Management Communication: How Not To Embarrass Yourself

Some years ago, the British comedian and Monty Python member, John Cleese participated in a series of sales and management training videos. To this day, I still laugh remembering one of them, “How Not to Exhibit Yourself.” “How Not to Exhibit Yourself” focuses on trade show behavior and particularly how to effectively connect with potential customers, but in my mind, the humorous lessons offered by Cleese could just as easily apply to networking with people in general. My key point in this post is that regardless whatever field you work, your ability and skill in relating to people and communicating effectively will be crucial to your success.


Some years ago, the British comedian and Monty Python member, John Cleese participated in a series of sales and management training videos. To this day, I still laugh remembering one of them, “How Not to Exhibit Yourself.” There are other videos in this series, all of which remain very relevant. “How Not to Exhibit Yourself” focuses on trade show behavior and particularly how to effectively connect with potential customers, but in my mind, the humorous lessons offered by Cleese could just as easily apply to networking with people in general. This further caused me to recall an equally relevant and recent Wall Street Journal essay, “Networking for Actual Human Beings.” My key point is that in whatever field you work, your ability and skill in relating to people and communicating effectively will be crucial to your success.

My UBC Management students and graduates know the importance I place on interpersonal and public speaking in management, and particularly also in engineering and entrepreneurial roles. I like to repeat Warren Buffett’s endorsement of public speaking as the most important skill he learned as a young man. No matter what you do, you will need to be able to clearly, comfortably and effectively communicate the ideas or projects you are promoting in order to succeed in life. Yet you may not know that speaking with others is the most difficult and intimidating thing for most people.

People I talk with often tell me how much they hate networking or simply meeting new people. The truth is, deep down, so do I and many other people. Recent research has shown that people feel that explicit business networking makes them feel as if they are insincere or manipulative. The result is that much networking is unsuccessful, and people will naturally gravitate to speaking with people they already know. I often convince myself that I have an excuse to not attend a networking event or to meet a new contact.

I have some recommendations on how I overcome these issues:

Persevere. Just Do It! This is the hardest part. I am at my core an introvert. Invariably I do not want to go, but force myself to go, even telling myself that I will find an excuse to leave early. Rationalize however you want, but do it. In my case, after the encounter, I surprise myself with the results. Suggestions to avoid networking events altogether and to focus on people you already know may make you feel more comfortable, but you will not grow in your self-confidence. You can still devote time to renewing your existing connections which will become even easier and productive.

Begin by going off topic. Be conversational not business focused. Think of some topic bound to be of conversational interest. Literally, avoid discussing business or the other person’s details. Before you enter the event, take some time to think of some conversation starters unrelated to all the obvious “groaners”: your job, goals, education or the other person’s details. This is also a crucial key to successful public speaking. What is your opener to grab the audience, one person or many? “Did you see that post today by Larry Page on Internet privacy?”

Let the conversation evolve organically. Don’t force it. Just enjoy the moment, and if the person opens up to you, you can seamlessly move into direct business. If not, you may still have made a new friend.

Whatever you do, be yourself. Be candid. You will feel better about yourself in the process. It may not always work, but if the person doesn’t appreciate your openness and honesty, you have just saved yourself a lot of valuable time.

Know that not every encounter will work. That’s normal, inevitable and perfectly OK. However, if you do suck it up and try novel new approaches to speaking with people and building their interest and trust, you will improve your success, and success breeds success.

I don’t agree with all the points in the following Wall Street Journal essay, but I accept that there are other points of view on the tough topic of fear of networking and public speaking, and some of the discussion below may be helpful to you.

Source: Networking for Actual Human Beings – WSJ

Kaspersky Lab Security Software Implicated in Russian NSA Breach

Many know the name Kaspersky well. Others may only dimly recognize the brand name. Its anti-virus and Internet security software has been around for years in computer stores and OEM’d with computer systems. More than a year ago, I became concerned about what I was learning about Kaspersky Lab and its headquarters in Moscow, I began asking myself hypothetical rhetorical questions. What if Kaspersky was quietly working with the Russian FSB? What if Kaspersky had installed a sleeping Trojan Horse in millions of copies of its consumer computer security software? I was a user of Kaspersky Lab cybersecurity software myself. I knew that it was rated very highly by the tech journals. I liked its elegance and simplicity compared with other competitor products from U.S. based companies like Symantec and McAffee.  Nevertheless, as the Russian hacking of the 2016 election became an ever-larger issue, I decided to pull the plug on Kaspersky because of my fears, though there was no direct evidence of collusion between Kaspersky and the Kremlin at that time, wiped my system clean, and installed another competitor product. 


UPDATE, October 11:

Israel hack uncovered Russian spies’ use of Kaspersky in 2015 – The Guardian

An Israeli security agency hacked into Russian antivirus firm Kaspersky Lab in 2015, providing the crucial evidence required to ban the company from providing services to the US government, according to a report.

While the Israeli spies were inside Kaspersky’s systems, they observed Russian spies, in turn, using the company’s tools to spy on American spies, the New York Times reports. That information, handed to the US, led to the decision in September to end the use of the company’s software across the federal government by December.

Read More: Israel hack discovered Russian spies use of Kaspersky Lab in 2015

Kaspersky Anti-Virus Software Includes a Feature That Copies Files And Provides A Backdoor for Russian Hackers – WSJ

Many know the name Kaspersky well. Others may only dimly recognize the brand name. Its anti-virus and Internet security software has been around for years in computer stores and OEM’d with computer systems. More than a year ago, I became concerned about what I was learning about Kaspersky Lab and its headquarters in Moscow, I began asking myself hypothetical rhetorical questions. What if Kaspersky was quietly working with the Russian FSB? What if Kaspersky had installed a sleeping Trojan Horse in millions of copies of its consumer computer security software? I was a user of Kaspersky Lab cybersecurity software myself. I knew that it was rated very highly by the tech journals. I liked its elegance and simplicity compared with other competitor products from U.S. based companies like Symantec and McAfee.  Nevertheless, as the Russian hacking of the 2016 election became an ever-larger issue, I decided to pull the plug on Kaspersky because of my fears, though there was no direct evidence of collusion between Kaspersky and the Kremlin at that time, wiped my system clean, and installed another competitor product.

Today, the Wall Street Journal has reported that Kaspersky software is implicated in the most serious breach of NSA security in years, validating my gut instinct decision more than a year ago.  My first hint of the serious nature of the Kaspersky/Kremlin connection came in a murky story related to the earliest public report on the Russian hacking stating with very high confidence that specific FSB officers and Kremlin officials had ordered and orchestrated the hacking. One of those individuals was also a senior engineer at Kaspersky Lab.  U.S. Senator Jeanne Shaheen, (D., N.H.) said in a statement: “This development should serve as a stark warning, not just to the federal government but to states, local governments, and the American public, of the serious dangers of using Kaspersky software.”  She added: “The strong ties between Kaspersky Lab and the Kremlin are extremely alarming and have been well-documented for some time. It’s astounding and deeply disturbing that the Russian government continues to have this tool at their disposal to harm the United States.”

Read more:

Source: Russian Hackers Stole NSA Data on U.S. Cyber Defense – WSJ 

Russian Hackers Stole NSA Data on U.S. Cyber Defense

The breach, considered the most serious in years, could enable Russia to evade NSA surveillance and more easily infiltrate U.S. networks

The National Security Agency campus in Fort Meade, Md. An NSA contractor took highly sensitive data from the complex and put it on his home computer, from which it was stolen by hackers working for the Russian government, people familiar with the matter said.
The National Security Agency campus in Fort Meade, Md. An NSA contractor took highly sensitive data from the complex and put it on his home computer, from which it was stolen by hackers working for the Russian government, people familiar with the matter said.PHOTO: PATRICK SEMANSKY/ASSOCIATED PRESS

WASHINGTON—Hackers working for the Russian government stole details of how the U.S. penetrates foreign computer networks and defends against cyber attacks after a National Security Agency contractor removed the highly classified material and put it on his home computer, according to multiple people with knowledge of the matter.

The hackers appear to have targeted the contractor after identifying the files through the contractor’s use of a popular antivirus software made by Russia-based Kaspersky Lab, these people said.

The theft, which hasn’t been disclosed, is considered by experts to be one of the most significant security breaches in recent years. It offers a rare glimpse into how the intelligence community thinks Russian intelligence exploits a widely available commercial software product to spy on the U.S.

The incident occurred in 2015 but wasn’t discovered until spring of last year, said the people familiar with the matter.

The stolen material included details about how the NSA penetrates foreign computer networks, the computer code it uses for such spying and how it defends networks inside the U.S., these people said.

Having such information could give the Russian government information on how to protect its own networks, making it more difficult for the NSA to conduct its work. It also could give the Russians methods to infiltrate the networks of the U.S. and other nations, these people said.

The breach is the first known incident in which Kaspersky software is believed to have been exploited by Russian hackers to conduct espionage against the U.S. government. The company, which sells its antivirus products in the U.S., had revenue of more than half a billion dollars in Western Europe and the Americas in 2016, according to International Data Corp. By Kaspersky’s own account it has more than 400 million users world-wide.

The revelation comes as concern over Russian infiltration of American computer networks and social media platforms is growing amid a U.S. special counsel’s investigation into whether Donald Trump’s presidential campaign sought or received assistance from the Russian government. Mr. Trump denies any impropriety and has called the matter a “witch hunt.”

Intelligence officials have concluded that a campaign authorized by the highest levels of the Russian government hacked into state election-board systems and the email networks of political organizations to damage the candidacy of Democratic presidential nominee Hillary Clinton.

A spokesman for the NSA didn’t comment on the security breach. “Whether the information is credible or not, NSA’s policy is never to comment on affiliate or personnel matters,” he said. He noted that the Defense Department, of which the NSA is a part, has a contract for antivirus software with another company, not Kaspersky.

In a statement, Kaspersky Lab said it “has not been provided any information or evidence substantiating this alleged incident, and as a result, we must assume that this is another example of a false accusation.”

Kremlin spokesman Dmitry Peskov in a statement didn’t address whether the Russian government stole materials from the NSA using Kaspersky software. But he criticized the U.S. government’s decision to ban the software from use by U.S. agencies as “undermining the competitive positions of Russian companies on the world arena.”

The Kaspersky incident is the third publicly known breach at the NSA involving a contractor’s access to a huge trove of highly classified materials. It prompted an official letter of reprimand to the agency’s director, Adm. Michael Rogers, by his superiors, people familiar with the situation said.

National Security Agency Director Michael Rogers.
National Security Agency Director Michael Rogers. PHOTO: SAUL LOEB/AGENCE FRANCE-PRESSE/GETTY IMAGES

Adm. Rogers came into his post in 2014 promising to staunch leaks after the disclosure that NSA contractor Edward Snowden the year before gave classified documents to journalists that revealed surveillance programs run by the U.S. and allied nations.

The Kaspersky-linked incident predates the arrest last year of another NSA contractor, Harold Martin, who allegedly removed massive amounts of classified information from the agency’s headquarters and kept it at his home, but wasn’t thought to have shared the data.

Mr. Martin pleaded not guilty to charges that include stealing classified information. His lawyer has said he took the information home only to get better at his job and never intended to reveal secrets.

The name of the NSA contractor in the Kaspersky-related incident and the company he worked for aren’t publicly known. People familiar with the matter said he is thought to have purposely taken home numerous documents and other materials from NSA headquarters, possibly to continue working beyond his normal office hours.

The man isn’t believed to have wittingly aided a foreign government, but knew that removing classified information without authorization is a violation of NSA policies and potentially a criminal act, said people with knowledge of the breach.

It is unclear whether he has been dismissed from his job or faces charges. The incident remains under federal investigation, said people familiar with the matter.

Kaspersky software once was authorized for use by nearly two dozen U.S. government agencies, including the Army, Navy and Air Force, and the departments of Defense, State, Homeland Security, Energy, Veterans Affairs, Justice and Treasury.

The headquarters of the Russian cybersecurity company Kaspersky Lab.
The headquarters of the Russian cybersecurity company Kaspersky Lab. PHOTO: SAVOSTYANOV SERGEI/TASS/ZUMA PRESS

NSA employees and contractors never had been authorized to use Kaspersky software at work. While there was no prohibition against these employees or contractors using it at home, they were advised not to before the 2015 incident, said people with knowledge of the guidance the agency gave.

For years, U.S. national security officials have suspected that Kaspersky Lab, founded by a computer scientist who was trained at a KGB-sponsored technical school, is a proxy of the Russian government, which under Russian law can compel the company’s assistance in intercepting communications as they move through Russian computer networks.

Kaspersky said in its statement: “As a private company, Kaspersky Lab does not have inappropriate ties to any government, including Russia, and the company has never helped, nor will help, any government in the world with its cyberespionage efforts.”

Suspicions about the company prompted the Department of Homeland Security last month to take the extraordinary step of banning all U.S. government departments and agencies from using Kaspersky products and services. Officials determined that “malicious cyber actors” could use the company’s antivirus software to gain access to a computer’s files, said people familiar with the matter.

The government’s decision came after months of intensive discussions inside the intelligence community, as well as a study of how the software works and the company’s suspected connections to the Russian government, said people familiar with the events. They said intelligence officials also were concerned that given the prevalence of Kaspersky on the commercial market, countless people could be targeted, including family members of senior government officials, or that Russia could use the software to steal information for competitive economic advantage.

“The risk that the Russian government, whether acting on its own or in collaboration with Kaspersky, could capitalize on access provided by Kaspersky products to compromise federal information and information systems directly implicates U.S. national security,” the DHS said Sept. 13 in announcing the government ban.

All antivirus software scans computers looking for malicious code, comparing what is on the machine to a master list housed at the software company. But that scanning also gives makers of the software an inventory of what is on the computer, experts say.

“It’s basically the equivalent of digital dumpster diving,” said Blake Darché, a former NSA employee who worked in the agency’s elite hacking group that targets foreign computer systems.

Kaspersky is “aggressive” in its methods of hunting for malware, Mr. Darché said, “in that they will make copies of files on a computer, anything that they think is interesting.” He said the product’s user license agreement, which few customers probably read, allows this.

“You’re basically surrendering your right to privacy by using Kaspersky software,” said Mr. Darché, who is chief security officer for Area 1, a computer security company.

“We aggressively detect and mitigate malware infections no matter the source and we have been proudly doing it for 20 years,” the company said in its statement. “We make no apologies for being aggressive in the battle against malware and cybercriminals.”

U.S. investigators believe the contractor’s use of the software alerted Russian hackers to the presence of files that may have been taken from the NSA, according to people with knowledge of the investigation. Experts said the software, in searching for malicious code, may have found samples of it in the data the contractor removed from the NSA.

But how the antivirus system made that determination is unclear, such as whether Kaspersky technicians programed the software to look for specific parameters that indicated NSA material. Also unclear is whether Kaspersky employees alerted the Russian government to the finding.

Kaspersky Lab Chief Executive Eugene Kaspersky. The company said it never would help ‘any government in the world with its cyberespionage efforts.’
Kaspersky Lab Chief Executive Eugene Kaspersky. The company said it never would help ‘any government in the world with its cyberespionage efforts.’ PHOTO: SHARIFULIN VALERY/TASS/ZUMA PRESS

Investigators did determine that, armed with the knowledge that Kaspersky’s software provided of what files were suspected on the contractor’s computer, hackers working for Russia homed in on the machine and obtained a large amount of information, according to the people familiar with the matter.

The breach illustrates the chronic problem the NSA has had with keeping highly classified secrets from spilling out, former intelligence personnel say. They say they were rarely searched while entering or leaving their workplaces to see if they were carrying classified documents or removable storage media, such as a thumb drive.

The incident was considered so serious that it was given a classified code name and set off alarms among top national security officials because it demonstrated how the software could be used for spying. Members of Congress also were informed, said people familiar with the matter.

Then-Defense Secretary Ash Carter and then-Director of National Intelligence James Clapper pushed President Barack Obama to remove Adm. Rogers as NSA head, due in part to the number of data breaches on his watch, according to several officials familiar with the matter.

The NSA director had fallen out of White House favor when he traveled to Bedminster, N.J., last November to meet with president-elect Donald Trump about taking a job in his administration, said people familiar with the matter. Adm. Rogers didn’t notify his superiors, an extraordinary step for a senior military officer, U.S. officials said.

Adm. Rogers wasn’t fired for a number of reasons, including a pending restructuring of the NSA that would have been further complicated by his departure, according to people with knowledge of internal deliberations. An NSA spokesman didn’t comment on efforts to remove Adm. Rogers.

Sen. Jeanne Shaheen, (D., N.H.) said in a statement: “This development should serve as a stark warning, not just to the federal government but to states, local governments and the American public, of the serious dangers of using Kaspersky software.”

She added: “The strong ties between Kaspersky Lab and the Kremlin are extremely alarming and have been well-documented for some time. It’s astounding and deeply disturbing that the Russian government continues to have this tool at their disposal to harm the United States.”

Write to Gordon Lubold at Gordon.Lubold@wsj.com and Shane Harris at shane.harris@wsj.com

Uber is Enron Deja Vu: Culture Trumps Strategy

For over a  year now I have blogged here about the red flags flying about Travis Kalanick and Uber. Many investigative articles have been published over this time, in the New York Times and other publications, which have raised disturbing questions about Uber, Kalanick and some members of his team. The Board of Directors has finally taken action but it feels like its a day late and a dollar short.  Why did it take so long?  I have bluntly used the epithet that “Uber is Trump,” but now on reflection, it is more apt to describe Uber as Enron the sequel, and “deja vu all over again.” Remember the audio of two Enron electricity traders laughing about “screwing grandma?” That is Uber. 


A Silicon Valley Tragedy

Remember Enron’s “Smartest Guys in the Room?”

An early photo of Uber’s management team

Why did Uber spin so wildly out of control?

For over a  year now I have blogged here about the red flags flying about Travis Kalanick and Uber. Many investigative articles have been published over this time, in the New York Times and other publications, which have raised disturbing questions about Uber, Kalanick and some members of his team. The Board of Directors has finally taken action but it feels like its a day late and a dollar short.  Why did it take so long?  I have bluntly used the epithet that “Uber is Trump,” but now on reflection, it is more apt to describe Uber as Enron the sequel, and “deja vu all over again.” Remember the audio of two Enron electricity traders laughing about “screwing grandma?” That is Uber.

Culture Trumps Strategy

So as the current management adage says, culture trumps strategy.  This is not simply about the bad behavior of a few individuals and that eliminating them will solve Uber’s problems. The aggressive, confrontational business strategy is itself an integral and inextricable part of the problem. Some have said that Uber has a good business model and deserves to succeed.  I dispute that.  Jeremy Rifkin’s Third Industrial Revolution describes his vision for a new sharing economy.  The book has been read by world leaders and praised for its insights into a bright new evolving economy.  Uber and other companies like it have morphed the sharing economy into something ugly.

Uber morphed the sharing economy into “the gig economy,” epitomized by jobs without security or benefits, and the now viral video of Kalanick berating an Uber driver who was going bankrupt. SFGate also exposed the Uber operating strategy of psychologically manipulating drivers to work more hours than intended. The central principle of Kalanick’s business strategy is what he euphemistically describes as “principled confrontation.” Uber enters a market without following any existing rules or regulations, simultaneously entering into negotiations with municipalities which are typified by stalling tactics from Uber, and no intention to conclude an agreement. Uber’s goal is to take over the market by force, making any agreements with municipalities unnecessary. While pursuing its strong-arm goal, Uber has used a software tool, Greyball, to evade law enforcement. Uber is now under criminal investigation for the use of Greyball. Even the notion that Uber somehow improves traffic congestion has been debunked by a Northwestern University study commissioned by the San Francisco Transportation Authority which found that ride sharing has a heavy negative impact on San Francisco’s traffic congestion. See www.sfcta.org/TNCsToday

Uber is also facing a major lawsuit from Google for expropriating Google driverless car technology by hiring one of Google’s engineers. Uber has now fired the engineer in question, but the firing itself may be a circumstantial admission that its intent was to steal Google IP.  In another case, nearly 200 Uber employees were encouraged to use fake ID, burner phones and credit cards to sabotage Lyft, by booking and then quickly canceling more than 5000 rides with Lyft. Then there is the matter of what can now only be described as pervasive sexual harassment within Uber. Adding to all of these issues, local communities have begun to resist Uber much more aggressively. In one example, a protest movement in Oakland is opposing Uber’s plan to open offices in Oakland. There are other examples dotted around the World. Finally, there is the unresolved matter of the status of Uber’s drivers as “independent contractors or employees” which is nearing a final decision in California state and federal courts.

Clearly, Uber’s business strategy is driven by its ugly corporate culture. Stepping back to consider the complete picture, Uber’s business strategy looks to me like a house of cards.

Uber’s Leadership Conundrum

Those who know me and my blogs here know that I am a student of Harvard Business School professor John Kotter and his philosophy of leadership with humility at its core.  Uber presents a leadership conundrum for me. I was interested to hear BackChannel journalist Jessi Hempel express the same point tonight on PBS Newshour.  Uber obviously urgently needs to change its culture, yet without the wild aggressive culture defined by Kalanick, the question remains whether Uber can survive? It is not clear to me that humility could turn the Uber cultural battleship. There have also been a number of business articles suggesting that changing a corporate culture is far more challenging than changing a corporate strategy. So I am left to ponder Peter Drucker’s Four Quadrants of Managerial Behavior, and Quadrant Four’s “high task, low relationship” model for Uber. I learned this in Intel’s M Series management courses years ago. The course used the case study of the film “12 O’Clock High,” a demoralized B-17 bomber unit as its example. Gregory Peck arrives as the new unit commander and begins by “kicking ass and taking names.”  A similar case would be George Patton’s arrival in North Africa to take command of a demoralized tank unit.  My sense at the moment is the only best hope is that somehow an interim leader at Uber will have the latitude to take whatever actions he deems necessary to right the ship.  Such a solution seems doubtful at the moment.

Business Ethics Missing in Action

This morning on NPR’s Morning Edition, Nina Kim interviewed the Director of the Markulla Center for Applied Ethics at Santa Clara University, Kirk Hansen. The Center is named for early Intel and Apple executive, Mike Markkula. Mr. Hansen said that “Uber will undoubtedly become one of the most important business case studies” to emerge from Silicon Valley. Hansen went on to point out that founders of startups are often not capable of taking the company to a mature large company, and that it may be necessary to remove or reassign the founder. In the case of Uber, this is impossible because Kalanick and his founder group have the majority of shares.  This contrasts with most startups legal framework, where the investors or Board may hold the right to remove the founder in specific circumstances.

The Smartest Guys in the Room

As a grey-haired Silicon Valley alumni, I am personally offended and outraged by what has happened at Uber. I am deeply ashamed. Over the years I have worked for some well-known SV companies, startups, VC firms, and my own consultancy. I have personal knowledge of things that happened that were not kosher, and I have been present in situations where the ethics were not the best, but nothing in my Silicon Valley experience rises to the level of Uber. Something has gone wildly out of control since my time with how we conduct ourselves in business, and it is now tarnishing the history and reputation of fifty years of Silicon Valley achievements. From my own personal experience working at one wildly successful company years ago, and after rewatching the Enron documentary video,  “The Smartest Guys in the Room,” the answer is simple: too much money.

 

Source: Uber CEO Kalanick likely to take leave, SVP Michael out: source | Reuters

By Heather Somerville and Joseph Menn | SAN FRANCISCO | Reuters

Uber Technologies Inc [UBER.UL] Chief Executive Travis Kalanick is likely to take a leave of absence from the troubled ride-hailing company, but no final decision has yet been made, according to a source familiar with the outcome of a Sunday board meeting.

Emil Michael, senior vice president, and a close Kalanick ally has left the company, the source said.

At the Sunday meeting, the company’s board adopted a series of recommendations from the law firm of former U.S Attorney General Eric Holder following a sprawling, multi-month investigation into Uber’s culture and practices, according to a board representative.

Uber will tell employees about the recommendations on Tuesday, said the representative, who declined to be identified.

The company is also adding a new independent director, Nestle executive, and Alibaba board member Wan Ling Martello, a company spokesman said.

Holder and his law firm were retained by Uber in February to investigate company practices after former Uber engineer Susan Fowler published a blog post detailing what she described as sexual harassment and a lack of a suitable response by senior managers.

The recommendations in Holder’s firm’s report place greater controls on spending, human resources and other areas where executives led by Kalanick have had a surprising amount of autonomy for a company with more than 12,000 employees, sources familiar with the matter said.

Kalanick and two allies on the board have voting control of the company. Kalanick’s forceful personality and enormous success with Uber to date, as well as his super-voting shares, have won him broad deference in the boardroom, according to the people familiar with the deliberations.

Any decision to take a leave of absence will ultimately be Kalanick’s, one source said.

The world’s most valuable venture-backed private company has found itself at a crossroads as its rough-and-tumble approach to local regulations and handling employees and drivers has led to a series of problems.

It is facing a criminal probe by the U.S. Department of Justice over its use of a software tool that helped its drivers evade local transportation regulators, sources have told Reuters.

Last week, Uber said it fired 20 staff after another law firm looked into 215 cases encompassing complaints of sexual harassment, discrimination, unprofessional behavior, bullying and other employee claims.

SILICON VALLEY SHOCK

Even a temporary departure by Kalanick would be a shock for the Silicon Valley startup world, where company founders in recent years have enjoyed more autonomy and often become synonymous with their firms.

Uber’s image, culture, and practices have been largely defined by Kalanick’s brash approach, company insiders and investors previously told Reuters.

Uber board member Arianna Huffington said in March that Kalanick needed to change his leadership style from that of a “scrappy entrepreneur” to be more like a “leader of a major global company.” The board has been looking for a chief operating officer to help Kalanick run the company since March.

The debate over Kalanick’s future comes as he is also facing a personal trauma: His mother died last month in a boating accident, in which his father was also badly injured.

Michael, described by employees as Kalanick’s closest deputy, has been a recurring flashpoint for controversy at the company.

He once discussed hiring private investigators to probe the personal lives of reporters writing stories faulting the company. Kalanick disavowed and publicly criticized the comments.

Michael will be replaced as the company’s top business development executive by David Richter, currently an Uber vice president, the company spokesman said.

Alongside Uber’s management crisis, its self-driving car program is in jeopardy after a lawsuit from Alphabet Inc alleging trade secrets theft, and the company has suffered an exodus of top executives.

One Uber investor called the board’s decisions on Sunday a step in the right direction, giving Uber an “opportunity to reboot.”

Trump’s radical new foreign policy portends much worse to come

As Fareed Zakaria has pointed out this week in the Washington Post and on CNN GPS, we now have a Trump foreign policy doctrine, and it is not reassuring for the World. Obviously heavily influenced by Bannon, who many had thought had been relegated to backseat status by McMaster, we have been fooled again. As Trump demonstrates his RealPolitik admiration for authoritarians like Putin, Xi Jinping, Erdogan, and Duterte, more sinister scenarios begin to crystallize.  Trump’s speech justifying the withdrawal of the United States from the COP21 Paris Climate Change Agreement is a frightening exposition of this new Trump Doctrine. It is Trump thumbing his nose at the World. It is the United States against the World, led by a coterie of plutocrats and their money.  The reality is that the evidence points to an ongoing seizure of executive power by Trump that destroys our Constitution in the name of our national security.  The question is what we can do about it. 


Trump Blows Off the Rest of the World

Trump Climate Change Speech More About Political Power Than Climate Change

Donald Trump and Philippine President Rodrigo Duterte

Fareed Zakaria has pointed out this week in the Washington Post and on CNN GPS, that we now have a Trump foreign policy doctrine, and it is not reassuring for the World. It is openly declaring its intent to destroy the World as we know it. New York Times Conservative columnist David Brooks reached the same conclusion. Obviously heavily influenced by Bannon, who many had thought had been relegated to backseat status by McMaster, we have been fooled again. As Trump demonstrates his Henry Kissinger RealPolitik admiration for authoritarians like Putin, Xi Jinping, Erdogan, and Duterte, more sinister scenarios begin to crystallize.  Trump’s speech justifying the withdrawal of the United States from the COP21 Paris Climate Change Agreement is a frightening exposition of this new Trump Doctrine. It is Trump thumbing his nose at the World. It is the United States against the World, led by a coterie of plutocrats and their money.  It was moved along by a campaign carefully crafted by fossil fuel industry players, most notably Charles D. Koch and David H. Koch, the Kansas-based billionaires who run a chain of refineries (which can process 600,000 barrels of crude oil per day) as well as a subsidiary that owns or operates 4,000 miles of pipelines that move crude oil. The reality is that the evidence points to an ongoing seizure of executive power by Trump that destroys our Constitution in the name of our national security.  The big rhetorical question is what we can do about it?

Read more: Gary Cohn and H.R. McMaster Wall Street Journal editorial: The New Trump Foreign Policy Doctrine

Read more: Fareed Zakaria Washington Post editorial: Trump’s radical departure from postwar foreign policy – The Washington Post

Read more: David Brooks New York Times editorial:

Read more:

 

Chinese company Anbang Insurance to buy B.C. retirement home chain

Reading this article today, I am dumbfounded that Anbang managed to get this far in the purchase of B.C. commercial real-estate without red flags going up. This mysterious Chinese company, Anbang Insurance Group has attracted the attention of The New York Times, The Wall Street Journal, Forbes, Fortune Magazine, and government authorities in the United States and other countries. A months-long investigation by the New York Times revealed an extremely opaque structure, empty offices, obscure shareholders, and extensive political connections to the Chinese elite. Anbang has all the earmarks of Chinese money laundering, corruption at the highest levels, and mysterious shell companies. It is a cautionary tale for Canadian authorities fretting over foreign real-estate buyers and skyrocketing real-estate prices.


Reading this article today, I am dumbfounded that Anbang managed to get this far in the proposed purchase of B.C. commercial real-estate without red flags going up. This mysterious Chinese company, Anbang Insurance Group has attracted the attention of The New York Times, The Wall Street Journal, Forbes, Fortune Magazine, and government authorities in the United States and other countries.  A months-long investigation by the New York Times revealed an extremely opaque structure, empty offices, obscure shareholders, and extensive political connections to the Chinese elite.  Anbang has all the earmarks of Chinese money laundering, corruption at the highest levels, and mysterious shell companies. It is a cautionary tale for Canadian authorities fretting over foreign real-estate buyers and skyrocketing real-estate prices.

anbang1

The dingy fourth floor of this building in Beijing houses two companies that control assets of Anbang Insurance Group worth more than $15 billion.

The Anbang Insurance takeover is currently under scrutiny by the federal government’s Investment Review Division because it exceeds the $600-million threshold and it will ultimately be up to Innovation Minister to make a decision.

Source: Chinese company Anbang buys stake in B.C.-based retirement home chain – The Globe and Mail

 

Chinese company Anbang buys stake in B.C.-based retirement home chain

A massive Chinese insurance company with a murky ownership structure is buying a majority stake in one of British Columbia’s biggest retirement home chains, a deal believed to exceed $1-billion that would give Beijing-based Anbang Insurance an important role in the delivery of health care in B.C.

Anbang Insurance Group, which has emerged in recent years to launch a global buying spree, has cut a deal to buy Vancouver-based Retirement Concepts, a family-owned retirement home business established in 1988.

This foreign takeover is currently under scrutiny by the federal government’s Investment Review Division because it exceeds the $600-million threshold and it will ultimately be up to Innovation Minister Navdeep Bains to make a decision.

Retirement Concepts owns and operates about 24 retirement “communities,” mostly in B.C., except for several properties in Calgary and Montreal. What makes it even more attractive is that it also owns holdings of unused or partly developed land that would allow a major expansion of facilities in the future.

The company is an important part of B.C.’s health-care delivery system. Retirement Concepts is the highest-billing provider of assisted living and residential care services in the province. The B.C. government paid the company $86.5-million in the 2015-16 fiscal year, more than any other of the 130 similar providers.

A source familiar with the deal said it exceeds $1-billion, but Retirement Concepts declined to confirm the size of the transaction. “The terms of the proposed transaction have not been disclosed publicly and we cannot comment on the amount you refer to,” said Azim Jamal, president and chief executive of Retirement Concepts.

Foreign investments are reviewed to determine whether they provide a net benefit to Canada and are compatible with this country’s industrial, economic and cultural policies and what impact they will have on Canadian participation in the business.

The Canadian government is eager to attract foreign money to make up for insufficient investment capital within Canada and acquisitions by foreigners are rarely rejected. Prime Minister Justin Trudeau is particularly eager to attract more investment from China and has begun exploratory free-trade talks with Beijing. The Liberals have already signalled they are open to rolling back a ban on state-owned Chinese investment in the oil sands imposed by former prime minister Stephen Harper.

Anbang appears to have gone to some lengths to conduct this B.C. deal below the radar.

The name of the firm acquiring Retirement Concepts is Cedar Tree Investment Canada, which was incorporated as a federal Canadian company only in July. Cedar Tree’s registration initially gave the names of its two directors as Hong Zhao and Ye Zhang with their contact address as Suite 2560 at 200 Granville St. in downtown Vancouver. People with the same names and address are also the two listed directors for Maple Red Financial Management Canada Inc., the company that Anbang used to buy a controlling interest in all four towers of Vancouver’s Bentall Centre last year.

The directors have since changed, as has their address, and Cedar Tree’s contact information is now a major Canadian law firm’s downtown Vancouver office.

Telephone calls and e-mails to Cedar Tree Investment’s listed directors were not returned. The Globe and Mail was also unable to reach anyone at Anbang International, Anbang Insurance’s global investment arm, at its Vancouver number.

In April, after abruptly walking away from an effort to buy Starwood Hotels & Resorts, one the world’s largest hotel companies, Anbang appears to have been shifting its attention to the Canadian market with a bid for Innvest, one of this country’s biggest hotel owners. This came amid reports from China that Chinese regulators were looking into whether its foreign asset acquisition binge – including the Waldorf Astoria hotel in New York – exceeded allowable limits.

Bloomberg News, citing a source involved in the transaction, reported that the CEO of the firm that would go on to buy Innvest, Bluesky Hotels & Resorts’ Li Chen, had said at the outset of the acquisition talks that she was representing Anbang but did not wish this company to be publicly identified as the buyer. Anbang later publicly denied “any connection” between it and Bluesky.

An investigation by The New York Times earlier this year revealed that 92 per cent of Anbang is currently held by firms either fully or partly owned by relatives of Anbang’s chairman, Wu Xiaohui, or his wife, the granddaughter of the former Chinese leader Deng Xiaoping, or Chen Xiaolu, the son of a famous People’s Liberation Army leader.

The B.C. retirement home acquisition thrusts Anbang into a new area of business: Canada’s health-care system.

Under international trade deals that Canada has signed, the provinces retain the right to refuse to give health-care contracts to foreign companies. That’s because Canada reserved the right in trade agreements for governments to discriminate against foreign suppliers of services in the health-care sector and foreign investors when it comes to health care.

Retirement Concepts, however, says it will remain as operator under a deal with Cedar Tree. Asked about how the Beijing company conducted itself in the transaction, Mr. Jamal said, “Anbang was transparent in its bidding from the outset.”

Mr. Jamal said Retirement Concept’s existing corporate team will remain intact to “provide continuity” to residents and the business.

“Under the partnership agreement, Retirement Concepts will retain a minority share and will continue to manage the day-to-day operations of all of our seniors’ communities,” the CEO said.

“As a result, there will be no change to staffing plans, the quality of care provided to our residents, nor to our policies, procedures and other operating standards.”

British Columbia’s Liberal government, however, says it is not concerned about the Retirement Concepts deal because it does not believe the patients at the company’s facilities will see a difference in the care they receive.

“Cedar Tree has assured patients, families and staff that it does not intend to make any changes to day to day operations, patient care, staff or leadership. In fact, they will all remain in operation as they are today,” B.C. Minister of Health Terry Lake said in a statement.

“We expect this change to be seamless, and that the patients residing in these facilities will continue to get the same quality of care.”

The B.C. government said nothing also prevents a foreign-owned company from owning a health-care provider.

“The Community Care and Assisted Living Act does not prohibit facilities from being sold to an out-of-province, or to an off-shore purchaser,” spokeswoman Kristy Anderson of B.C.’s Health Ministry said.

The Investment Review Division at the federal department of Innovation confirmed it’s reviewing the acquisition before Mr. Bains makes a decision. “Cedar Tree Investment Canada has filed an application for review under the Investment Canada Act of its proposed acquisition of Retirement Concepts,” spokeswoman Stéfanie Power said in a statement.

“Due to the confidentiality provisions of the Investment Canada Act, we cannot comment further on the timing of the review.”

The department likely received the application in late September or early October but it will not confirm the date the review began. “In general terms, the Minister has 45 days from the date the application is received to make a decision. However, the Minister can extend this period by 30 days. Further extensions are possible with the investor’s consent,” Ms. Power said.

China itself faces a daunting retirement-care challenge with a rapidly graying population and it is seeking the expertise and capacity to design the vast system necessary to look after its elderly.

————–

Bayer’s Proposed $56 Billion Monsanto Acquisition No Done Deal

The global agribusiness industry has recently seen a feeding frenzy of merger and acquisition activity. The announcement this week of Bayer’s proposed purchase of Monsanto after months of difficult negotiation is only one among other such industry consolidation deals. Dow Chemical and DuPont agreed last year to merge their crop science businesses, a deal currently under Justice Department review. Canadian fertilizer companies Potash Corp. and Agrium also agreed to merge this week. Finally, Swiss pesticide giant Syngenta AG agreed to a $43 billion takeover by China National Chemical Corp., a state-owned conglomerate that already sells generic agricultural chemicals. The bigger picture suggests severely reduced competition, higher prices for farmers and consumers, and increased global corporate control of crop seeds, particularly GMO’s. So what is going on here?


Global Agribusiness On A Consolidation Spree

Once Again, Consumers Are The Likely Losers

The global agribusiness industry has recently seen a feeding frenzy of merger and acquisition activity. The announcement this week of Bayer‘s proposed purchase of Monsanto after months of difficult negotiation is only one among other such industry consolidation deals.  Dow Chemical and DuPont agreed last year to merge their crop science businesses, a deal currently under Justice Department review. Canadian fertilizer companies Potash Corporation and Agrium, Inc. also agreed to merge this week. Finally, Swiss pesticide giant Syngenta AG agreed to a $43 billion takeover by China National Chemical Corp., a state-owned conglomerate that already sells generic agricultural chemicals.  The bigger picture suggests severely reduced competition, higher prices for farmers and consumers, and increased  global corporate control of crop seeds, particularly GMO’s.

Antitrust authorities have challenged deals ranging from oilfield services mergers to health insurance buyouts, while other regulators have sought to crack down on deals that aid tax avoidance or risk harming national security. Wednesday’s announced tie-up between Monsanto and Bayer, the largest-ever all-cash acquisition, will inevitably face an intense and lengthy regulatory process in the United States, the European Union and elsewhere, regulatory experts said. Meanwhile, The Wall Street Journal is crowing about the Monsanto/Bayer deal.

“This merger is not a slam dunk,” said Diana Moss, president of the American Antitrust Institute.

In my view, this is just one more case of the disturbing growth of global corporate power, and the difficulty of governments around the World to control it.  Monopoly comes to mind. Where we end up on Apple’s €13 Billion tax liability,  or this consolidation in agribusiness will not be resolved for years, but they represent the greatest threats to our economy and the survival middle-class prosperity.

Bayer’s Monsanto acquisition to face politically charged scrutiny

By Diane Bartz and Greg Roumeliotis | WASHINGTON D.C./NEW YORK

As the global agricultural sector races to consolidate, Bayer AG’s $66 billion all-cash deal to acquire Monsanto Co will test growing political and consumer unease in the United States and abroad over the future of food production.

Bayer’s pesticide-focused agricultural business has few overlaps with Monsanto’s dominant seed franchise, according to the companies’ executives. Still, marrying two of the world’s top farm suppliers, at a time when rivals are also merging, is fuelling concern over fewer players competing in the $100 billion global market.

Monsanto and Bayer “have chosen to do a deal in the year of merging dangerously,” said David Balto, a former policy director at the U.S. Federal Trade Commission. “They are in for a tough time.”

U.S. Senate Judiciary Committee Chairman Chuck Grassley has called a hearing next Tuesday to scrutinize the wave of consolidation. Farmers in Iowa, the Republican senator’s home state, are worried that seed and chemical costs are rising while a global glut of grain has pushed prices close to their lowest levels in years. Farm incomes have plunged.

Monsanto agreed to sell itself to Bayer for $128 per share in cash, yet its shares were hovering around $107 on Wednesday, reflecting the significant regulatory uncertainty surrounding the deal in the minds of investors. Bayer has agreed to pay Monsanto a $2 billion breakup fee if regulators thwart the deal.

The German company aims to create a one-stop shop for seeds, crop chemicals, and computer-aided services to farmers.

That was also the idea behind Monsanto’s swoop on Syngenta AG last year. The Swiss company fended off that offer only to agree later to a takeover by China’s state-owned ChemChina.

U.S. chemicals giants Dow Chemical Co and DuPont plan to merge and later spin off their respective seeds and crop chemicals operations into a major agribusiness.

If all of the deals close, three companies would control nearly 70 percent of the world’s pesticide market and 80 percent of the U.S. corn-seed market.

Other agricultural sectors are also consolidating.

Canadian fertilizer producers Potash Corp of Saskatchewan Inc and Agrium Inc said on Monday they agreed to merge, sparking questions of whether the new company’s potential pricing power would attract tough regulatory scrutiny.

INEVITABLE SCRUTINY

Dealmakers trying to push through aggressive mega-deals in corporate America have had a tough year.

Antitrust authorities have challenged deals ranging from oilfield services mergers to health insurance buyouts, while other regulators have sought to crack down on deals that aid tax avoidance or risk harming national security.

Wednesday’s announced tie-up between Monsanto and Bayer, the largest-ever all-cash acquisition, will inevitably face an intense and lengthy regulatory process in the United States, the European Union and elsewhere, regulatory experts said.

“This merger is not a slam dunk,” said Diana Moss, president of the American Antitrust Institute.

Hugh Grant, Monsanto’s chief executive, told reporters on Wednesday the companies will need to file in about 30 jurisdictions for the merger.

The value of the assets that Bayer is willing to divest is to be revealed by next week, when details of the merger agreement with Monsanto become public, according to sources familiar with the deal.

Areas of potential overlap include some soybeans, canola and cotton seeds.

Bayer’s share of the U.S. cotton seed market sits at 38.5 percent, while Monsanto is at 31.2 percent, according to data compiled by the Konkurrenz Group.

Monsanto and Bayer have had “initial contacts with regulatory agencies describing what this combination would be about,” Bayer Chief Executive Officer Werner Baumann said on an investor call on Wednesday, and “received encouraging feedback.”

TOUGH YEAR

But U.S. antitrust enforcers will look at more than product overlaps in assessing the proposed merger, said Moss.

“People don’t get the enormous impact that these deals can have on innovation markets. You need more innovators in there battling it out so that you actually do produce new technology for farmers,” she said.

The deals would leave farmers facing a duopoly in seed (Bayer/Monsanto and Dow) and two big firms in chemicals (Syngenta and Bayer/Monsanto), she said.

In terms of the U.S. corn seeds and traits market, according to Morgan Stanley Research, a merged Dow and DuPont would have about a 41 percent market share, while a merged Monsanto-Bayer would have about 36 percent share. In soybean seeds and traits, the group estimated a merged Dow/DuPont would have about 38 percent. Monsanto-Bayer would have 28 percent.

One unknown factor that will influence these ag-related deals is the U.S. political landscape after the November federal election.

Maurice Stucke, formerly in the Justice Department now with the Konkurrenz Group, said it was highly unlikely that Obama administration antitrust enforcers, who have knocked down a long list of big mergers in concentrated industries this year, would make the final decision in the Bayer-Monsanto deal.

“Merger reviews of this complexity would take six to nine months,” Stucke said. “This would be the first major test of the new administration.”

(Additional reporting by Ludwig Burger in Frankfurt, Germany, and Karl Plume in Chicago. Writing by P.J. Huffstutter in Chicago; Editing by David Gregorio)

Mysterious Chinese Firm On Real Estate Spending Spree A Cautionary Tale For Canada

A mysterious Chinese company, Anbang Insurance Group has attracted the attention of The New York Times, The Wall Street Journal, Forbes, Fortune Magazine, and government authorities in the United States and other countries. The cause of the scrutiny has been Anbang’s sudden involvement in a number of massive multi-billion dollar real estate investments around the World. Formed in 2004, Anbang apparently holds assets worth at least $295 Billion, but a months-long investigation by the New York Times has revealed an extremely opaque structure, empty offices, obscure shareholders, and extensive political connections to the Chinese elite. Analysis of Anbang and its operations holds a potential lesson for Canadian authorities fretting over foreign buyers and skyrocketing real-estate prices.


A mysterious Chinese company, Anbang Insurance Group has attracted the attention of The New York Times, The Wall Street Journal, Forbes, Fortune Magazine, and government authorities in the United States and other countries.  The cause of the scrutiny has been Anbang’s sudden involvement in a number of massive multi-billion dollar real estate investments around the World. Formed in 2004, Anbang apparently holds assets worth at least $295 Billion, but a months-long investigation by the New York Times has revealed an extremely opaque structure, empty offices, obscure shareholders, and extensive political connections to the Chinese elite. Wu Xiaohui, Anbang’s Chairman, is married to Deng Xiaoping’s granddaughter  and involved with at least two others with family connections to the People’s Liberation Army. Both Wu and his wife, Zhuo Ran have disappeared from Anbang’s list of shareholders after the New York Times investigation began. Anbang has all the earmarks of a Panama Papers situation: Chinese money laundering, corruption at the highest levels, and mysterious shell companies. Analysis of Anbang and its operations is a cautionary tale for Canadian authorities fretting over foreign real-estate buyers and skyrocketing real-estate prices.

Last Spring, as B.C. Premier Christy Clark was preparing to announce new regulations to stem the flood of non-resident residential real-estate buyers, she simultaneously flew to China on a trade mission with a group of B.C. commercial real estate moguls, apparently to reassure the Chinese that B.C. was still interested in Chinese commercial real-estate investment. But by the time Clark made her trip to China, questions about the Anbang Insurance Group’s ownership had already been flying in the U.S. financial press for over two years. Whether it may have been more prudent for Clark to defer promoting Chinese commercial real estate investment in Vancouver, only time will tell. What does appear clear is that China is demonstrating a much more aggressive, arrogant and even hostile tone in its relations with both Canada and the United States. This is evidenced by this week’s G20 Summit in Hangzhou, beginning with the deliberate snubbing of Barak Obama on arrival in China, and a number of other incidents, including Trudeau’s inability to achieve an agreement with China on canola oil. Canada needs to be smarter about how it deals with these new realities.

anbangchina

Anbang Insurance Group Corporate Headquarters, Beijing 

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The dingy fourth floor of this building in Beijing houses two companies that control assets of Anbang Insurance Group worth more than $15 billion.

Anbang_WuXiaohui

Wu Xiaohui, Chairman of Anbang Insurance Group

Pingyang County’s verdant hills still hint at a long-lost China. Rice paddies and villages surround its bustling towns, and in the fields, farmers wade into the mud to plant seedlings as they have for thousands of years.

It is an odd place to find the people behind a Chinese corporate powerhouse that is turning heads on Wall Street with a global takeover binge. Yet the area is home to a tiny group of just such people — small-time merchants and villagers who happen to control multibillion-dollar stakes in the Anbang Insurance Group, which owns the Waldorf Astoria in New York and a portfolio of global names and properties.

American regulators are now asking who these shareholders are — and whether they are holding their stakes on behalf of others.

The questions add to the mystery surrounding a company that seemed to come out of nowhere, surprising deal makers with offers to pay more than $30 billion for assets around the world.

Anbang’s shopping spree is part of an outflow of money from China that has reshaped global markets but has often been shrouded in secrecy, sometimes by prominent Chinese looking to shift their wealth abroad without attracting attention at home. That poses a problem for international regulators trying to identify the buyers behind major acquisitions and to assess the riskiness of these deals.

The Anbang shareholders in the Pingyang County area hold their stakes through a byzantine collection of holding companies. But according to dozens of interviews and a review of thousands of pages of Anbang filings by The New York Times, many of them have something in common: They are family members and acquaintances of Wu Xiaohui, Anbang’s chairman, a native of the county who married into the family of Deng Xiaoping, China’s paramount leader in the 1980s and ’90s.

In many ways, Anbang and Mr. Wu appear to be archetypal products of China’s mix of freewheeling capitalism and Communist Party dominance, a formula that has fueled nearly four decades of untrammeled growth.

Anbang got its start as an auto insurance company in 2004 in the eastern Chinese city of Ningbo. For years it was only a minor player. But it took off as it became more aggressive with its finances, buying stakes in Chinese banks and bringing in money by selling high-risk, high-yield investment funds to ordinary Chinese.

Mr. Wu, 49, a former car salesman and low-level antismuggling official, led Anbang through this transformation and is now known as one of China’s most successful businessmen. He wears tailored suits and polished loafers,hobnobs with the likes of Stephen A. Schwarzman of Blackstone, and sometimes holds court at Harvard.

But he does not appear in Anbang’s filings as an owner.

It is common in China for the wealthy to have their shares in companies held in others’ names. Known in Chinese as baishoutao, or white gloves, these people are often trusted relatives or acquaintances. Many defend the practice as a way to protect their privacy in a nation where riches can be a political liability. But others say white gloves can be used to hide ill-gotten gains and thwart corruption investigators.

On the fourth floor of this shabby building in Beijing is an office that is home to two companies with a total stake of more than $15 billion in assets of one of China’s biggest financial conglomerates: the Anbang Insurance Group. CreditGilles Sabrie for The New York Times

Anbang did not respond when asked if Mr. Wu was a shareholder and declined to answer questions about its owners.

The company, a spokesman said, “has multiple shareholders who have made all required disclosures under Chinese law. They are a mix of individual and institutional shareholders who made a commercial decision to invest in the company. Anbang has now grown to be a global company thanks to the support of these long-term shareholders.”

For investors and regulators, white gloves can make it difficult to evaluate the financial health of a Chinese buyer. Ownership may be concentrated in the hands of a few people, posing hidden risks, and companies with government connections could be vulnerable to political shifts or become magnets for corruption.

“It is very important for businesses to know who they are ultimately doing business with, and for investors, what they are investing in,” said Keith Williamson, a managing director in Hong Kong at Alvarez & Marsal, a firm that carries out corporate fraud investigations.

It is not clear whether the shareholders in the Pingyang County region are holding large stakes on behalf of anyone else. But on May 27, Anbangwithdrew its application with New York State to buy an Iowa insurer, Fidelity & Guaranty Life, for $1.6 billion. Regulators had asked about ties between several shareholders with the same family names, said one person briefed on the matter who spoke on the condition of anonymity.

A $6.5 billion deal for a portfolio of hotels that includes the Essex House in New York and several Four Seasons locations is awaiting results from a security review by the American government. In March, Anbang withdrew a $14 billion bid for Starwood, the operator of Sheraton and Westin hotels, in a move that surprised Wall Street.

The company could come under greater scrutiny as it prepares to sell sharesin its life insurance business on the Hong Kong stock exchange next year. Already, at least one major New York-based investment bank has raised concerns about Anbang’s ownership after studying its shareholding structure to evaluate whether to help with its overseas deals, according to two people involved in the matter who asked not to be identified because the process was private. The bank did not participate in Anbang’s deals.

Separately, the Chinese magazine Caixin reported in May that Chinese regulators were examining Anbang’s riskier financial products. It is unclear where that inquiry stands or whether Anbang’s ownership structure is being investigated.

President Xi Jinping has waged a campaign against graft since taking office, and the use of white gloves has recently come under scrutiny. “White gloves are accompanied by power’s black hands,” the Communist Party’s disciplinary watchdog wrote in a report last year.

Questions about Anbang’s owners come as Chinese companies make deals around the world — sometimes representing efforts by China’s powerful to move money out of the country, as the economy slows and the party tightens its grip on everyday life.

Photo

Wu Xiaohui, chairman of Anbang, at a global insurance conference in 2015.CreditBen Asen/International Insurance Society

China has encouraged some capital outflow to improve the performance of its investments and expand its influence. But the subject of the elite moving money overseas is politically sensitive, raising questions about the source of their wealth and their confidence in the Chinese economy.

Luo Yu, the son of a former chief of staff of China’s military, said China’s most politically powerful families had been transferring money out of the country for some time.

“They don’t believe they will hold on to power long enough — sooner or later they would collapse,” said Mr. Luo, a former colonel in the Chinese Army whose younger brother was a business partner with one of Anbang’s founders. “So they transfer their money.”

At its founding in 2004, Anbang had an impressive list of politically connected directors. Records show early Anbang directors included Levin Zhu, son of a former prime minister, and Chen Xiaolu, the son of an army marshal who helped bring Communist rule to China.

Then there was Mr. Wu, who was born Wu Guanghui but was known as Wu Xiaohui from a young age. Relatives said he grew up in a Catholic family; a crucifix sat on his aunt’s dining room table, and she wears a necklace with a portrait of the Virgin Mary.

Mr. Wu married Zhuo Ran, a granddaughter of Deng, the Chinese leader who brought China out of the chaos of the Mao era. Together, Mr. Wu, Ms. Zhuo, Mr. Chen and their relatives owned or ran the companies that controlled Anbang, according to company filings.

Anbang leapt onto the global stage with last year’s purchase of the Waldorf Astoria and its aborted bid for the Starwood chain. By this year, Anbang’s assets had swelled to $295 billion.

It is not clear what prompted Anbang’s sudden interest in overseas assets. But the shift came after a reshuffling of its ownership structure that also led to the injection of more than $7.5 billion into the company.

Company documents filed with Chinese agencies show that the number of firms holding Anbang’s shares jumped to 39, from eight, over six months in 2014. Most of those firms received large injections of funds. At the same time, Anbang’s capital more than quintupled.

Ms. Zhuo disappeared from the ownership records by the end of that year. Many of Mr. Wu’s relatives did as well. Mr. Wu and Mr. Chen had disappeared earlier from the records.

Photo

The Anbang Insurance Group owns the Waldorf Astoria in New York, above, and a portfolio of global names and properties.CreditChang W. Lee/The New York Times

Mr. Zhu, who does not appear to have owned shares, disappeared in paper filings from Anbang’s roster of directors by 2009, though he was listed as a director on online government filings as late as 2014.

Mr. Wu, Mr. Chen and Mr. Zhu did not respond to requests for comment, and Ms. Zhuo could not be reached. In March, Mr. Zhu told Chinese reporters that he was not an Anbang director.

Anbang’s current shareholding firms are not well-known names in China, and some appear to have been set up just to hold Anbang shares. One lists its address as the empty 27th floor of a dusty Beijing office building. Two more list an address at a mail drop above a Beijing post office.

Using corporate filings, The Times compiled a list of nearly 100 people who own shares in the firms and traced about a dozen to Pingyang County or nearby. Reporters visited the area, in China’s eastern Zhejiang Province, and interviewed dozens of residents, including several whose names appeared on the list. They also interviewed an uncle, an aunt and a nephew of Mr. Wu.

The latter two, as well as others in the area, said one name matched that of his sister, Wu Xiaoxia. The family members said several other names matched those of Mr. Wu’s extended kin, including two cousins and others on his mother’s side of the family. Through their various stakes in Anbang shareholding companies, these people control a stake representing more than $17 billion in assets.

Other names matched local acquaintances of Mr. Wu, including Huang Maosheng, a local businessman who confirmed in a brief phone interview that he had a business relationship with Mr. Wu but declined to elaborate.

One village leader and neighbors identified the names of four of Mr. Huang’s relatives — including some whom they described as common workers — from among those on the list. Their Anbang holdings represent about $12 billion in assets.

Another resident, Mei Xiaojing, said two names on the list matched those of her relatives. Asked if she knew Mr. Wu, she said, “Well, yes,” then ended the phone conversation and did not respond to subsequent calls. Through multiple holding companies, those three people have a stake representing about $19 billion in Anbang assets.

As Anbang rose, so did Mr. Wu’s profile. In 2013 Mr. Wu secured a yearlong position as a visiting fellow at the Asia Center of Harvard, joining a growing list of politically connected Chinese billionaires with ties to Harvard.

Ezra F. Vogel, a professor emeritus at Harvard who wrote a biography of Deng, said he met Mr. Wu on several occasions.

“He had this staff of sharp people who were working for him,” Mr. Vogel said. “It seems that they were doing the detail work, and he was the friendly man supplying the connections.”

Tom Perkins of KPCB, Another Silicon Valley Jerk. Where Have We Gone So Wrong?

This weekend, the media and blogosphere have been ignited with reaction to the open letter to the Wall Street Journal by venture capitalist Tom Perkins, founder of Kleiner Perkins Caufield & Byers, and the blowback from Atlantic Magazine writer Jordan Weissmann. The overwhelming reaction has been disbelief and outrage at Perkins comments. I am so angry and sad to see this article and interview of legendary Silicon Valley venture capitalist, Tom Perkins. It is further evidence to my earlier post on the “Silicon Valley Jerk Conundrum.”

Ironically, if Perkins had kept his thoughts to himself and his mouth shut, he could have avoided what is now a firestorm likely to engulf him and insure further scrutiny of income inequality.


This weekend, the media and blogosphere have been ignited with reaction to the open letter to the Wall Street Journal by venture capitalist Tom Perkins, founder of Kleiner Perkins Caufield & Byers, and the blowback from Atlantic Magazine writer Jordan Weissmann. The overwhelming reaction has been disbelief and outrage at Perkins comments.

I am so angry and sad to see this article and interview of legendary Silicon Valley venture capitalist, Tom Perkins. It is further evidence to my earlier post on the “Silicon Valley Jerk Conundrum.”  Mr. Perkins and his firm, Kleiner, Perkins, Caufield & Byers, better known in the Valley as KPCB, have spawned some of the best and most famous companies in Silicon Valley. Former Intel colleagues, Jim Lally and John Doerr partnered there. Vinod Khosla, co-founder of Sun Microsystems made his mark there, and is now the leading clean tech VC in the Valley. But Mr. Perkin’s public claim in his interview with the Wall Street Journal that there is a “war” on the rich, which is like the Nazi’s extermination of the Jews, is just too much for any decent thinking person.  Where has Silicon Valley gone so terribly wrong as to create a plutocrat like this?  As the writer says, “This is the reductio ad absurdum of a rich-guy’s persecution complex. The Jews were a minority. The rich are a minority. Therefore, criticizing the rich is akin to committing genocide against the Jews.”

Read more: The Silicon Valley Jerk Conundrum

As a Silicon Valley veteran I am deeply ashamed of this man and his thinking.

Venture Capitalist Says “War” on the Rich Is Like Nazi Germany’s

War on the Jews

In a letter to the Wall Street Journal, Tom Perkins makes the worst historical analogy you will read for a long, long time.
JAN 25 2014, 12:34 PM ET
Venture capitalist Tom Perkins (Reuters) of Kleiner, Perkins, Caufield & Byers

Tom Perkins is known is a founder of one of Silicon Valley’s top venture capital firms,  Kleiner Perkins Caufield & Byers. He is not, however, a very adept historian.

In a letter to The Wall Street Journal, he suggests that progressives protesting income inequality are today’s equivalent of Nazi’s persecuting Jews.

Regarding your editorial “Censors on Campus” (Jan. 18): Writing from the epicenter of progressive thought, San Francisco, I would call attention to the parallels of fascist Nazi Germany to its war on its “one percent,” namely its Jews, to the progressive war on the American one percent, namely the “rich.”

From the Occupy movement to the demonization of the rich embedded in virtually every word of our local newspaper, the San Francisco Chronicle, I perceive a rising tide of hatred of the successful one percent. There is outraged public reaction to the Google buses carrying technology workers from the city to the peninsula high-tech companies which employ them. We have outrage over the rising real-estate prices which these “techno geeks” can pay. We have, for example, libelous and cruel attacks in the Chronicle on our number-one celebrity, the author Danielle Steel, alleging that she is a “snob” despite the millions she has spent on our city’s homeless and mentally ill over the past decades.

This is a very dangerous drift in our American thinking. Kristallnacht was unthinkable in 1930; is its descendent “progressive” radicalism unthinkable now?

Kristallnacht was a rash of anti-Jewish riots that swept Germany, Austria, and the Sudetenland in 1938, in which ordinary Germans, with Nazi support, destroyed Jewish shops and burned synagogues. As the U.S. Holocaust Memorial Museum notes in its online encyclopedia:

As the pogrom spread, units of the SS and Gestapo (Secret State Police), following Heydrich’s instructions, arrested up to 30,000 Jewish males, and transferred most of them from local prisons to Dachau, Buchenwald, Sachsenhausen, and other concentration camps. Significantly, Kristallnacht marks the first instance in which the Nazi regime incarcerated Jews on a massive scale simply on the basis of their ethnicity.

This is the reductio ad absurdum of a rich-guy’s persecution complex. The Jews were a minority. The rich are a minority. Therefore, criticizing the rich is akin to committing genocide against the Jews. QED.

Industry Analysis: Two Year Semiconductor Industry Portfolio Returns Nearly 33%

Students of Industry Analysis may be interested in this. For my January 2012 Industry Analysis course focused on the semiconductor industry, I set up an imaginary portfolio, using only industry analysis macro information. My Wall Street Journal portfolio of 13 semiconductor companies, covered a wide range of application markets. I would NOT recommend this as a serious portfolio strategy due to the highly cyclical and volatile nature of this industry. However, my overall gain over 2 years has been 32.87%. The top gainer, Micron Technologies (296.73%), lost its CEO in a plane crash after I invested but obviously recovered. The other two top gainers, ARM (112.70%), and Texas Instruments (56.71%) are both heavily involved in wireless communication chips.


Trends Driving the Semiconductor Market

Students of Industry Analysis may be interested in this. For my January 2012 Industry Analysis course focused on the semiconductor industry, I set up an imaginary portfolio, using only industry analysis macro information. My Wall Street Journal portfolio of 13 semiconductor companies, covered a wide range of application markets, and included Canadian semiconductor company PMC-Sierra. I would NOT recommend this as a serious portfolio strategy due to the highly cyclical and volatile nature of this industry. However, my overall gain over 2 years has been 32.87%. The top gainer, Micron Technologies (296.73%), lost its CEO in a plane crash after I invested but obviously recovered. The other two top gainers, ARM (112.70%), and Texas Instruments (56.71%) are both heavily involved in wireless communication chips.

WSJPortfolio_Semiconductors

Cisco System’s Vision For Online Education Is Emerging Now

Google is driving the deployment of Gigabit Fiber to the Home (FTTH), which holds the promise of orders of magnitude higher bandwidth and dramatically lower cost. But people have asked the question, “what will people do with all of this massive bandwidth?” Now we are seeing actual glimpses into that future, and how Cisco Systems vision for the future of education is already emerging.


onlineeducation

Google is driving the deployment of Gigabit Fiber to the Home (FTTH), which holds the promise of orders of magnitude higher bandwidth and dramatically lower cost.  But people have asked the question, “what will people do with all of this massive bandwidth?” Having lived with Moore’s Law for most of my career, I smile in bemusement. I can remember a fear that the 256Kb flash memory chip was “too big.” The truth is that if you were asked 20 years ago to predict how we would be using the Internet today, I doubt many would have accurately predicted our current global village.  The few exceptions would be visionaries like Dave Evans, Chief Futurist at Cisco Systems, who authored a Huffington Post article, providing an excellent prediction of how FTTH may impact just one aspect of the future: education.  Read below:

Read more: How Gigabit fiber to the home will transform education way beyond MOOC’s

Now we are seeing actual glimpses into that future,  and how Cisco Systems vision for the future of education is already emerging.

VIDEO: Could your child could benefit from a 24/7 tutor?

The Invasion of the Online Tutors

They teach via chat windows and digital whiteboards

By

SUE SHELLENBARGER
Nov. 12, 2013 7:21 p.m. ET

In the world of on-demand tutoring, kids can log on 24/7 to sites with problems or questions. But how well do these really work? Sue Shellenbarger reports and mother Peggy Bennett shares her own experience. Photo: Justin Clemons for The Wall Street Journal.

It’s a nightly dilemma in many households: A student hits a wall doing homework, and parents are too tired, too busy—or too mystified—to help.

Ordering up a tutor is becoming as easy for kids as grabbing a late-night snack. Amid rapid growth in companies offering online, on-demand tutoring, students can use a credit card to connect, sometimes in less than a minute, with a live tutor. Such 24/7, no-appointment-needed services can be especially helpful to students with tight budgets or tight time frames or those in remote areas.

“All of a sudden, the world opens up to them,” says Michael Horn, executive director of education for the Clayton Christensen Institute, a San Mateo, Calif., education and health-care think tank.

That said, the quality of on-demand scholastic support can be uneven, and the catch-as-catch-can approach to enlisting a tutor may not be best for struggling students who need sustained help. Sessions can bog down on technical glitches, and language barriers can cause problems on sites that rely on tutors from abroad.

Chloe Friedman of Dallas uses Tutor.com for homework help between dance classes. Justin Clemons for The Wall Street Journal

Prices, ranging from about $24 to $45 an hour (and often prorated to the minute), are cheaper than what many skilled tutors charge in a student’s home. And parents and students say the quick homework fix can ease stress and make evenings at home more peaceful.

Whenever Peggy Bennett of Dallas tried to help her 13-year-old daughter, Chloe Friedman, with her eighth-grade physics and algebra homework, “we’d always end up bickering,” Ms. Bennett says, with Chloe often objecting that the teacher did it differently. “It was a lose-lose situation.”

Chloe says she was skeptical when her mom helped her sign up last month on Tutor.com, a New York City-based provider of on-demand tutoring. But after she logged on one evening for algebra help, a tutor, identified only by a first name and last initial, responded within a minute. Chloe says she was guided to figure out the answers, using text chat and an interactive “whiteboard” that displayed their writing and calculations on a shared screen. After hearing nothing but typing for about 10 minutes, Ms. Bennett says she heard Chloe yell from the other room, “They told me I did a good job!” Ms. Bennett adds, “That was all that she needed.”

Chloe, who takes classes in dance, acting and singing, also uses Tutor.com on hersmartphone at the dance studio between classes. She says she recently got help solving a math problem in less than 10 minutes.

Math Mentoring on the Fly: A text chat between Chloe Friedman of Dallas and her Tutor.com tutor. ‘He didn’t give me the answer,’ she says. ‘He went through it with me like my teacher would at school.’ Justin Clemons for The Wall Street Journal

Ms. Bennett now lets Chloe use her credit card to extend her Tutor.com subscription whenever she needs help. So far, Chloe has spent $79.99 for up to two hours of tutoring. Tutor.com subscribers pay once a month for time used; unused minutes can be carried to the next month.

Most sites enlist moonlighting or retired teachers, college professors or professionals with tutoring experience; most offer scheduled tutoring in addition to on-demand sessions. The most common users are middle- and high-schoolers, and college students taking basic courses.

About 95% of the 1,200 tutors available on Bangalore, India-based TutorVista are recruited from India, says C.S. Swaminathan, president of TutorVista, which was recently acquired by the London-based publishing and education companyPearson PSON.LN -0.76% PLC. Tutoring sessions with its mostly U.S.-based customers are usually held via whiteboard and text chat, to reduce potential language difficulties, Mr. Swaminathan says. Still, students say, language barriers can sometimes slow communication, and grammar glitches can occasionally creep in.

Saira Sultan, an Irvine, Calif., college student, says the TutorVista tutors she taps several times a week for help with her English and math courses are pleasant and knowledgeable. She recently uploaded a business letter she had been assigned to write for her English class, and the tutor marked errors in the text and texted instructions on correcting verb tenses, rearranging paragraphs and rephrasing sentences to read more smoothly, Ms. Sultan says. The one-on-one edits have helped her learn to write more clearly, she says.

The drawback, she says, is that communicating via text chat “takes a lot of time.” Mr. Swaminathan says TutorVista can provide audio-chat sessions if scheduled in advance.

As with in-person tutors, knowledge levels and teaching skills can be uneven. Stephanie Dobbs of Los Angeles says one InstaEDU tutor who responded to her daughter Sarah’s request for calculus help “didn’t know the material at all.” But Sarah, who uses the site two to three times a week, says it has so many tutors that switching is easy, and the convenience outweighs any drawbacks.

An InstaEDU spokeswoman says on occasion, tutors can halt billing while they figure out the material, or students can be given refunds or a different tutor.

James Nickerson agrees that on-demand tutors need winnowing. When he turned to InstaEDU recently to help his 16-year-old daughter Emma with an advanced-Latin class (they couldn’t find a skilled Latin tutor in their hometown of Stevens Point, Wis.), he didn’t turn Emma loose online. Instead, he sat beside her while she chose a tutor, urging her to bypass a math major who claimed a sideline expertise in Latin in favor of a New York University grad student majoring in classics. He also helped her schedule sessions, to provide continuity with the same tutor.

On-demand tutoring is just one of a growing array of online homework-help options. Khan Academy, one prominent example, offers interactive tutorials in addition to educational videos. Chegg.com provides answers to homework questions, while crowdsourcing sites such as StudyBlue enable students to share study guides, notes and flashcards.

Some school districts pay New York City-based TutaPoint and other online-tutoring sites to provide free access to students; about 2,000 libraries let students use Tutor.com without cost. Free access to tutoring sites can help level the playing field for students from all income groups—if they provide trained, qualified tutors, conduct background checks and safeguard users’ security, says Nora Carr, president of the National School Public Relations Association, a professional group.

But the sites can also tilt the playing field in favor of kids with plenty of money for tutoring help, creating pressure for other students to have a tutor too. Parents should monitor kids’ use of the sites and track fees, which “can get very expensive very quickly,” says Ms. Carr, who is chief of staff of the Guilford County Schools in Greensboro, N.C.

Yamini Naidu says online tutoring last year through InstaEDU helped her earn As in advanced-placement classes at her Beaverton, Ore., high school. Now a freshman at Yale University, Ms. Naidu works eight hours a week as an InstaEDU tutor.

She says that students who come to sessions with a list of questions or assignments to work on—and who block out time to concentrate—benefit most. Text chats occasionally stall, though, if students are distracted or start multitasking; Ms. Naidu tries to re-engage students by asking questions to spark their interest, she says.

Bharathy Chummar of Plantation, Fla., turned to the online tutoring site Eduboard last summer to help her 15-year-old son Prajwal research possible science-fair topics. Prajwal had a 45-minute audio and text chat with a tutor, who is also a physician, about an idea involving bacteria. The doctor later sent him a research summary with links to more studies.

Online tutors “fill a huge gap that can never be filled by parents,” Ms. Chummar says.

Write to Sue Shellenbarger at sue.shellenbarger@wsj.com