Juul Says Its Focus Was Smokers, but It Targeted Young Nonsmokers The company planted the seeds of a public health crisis by marketing to a generation with low smoking rates, and it ignored evidence that teenagers were using its products.

NY TIMES


SAN FRANCISCO — In the face of mounting investigations, subpoenas and lawsuits, Juul Labs has insisted that it never marketed or knowingly sold its trendy e-cigarettes and flavored nicotine pods to teenagers.

As youth vaping soared and “juuling” became a high school craze, the company’s top executives have stood firm in their assertion that Juul’s mission has always been to give adult smokers a safer alternative to cigarettes, which play a role in the deaths of 480,000 people in the United States each year.

“We never wanted any non-nicotine user and certainly nobody underage to ever use Juul products,” James Monsees, a co-founder of the company, testified at a congressional hearing in July.

But in reality, the company was never just about helping adult smokers, according to interviews with former executives, employees and investors, along with reviews of legal filings and social media archives.




Juul’s remarkable rise to resurrect and dominate the e-cigarette business came after it began targeting consumers in their 20s and early 30s, a generation with historically low smoking rates, in a furious effort to reward investors and capture market share before the government tightened regulations on vaping.

As recently as 2017, as evidence grew that high school students were flocking to its sleek devices and flavored nicotine pods, the company refused to sign a pledge not to market to teenagers as part of a lawsuit settlement. It wasn’t until the summer of 2018, when the Food and Drug Administration required it to do so, that the company put a nicotine warning label on its packaging.

Though some former employees recalled Mr. Monsees wearing a T-shirt at the office that used an expletive to refer to Big Tobacco, the start-up’s early pitches to potential investors listed selling the business to a big tobacco company as one of the potential ways to cash out. (Last December, the tobacco giant Altria paid $12.8 billion for a 35 percent stake in the company.)

These and other previously unreported decisions would plant the seeds for a public health crisis in which a new generation is becoming hooked on nicotine and that has raised questions about the future of e-cigarettes in the United States and Juul’s ability to stay in business.

In the fall of 2015, only a few months after the company’s newfangled vaping device, called the Juul, came on the market, investors, including the mutual fund giant Fidelity Investments, were already impatient for progress, according to former executives.


“They had yet to see the fruits of their investment, given what the opportunity was, and it was unclear for how long vaping was going to be lightly regulated,” said Scott Dunlap, the chief operating officer at the time. “They were excited and pushing hard.”

Fidelity declined to comment.

The Juul, which looked unlike any other e-cigarette and delivered a far more powerful nicotine punch, was supposed to be the hit product for the company, then named Pax Labs, but a few months in, it appeared to be a bust. Convenience stores and vape shops were not getting their orders because of supply chain problems. Manufacturing defects left some customers with bad batteries, or worse, a condition nicknamed JIM — juice in mouth — with no one at the company quite sure how much of the toxic nicotine substance could be safely ingested.

In a meeting in San Francisco in the fall of 2015, the board of directors decided to remove Mr. Monsees as chief executive, dismiss other senior leaders and effectively take over the company. It would be 10 months before they named another C.E.O.

“I was in that first meeting where you tell the board, ‘We aren’t going to hit the numbers. There are issues; there are problems in the supply chain.’ Not a lot of good news,” said Mr. Dunlap, who said he had advised the company to slow down and take the time needed to fix the problems. He was fired the next day.

The board meeting, which has not been previously reported, was a turning point for the company.

Over the next few years, the company — which became Juul Labs after splitting from Pax in 2017 — would reignite the stale e-cigarette business, grabbing more than 75 percent of the vaping market and tallying more than $1 billion in sales in 2018. At the end of last year, it was valued at $38 billion, more than the Ford Motor Company.

From 2016 to 2018, the years Juul’s growth became astronomical, the number of adult nonsmokers who began using e-cigarettes doubled in the United States, according to an analysis of federal survey data by researchers at the Johns Hopkins Ciccarone Center for the Prevention of Cardiovascular Disease. The study estimates that six million adults were introduced to nicotine via e-cigarettes.

During that time, millions of high school and middle school students began vaping, according to federal health surveys. More than five million youths — one in four American high school students and one in 10 middle school students — now vape, the Centers for Disease Control and Prevention and the Food and Drug Administration said in a joint report this summer. Nicotine is a highly addictive drug that impedes the developing brain, and many teenagers have struggled to quit.

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Jim Lefebvre, dean of students at Fairview High School in Boulder, Colo., showed some of the vaping devices that had been confiscated from students during a presentation last year.Credit...Nick Cote for The New York Times


From the beginning, there was plenty of evidence of teenage use on social media that should have been apparent to a company that had made social media the core of its marketing strategy. A sampling of tweets from Juul’s first 18 months of sales showed that juuling had quickly become a fad among high school students, long before the company acknowledged that there was a problem.

“petition to make our school mascot a juul,” said one tweet in December 2015.

“horizon highschool, where every1 is juuling in the bathroom,” said another in January 2016.

“HAPPY 16th BIRTHDAY, LEXI T!!! I hope ur day is filled with juuling & just having the best day ever!” said a tweet in October 2016.

There was also evidence from employees’ own lives. In 2016, some salespeople inside Juul passed around a photo taken by a colleague’s teenage son of a picture of a Juul drawn on a bathroom stall at his high school with the word “Juul” scrawled beside it.

Juul declined to make Mr. Monsees — who stayed at the company after being removed from the C.E.O. job — or any other executives available for this article.

The company says it is refocusing on its core mission. It has recently taken steps to keep its products away from teenagers, including stopping sales of most of its flavors; halting all broadcast, print and digital advertising; and offering $100 million in incentives for retailers to adopt a new electronic age-verification system intended to curb illegal sales to minors. This month it announced it would discontinue its mint flavor, which a new study showed had become its most popular among teenagers.

“We fully understand the need to earn back the trust of regulators, policymakers, key stakeholders and society at large and reset our company and the vapor category,” said Joshua Raffel, a spokesman who joined Juul in October 2018 after working as a deputy communications director in the Trump White House.

Another market in millennials


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Ploom products available at an album release party for Robin Thicke in September 2013. Credit...Andrew Toth/WireImage, via Getty


The story of Juul began more than a decade ago when two smokers, Mr. Monsees and Adam Bowen, became friends over cigarette breaks as graduate students in design at Stanford. During those chats, they came up with an idea for their final thesis, a design for an e-cigarette that would give smokers the nicotine they craved but without the cancer-causing substances that come from burning tobacco. They called it Ploom, and two years later, in 2007, they started a company by the same name.

Ralph Eschenbach, an early investor through the firm Sand Hill Angels, recalled Ploom’s pitch as being fairly simple: “They said they wanted to build a cigarette that would be a lot less dangerous to smokers and could be enjoyable.”

But, Mr. Eschenbach said, there was a major hurdle in going after that demographic: F.D.A. restrictions prevented Ploom from claiming its product was safer than cigarettes.

So the company was eying another potential market as well, he said: young millennials who were occasional smokers and might be drawn to a luxe, sleekly-designed tech product that they could carry while bar hopping on a Saturday night.


Other investors jumped on board, most notably Nicholas J. Pritzker, a member of the wealthy Chicago family that once owned the chewing tobacco giant Conwood before it was sold to Reynolds American. Mr. Pritzker had focused on the family’s holdings in real estate and the Hyatt hotel chain. Calls and emails to Mr. Pritzker’s investment firm were not returned.

When it was released in 2010, the Ploom Model One Vaporizer was shaped like an oversize pen. After a couple of years, it became clear that it wasn’t going to catch on. The biggest complaint? Not enough nicotine.

Kurt Sonderegger, who was Ploom’s head of marketing, would tape two of the devices together to try to get a satisfying hit, he said, but “I still needed to go out and smoke a cigarette.”

In early 2015, the company sold the Ploom brand to the industry it had ostensibly been taking on. Japan Tobacco International, a cigarette company, had bought a minority stake in Ploom in 2011 with a plan to market the device abroad, and in early 2015, it acquired the rights to the brand. Ploom executives renamed their company Pax Labs, for the pricey Pax Vaporizer that they had introduced in 2012. That device was quickly gaining a following among cannabis users as more states legalized marijuana.

But the company wasn’t abandoning e-cigarettes. On the contrary, it had a breakthrough. It had discovered a way to substantially increase the nicotine levels in a new product, named Juul.
A powerful nicotine hit




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A deconstructed Juul pod awaiting testing at a vaping research facility at the University of Louisville in Kentucky.Credit...Leah Klafczynski for The New York Times


It was this breakthrough that would make the Juul so addictive to teenagers and people who had never smoked.



But just before the debut, in an interview published by The Verge in April 2015, Ari Atkins, an engineer who had worked on the team developing the Juul, said: “We don’t think a lot about addiction here because we’re not trying to design a cessation product at all.”

He added, according to the article, “Anything about health is not on our mind.” The article noted that his colleagues in the interview winced.

What made the Juul a game-changer in the e-cigarette industry was not just the cool design, which immediately drew comparisons to the iPhone. It was the power and smoothness of its nicotine hit.

In 2013, Chenyue Xing, a young chemical engineer, was working at MAP Pharmaceuticals in California developing medications that could be inhaled, when she got a call from a Pax recruiter. The idea of working on a project to reduce health risks to smokers appealed to her.

“I was working in products that were treatments for sickness and illnesses,” Dr. Xing said. “I was intrigued at the idea of working on the preventative side.”

Mr. Bowen, the co-founder, had sketched out the concept for a new formulation of the pods for the company’s e-cigarettes, one that would use nicotine salts.

Nicotine salts are not exactly like the crystalline salt in a shaker on the dinner table. In chemistry, a “salt” is the substance produced from the reaction of an acid with a base. Nicotine salts exist naturally in tobacco, which means they are in all cigarettes.



But e-cigarettes at the time were using freebase nicotine, which is extracted from tobacco. The problem with freebase nicotine liquid is that it has a high alkalinity, which makes it harsh for consumers. Many smokers who tried e-cigarettes wound up with sore throats or coughs.

For manufacturers, that harshness increased with higher nicotine levels, so most e-cigarettes had only 1 or 2 percent nicotine. A few came in at 3 percent.




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Juul’s offices in San Francisco.Credit...Jason Henry for The New York Times


Dr. Xing and other researchers at Pax were able to develop a formulation that allowed the company’s Juul pods to have a nicotine level of 5 percent, the equivalent of a pack of cigarettes. They had worked through different formulations before landing on one that combined freebase nicotine with benzoic acid (the patent covers a range of acids) that set off a chemical reaction, producing a nicotine salt liquid that reduced the harshness and allowed a higher rate of nicotine.

The result was “a much better experience for smokers” compared with earlier e-cigarettes, Dr. Xing said. “One that would make them more willing to switch over from smoking to e-cigarettes.”

Mr. Dunlap, the chief marketing officer at the time, saw the immense promise. “When I first tried the Juul prototype, the nicotine hit was immediate, within seconds. No e-cig had ever come close to this,” he said. “The design was also unique — the shape, the glowing light, the crackling sound, the thick vapor. It was a multisensory experience. This was the first vaping product that actually had a shot at switching an existing smoker.”

The high level of nicotine also appealed to skeptical retailers. In the summer of 2014, the year before Juul’s debut, the sales teams had run into resistance from stores who were stuck with other e-cigarette inventory that simply was not selling. But by focusing on the chemistry behind Juul, and its delivery of nicotine levels that were close to combustible cigarettes, two former sales executives said, they persuaded convenience store chains like 7-Eleven and Circle K to order the new product.


Where are the smokers?

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An ad from Juul’s 2015 “Vaporized” marketing campaign.Credit...Stanford University, via Reuters


The nicotine experience was the key to attracting smokers to any e-cigarette, but mention of nicotine was only in tiny, hard-to-read letters in the print ads for Juul’s initial marketing campaign.

In June of 2015, the campaign, called Vaporized, introduced the Juul with glitzy parties and events that stretched from San Francisco to Miami and New York, and ads and social media posts featuring young women in midriff-baring tops holding the sleek metal device.

Even some employees were confused. Three members of the company’s sales force recalled being puzzled: If this was a product targeting smokers, why not market where the smokers were, say, NASCAR races, which had long been sponsored by tobacco companies? Why was the campaign so youthful?

The ads for Juul showed up in Vice magazine, at pop-up “Juul Bars” at concerts that offered free samples of the product, on a bright billboard display that loomed over Times Square, and in a social media blitz. A lawsuit filed this month by the state of California against the company said that Juul directed “brand ambassadors” to look for “people who fit the JUUL demographic” such as “smokers, cool kids, fun people, etc.”

The company began hiring consultants to identify social media influencers with large followings on Instagram and Twitter to promote Juul. It pushed hashtags like #juul and #vaporized that the influencers used while showing images of themselves or other young people doing tricks with the device.

Mr. Dunlap, the chief operating officer at the time, noticed strikingly young users right away, in the wave of social media posts that followed the marketing events.



“There were hundreds of activation events, and it was in seeing the photos and social usage that followed that I would catch myself saying, ‘Wow, they look really young’,” he said. “But you don’t really know. It’s social media after all, where everyone is their younger, idealized selves. All you know is that you are seeing the early signs of a viral brand taking off.”

Two former executives, one from marketing and one from sales, said in interviews that the thinking inside the company was that by showing young and hip people using Juul, they would also draw in older smokers who imagined themselves as, well, young and hip.

Bailey Legacki was one of the high school students drawn in by the Vaporized campaign and she is now weighing a lawsuit against Juul.

She began using Juul during the 2015-16 school year, she said, as a 15-year-old in South Florida. “It was everywhere,” she recalled. “Everyone had one.”

Ms. Legacki, now 18, said she was influenced by her friends but also by the ubiquitous advertisements and social media posts on Snapchat, Instagram, Twitter and Facebook.

“They were young people and it looked like they were having fun,” she said. “Or, it would just be the device that was shown, but not really explaining anything about it, just, ‘Try this.’”

She said she did not realize there was nicotine in the pods. Mr. Raffel, the Juul spokesman, confirmed that in the early days the packaging mentioned nicotine only in tiny type in the ingredients list and did not have the warning labels it does now.

Ms. Legacki said she has now scaled back her vaping but has not been able to quit. “If I knew it had nicotine at all, I wouldn’t have done it,” she said. “Now I’m so reliant on something I had no intention of doing. I knew what cigarettes do. This Juul was new and nobody knew what the Juul did.”

She is considering suing the company. Her lawyer, Jeffrey L. Haberman of Schlesinger Law Offices in Fort Lauderdale, Fla., said the case will claim that Juul was made “to create and sustain nicotine addiction.”

Juul declined to comment on her experience.




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Instagram marketing from 2017.Credit...Stanford University, via Reuters


Employees were also noticing orders made with clearly fake IDs. In 2017, orders were coming in weekly that all used an Arizona driver’s license for a man from Phoenix named Jelani Sample, according to an employee brought in to upgrade the age verification system. (It was actually a sample of the new driver’s license the state had posted online.)

The flagged orders were not filled, the employee said. But they were a sign teenagers were trying to buy Juuls.

There were also orders coming in for 10 Juul starter kits at a time, a tip-off to some employees that Juuls were being purchased either for resale or to be given to youths.

But the company continued to push its presence on social media, and in 2017, with sales soaring, the company and Mr. Bowen, the co-founder, filed a patent for a vaping device with a feature that seemed aimed at younger users. It was a gaming mode, so people could play Simon Says or Cat and Mouse on the device. It also had a “party” mode with lights and music clips. (It was never made, however.)



That same year the company was in talks to settle a lawsuit brought by the Center for Environmental Health, a nonprofit in California. The group had tested e-cigarettes and nicotine liquids made by Juul and over a dozen other companies and found levels of formaldehyde, a carcinogen created when e-cigarettes containing certain chemicals are heated, that exceeded the California limit. The organization had sued the manufacturers to force them to lower formaldehyde levels, and to add a warning label noting the presence of a cancer-causing ingredient.

But in settling the cases, the environmental group saw an opportunity to do something more. “We wanted to go beyond just the cancer warning,” its lawyer, Mark Todzo, said. “At the time, there were reports coming out about the teen vaping rates that were just starting to be reported on.”

Mr. Todzo said the group added a provision into the settlement to require the e-cigarette companies to agree not to market to youths. Documents show that it was signed by EonSmoke, Vapor4Life, International Vapor Group and others — but not by Juul.

Juul declined to sign and opted instead to pay an additional penalty, based on its sales for 2015 — just $2,500.

Mr. Raffel, the Juul spokesman, did not dispute the account, but said the company had no further comment.

Finally, last month, Juul signed.
The fallout




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James Monsees testifying before the House Oversight and Reform Committee in July.Credit...Susan Walsh/Associated Press


In the summer of 2018, a group of former attorneys general and public health experts got on a call with Juul executives, including then-chief executive Kevin Burns, to advise them how to stop teenagers from getting Juuls.



The call, which has not previously been reported, did not go well, especially when Grant Woods, the former attorney general for Arizona, who had worked on the master settlement with tobacco companies in the 1990s, told Mr. Burns to dump the company’s flavored nicotine pods because of their appeal to youths.

“They just refused to do it,” said Mr. Woods, who dropped out of the advisory group after the initial call, convinced that the company was insincere. “I said on the call, ‘I would sue you.’”

Mr. Woods said the Juul C.E.O., Mr. Burns, took the position “that they were not marketing to minors, and so the flavoring wasn’t an issue.” Mr. Burns declined to comment on the phone call.

Mr. Burns’s recalcitrance in the face of growing pressure would soon be on display again in the company’s weekly executive meeting in September 2018, after the F.D.A. seized thousands of pages of documents from the company’s San Francisco headquarters, a former executive said.

“Kevin Burns said, ‘Do not give me anything in writing if it is sensitive, anything the F.D.A. could get,’” recalled the former executive, who was at the meeting but asked not to be identified for fear of retribution. “He said, ‘Pick up the phone and call me if you have to.’”

In a statement emailed to The New York Times, Mr. Burns said, “That is a mischaracterization of a meeting where I was clear that our employees should fully cooperate with any regulatory authority and that I expected them to bring any concerns to me directly to make sure important issues were addressed promptly and with no room for misinterpretation.”

Now Juul is facing an ever growing pile of lawsuits from parents, school districts, counties and states, including two new ones filed this month by California and New York. In addition to the F.D.A., the Federal Trade Commission, the United States attorney’s office in Northern California and several states are investigating the company.



And it is still waiting for federal health officials to completely clear its devices and nicotine pods from the mysterious vaping-related illness that emerged this summer, making almost 2,300 people seriously ill and killing 47 others. Earlier this month, the Centers for Disease Control and Prevention said that the likely culprit is THC vaping liquids, which Juul does not sell, that include vitamin E acetate, but cautioned that health investigators had not exonerated nicotine products.

All of this means that the F.D.A. is likely to make it very challenging for Juul to obtain the necessary clearance to stay on the market, according to two former F.D.A. commissioners: David Kessler, who served in the George H.W. Bush and Clinton administrations; and Scott Gottlieb, who ran the agency for President Trump until resigning this spring.

Juul’s application is due in May, and the F.D.A. must decide whether the products are appropriate for the protection of public health. The agency will weigh the number of people likely to become addicted to nicotine via Juul, against the number who might use it to quit combustible cigarettes, and will also assess the safety of the products.
Altria to the rescue

In early 2017, the tobacco giant Altria, maker of Marlboro cigarettes, reached out to Juul, and in the spring of that year the two began confidential discussions in earnest, according to documents obtained from Altria by Senator Richard Durbin, Democrat of Illinois.

It would take 20 months to work out, but on Dec. 20 of last year, Altria announced it would pay $12.8 billion in cash for a 35 percent stake in Juul. Filings with the Securities and Exchange Commission showed that the vast majority of the cash went into executives and investors’ pockets. Less than $1 billion was required to stay on the company’s books.

Under the terms of the deal, Altria said it would use its vast distribution channels to sell Juul products and, after four years, Altria would be allowed to make a takeover offer for Juul Labs.

Some employees were unsettled by the fact that they were now in business with Big Tobacco. And regulators? They were irate.

The F.D.A. was blindsided by Juul’s deal with Altria, and it further strained the relationship between the agency, including its commissioner, Dr. Gottlieb, and both companies.

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Signage for Juul and some competitors at a storefront in New York City.Credit...Jeenah Moon for The New York Times


The F.D.A. had initially been supportive of e-cigarettes, and Dr. Gottlieb had served on the board of Kure, a chain of vaping lounges, before he was tapped to run the agency. In July 2017, a few months after taking office, Dr. Gottlieb made a much criticized decision to push back by four years the deadline for Juul and other e-cigarette companies to submit applications to stay on the market.

Juul contended it had a virtuous health mission, but by fall of 2018, the F.D.A. was no longer buying it. In October, Altria had agreed to stop selling its own e-cigarette products, after acknowledging that they were driving the youth vaping problem. The notion that Altria would now help Juul expand its market infuriated Dr. Gottlieb.

He summoned executives from Juul and Altria to his office in March of this year, for what several people who were there (and not authorized to speak publicly on the matter) described as a tense, unpleasant meeting with him, his chief of staff, Lauren Silvis, and the head of the agency’s tobacco division, Mitchell Zeller. When news about their difficult meeting leaked out, Altria’s stock fell 2.5 percent.

According to several people present, Dr. Gottlieb condemned Juul’s lobbying of Congress and the White House. “We have taken your meetings, returned your calls and I had personally met with you more times than I met with any other regulated company, and yet you still tried to go around us to the Hill and White House and undermine our public health efforts,” he said angrily, according to three people who were there. “I was trying to curb the illegal use by kids of your product and you are fighting me on it.”

In September, Juul’s ties to Altria further strengthened when Mr. Burns resigned under pressure, and the board replaced him with an Altria executive, K.C. Crosthwaite. A former president and chief executive of Philip Morris USA, Mr. Crosthwaite has spent his entire career in the tobacco industry.

Juul’s future now rests with Big Tobacco, the industry its founders said they were trying to vanquish.

Why the Protests in Hong Kong May Have No End in Sight

NY TIMES




HONG KONG — Resolving the increasingly violent protests in Hong Kong will most likely fall to an influential group of Beijing’s local allies.

The trouble: They don’t agree on much.

The fissures raise the likelihood that unrest in Hong Kong could fester for months or even years. That could further hurt the city’s economy, create a constant headache for Beijing and aggravate an already sore point between the United States and China.

Some of Beijing’s local allies are populists who want to break up local monopolies, seize private land and build public housing. Some are tycoons who are happy to support the local government and Beijing as long as no one touches their businesses.

The differences within the pro-Beijing camp are even deeper on the protesters’ biggest demand, for greater democracy.

A moderate camp led by the city’s embattled chief executive, Carrie Lam, would like to see gradual progress toward freer elections, at least within Beijing’s predefined limits. The city’s hard-liners loathe the idea, and are deeply frustrated by what they perceive as Mrs. Lam’s desire to negotiate with democracy advocates and her wariness of ordering a harsher police crackdown.

The divisions were visible on Wednesday when Mrs. Lam gave her annual policy address, Hong Kong’s equivalent of the State of the Union speech in the United States. After months of internal meetings, she delivered a fairly narrow set of initiatives on issues like housing and did not even try to address broad political tensions.

Mrs. Lam said at a news conference afterward that avoiding the question of democracy in her annual address was “not a responsible act.” But she said she couldn’t tackle the subject, criticizing opposition lawmakers for having blocked the last election proposal from Beijing in 2014.

For the pro-Beijing camp, the disagreements add to the growing weakness among the various political parties. The pro-Beijing coalition has slumped to record-low support in independent opinion surveys in recent weeks, and such parties face the potential for heavy losses in neighborhood district elections in November and again in legislative elections next September.


‘I’m Worried That I Will Die:’ Hong Kong Protesters Write Final Goodbyes
As violence escalates between demonstrators and the police in Hong Kong, protesters have started writing “last letters” to their loved ones, in case they don’t return. These notes chronicle the mental and emotional state of frontliners coming to terms with risking death for their beliefs.

[gun shots] Street battles are the new normal in Hong Kong, and they are getting more violent by the day. Police have fired live rounds on protesters and they have ramped up arrests. [sirens] Hardline protesters have become emboldened by the crackdown. They return week after week, ready to fight. They come armed with petrol bombs, masks and letters — farewell notes — in case they don’t return from the streets. [sniffles] [shouting] [crying] [glass shattering] [shouting]


Politicians in the pro-Beijing coalition in Hong Kong are “like birds in a forest — when things are good, they stay together, but when things are bad, they fly in all directions,” said Jasper Tsang Yok-sing, the main founder of the biggest pro-Beijing political party in Hong Kong, who was the president of the legislature until 2016.

“Our biggest worry now is Nov. 24; we are thinking how we can minimize our loss,” he added.

Mrs. Lam has tried repeatedly, if ineffectively, to reach what she sees as compromises with the pro-democracy opposition, most notably by first suspending and then agreeing to withdraw the extradition bill that sparked the protests. She has tried to set up public and private dialogues with her opponents, only to have an unflattering audio recording leak from one event and democracy advocates picket at another.

To the pro-democracy side, she is a figurehead for a government increasingly beholden to Beijing. She had to release her policy address on Wednesday as a video after pro-democracy lawmakers shouted her down in the legislative chamber.

Any effort by Mrs. Lam to begin a dialogue with democracy activists, though, has just intensified criticism among Beijing’s most outspoken allies.

“The Carrie Lam government is still trying to curry favor with the opposition, thinking that she has the support of the pro-Beijing people,” said Lau Siu-kai, who was a top Hong Kong official until 2012 and is now one of Beijing’s top advisers on Hong Kong policy. Beijing sees the opposition “as hard-line opponents and as a die-hard, anti-communist element willing to collude with foreign forces, above all the United States.”

About all that Beijing’s allies agree on these days is their strong support for the Hong Kong police.

“The government ought to have gotten tougher, taking firmer action sooner,” said Regina Ip, a member of Mrs. Lam’s cabinet and a lawmaker who leads a pro-Beijing political party that supports strict adherence to law and order.

Yet such an approach could trigger further protests. Demonstrators have already complained of police brutality, calling for an amnesty for those accused of rioting and for the creation of a commission of inquiry into the actions of the police force.

The chance of compromise on the issue of democracy seems remote — from all sides.

Moderates in the pro-Beijing camp want to revive a plan offered by the Chinese government to protesters in 2014 and rejected as inadequate. Mrs. Lam reminisced about the plan on Wednesday. But hard-liners say that recent turbulence in the streets of Hong Kong shows that further steps toward democracy are too risky, and oppose making the plan available again.




ImageResolving the increasingly violent protests in Hong Kong will most likely fall to an influential group of Beijing’s local allies.Credit...Lam Yik Fei for The New York Times


The proposal would have allowed all Hong Kong adults to vote. But the names on the ballot would have been selected by a 1,200-member committee. The same committee currently chooses chief executives without putting them to a general vote of the population.

The members of the committee are selected mainly by sectors of the Hong Kong public that have traditionally aligned with Beijing. These include neighborhood district councilors, accountants and real estate lawyers.

The paradox of Hong Kong politics today is that the committee might not be so reliably under Beijing’s control. Cornerstones of mainland influence in Hong Kong are eroding.

Many solicitors — lawyers who mainly handle real estate transactions — and accountants have unexpectedly emerged as critics of the Hong Kong government and Beijing over the extradition issue. The largest bloc of committee members is chosen by Hong Kong’s district councils, which makes pro-Beijing parties even more nervous about losing council seats in next month’s elections.


Democracy activists have been cautious about their chances of gaining seats in the coming elections, since the city government has the legal power to disqualify candidates who have advocated independence.

There have also been worries about violent attacks on candidates and voters, and possibly even the postponement of the elections. Jimmy Sham, the leader of the main pro-democracy protest group, the Civil Human Rights Front, was hospitalized on Wednesday after men beat him with hammers.

Regardless of the outcome of the elections, democracy advocates say they cannot endorse the democracy plan now, having rejected it in 2014. “No one ever dares to say ‘think about it’ or ‘accept it’ — anyone who does so will be severely attacked,” said Joseph Cheng, who led a broad coalition of pro-democracy groups in 2014. “We come to a consensus, we stick to that position and we cannot shift.”

The main wild card in all of this is Beijing. The pro-Beijing parties have a history of quashing disagreements and coming together when the Chinese government issues instructions.

Some pro-Beijing politicians in Hong Kong argued bitterly in 2005 that the next chief executive should not be Donald Tsang, a longtime civil servant who had been knighted by Prince Charles for his service to Britain. But when Beijing ordered support for Mr. Tsang, he was quickly endorsed even by vehement critics like Ma Lik, the chairman then of the biggest pro-Beijing party.

“He won the trust of Beijing, and we support whoever Beijing trusts,” Mr. Ma said in a telephone interview at the time. “That’s why we are called pro-Beijing.”

Hong Kong Election Results Give Democracy Backers Big Win A surge in voting, especially by young people,

NY TIMES




HONG KONG — Pro-democracy candidates buoyed by months of street protests in Hong Kong won a stunning victory in local elections on Sunday, as record numbers voted in a vivid expression of the city’s aspirations and its anger with the Chinese government.

It was a pointed rebuke of Beijing and its allies in Hong Kong, and the turnout — seven in 10 eligible voters — suggested that the public continues to back the democracy movement, even as the protests grow increasingly violent. Young Hong Kongers, a major force behind the demonstrations of the past six months, played a leading role in the voting surge.

With three million voters casting ballots, pro-democracy candidates captured at least 389 of 452 elected seats, up from only 124 and far surpassing the previous high of 198 set in 2003. With one race undecided, the government’s allies held just 57 seats, down from 300, and independents held five.

To many democracy advocates, Sunday was a turning point.

“There has been a very deep awakening of the Hong Kong people,” said Alan Leong, chairman of the Civic Party, one of the largest pro-democracy parties.

The elections were for district councils, one of the lowest elected offices in Hong Kong, and they are typically a subdued affair focused on community issues. The job mostly entails pushing for neighborhood needs like bus stops and traffic lights.

But this election took on outsize significance, and was viewed as a referendum on the unrest that has created the city’s worst political crisis in decades. In a semiautonomous part of China where greater democracy is one of the protesters’ biggest demands, it gave residents a rare chance to vote.

The gains at the ballot box are likely to embolden a democracy movement that has struggled with how to balance peaceful and violent protests to achieve its goals.

They are also likely to deepen the challenges for China’s central government, which wants to curb the unrest in Hong Kong. And they might exacerbate Beijing’s fears about giving the city’s residents even greater say in choosing their government.




The district councils are among the most democratic bodies in Hong Kong. Almost all the seats are directly elected, unlike the legislature, where the proportion is just over half. The territory’s chief executive is also not chosen directly by voters, but is instead selected by a committee stacked in favor of Beijing.

The election results will give democracy forces considerably more influence on that committee, which is scheduled to choose a new chief executive in 2022.

The district councils name about a tenth of the group's 1,200 members, and now all of these will flip from pro-Beijing to pro-democracy seats. Democracy advocates already control about a quarter of the seats, while other previously pro-Beijing sectors of the committee are now starting to lean toward democracy, most notably accountants and real estate lawyers.

Mr. Leong, the Civic Party chairman, called on the Chinese Communist Party to change its policies in Hong Kong.

“Unless the C.C.P. is doing something concrete to address the concerns of the Hong Kong people,” he said, “I think this movement cannot end.”

Regina Ip, a cabinet member and the leader of a pro-Beijing political party, said she was surprised to see so many young voters, many of whom tried to confront her with the protesters’ demands.

“Normally,” she said, “the young people do not come out to vote. But this time, the opposition managed to turn them out.”

Ahead of the election, the city’s leadership was concerned that the vote would be marred by the chaos of recent months. Some of the most violent clashes yet between protesters and the police took place last week, turning two university campuses into battlegrounds.

But the city remained relatively calm on Sunday as voters turned out in droves. Long lines formed at polling centers in the morning, snaking around skyscrapers and past small shops. Riot police officers were deployed near polling stations on Sunday.

Image
Campaign volunteers lined a street in Lok Fu on Sunday.Credit...Lam Yik Fei for The New York Times


David Lee, a retired printer approaching his 90th birthday, was among the earliest voters on Hong Kong Island and said he had come because he wanted democracy.

“This is important,” he said.

Some analysts had predicted that pro-democracy candidates would have difficulty making big gains. Pro-Beijing candidates are much better financed, and the district races have traditionally been won on purely local issues, not big questions like democracy, said Joseph Cheng, a retired professor at City University of Hong Kong.

But voter turnout soared to 71 percent, far surpassing expectations. Typically in district council elections, it is little more than 40 percent. Four years ago, after the 2014 Umbrella Movement increased public interest in politics, turnout climbed to 47 percent. This year, the number of registered voters hit a record.

On Sunday, several prominent pro-Beijing politicians lost their races, among them Michael Tien, a longtime establishment lawmaker. After his defeat, he said the increase in young voters signaled that they were becoming more politically engaged, adding that the government should listen to them.

In the district of Tuen Mun, about a hundred people celebrated with cheers and champagne the defeat of Junius Ho, a controversial lawmaker many protesters accused of supporting mob attacks against them.

The previous record for pro-democracy seats set in 2003 followed huge protests against national security legislation. But after that election Beijing began investing heavily in grass-roots mobilization efforts for local elections, including busing large numbers of older Hong Kong citizens from retirement homes in mainland China to polling places in Hong Kong.

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Polling officials counting votes on Sunday.Credit...Lam Yik Fei for The New York Times


Instead of just focusing on local issues, many pro-democracy candidates ran on the broad themes of the protest movement, especially anger at police brutality, and the intensity of the demonstrations sometimes spilled into the race. Candidates on both sides were attacked while campaigning.

Mandy Lee, 53, a homemaker who voted at the Kowloon Bay neighborhood, showed up to vote for the pro-Beijing establishment and criticized the protests.

“It’s not that I have no sympathy toward young people, but I strongly believe that their efforts are futile,” she said. “We are a tiny island; it’s only a matter of time before China takes us over and integrates us.”

The outcome of the election could further complicate the position of Carrie Lam, Hong Kong’s embattled chief executive. Critics say that she has failed to engage with the community over the protests and that she has not listened to people’s concerns.
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Carrie Lam, Hong Kong’s chief executive, casting her vote on Sunday.Credit...Lam Yik Fei for The New York Times


In June, Mrs. Lam set off enormous protests by pushing ahead with a bill that would have allowed the extradition of Hong Kong residents to the opaque judicial system in mainland China. The issue played to deeper worries about Beijing’s encroachment on Hong Kong, which has maintained its own political and judicial system since the former British colony was reclaimed by China in 1997.

Mrs. Lam withdrew her proposal after months of protests, but many said she acted too late. The protesters are now demanding additional concessions, including the introduction of universal suffrage and an independent inquiry into police conduct, and now they can argue the public supports them by pointing to the pro-democracy camp’s overwhelming election win.

Many pro-Beijing political parties receive large donations from the Hong Kong subsidiaries of state-owned enterprises in mainland China, which they use to organize picnics and other campaign events. But the results on Sunday showed the limits of these efforts.

Matthew Cheung, the chief secretary and second-highest official of the Hong Kong government, said on Sunday during the voting that the city’s leadership would pay close attention to the results of the vote no matter how it turned out.

“The election is an important political thermometer,” he said. “We will definitely take it seriously.”

The United States Is Starting to Look Like Ukraine Why the president must be impeached and removed.

BRET STEPHENS, NY TIMES


Donald Trump ought to be impeached and removed from office. This isn’t what I thought two months ago, when the impeachment inquiry began. I argued that the evidence fell short of the standards of a prosecutable criminal act. I also feared impeachment might ultimately help Trump politically, as it had helped Bill Clinton in 1998. That second worry might still prove true.

But if the congressional testimonies of Marie Yovanovitch, Bill Taylor, Gordon Sondland, Alexander Vindman and especially Fiona Hill make anything clear, it’s that the president’s highest crime isn’t what he tried to do to, or with, Ukraine.

It’s that he’s attempting to turn the United States into Ukraine. The judgment Congress has to make is whether the American people should be willing, actively or passively, to go along with it.

I’ve followed Ukrainian politics fairly closely since 1999, when I joined the staff of The Wall Street Journal Europe. It has consistent themes that should sound familiar to American ears.




The first theme is the criminalization of political differences. Years before Trump led his followers in “Lock Her Up” chants against Hillary Clinton, then-Ukrainian President Viktor Yanukovych did exactly that against his own political rival, Yulia Tymoshenko, who was sentenced to seven years in prison on a variety of byzantine charges after she had narrowly lost the 2010 election.

She spent three years in prison before her release during the 2014 Maidan Revolution. Key to Yanukovych’s efforts to discredit Tymoshenko was — who else? — Paul Manafort.

A second theme is the use of political office as a shield against criminal prosecution and as a vehicle for personal and familial enrichment. Why have so many of Ukraine’s oligarchs — including Burisma Holdings founder Mykola Zlochevsky — also served as government ministers? Simple: Because, until recently, it shielded them from criminal prosecution thanks to parliamentary immunity, while also providing them with the means to use government power for their own benefit.

The third theme is what one might call the netherworldization of political life, in which conspiracy theories abound, off-stage figures yield outsized influence, and channels of formal authority are disconnected from the real centers of power.



This reality came vividly to light in 2016, when a parliamentary effort to vote “no confidence” in the government of then-Prime Minister Arseniy Yatsenyuk unexpectedly collapsed, thanks to the usual string-pulling from the country’s wealthiest power brokers. As Ukrainian political commentator Maxim Eristavi noted at the time, in Ukraine “There are no party lines, no real policy debates, no ideological clashes: just cold-hearted vested interests and short-term alliances between various oligarchic groups.”




The fourth theme is covert Russian interference, usually facilitated by local actors.

Ukraine offers the world’s most extreme example of this kind of interference (nearby Georgia is a close second), since large parts of the country have been seized outright by Russia and its proxies. But long before the Kremlin’s “little green men” arrived in Crimea in 2014, Russia and its agents were using every dirty trick at their disposal, from poisoning a future Ukrainian president with dioxin to poisoning the media landscape with disinformation. Too often, it worked, whether because its victims were suggestible, corrupt, fearful or simply not paying attention.

That last point was also made by Fiona Hill in her testimony on Thursday, where she warned members of the House Intelligence Committee that they ran the risk of themselves falling victims to “politically driven falsehoods,” regarding a bogus theory about Ukrainian political interference, “that so clearly advance Russian interests.”

Yet the person who is both the principal consumer and purveyor of those falsehoods is the president of the United States, just as he has been a purveyor of so many other conspiracy theories. Even now, this should astound us.

It doesn’t, because we’ve been living in a country undergoing its own dismal process of Ukrainianization: of treating fictions as facts; and propaganda as journalism; and political opponents as criminals; and political offices as business ventures; and personal relatives as diplomatic representatives; and legal fixers as shadow cabinet members; and extortion as foreign policy; and toadyism as patriotism; and fellow citizens as “human scum”; and mortal enemies as long-lost friends — and then acting as if all this is perfectly normal. This is more than a high crime. It’s a clear and present danger to our security, institutions, and moral hygiene.

It’s to the immense credit of ordinary Ukrainians that, in fighting Russian aggression in the field and fighting for better governance in Kyiv, they have shown themselves worthy of the world’s support. And it’s to the enduring shame of the Republican Party that they have been willing to debase our political standards to the old Ukrainian level just when Ukrainians are trying to rise to our former level.

The one way to stop this is to make every effort to remove Trump from office. It shouldn’t have to wait a year.

Can the Racial Wealth Gap Be Closed Without Speaking of Race? Political momentum on the left for such an effort must face the reality of legal obstacles, particularly from the Supreme Court.

NY TIMES


Elizabeth Warren wants to offer down-payment assistance to home buyers living in formerly “redlined” neighborhoods where the federal government once denied access to mortgages. Cory Booker would like to create “baby bonds” that would be worth more to children in poorer families, helping them one day to buy houses or other assets.

Both presidential candidates say their proposals would aid in narrowing the enduring black-white wealth gap in America. But neither policy attempts to do that in the most direct way possible — by steering benefits to African-Americans.

Their ideas, along with several others that scholars advocate, are facing a tricky problem today. There’s growing momentum on the left to address the racial wealth gap. But the prospects for race-based policies before the Supreme Court are unpromising, and that’s unlikely to change with five conservative justices.

“The court is functionally not now going to be an ally in anything here, so you do have to be careful,” said Mehrsa Baradaran, a law professor at the University of Georgia who has written about the racial wealth gap.




The court is unlikely to uphold baby bonds or housing programs explicitly for African-Americans, even to remedy disparities created when many government benefits were explicitly for whites. Affirmative action and government contracting programs have similarly struggled to meet or skirt the court’s strict scrutiny for applying benefits by race.

Proponents concerned about the wealth gap instead must come up with policies that have the effect of disproportionately building wealth for African-Americans, without singling them out.

“There are ways that you can craft legislation that essentially gets at this effect,” Ms. Baradaran said. “Look at how much legislation we have that gets at the opposite effect.”

Policies like the mortgage interest deduction, for example, disproportionately benefit white families, who are more likely to own homes. So do tax advantages for the rich, who are more likely to be white. Even federal investments in seemingly race-neutral infrastructure like the Interstate Highway System had this effect by enabling the development of all-white suburbs in an era of legal discrimination.

Wealth-building proposals today are trying to engineer a similar if opposite outcome. That makes the details thorny.





“The first and most efficient approach is targeting relief to the people who were targeted with discrimination,” said Dorothy Brown, a law professor at Emory University. “If we can’t get there, then we have to go to next best.”

Ms. Warren’s strategy, she said, is a clever workaround. Rather than specifying African-Americans, Ms. Warren’s bill would target specific neighborhoods where African-Americans harmed by the legacy of lending discrimination are likely to live.

Other researchers argue that a program based on neighborhoods redlined in the 1930s would be too narrow; most African-Americans who buy homes aren’t purchasing in such neighborhoods today (and in some cities, middle-income whites are).

But the kind of neighborhood criteria Ms. Warren has in mind could be one model. Ms. Brown proposes identifying neighborhoods with the least household wealth and allowing tax breaks associated with homeownership, like the mortgage deduction, only to people who live there.

Ms. Baradaran proposes a “21st Century Homestead Act” that would focus on neighborhoods with many vacant properties. She proposes using government funds to purchase, restore and transfer properties to residents, then to help them build wealth by revitalizing their neighborhoods.

Mr. Booker’s proposal would give $1,000 in a government savings fund to every newborn in America, for use later in adulthood. But the government would seed more money into that fund each year according to a family’s income, giving the most to children in the poorest families. That money could then be spent in adulthood on education, buying a home or starting a business.

It isn’t meant to be an income supplement, but rather a means to build assets.

“Ultimately, assets give people agency in their lives,” said Darrick Hamilton, director of the Kirwan Institute for the Study of Race and Ethnicity at Ohio State University. His work on the baby bonds concept informed Mr. Booker’s proposal. “Assets give people the ability to make decisions,” he said, “to have choice and have freedom and self-determination.”





The point is not just to equalize wealth in America, Mr. Hamilton said, but to equalize those choices.

Mr. Booker’s proposal could benefit African-Americans in particular by giving more to the families with the lowest incomes. But Mr. Hamilton’s original idea would steer the greatest benefits to families with the least wealth. Wealth, which takes into account the value of assets like a home or a stock portfolio, is harder for the government to track than income. But it is a clearer proxy for race in economic data.

Research shows that black people with higher-paying jobs still hold less wealth than white people with lower incomes, who may benefit from generations of accumulated wealth. Even black people with college degrees are likely to have less wealth than white people who didn’t complete high school.

While the federal government might have trouble tracking wealth for allocating baby bonds, it would be feasible with homeownership programs, said Dan Immergluck, a professor at Georgia State University. Loan officers already assess wealth when deciding whether to give people mortgages.

Mr. Immergluck favors an idea that would grant down-payment assistance, as Ms. Warren proposes, but that would target households with low family wealth. Ideally, he said, such a program would count parental wealth, too, given that whites are far more likely than African-Americans to receive down payment assistance (or any kind of financial help) from their parents.

Much more sophisticated data is available now than in the past, said Andre Perry, a fellow at the Brookings Institution, and it could be used to devise these policies — to identify neighborhoods with depressed property values, or to trace back the people helped or harmed today by past government policies.

There are ways, in other words, to sidestep race itself.

But in the end, that may close the racial wealth gap only so much. Today, African-Americans make up about 13 percent of the population, but hold only 2.6 percent of the country’s wealth, said William Darity, a professor at Duke who has also worked on the baby bonds proposal. He wants to see those numbers equalized.



“That’s an objective that is not achieved by any of the existing policies on the table now,” Mr. Darity said. “Ultimately, you need a person-based program if you’re really concerned about the racial wealth gap. And it not only has to be person-based, but it has to be race-specific.”

That would look, he said, like another idea that has gotten attention — albeit with far fewer details — on the campaign trail: a comprehensive reparations program.



Emily Badger writes about cities and urban policy for The Upshot from the Washington bureau. She's particularly interested in housing, transportation and inequality — and how they're all connected. She joined The Times in 2016 from The Washington Post. @emilymbadger

The Jim Crow South? No, Long Island Today An investigation reveals widespread housing discrimination against blacks and other minorities in New York’s suburbs, more than 50 years after the Fair Housing Act.

By The Editorial Board


The editorial board is a group of opinion journalists whose views are informed by expertise, research, debate and certain longstanding values. It is separate from the newsroom.
Nov. 21, 2019

NY TIMES





White Americans have long found comfort believing that racial discrimination is a thing of the past.


Black Americans feel they know better, and a three-year investigation of Long Island real estate agents by the local newspaper Newsday provides the latest depressing evidence that they are right.


More than half a century after the great civil rights battles to end discrimination, the newspaper found that black home buyers are being steered to black neighborhoods and more closely scrutinized by brokers.


Newsday sent white investigators posing as buyers to meet with 93 real estate agents about 5,763 listings across Long Island. Then, they sent a second buyer — either black, Hispanic or Asian — to meet with the same agents. The practice is a gold-standard methodology known as “paired testing,” in which real estate agents are contacted by pairs of prospective clients with similar financial profiles.








Black testers were treated differently than white ones 49 percent of the time. Hispanic buyers encountered unequal treatment 39 percent of the time and Asian buyers 19 percent of the time.


Along with steering minority testers to majority-minority areas, and white testers to mostly white areas, some agents required black buyers to meet additional financial conditions that they didn’t demand of white buyers with the same profile.


Sometimes, in exchanges recorded by undercover cameras, agents would deter white buyers from house hunting in minority areas.


“Follow the school bus, see the moms that are hanging out on the corners,” Rosemarie Marando, a Coldwell Banker Residential Brokerage agent, told one buyer.


In another case, Le-Ann Vicquery, then a Keller Williams Realty agent, extolled the virtues of the Long Island hamlet of Brentwood to a black buyer. But to a white buyer interested in Brentwood, Ms. Vicquery sent this text message: “You may want to look into recent gang killings in the Brentwood area online.”The discrimination found by Newsday flagrantly violates the Fair Housing Act, approved as part of the 1968 Civil Rights Act, banning discrimination in housing based on race, religion, national origin, sex, handicap or family status.


The Fair Housing Act offered watershed relief to black, Jewish, and other Americans who had long been blocked — by the force of federal, state and local laws, as well as racial terrorism — from living in or buying homes in majority-white or non-Jewish neighborhoods.


New York’s suburbs were no exception. Levittown, the Long Island suburb of tidy homes whose name became synonymous with middle-class success in postwar America, was all-white, even as the development was only made possible because of federally backed loans.


Those loans were administered by the Federal Housing Administration, which maintained color-coded maps of neighborhoods across the United States. Under a process known as “redlining,” the federal agency marked off areas where black people lived, then refused to insure mortgages in those areas.


Under the same federal rules, black Americans weren’t able to buy homes in new developments like Levittown, even under the much-celebrated G.I. Bill that helped so many white Americans enter the middle class.


It is no longer 1949; explicit racism in real estate is no longer legal. But the Newsday investigation makes clear that the changes in the rules are greater than the changes in reality. Real estate agents will shake the hands of black buyers, and show them around, but those buyers are still being treated as second-class citizens because of the color of their skin.







In a country where homeownership has long been the way to build wealth, discrimination in housing is uniquely harmful. It is the chief reason behind the deep segregation in New York’s public schools, which is among the worst in the country. It also helps explain the startling racial gap in wealth in the United States. The median wealth of white Americans is $134,000, according to the Economic Policy Institute. The median wealth of black Americans is $11,030.


Americans would find it unfathomable if schools or water fountains were labeled “White Only,” as was commonplace across the South just several decades ago. They would be kidding themselves to think this kind of discrimination in housing, without the labels, is any less pernicious.


But there’s plenty that can be done about it.


The New York State attorney general, Letitia James, said on Tuesday that her office’s Civil Rights bureau would investigate housing discrimination on Long Island. Officials said anyone with information about possible violations of the Fair Housing Act can call (212) 416-8250, or email civil.rights@ag.ny.gov.


Gov. Andrew Cuomo, a former head of the federal housing department, said in February 2016 that New York would launch a “fair housing enforcement program,” using paired testing and beginning in Buffalo, Syracuse and New York City’s northern suburbs. But Newsday found that the state has not conducted any additional paired testing after that initial round of 88 tests. The Newsday investigation makes clear that the state needs to get up off the couch.


The paired testing Newsday relied upon is expensive, but necessary. The Department of Housing and Urban Development conducts a national test every decade, which reliably finds evidence of discrimination. The most recent results were published in 2012.


Taxpayers need not foot the bill. By licensing real estate agents, New York is conferring a valuable privilege. That license also comes with obligations and, evidently, a need for more supervision. The conclusion is straightforward: New York should impose a fee on real estate agents to fund a vigorous program of paired testing, and agents who are found to be discriminating against clients should face severe penalties.


Yet the persistence of discrimination suggests the need for still stronger correctives.


In Australia and the United Kingdom, home buyers rarely hire their own real estate agents. Instead, the agent selling a home handles the whole process. This is significantly cheaper for buyers and sellers, and it limits the opportunity for discrimination, since buyers decide which houses to visit on their own.







The key difference is that buyers in those countries pay agents directly, whereas in the United States, the trade associations that control real estate listings require sellers to agree to pay the buyer’s agent as a condition of listing a home.


Consumer advocates have long attacked this “buyer broker rule” as a key reason agents still are able to command such high fees. That is reason enough for New York to end the practice. But reducing the reliance of buyers on real estate agents — or at least shifting the relationship so the agent is paid by the buyer — could also make a meaningful difference in reducing the practices uncovered by Newsday.


More than 50 years after the Fair Housing Act, black Americans and other minorities are still waiting for the protection of full citizenship under the law, and in everyday life.


Their fellow Americans may be shocked. But they can no longer say that they didn’t know.

Netanyahu indicted on charges of bribery, fraud, breach of trust as Benny Gantz is unable to get a coalition to back him.   

WASHINGTON POST

Netanyahu formally charged with bribery, fraud and breach of trust

Israel's attorney general formally charged the embattled Prime Minister Benjamin Netanyahu with bribery, fraud and breach of trust on Nov. 21. (Reuters)

By

Steve Hendrix and 

Ruth Eglash 

November 21, 2019 at 1:01 p.m. EST

JERUSALEM — Prime Minister Benjamin Netanyahu was formally charged with bribery, fraud and breach of trust on Thursday, making him the first Israeli premier to be indicted while in office and sending Israel’s already stalemated political system into further disarray.

Israeli Attorney General Avichai Mandelblit capped almost three years of investigation and months of speculation by handing down a 63-page indictment against the country’s longest-serving prime minister and its center of political gravity for the last decade.

The cases against Netanyahu center on allegations that the prime minister and his wife, Sara, accepted more than $260,000 worth of luxury goods in exchange for political favors and that Netanyahu interceded with regulators and lawmakers on behalf of two media companies in exchange for positive news stories.

Netanyahu has steadfastly denied wrongdoing during a wide-ranging probe that he has dismissed as a politically motivated “witch hunt.”

In October, his legal team spent four marathon days in front of prosecutors arguing that the charges should be reduced or dismissed, an effort that apparently had little effect.

“I made this decision with a heavy heart but with a whole heart and a sense of commitment to the rule of law,” Mandelblit said at a news conference carried live on Israeli television. “Law enforcement is not a discretionary matter. It is an obligation that is imposed on us. It is my duty to the citizens of Israel to ensure that they live in a country where no one is above the law and that suspicions of corruption are thoroughly investigated.”

Few here expect the pugnacious prime minister to do anything other than ferociously fight the counts that emerged. Many predict he will seek a vote in parliament granting him some measure of immunity.

Of more immediate concern, though, is how the indictments will scramble his standing in Israel’s chaotic political standoff.

“We are in a historical and unprecedented situation with new legal questions almost every day,” said Suzie Navot, a professor of constitutional law at the Haim Striks Law School in Rishon LeZion.

The indictments came down on the first day of an unparalleled phase in Israeli politics: a 21-day window in which any member of parliament can try to form a governing majority, including Netanyahu and his rival Benny Gantz, who both failed at that task in previous cycles.

While the law allows for a prime minister to remain in office until he or she is convicted and has exhausted all appeals, it is unclear whether Netanyahu remains eligible to present a proposed government to Israel’s president.

“This is a question that will be brought to the Supreme Court of Israel,” Navot said. “I can imagine they will say the president does not have to give the mandate to an indicted member of the Knesset, that he can chose to give it to another member of the same faction.”

The day’s news marked a stunning — and ignominious — moment in the remarkable career of “King Bibi.” Netanyahu has dominated Israeli politics in recent years like few other leaders before him. In office for a decade, last summer, he surpassed David Ben-Gurion as the country’s longest-serving premier.

Political observers have marveled at his survival powers in the rough and tumble of Israel’s fractious party system and his ability to wield the levers of government to his own advantage. Being able to stay in power after failing to claim a majority in the last two elections has only added to his reputation for near invincibility.

But after two officials that he personally appointed to their jobs became instrumental in the corruption investigation — Mandelblit, his former cabinet secretary and former Israeli police chief Roni Alsheich — Netanyahu’s powers to ward off threats seem diminished.

“It shows that he’s not as omnipotent as everyone thought,” said Anshel Pfeffer, a Ha’aretz columnist who wrote a recent biography of the prime minister. “It shows the system is stronger than Netanyahu.”

Pointing out that Israel has previously convicted a former prime minister — Ehud Olmert, who stood trial for taking money from real estate developers when he was mayor of Jerusalem — Pfeffer counted Mandelblit’s move as a mixed blessing.

“It’s not a proud day for any country when its prime minister is indicted on a charge of corruption, but it shows that Netanyahu has failed in his quest to erode the rule of law,” Pfeffer said.

In the first of the three cases, resulting in breach of trust and fraud counts, police say the Netanyahus accepted more than a quarter of a million dollars in jewelry, cigars and other gifts from wealthy benefactors who had official business with the government, among them the Israeli-born producer Arnon Milchan, whose credits include “Fight Club” and “Pretty Woman.”

Netanyahu was also alleged to have repeatedly pressed the United States to give Milchan a U.S. visa and, in Israel, pushing the finance minister to extend an income tax exemption that would benefit the producer. That also produced indictments for breach of trust and fraud.

 The most serious charge, bribery, stemmed from another case arising from a period in which Netanyahu served as his own minister of communications. He is alleged to have intervened to smooth a merger sought by Shaul Elovitch, majority shareholder of Bezeq, the country’s largest telecommunications company, in exchange for favorable coverage on the popular news website Walla, also owned by Elovitch. Walla reporters and editors have described being ordered to spike stories, tweak headlines and change photographs in ways that boosted Netanyahu’s image.

Elovitch and his wife Iris were also charged with bribery, disruption of legal proceedings and impeachment in the investigation. They have denied the allegations, according to Israeli media reports.

It is far from clear how the charges will affect Netanyahu’s political standing. He would remain eligible to run in a possible third election next spring. (Only those convicted of moral turpitude are barred from the ballot). But even the threat of indictment has been a major issue in the two previous campaigns. Gantz built his own campaign around a pledge not to serve with an indicted premier.

One October poll showed that a small majority of Israelis, 53.5 percent, thought Netanyahu should resign if indicted. Almost half, 47 percent, of his core right-wing supporters thought the same.

But Netanyahu has spent months disparaging the investigation as politically motivated “kish kush (Hebrew for nonsense.) Large parts of the electorate are sympathetic to his complaints.

“Among Likud members and the right-wing there is deep distrust for the legal process,” said Tal Schneider, a diplomatic and political correspondent for the Israeli business newspaper Globes. “Likud is backing him up because they have convinced themselves that it’s all a witch hunt and we hear the same things from D.C. about Trump.”

Another legal scholar, Gadi Taub of the Federmann School of Public Policy at Hebrew University, also compared the unfolding drama in Jerusalem to the impeachment hearings in Washington.

“The difference is that the impeachment is a political process, whereas in Israel, the prosecutor is also the legal adviser to the government, which is absolutely ridiculous,” Taub said. “There is no other functionary in the government that holds so much power, he can announce an investigation and he can make the decision on pressing indictment. That means a single unelected official can overthrow a government.”

Many will be watching Netanyahu’s Likud party for signs that the indictments will weaken what has been his formidable grip on it.

Netanyahu was first elected as chairman of the Likud in 1993, serving in the opposition until 1996. He resigned from politics after being defeated in a general election in 1999, returning to lead the party in 2005. Since then he has consolidated his position in Likud, dividing and weakening his opponents and facing very few challenges over the years.

The attorney general’s decision is unlikely to have an immediate impact on Netanyahu’s standing within his ruling Likud, but on Thursday there were already indications that a leadership challenge was underway.

Speaking at a diplomatic conference, former Likud minister Gideon Sa’ar said holding elections for a new party leader, especially if the country was forced into a third election, was “the right and necessary thing to do under the current circumstances.”

“First of all, that is what our constitution requires if we are about to have new elections,” he said. “We are a democratic party, and we haven't had primaries for several years already.”

Sa’ar said that he supported the prime minister’s efforts to form a national unity government, but “if we do go to elections, it is not reasonable to think that he will be successful in forming a government after third elections.”

He added, “I think I will be able to form a government, and I think I will be able to unite the country and the nation.”