running to be president of Chile at the time, as they sought a $10 million loan for their company from Banco de Chile, which is controlled by the Luksic family conglomerate. After Ms. Bachelet’s 2013 election, the bank approved the loan.

A spokesman for Ms. Bachelet said an investigation into the meeting didn’t lead to any charges. Representatives for Mr. Luksic said that he never discussed the loan with Ms. Bachelet, and that regulators found “there was absolutely nothing irregular about the bank’s approval of the loan.”

The Trump administration’s efforts to smooth the way for Antofagasta’s mining ambitions began less than two weeks after the inauguration, when Interior Department officials began re-examining the leases, the government emails show.

The message from an early meeting, according to an attendee who spoke on condition of anonymity, was that officials should prepare for a change in direction.

Officials also made sure the incoming interior secretary, Ryan Zinke, not yet in the job, was briefed. In an email, one Interior Department official described that effort as a “fire drill.”

The administration’s efforts are documented in part in thousands of pages of government emails and calendars, many obtained through records requests by Louis V. Galdieri, a documentary filmmaker, and the Sierra Club, an environmental organization.

A key meeting occurred in early May, when Antofagasta’s chief executive, along with other executives and lobbyists, discussed the issue with the White House’s top adviser on domestic energy and the environment, Michael Catanzaro. The company said it wanted to reverse the Obama-era decisions, which it said were illegal and inflicted “undue damage.”

Rock core samples taken by Twin Metals as part of preparations for mining.CreditTim Gruber for The New York Times
Near the Wintergreen Dogsled Lodge outside Ely. Dogsledding in the Boundary Waters wilderness is popular in winter.CreditTim Gruber for The New York Times A slab of taconite iron ore, a major local industry in decades past, on display in Babbitt, Minn.CreditTim Gruber for The New York Times

The next month, Interior Department officials learned that the White House had “expressed interest in the Twin Metals matter,” according to an email sent by a department lawyer marked “TIME SENSITIVE.” Soon after, top interior appointees traveled to the Minnesota site.

That December, the department reversed course on denying the company’s leases, and Twin Metals withdrew its lawsuit. The Interior Department formally renewed the leases last month, with some restrictions.

Twin Metals scored another victory in September when the Forest Service cut short its mining-ban review. An agency spokesman said it had determined that neither the study nor a ban was needed.

A Twin Metals spokesman, David Ulrich, said the company’s outreach was part of a long-running effort to share its views with the federal government. Obama administration officials had also visited the mining site, he said.

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“We are confident that this world-class mineral resource can be developed safely and with a minimal impact to the environment,” he said in a statement.

The mine still faces a yearslong permitting and approval process. Engineers have been drilling boreholes and wells to study the region’s geology and water, and the company is preparing an operating plan.

“The last administration created some challenges,” Mr. Ulrich said during a tour of the site on the Boundary Waters’ edge. “But it was never not moving forward.”

On a trip to Minnesota in April, Mr. Trump was jubilant about the restoration of mining.

“Under the previous administration,” he said at a truck factory, “America’s rich natural resources were put under lock and key.” The changes since then, he said, were “really pretty amazing.”

Moonrise over Garden Lake, on the edge of the Boundary Waters in Minnesota.CreditTim Gruber for The New York Times

Reporting was contributed by Lisa Friedman in Washington, Jesse Drucker and Kate Kelly in New York, and Pascale Bonnefoy in Santiago, Chile. Kitty Bennett and Alain Delaquérière contributed research.

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Nissan Reappoints Saikawa to Board as Shareholders Hammer Renault

Westlake Legal Group 24nissan1-facebookJumbo Nissan Reappoints Saikawa to Board as Shareholders Hammer Renault Shareholder Rights and Activism Senard, Jean-Dominique Saikawa, Hiroto Renault SA Nissan Motor Co Japan Ghosn, Carlos Boards of Directors Appointments and Executive Changes

YOKOHAMA, Japan — Nissan’s embattled chief executive, Hiroto Saikawa, was re-elected to the company’s board on Tuesday, during an annual meeting in which shareholders vented their anger at the scandal-wracked company’s French partner, Renault.

Mr. Saikawa apologized on Tuesday to shareholders gathered at a hotel in Yokohama, where Nissan is based, for the company’s financial misconduct issues, which have rocked Nissan and led to charges against its former chairman, Carlos Ghosn. After his apology, Mr. Saikawa and other Nissan officials bowed to the assembled shareholders.

He said he would swiftly implement an overhaul of Nissan’s corporate governance structure, which shareholders approved on Tuesday. The new system — aimed at preventing a recurrence of the management problems that occurred under Mr. Ghosn’s tenure — introduces independent committees for nominations and compensation, putting the company in line with global governance standards.

“There’s a responsibility for the past, and there’s another responsibility, responsibility for the future,” Mr. Saikawa said.

“We were a bit slow in taking actions,” he added. “We are intensifying our efforts to catch up as soon as possible.”

Some investors were not mollified. They blamed Mr. Saikawa in part for the chaos that enveloped the company following the arrest in November of Mr. Ghosn and for the company’s lackluster financial performance. Some shareholders unsuccessfully called on investors to reject Mr. Saikawa as a board member.

Shareholders reserved most of their bile for Renault, however. With Mitsubishi Motors, the Japanese carmaker, the three companies comprise the world’s largest carmaking alliance. Renault controls over 43 percent of Nissan’s stock, giving it a major say in Nissan’s future.

The shareholders expressed anger over the French company’s move to block Nissan’s effort to overhaul its governance. One questioner accused Renault’s chairman, Jean-Dominique Senard, who attended the meeting, of trying to sell the company out to the French government. The French government, a major Renault shareholder, has pushed for the company to pursue a merger with Nissan, a move that has provoked anxiety in Japan.

“French people are very sly!” the questioner said as he dressed Mr. Senard down. The person’s identity was not immediately clear.

Mr. Senard defended his conduct as well as Renault’s unsuccessful talks in recent weeks to merge the company with Fiat Chrysler Automobiles, the Italian-American automaker. The potential combination roiled the auto world, but Nissan’s hesitance amid calls for a quick deal helped torpedo the proposed marriage. Mr. Senard said it would have brought substantial benefits to the Nissan-Renault alliance.

”Since I arrived, I have done everything I can to smooth the relationship of an alliance that I found in a much worse state than I thought,” he said.

Mr. Saikawa has been struggling to free the company from a mire of controversy following Mr. Ghosn’s arrest and eventual ouster over charges of financial wrongdoing, which he has denied.

Mr. Ghosn’s fall blew open the tensions between Nissan and Renault. It has also led to a parade of embarrassing revelations for both the company and Mr. Saikawa himself, revealing the depth of dysfunction in Nissan’s corporate governance and raising questions about the chief executive.

Mr. Saikawa was nevertheless guaranteed reappointment to Nissan’s board on Tuesday because he enjoys the support of Renault. Under their partnership, Renault has effectively agreed to a hands-off approach to Nissan’s management ranks. The full count of the shareholder votes will not be available for several days, the company said.

Though Renault has continued to support him, Mr. Saikawa has a complicated relationship with Nissan’s French partner. In addition to Nissan’s foot-dragging on the Fiat Chrysler deal, he has also batted away overtures to merge Nissan and Renault.

After the deal fell apart, Mr. Senard, Renault’s chairman, used his company’s leverage to force Nissan to add the French carmaker’s top executives to the newly established committees.

During the meeting, Mr. Senard apologized to Nissan shareholders for any anxiety he may have caused. But he defended his power play on getting Renault’s representatives appointed to the new governance committees, saying that he was “just asking for parity. For fairness.”

Mr. Saikawa faces other challenges in guiding Nissan. The company posted dismal financial results for fiscal year 2018, with operating profit dropping by nearly 45 percent. It has projected that its profitability will drop by more than a quarter during the fiscal year ending in March 2020.

Investors are likely to remain skeptical. In an unusual move this month, two proxy adviser firms called for a clean break with Nissan’s tainted past, recommending that the company’s shareholders vote Mr. Saikawa off the board where he has served for 14 years, asking how he could have been unaware of Mr. Ghosn’s alleged wrongdoing.

In an interview with Japanese media earlier this month, Greg Kelly, another former Nissan executive, who faces charges of hiding Mr. Ghosn’s compensation from shareholders, said Mr. Saikawa had been directly involved with discussions of the former chairman’s pay and accused him of manipulating stock-based compensation for his own financial gain. Mr. Saikawa has declined to comment on the allegations.

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Does Trump Have the Legal Authority to Demote the Federal Reserve Chairman?

President Trump has been attacking the Federal Reserve and its chairman, Jerome H. Powell, because he is angry that the central bank’s efforts to keep the economy healthy over the long term may dampen the stock market and economic growth in the short term just as he gears up for re-election.

The Fed’s powers include the ability to lower or raise interest rates and expand or contract the money supply. It uses these tools to add fuel when the economy is struggling and too many people are unemployed, and to slow activity down when the economy is overheating and prices are rising too quickly.

The Fed has raised rates nine times since 2015 — including four times last year, during the tenure of Mr. Powell, whom Mr. Trump nominated for the chairmanship.

Against that backdrop, Bloomberg News reported this week that the White House counsel, Pat Cipollone, had been researching whether Mr. Trump could remove Mr. Powell as the Fed chairman, demoting him to an ordinary member of the agency’s seven-member board of governors.

Such a step would be yet another violation by Mr. Trump of norms that previous presidents of both parties exercised. It would also constitute an unprecedented challenge to the agency’s relative independence from politics.

The idea is that the central bank should make decisions based on economic data with an eye toward serving the long-term interests of the country, rather than taking whatever action would be expedient in the near term for politicians facing re-election, according to Sarah A. Binder, a George Washington University political science professor who studies the Fed.

The Fed’s credibility as the guardian of the economy stems from public perception that it will make the right decision without regard to partisan politics — including raising interest rates even though that is unpopular in the short term, she noted. When it costs more to borrow, fewer people will buy homes and cars, and fewer businesses will invest or hire new employees. While such a decision may be good for the long-term economic health of the country, it is bad for incumbent politicians who want happy voters in a coming election.

“Lawmakers tied their hands behind their backs so politicians won’t be tempted to super-juice the economy before an election,” Ms. Binder said.

Most senior government officials are subject to political control by Mr. Trump because he can fire them at will. But the Fed is one of several independent executive agencies that work differently. Congress wrote into the law that its governors, once confirmed by the Senate and appointed by the president, cannot be removed except “for cause,” like personal misconduct.

This is not clear.

In the statute, the phrase that forbids a president to fire the seven Fed governors without cause is attached to a sentence that sets their terms at 14 years. This sentence traces back to the original 1913 law that created the Fed, which was revised in a 1935 law. The next sentence, which Congress added in a 1977 law, says the president shall designate one of those governors to be the chair for a four-year term, subject to additional Senate approval.

As if parsing text that different generations of lawmakers edited decades apart was not tricky enough, the question focuses on what to make of the fact that the 1977 sentence about designating a chair does not contain the “for cause” removal phrase. Because no president has tried to fire a Fed chair who was unwilling to resign, there is no precedent to serve a guidepost for whether the protection from arbitrary firing extends to the role of board chair.

If Mr. Trump did demote Mr. Powell and the latter filed a lawsuit challenging whether it was lawful to strip him of his chairmanship, the outcome could turn on the philosophy that a judge brings to the question of how to interpret statutes, said Peter Conti-Brown, a legal studies and business ethics professor at the University of Pennsylvania’s Wharton School and the author of the book “The Power and Independence of the Federal Reserve.” A judge who analyzes the dispute based on the text alone would most likely rule that Mr. Trump could demote Mr. Powell, while a judge who thinks the statute should be analyzed in light of Congress’s intent of structuring the Fed to be able to resist political pressure could rule the other way.

Not on paper. The Fed chair wields no more voting power than the other six governors as the head of the central bank’s board. But the chair does have outsize influence on the financial markets, which parse and react to every utterance that person makes.

Even if Mr. Trump were to demote Mr. Powell, the president might not succeed in removing him from his parallel position as the chairman of the central bank component that sets interest rates and controls the money supply. That group, known as the Federal Open Market Committee, has 12 voting members: the seven Fed governors and five of the 12 presidents of the regional Fed banks. By tradition, the committee has selected whoever is serving as Fed chair to be its chair, too — but in theory, it could choose to keep Mr. Powell as its chairman regardless of Mr. Trump’s demotion, in a show of resistance to political interference.

Nevertheless, Mr. Trump could see a high-profile and unprecedented demotion of Mr. Powell as a politically advantageous symbolic step, since it would help him try to persuade any voters who are experiencing economic problems not to blame him.

Mr. Conti-Brown said Congress had two options for trying to block Mr. Trump from removing Mr. Powell as the chairman.

The first, less effective option, he said, would be for the Senate to tell Mr. Trump that it would refuse to confirm any nominee to be the replacement chair before the election. To prevail, it would take 51 votes — meaning at least four Republicans would have to defy the president, assuming every Democrat would be willing to do so.

The second, better option, he said, would be for Congress to enact legislation adjusting the text of the Federal Reserve law so that it clearly and explicitly protects the chair from being removed without good cause. Since it would take two-thirds of both chambers to override Mr. Trump’s likely veto of such a bill, this would require many more Republicans to be willing to break with the president.

“President Trump is playing a dangerous game. It is not in anyone’s interest to do what he’s thinking of doing — including his own,” Mr. Conti-Brown said, adding: “History has proven time and again that when we give politicians the power to set the value of money, they do it badly and the consequences can be catastrophic.”

Trump Renews Attacks on Fed, Putting Central Bank in a Bind

June 10, 2019

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