Kremlin Welcomes Biden’s Offer to Extend Nuclear Treaty
The response from Moscow suggests that Russia will engage in talks to continue a disarmament pact, despite the new U.S. administration’s pledge to take a harder line on other issues.
Why Kamala Harris Is a Star of the N.Y.C Mayor’s Race
The candidates are competing over who can best capture Washington’s attention and assistance as New York navigates its recovery from the pandemic.
Why Kamala Harris Is a Star of the New York City Mayor’s Race
The candidates are competing over who can best capture Washington’s attention and assistance as New York navigates its recovery from the pandemic.
In Russia, effort underway to curb upcoming Navalny protests
MOSCOW — Authorities in Russia have taken elaborate measures to curb protests against the jailing of opposition leader Alexei Navalny, planned by his supporters for Saturday in more than 60 Russian cities.
Navalny’s associates in Moscow and other regions have been detained in the lead-up to the rallies. Opposition supporters and independent journalists have been approached by police officers with official warnings against protesting.
Universities and colleges in different Russian regions have urged students not to attend rallies, with some saying they may be subject to disciplinary action, including expulsion.
Kremlin spokesman Dmitry Peskov said Friday that “it is only natural that there are warnings … about the possible consequences related to noncompliance with the law” since there are calls for “unauthorized, unlawful events.”
Navalny, an anti-corruption campaigner and Kremlin’s fiercest critic, was arrested Sunday when he returned to Russia from Germany, where he had spent nearly five months recovering from nerve-agent poisoning that he blames on the Kremlin. On Monday, a judge ordered Navalny jailed for 30 days.
He faces a years-long prison term — authorities accused him of violating the terms of a suspended sentence in a 2014 conviction for financial misdeeds, including when he was convalescing in Germany.
Navalny’s supporters have called for nationwide demonstrations on Saturday to pressure the government into releasing the politician, but have come under pressure themselves.
On Thursday evening, police in Moscow detained three top associates of Navalny. On Friday, his spokeswoman Kira Yarmysh was ordered to spend nine days in jail, and Georgy Alburov was jailed for 10 days. Navalny’s close ally Lyubov Sobol was released Thursday night, but ordered by a court on Friday to pay a fine equivalent to $3,300. All three have been charged with violating protest regulations.
More than a dozen activists and Navalny allies in several Russian regions have been detained as well.
Russia’s Prosecutor General’s office and police have issued public warnings against attending or calling for unauthorized rallies. The prosecutors have also demanded Roskomnadzor, Russia’s media and internet watchdog, to restrict access to websites containing calls to protest on Saturday.
On Friday, Russia’s largest social network VKontakte blocked all the pages dedicated to the rallies.
Roskomnadzor also announced that it would fine social media companies for encouraging minors to participate in the protests. The move came amid media reports of calls for demonstrations — and videos of school students replacing portraits of President Vladimir Putin in their classrooms with that of Navalny — going viral among teenagers on social network TikTok.
Russia’s Education Ministry has issued a statement urging parents to “shield” their children from the events on Saturday, stating that “no one has the right to drag young people into various political actions and provocations.”
And the Investigative Committee has opened a criminal probe into the “involvement of minors in illegal activity,” accusing unidentified supporters of Navalny of encouraging minors to participate in the rallies on social media.
Also on Friday, Moscow Mayor Sergei Sobyanin urged Muscovites not to attend the rally, in a video statement shown by the Moskva24 TV channel. Sobyanin cited coronavirus concerns, called the upcoming demonstration “unlawful” and said that “law enforcement agencies will ensure the necessary order in the city.”
Navalny’s allies are telling supporters not to get discouraged and to show up on Saturday.
“Don’t be afraid. Leave it to the Kremlin. We’re in the right, and we’re the majority,” Lyubov Sobol wrote in a Facebook post.
Dozens of influential Russians, including actors, musicians, journalists, writers, athletes and popular bloggers, have come out with statements in support of Navalny, and some promised to attend the demonstrations.
Biden ordering stopgap help as talks start on big aid plan
BALTIMORE — President Joe Biden plans to take executive action Friday to provide a stopgap measure of financial relief to millions of Americans while Congress begins to consider his much larger $1.9 trillion package to help those affected by the coronavirus pandemic.
The two executive orders that Biden is to sign would increase food aid, protect job seekers on unemployment and clear a path for federal workers and contractors to get a $15 hourly minimum wage.
“The American people cannot afford to wait,” said Brian Deese, director of the White House National Economic Council. “So many are hanging by a thread. They need help, and we’re committed to doing everything we can to provide that help as quickly as possible.”
Deese emphasized that the orders are not substitutes for the additional stimulus that Biden says is needed beyond the $4 trillion in aid that has already been approved, including $900 billion this past December. Several Republican lawmakers have voiced opposition to provisions in Biden’s plan for direct payments to individuals, state and local government aid and a $15 hourly minimum wage nationwide.
Most economists believe the United States can rebound with strength once people are vaccinated from the coronavirus, but the situation is still dire as the disease has closed businesses and schools. Nearly 10 million jobs have been lost since last February, and nearly 30 million households lack secure access to food.
One of Biden’s orders asks the Agriculture Department to consider adjusting the rules for food assistance, so that the government could be obligated to provide more money to the hungry.
Children who are unable to get school meals because of remote learning could receive a 15% increase in food aid, according to a fact sheet provided by the White House. The lowest-income households could qualify for the emergency benefits from the Supplemental Nutrition Assistance Program. And the formula for calculating meal costs could become more generous.
The order also tries to make it easier for people to claim direct payments from prior aid packages and other benefits. In addition, it would create a guarantee that workers could still collect unemployment benefits if they refuse to take a job that could jeopardize their health.
Biden’s second executive order would restore union bargaining rights revoked by the Trump administration, protect the civil service system and promote a $15 hourly minimum wage for all federal workers. The Democratic president also plans to start a 100-day process for the federal government to require its contractors to pay at least $15 an hour and provide emergency paid leave to workers, which could put pressure on other private employers to boost their wages and benefits.
These orders arrive as the Biden White House has declined to provide a timeline for getting its proposed relief package through, saying that officials are beginning to schedule meetings with lawmakers to discuss the proposal.
White House press secretary Jen Psaki said at a Thursday briefing that the proposal has support ranging from democratic socialist Sen. Bernie Sanders to the U.S. Chamber of Commerce.
But not all components of the package are popular among Republicans, and that could delay passage in ways that could injure the economy. Psaki stressed that Biden wants any deal to be bipartisan and that the process of meeting with lawmakers to talk through the plan is just beginning.
Biden must balance the need for immediate aid against the risk of prolonged negotiations. Psaki told ABC’s “Good Morning America” on Friday that Biden is “not going to take tools off the table” as he looks to bring Republicans to the table, and she argued that the back-and-forth is “exactly how it should work.”
“We’ll figure out what the sausage looks like when it comes out of the machine,” she said.
Neil Bradley, chief policy officer at the Chamber, told reporters Thursday that Congress should act fast to approve the roughly $400 billion for national vaccination and reopening schools and other elements of the plan with bipartisan support, rather than drag out negotiations.
“We’re not going to let areas of disagreement prevent progress on areas where we can find common ground,” Bradley said. “We cannot afford six months to get the vaccination process working right. … We can’t even wait six weeks to get vaccinations distributed and schools reopened.”
Lawyers advise Ethiopian Airlines against ‘financially disastrous’ settlement offer by Boeing over 737 Max crash
American attorneys for Ethiopian Airlines, which lost 157 passengers and crew in the second fatal crash of a Boeing 737 Max in early 2019, have advised the carrier not to accept a settlement Boeing has offered but instead to sue the manufacturer for punitive damages in the U.S.
In an urgently worded letter sent Sunday, the Chicago-based attorneys warned Ethiopian CEO Tewolde GebreMariam that the offer falls “grossly short” of what the airline could win before a U.S. jury — particularly since Boeing recently accepted responsibility for criminal fraud during the plane’s certification by regulators.
The settlement Boeing has offered is “a mere fraction” of the actual damage, the lawyers told Tewolde, and accepting it “will inevitably leave substantial money on the table and would be a tremendous political and financial mistake for Ethiopian Airlines.”
Yet like many airlines, Ethiopian is now desperate for cash.
Before the 2019 crash of Flight ET302, state-owned Ethiopian was the largest and most successful airline in Africa. It lost business after the tragedy and the subsequent grounding of the Max fleet. Then last year its revenue plummeted further when the COVID-19 pandemic paralyzed air travel.
The letter conveys the attorneys’ concern that direct settlement negotiations between Boeing and the airline’s management are close to done and that a “financially disastrous” deal may be imminent.
A person familiar with developments in the private negotiations shared details from the letter with The Seattle Times.
It offers a rare look inside what are normally secret negotiations. And with the Max back in the air and the second anniversary of the second crash approaching, it highlights a Boeing push to conclude customer compensation discussions and put the Max crisis behind it.
The letter from law firm DiCello Levitt Gutzler, which Ethiopian hired to provide advice on its claims against Boeing, is signed by co-founding partner Adam Levitt.
Boeing declined to comment on discussions with its customer. Ethiopian Airlines did not respond to an emailed request for comment. Levitt did not return a call seeking an interview.
Levitt’s letter argues that Boeing’s Deferred Prosecution Agreement with the Department of Justice (DOJ) earlier this month provides Ethiopian new legal leverage because of “Boeing’s admission of its criminal conduct.”
The DOJ settlement staves off a criminal fraud charge against Boeing with a relatively light $244 million penalty.
It also explicitly exonerates senior management while pinning the fraud on two Boeing technical pilots who misrepresented to airlines the details of new flight control software on the Max — the maneuvering characteristics augmentation system (MCAS) — that was a key contributing factor in both crashes.
However, Boeing admitted in the deferred prosecution agreement that the accusations of fraud involving the two pilots were “true and accurate” and acknowledged that the company is responsible for criminal acts by its employees.
Furthermore, the DOJ deal explicitly states that Boeing agrees to make no claims “in litigation or otherwise” that contradict its acceptance of responsibility.
Levitt wrote that Boeing’s “admissions would prove a case of fraud and would also support a punitive damages claim.”
And he said Boeing’s deception is exacerbated by how company executives initially sought to cast blame on Ethiopian’s pilots for the March 2019 crash.
“These facts will have a powerful effect in a court of law and Boeing knows it,” Levitt wrote.
He urged Tewolde to “reject Boeing’s current, desperate settlement entreaties” and “immediately file and prosecute its claims against Boeing, in the United States.”Boeing’s offer
The airline’s claim against Boeing is separate from the claims of the families of those who died in the Flight ET302 crash. Other U.S. law firms are handling about 140 such lawsuits, of which only a handful have been settled.
Ethiopian is negotiating for economic compensation: for the loss of its plane; for the subsequent grounding of its Max fleet and the halt of new deliveries that reduced its profits in the year that followed; for the payouts the airline itself made to the families of passengers immediately after the crash; and for the significant reputational and brand damage.
Levitt’s letter states that independent expert assessments put the airline’s financial hit at “not less than $1.8 billion in cash.”
The person familiar with the discussions said Boeing is offering an amount on the order of $500 million to $600 million, a large portion of which is not cash but concessions on future Boeing airplane sales, including waivers on maintenance costs and discounts on future airplane deliveries.
“It’s nowhere near the value of the loss,” the person said. “It’s astonishing that Ethiopian management could accept this.”
With the deep downturn in air travel during the coronavirus pandemic, the person added, “What use is a $5 million discount on planes you don’t want?” Ethiopian still has unfilled orders for 25 Maxes.
According to disclosures in financial filings, Boeing has set aside a total of about $9 billion to cover present and future compensation to all of its Max customers, about 58 airlines and airplane lessors. So the $1.8 billion figure cited by the lawyers advising Ethiopian would be a massive claim for a single customer.
Though Ethiopian’s status as a victim of a crash clearly adds substantial financial damage, its fleet at the time of the crash had only six 737 Maxes, each worth perhaps $55 million.
A footnote in the letter concedes that the amount of a jury award is uncertain.
“While a U.S.-based judicial proceeding may ultimately yield an award of less than $1.8 billion, with the greatly-strengthened punitive damages threat that we presently have against Boeing, and which we would strongly press in a litigation context, we would not start with a number less than that amount,” the footnote reads.
Ethiopian’s U.S. legal team may have some financial incentive to seek a trial rather than a private settlement.
While lawyers representing families of those killed, many of whom have meager means, typically work on a contingency basis and take about 20% of any eventual settlement, the norm for lawyers representing companies in commercial cases is payment by the hour. Typically, such legal advice as Levitt’s firm is providing starts at about $550 per hour, according to a person familiar with the rates.Why settle for less?
A foreign company ignoring the expensive legal advice from the U.S. counsel it has hired is not unheard of.
Steven Marks, of the Miami aviation law firm Podhurst Orseck, and one of three lead lawyers litigating on behalf of the families of the victims of Flight ET302, said he has personal experience: Boeing bypassed him to close a direct deal with one of his clients, a foreign aircraft-leasing company which sued Boeing for damages over the Max.
He said Boeing leverages its long-term relationships with foreign governments and customers, who need the manufacturer to supply spare parts and provide logistical support.
“They are joined at the hip,” Marks said. “They get sweetheart deals.”
A critical factor is Ethiopian’s need for cash to survive the year ahead. Because of the pandemic, Ethiopian now makes more money from carrying cargo than passengers and, like airlines around the globe, has suffered a precipitous drop in revenue.
The Ethiopian economy is currently crushed by the impact of the pandemic. And the government — which owns the airline — is also engulfed by a bloody ethnic conflict in the northern Tigray region. It’s likely not in a position to bail out the carrier.
Facing this crisis, the airline’s management will be aware that U.S. lawsuits can be yearslong affairs and that Boeing will defend itself with top legal talent that could draw the process out. In addition, the pandemic has halted jury trials in most large cities in the U.S., creating a huge backlog of cases that would likely delay an outcome further.
The two-year anniversary of the crash coming up in March, after which Boeing could potentially limit the scope of the suit with statute-of-limitations arguments, is probably a hard deadline for a decision on filing suit.
Bob Clifford, a Chicago lawyer who is another of the lead attorneys representing the families of ET302 victims but is not involved with Ethiopian’s case against Boeing, said it seems grossly unfair that the airline’s distress might force acceptance of a lowball settlement.
Told of the reported Boeing offer, he asked “Why on heaven’s earth would the leadership of Ethiopian Airlines even contemplate that kind of resolution?”
“I get that companies like to skip the litigation process and the lawyers if they can,” Clifford added. “But it’s a deal that smells to high heaven.”
Washington lawmakers introduce bill to increase state gas tax
OLYMPIA — Lawmakers in Washington have introduced legislation that could increase the state gas tax, making it the highest in the country at 67.4 cents a gallon.
The proposal calls for a 18-cent increase a gallon in the state’s gas tax, KING-TV reported Thursday. The bill would increase the price by 10 cents a gallon this year and another 8 cents a gallon in 2022.
Washington state drivers currently pay 49.4 cents a gallon in state taxes and an additional 18.4% in federal taxes, officials said. California drivers currently pay 64.47 cents a gallon in state taxes.
“Our proposal is much more substantial than any in state history because the needs and challenges are so much higher,” said Democratic state Rep. Jake Fey, who is sponsoring the bill.
Fey said the funding would pay for transportation projects, help convert diesel ferries to electric and upgrade salmon culverts under a federal order to redesign hundreds of fish culverts by 2030.
Some lawmakers have argued the state should instead prioritize relief aid for residents impacted by the coronavirus pandemic. Republican state Rep. Andy Barkis suggested delaying the culvert projects.
“We’ve got 9 more years left,” Barkis said. “Do you think maybe this would be a year we could reprioritize that money and do some other things?”
Democratic Gov. Jay Inslee has not yet determined if he will support the bill, KING-TV reported.
Amazon, Virginia Mason team up on COVID-19 vaccine pop-up clinic
Amazon is partnering with Virginia Mason on a pop-up COVID-19 vaccine clinic Sunday in Amazon’s Seventh Avenue meeting center in Seattle, the company announced Thursday at a news conference with Gov. Jay Inslee.
Sunday’s event — the first of many, Amazon says — has a goal of administering 2,000 vaccines to people who are on Virginia Mason’s waitlist for the vaccine. Eligible Washingtonians can join the waitlist at virginiamason.org. The state allows people aged 65 or older and people aged 50 or older in multigenerational households to receive the vaccine now.
As of Thursday afternoon, there were still fewer than 2,000 people on the waitlist, said Virginia Mason CEO Gary Kaplan. The hospital will notify by email those who made the cutoff to get vaccinated at Sunday’s clinic.
Inslee has set a goal of administering 45,000 vaccines daily; now, about 16,000 Washingtonians are vaccinated every day, though that rate is rising quickly, Inslee said Thursday.
Amazon joins a rapidly growing list of local corporations that have signed on to assist with the state’s vaccine deployment.
Microsoft will transform its vast Redmond campus — now empty of most employees because of remote work policies instituted at the start of the pandemic — into a mass-vaccination site capable of vaccinating 5,000 people a day, Microsoft president Brad Smith said Monday. Starbucks employees will help the state’s vaccine task force fast-track inoculations. And preparations are underway to administer vaccines at more than 2,000 pharmacies and Costco locations.
Amazon intends to host more pop-up clinics in the weeks to come, a company spokesperson said Thursday. Amazon will also loan one of its executives to the state’s vaccine command center, said Jay Carney, Amazon’s vice president of global corporate affairs.
Sunday’s clinic is “a down payment on things we hope [Amazon is] going to help us with” going forward, Inslee said at the news conference.
Amazon has repeatedly offered to assist with vaccine rollout while requesting that its workers be prioritized for the vaccine. Thursday’s news conference was no exception: Carney again offered to implement vaccination programs for the company’s roughly 20,000 warehouse, grocery and data-center workers in Washington state.
“Because we have such big employee bases in these fulfillment centers, we can administer a lot of vaccinations very quickly,” Carney said. “The help we can provide administering those vaccinations will help free up resources for other efforts on vaccinations.”
Amazon also sent a letter to President Joe Biden’s administration Wednesday in which it offered to assist with vaccine rollout and asked that its noncorporate workers receive the vaccine “at the earliest appropriate time.” The company had previously made the same plea to Inslee and King County Executive Dow Constantine.
Other organizations also have hosted mass vaccination clinics. showed up at the Jamestown S’Klallam Tribe’s drive-thru vaccination clinic in early January after it offered its excess COVID-19 vaccine to nontribal members.
The first state-run mass vaccination sites will open next week in Kennewick, Spokane, Wenatchee and Vancouver, Washington secretary of health Umair Shah said Thursday morning. King County has said it will open its own mass vaccination sites in February.
Health care providers will likely set up additional mass-vaccination events in coming weeks, Kaplan said at Thursday’s news conference.
“I’m really looking forward to putting shots in arms,” he said.
Existing home sales rise in 2020 to highest in 14 years
WASHINGTON — Sales of existing homes rose 0.7% in December, pushing the entirety of 2020 to a pace not seen in 14 years and providing one of the few bright spots for a U.S. economy mired in a global pandemic.
Rising sales in the final month of the year lifted activity to a seasonally adjusted annual rate of 6.76 million units, the National Association of Realtors reported Friday.
Sales rose to 6.48 million in 2020, the highest level since 2006 at the height of the housing boom.
The median sales prices was $309,800 in December, up 12.9% from a year ago.
Stocks slip on Wall Street as worldwide rally takes a pause
NEW YORK — Wall Street is tapping the brakes on its record-setting rally this week, as markets worldwide take a pause on Friday.
The S&P 500 was 0.5% lower in morning trading, a day after inching up to its second straight all-time high. The Dow Jones Industrial Average was down 240 points, or 0.8%, at 30.963, as of 10:45 a.m. Eastern time, and the Nasdaq composite was down 0.3%.
The modest losses for global markets started early in Asia and then carried westward amid worries about resurgent coronavirus cases in China and weak economic data from Europe. In the United States, disappointing earnings reports from IBM and some other companies gave cover for investors to sell and book profits after big recent gains. The S&P 500 is still on pace to climb 1.8% this week, its third weekly gain in four.
IBM dropped 10.5% for one of the market’s sharpest losses after reporting weaker revenue for the last three months of 2020 than analysts expected. The tech giant’s revenue has been mostly shrinking for years.
IBM nevertheless also reported a higher profit for the end of 2020 than Wall Street expected. That’s been the big theme so far in the early part of this earnings season, with about 13% of companies in the S&P 500 having reported. With bank and some other industries leading the way, profit reports have consistently come in better than Wall Street had feared.
Seagate Technology fell 6.9% despite joining that cavalcade of companies reporting better earnings than expected. It also gave a forecast for revenue and profit in the current quarter that matched or topped Wall Street’s. Analysts said a lot of that optimism may have already been built into the stock’s price.
Markets have been mostly rallying recently on hopes that COVID-19 vaccines will lead to a powerful economic recovery later this year as daily life gets closer to normal. Hopes are also high that Washington will deliver another dose of stimulus for the economy now that the White House and both houses of Congress are under single control of the Democrats.
President Joe Biden has proposed a $1.9 trillion plan to send $1,400 to most Americans and deliver other stimulus for the economy. But his party holds only the slimmest possible majority in the Senate, raising doubts about how much can be approved. Several Republicans have already voiced opposition to parts of the plan.
The coronavirus pandemic is also worsening and doing more damage to the economy by the day. In Europe, a survey of purchasing managers showed on Friday that activity in the manufacturing and services sectors shrank during January in the 19-country eurozone. The data suggests the eurozone’s economy may contract again this quarter.
In European stock markets, France’s CAC 40 fell 0.8%, and Germany’s DAX lost 0.3%. The FTSE 100 in London dropped 0.4%.
In China, where the pandemic began in late 2019, the government has reimposed travel controls after outbreaks in Beijing and other cities. A spike in infections has authorities calling on the public to avoid travel during February’s Lunar New Year holiday, normally the year’s most important family event.
That has “raised some concerns among investors who, after a slow start to the global vaccine rollout, are debating how fast economies can vaccinate the most vulnerable and start returning to business as usual,” said Stephen Innes of Axi in a report.
Stocks in Shanghai slipped 0.4%, while Hong Kong’s Hang Seng lost 1.6%. Japan’s Nikkei 225 fell 0.4%, and South Korea’s Kospi dropped 0.6%.
The U.S. economy has also been taking hits recently, with reports showing weakness in the job market and falling confidence among shoppers. But the data has been mixed.
One report on Friday showed the housing industry continues to be a bright spot for the economy. Sales of previously occupied homes were stronger last month than economists expected. A separate report from IHS Markit gave a preliminary reading on U.S. business activity for January that was also stronger than expected, indicating an acceleration in growth.
One major underpinning for the market seems to have little chance of going away soon: massive support from the Federal Reserve. The central bank is holding short-term interest rates at a record low and making other moves in hopes of boosting markets and the economy.
The yield on the 10-year Treasury note was holding steady at 1.09%. It has been mostly climbing this month, up from roughly 0.90% at the start of the year, with expectations for increased government borrowing, economic growth and inflation.
A big question on Wall Street is how much more it can climb before criticism blares even louder that stock prices have grown too expensive relative to corporate profits.