C.E.O.s urge Washington to help with asylum seekers
As New York City’s migrant crisis continues to escalate, with more than 100,000 arrivals from the southern U.S. border straining shelters, some of the city’s top business leaders are intervening in a fight over who’s responsible.
More than 120 executives — including Jamie Dimon of JPMorgan Chase, Larry Fink of BlackRock and Jane Fraser of Citigroup — sent a letter to President Biden and congressional leaders on Monday, urging Washington to fulfill New York State’s request for federal assistance. But recent communications by the Biden administration suggest that such calls won’t be heeded.
The letter underscores the increasing urgency of the crisis, which has pitted Mayor Eric Adams against Gov. Kathy Hochul — and both Democrats against Biden. Adams has said the crisis could cost the city $12 billion over three years, while Hochul has spent $1.5 billion and deployed nearly 2,000 National Guard members so far.
The migrant crisis is a business issue. Of immediate concern is the financial strain that the wave of asylum seekers is putting on local governments: “The situation is overwhelming the resources not only of the border region but of city and state governments across the nation,” the letter reads.
The migrants are affecting New York-based companies in another way: New arrivals are increasingly being forced to sleep outdoors in the city despite the opening of 200 emergency sites. And long lines have snaked around the Roosevelt Hotel in Midtown, now an intake center — just blocks away from JPMorgan’s offices.
The C.E.O.s also said that immigration control was “clearly” a federal issue, siding with Hochul in calling for federal funding for educational, housing, security and health care services for migrants.
They also supported Hochul’s and Adams’s requests for faster processing of asylum applications and work permits, since newly arrived migrants must otherwise wait 180 days before they can work legally.
But the Biden administration has pushed back against New York’s requests. In letters to city and state officials, Alejandro Mayorkas, the Homeland Security secretary, questioned New York’s handling of the crisis. Mayorkas identified “structural and operational issues” and said that the administration had offered access to hangars at Kennedy Airport and at Floyd Bennett Field in Queens, as well as 11 other federal sites that could be repurposed to house migrants.
That response led to pushback from New York officials: A Hochul representative said that many of those locations were far from the city, and a spokeswoman for Adams said bluntly, “Our requests from the federal government remain the same, and quite frankly, unaddressed.”
It’s unclear whether the voices from top business leaders, many of whom are Democratic donors, will break that impasse.
HERE’S WHAT’S HAPPENING
Donald Trump has yet another court date. His trial on federal charges of conspiring to overturn the 2020 election is set to begin March 4, two years earlier than what his lawyers had requested. It could bring the proceedings into conflict with other Trump trials, including ones in Manhattan and Georgia, and is a day before Super Tuesday in the Republican presidential primary.
OpenAI unveils an enterprise version of ChatGPT. The business-focused edition of the chatbot will allow customers to customize it, and offers faster performance and unlimited data use. Corporate adoption of tools like chatbots has been considered key for A.I. companies, especially as consumer use of ChatGPT has started to wane.
Hawaiian Electric rebuffs blame for the deadly Maui wildfire. The embattled utility said in a court filing that while its power lines set off a fire the morning of Aug. 8, Maui County fire officials declared it contained — and that the company wasn’t responsible for what it called a later blaze that devastated a town. The filing sets up a court clash between Hawaiian Electric and Maui County.
Goldman Sachs sells another business as it revamps its strategy. The Wall Street bank agreed to sell an investment advisory division to Creative Planning, a wealth management firm, just four years after acquiring it. The sale is part of Goldman’s effort to refocus on its core base of highly wealthy clients. Meanwhile, the company is reportedly in the final stages of selling its GreenSky consumer lending unit.
The complicated politics of Foxconn’s founder
Nearly 50 years ago, Terry Gou founded a tiny manufacturing shop that eventually became Foxconn, the Taiwanese manufacturing giant that produces many of the world’s best-known electronic devices — most importantly the iPhone.
Gou’s run for Taiwan’s presidency, announced on Monday, could be a long shot, but it could also have big ramifications for geopolitics, especially given the billionaire’s desire for closer ties between Taipei and Beijing.
Gou favors talks with China to preserve peace in the Taiwan Strait. That’s as the ruling Democratic Progressive Party continues to assert Taiwanese sovereignty in the face of ongoing Chinese claims to the island. By contrast, Gou prioritizes an interpretation of the so-called one-China framework that favors a closer relationship between Beijing and Taipei over support for Taiwan’s independence.
The Foxconn founder, who stepped down from the company in 2019 to pursue an unsuccessful presidential run, has blamed the D.P.P. for unnecessary saber-rattling: “If we don’t pull back now, it will be too late to save Taiwan from falling,” he said on Monday.
Gou could upend America’s approach to China. The White House has taken a hard-line stance with Beijing on multiple fronts — and President Biden has pledged to defend Taiwan against a Chinese incursion.
A Gou victory could put Taiwan — whose vast electronics manufacturing plants are vitally important to American businesses — more firmly in Beijing’s orbit. Tech investors have long grasped the importance of Taiwan, an important hub for chip makers like Nvidia.
Gou denies feeling any pressure from Beijing. Critics note that his roughly $7 billion fortune was built on cross-strait ties: Foxconn shot to success via its main manufacturing hub in central China. (He’s still a shareholder in the company.) But the mogul has insisted that he “will not bow to China’s threats” and that any effort by Beijing to seize Foxconn assets would backfire, given the manufacturer’s importance to global clients like Apple, Tesla and Amazon.
But his run might actually help the D.P.P., since it could end up splitting support among opposition candidates. Gou is currently polling at about 15 percent, behind the nominees of the Taiwan People’s Party and the Kuomintang and well behind the D.P.P.’s candidate, Vice President Lai Ching-te.
“If Gou runs, the rest of us are done for,” Ko Wen-je, the Taiwan People’s Party candidate, said in July.
In other China news:
Following a meeting on Tuesday morning with Vice Premier He Lifeng, Commerce Secretary Gina Raimondo again struck a conciliatory note on trade: “While we will never of course compromise in protecting our national security, I want to be clear that we do not seek to decouple or to hold China’s economy back.”
Raimondo also discussed U.S. concerns over Beijing’s trade restrictions on the chip makers Intel and Micron and components like gallium and germanium with her Beijing counterpart, Wang Wentao.
The fate of TikTok, the Chinese-owned video app that has been under pressure in Washington, remains in limbo; Ms. Raimondo isn’t expected to discuss it during her trip.
“It’s past the time to disagree and commit. And if you can’t disagree and commit, I also understand that, but it’s probably not going to work out for you at Amazon.”
— Andy Jassy, Amazon’s C.E.O., in a meeting with employees, a recording of which was obtained by Insider. Jassy reportedly defended making workers come back to the office three days a week, even though, unlike many of the company’s decisions, it was not based on reams of data.
Wall Street’s latest scuffle with the S.E.C.
Wall Street appears poised to clash again with the S.E.C., this time over new rules the agency says will bring transparency to the fast-growing private funds sector.
Last week, the S.E.C. adopted rules to introduce more stringent reporting guidelines for hedge funds and private equity firms such as Blackstone, Apollo and Citadel. Gary Gensler, the agency’s chair, said the measure would bring down fees and remove “opacity.”
The industry, which has fought rule changes for the past year, has ridden a decade-long investing boom that brought its assets under management to roughly $20 trillion.
The new requirements were approved by the three Democratic commissioners, but opposed by both Republicans. They will require funds to provide reports on quarterly performance, fees and expenses, and submit to additional audits. The new disclosures would benefit the millions of Americans with retirement savings in pension plans, Andrew Park, a senior policy analyst at Americans for Financial Reform, a financial sector watchdog group, told DealBook.
But Hester Peirce, a Republican S.E.C. commissioner, said they would “unnecessarily” add government red tape to contracts between investors and the funds.
Industry players were initially relieved to have won some concessions. The final rules seemed less strict than the S.E.C.’s first shot, which would have opened up the funds to more legal liability. Still, some industry representatives told DealBook they believe the rules will raise compliance costs for private fund advisers, which could chill investment opportunities.
Brace for litigation. Trade groups like the Managed Funds Association say they are contemplating a lawsuit to block the measure. (Opponents have 60 days from its publication date to sue.)
One to watch is the previously unknown National Association of Private Fund Managers, which is registered to the address of a Texas law firm and has raised its objections to the rules. Those closely following the matter say it appears to have been strategically created to ensure at least one legal challenge would be heard in the conservative Fifth Circuit Court of Appeals. The association did not respond to a request for comment.
THE SPEED READ
Chamath Palihapitiya’s Social Capital reportedly sought to sell off its stakes in over 250 tech start-ups that the firm valued collectively at more than $300 million. (The Information)
Danaher agreed to buy Abcam, a top maker of supplies for the life sciences industry that is known as the “Amazon of antibodies,” for $5.7 billion. (Bloomberg)
The supermodel Karlie Kloss is said to be in talks to buy i-D magazine from Vice Media. (Puck)
Tech executives including Elon Musk, Sundar Pichai of Google and Sam Altman of OpenAI will meet with Washington lawmakers next month to discuss potential A.I. regulations. (NYT)
The rapper Eminem asked Vivek Ramaswamy, the “anti-woke” activist running for the Republican presidential nomination, to stop using his music in his campaign. (NYT)
The S.E.C. took its first enforcement action against an N.F.T. issuer, calling the tokens released by Impact Theory unregistered securities. (The Verge)
Best of the rest
The world could face a shortage of lithium, a key component of batteries, as soon as 2025. (CNBC)
How Ozempic is reshaping the Danish economy. (NYT)
Is Google’s search engine losing its cultural cachet? (The Verge)
“Would Your Partner Cheat? These ‘Testers’ Will Give You an Answer.” (NYT)
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Andrew Ross Sorkin is a columnist and the founder and editor at large of DealBook. He is a co-anchor of CNBC’s “Squawk Box” and the author of “Too Big to Fail.” He is also a co-creator of the Showtime drama series “Billions.” More about Andrew Ross Sorkin
Bernhard Warner joined the The Times in 2022 as a senior editor for DealBook. Previously he was a senior writer and editor at Fortune focusing on business, the economy and the markets. More about Bernhard Warner
Sarah Kessler is a senior staff editor for DealBook and the author of “Gigged,” a book about workers in the gig economy. More about Sarah Kessler
Michael de la Merced joined The Times as a reporter in 2006, covering Wall Street and finance. Among his main coverage areas are mergers and acquisitions, bankruptcies and the private equity industry. More about Michael J. de la Merced
Lauren Hirsch joined The Times from CNBC in 2020, covering deals and the biggest stories on Wall Street. More about Lauren Hirsch
Ephrat Livni reports from Washington on the intersection of business and policy for DealBook. Previously, she was a senior reporter at Quartz, covering law and politics, and has practiced law in the public and private sectors. More about Ephrat Livni
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