Good morning. Join us on Dec. 4 for the DealBook Summit. Andrew will host a series of conversations with newsmakers including Sam Altman, the C.E.O. of OpenAI; Shawn Fain, the president of the United Automobile Workers union; and David Ricks, the C.E.O. of Eli Lilly. Apply here to attend in person. In today's newsletter: How Donald Trump's new pick for attorney general might steer the Justice Department; the crypto industry's stellar run rolls on; why Detroit automakers are defending Biden-era vehicle regulations; and how the European tech sector may respond to having Trump back in the White House. (Was this newsletter forwarded to you? Sign up here.)
New face, same goals?Heads in Washington are still spinning after Donald Trump named Pam Bondi as his choice for attorney general, just hours following Matt Gaetz's withdrawal from consideration. Bondi, a former Florida attorney general and close ally of the president-elect, would most likely share his and Gaetz's goal of shaking up the Justice Department. But the switcheroo also raises questions about how willing Republicans might be to push back against the more divisive elements of the Trump agenda. What to know: As Florida's attorney general, Bondi participated in efforts to overturn the Affordable Care Act and the legalization of marijuana, as well as a multi-state lawsuit against Purdue Pharma, the maker of OxyContin. Since leaving office in 2019, she has worked for the powerful Republican lobbyist Brian Ballard — where her clients included General Motors (labor and tax policy), Amazon (cloud computing and trade) and Uber (the gig economy) — and a separate right-wing think tank that's close to the Trump transition team. But while she is a favorite of Trump's, it's unclear whether she had been on a vetting list for an administration role. The Times reports that she interviewed for the position only yesterday. It's also uncertain how Bondi would steer the Justice Department. She is a longtime loyalist who served on the legal team that fought his first impeachment and publicly criticized the prosecutors and judge in his Manhattan criminal trial. "For too long, the partisan Department of Justice has been weaponized against me and other Republicans — Not anymore," Trump wrote in announcing her selection. That said, it isn't clear where she stands on some issues compared with Gaetz, such as whether she shares the former congressman's deep skepticism of Big Tech. Does Gaetz's flameout signal Republicans' willingness to check Trump's ambitions? Gaetz pulled out after meetings with senators revealed implacable opposition, given allegations of sex trafficking and drug abuse. Some have speculated that G.O.P. senators might oppose other highly polarizing Trump picks, including Pete Hegseth as defense secretary and Robert F. Kennedy Jr. as secretary of health and human services. But so far, Republican lawmakers appear more willing to back Hegseth, who faces sexual assault accusations.
David McCormick officially wins Pennsylvania's Senate race. The Democratic incumbent, Bob Casey, conceded to the former C.E.O. of Bridgewater Associates yesterday, after a state-mandated recount of the razor-tight contest. McCormick's victory gives Republicans a 53-to-47 majority in the Senate, giving President-elect Donald Trump more flexibility to pursue his agenda. A Chinese hack of U.S. telecoms went deeper than first suspected. The operation, nicknamed Salt Typhoon, broke into every major service provider and allowed hackers to listen in on phone calls and read text messages involving government officials. "This is far and away the most serious telecom hack in our history," Senator Mark Warner, the Democratic chair of the Senate Intelligence Committee, told The Times. DirecTV ends its proposed takeover of Dish Network. The deal fell apart after Dish bondholders balked at the terms of the transaction, which would have seen them take a loss on their holdings as part of a debt exchange. Its failure raises questions about the fates of both of the debt-laden satellite-TV operators, which had hoped to combine to gain more leverage with content providers. Adani Group companies' stocks recover after a swoon tied to U.S. charges. Shares in some of Gautam Adani's businesses rose today, after tumbling on Thursday following U.S. criminal charges against the Indian tycoon. But concerns remain about the Adani Group, with New York prosecutors accusing Adani and other executives of fraud and other illegal acts. Crypto cloutBitcoin is smashing more price records and edging tantalizingly close to $100,000 this morning. And with an ally in President-elect Donald Trump, the sector is beginning to wield its new clout in Washington, too, hoping to reshape the S.E.C. into a more industry-friendly watchdog. It got a lift when Gary Gensler, the agency's tough-on-crypto chair, announced yesterday that he would step down in January. "Woo, Gary's gone," said Kristin Smith, the C.E.O. of the Blockchain Association, during a call with DealBook. The lobbying group issued a letter yesterday to Trump and Congress, DealBook's Sarah Kessler is first to report, that outlines its five priorities for the incoming government. One action point: Getting Congress to establish a regulatory framework for crypto. Industry executives have pushed for a law that would facilitate stablecoin trading. Another proposed bill would make it more difficult for the S.E.C. to pursue cases against crypto companies. "There are some gaps," Smith said, in how existing regulations apply to crypto. Trump has signaled that his government would support the industry, including by creating a crypto advisory council. Such overtures have prompted a huge post-Election Day rally in digital assets and has made industry lobbyists suddenly optimistic.
Trump's family has ventured into the sector, and Truth Social, the president-elect's social media company, filed a trademark application this week that suggests it plans to develop a cryptocurrency payment service. The crypto industry has become a political force, after spending more than $130 million to help pro-crypto candidates win office. A crypto executive or industry ally could be in line to replace Gensler at the S.E.C. Some names being floated include:
Smith said her top picks were Brian Brooks, a former banking regulator and crypto industry veteran, and Paul Atkins, a former S.E.C. commissioner under President George W. Bush.
The auto sector wants a green TrumpAutomakers have invested billions of dollars over the past decade to electrify their cars. But slowing demand and mounting losses have cast uncertainty on that strategy. Now Detroit is preparing for the return of Donald Trump — and hopes to persuade the president-elect not to scrap Biden-era electric vehicle regulations, The Times reports. It's a matter of defending hefty investments in E.V.s. The Big Three in Detroit — Ford, General Motors and Stellantis — don't necessarily love federal regulations that compel them to sell such vehicles. But they have spent heavily to revamp their factories to focus on E.V.s, and worked with the Biden administration on significantly stronger tailpipe emission rules. The Detroit giants also want to preserve a popular $7,500 consumer tax credit that is designed to bolster E.V. sales. They fear an abrupt rule-change by Trump, who has railed against the Biden policies, including by deriding the tax credits as expensive and ineffectual handouts. On the campaign trail last month, the Republican said he would "save the auto industry" against overseas competition, especially low-cost Chinese models, through punitive tariffs — but also disparaged E.V.s as expensive options with lousy range. Detroit automakers worry if those regulations are scrapped, the companies could be undercut by rivals who sell cheaper gas-powered cars. Detroit also faces a significant foe in Elon Musk. The Tesla C.E.O. is a powerful adviser to Trump and has said he wouldn't mind if the tax rebates disappear, suggesting his company could weather the hit, while rivals couldn't. Automakers' campaigning has gone into overdrive. The Alliance for Automotive Innovation, a group representing the biggest manufacturers, published a letter urging Trump to protect the U.S. auto sector by retaining the E.V. credits, while also calling for "reasonable and achievable" emission rules. They also called for more government support for autonomous vehicles. Could Trump be good for European tech?Europe pitches itself as a global force in the technology sector, despite tough regulation that has cost the industry billions of dollars and has pushed start-ups to often look to the United States to raise money or to go public. President-elect Donald Trump's America-first agenda raises new challenges. But at one of Europe's top tech events, the Slush conference this week in Helsinki, Finland, policymakers, executives and investors told DealBook that he could actually force a rethink that could be good for innovation. Some hope a Trump administration could also prompt a new view on regulation. Aura Salla, a Finnish member of the European Parliament and a former lobbyist for Meta, has criticized Brussels for going too far on regulation. She says the crackdown on Big Tech has had a chilling effect on European companies, too. Europe needs American tech companies "so that our ecosystem can grow," she added. Europe's defense tech sector could be one winner. Trump has promised to end the war in Ukraine, but some worry that his efforts could ultimately strengthen the hand of Vladimir Putin, Russia's president. That concern has bolstered the argument for strengthening domestic capability. "The war in Ukraine and ongoing geopolitical volatility are catalysts for Europe, and specifically European tech," Ian Hogarth, a partner at Plural, a London-based venture capital firm, and the head of Britain's A.I. Safety Institute, told DealBook. His investments include Helsing, a German defense tech start-up, that raised almost $500 million this summer at a valuation of $5.4 billion. Trump's crackdown on immigration could help European start-ups. He has promised to target undocumented workers. A similar push during his first term had the effect of scrambling the war on talent. Roxanne Varza, head of Station F, a Paris-based incubator, said that some American founders moved to Paris during Trump's first presidency. More may come again. "Depending on what Trump does, it could accelerate things," she said. Watch the Elon Musk effect. Many at the Helsinki event said they thought the Tesla boss having Trump's ear was a good thing. Paul Murphy, a partner at Lightspeed Venture Partners, an investment firm that backed SpaceX and xAI, thinks tech policy under Trump 2.0, will be "a whole lot more effective with him close to Trump than away from him."
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Friday, November 22, 2024
DealBook: Trump’s new face of justice
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