Venezuela Arrests Top Citgo Executives

Venezuelan authorities arrested the acting president of Citgo, the U.S. subsidiary of state-owned Petroleos de Venezuela SA (PDVSA), along with five other senior executives Tuesday for alleged corruption.

Attorney General Tarek William Saab told a press conference that interim president Jose Pereira and other managers allegedly arranged contracts that put Citgo at a disadvantage. The company operates refineries in Illinois, Texas and Louisiana with a capacity of 749,000 barrels per day.

“They did it with total discretion, without even coordinating with the competent authorities,” Saab said. “This is corruption, corruption of the most rotten kind.”

The six were accused of misappropriation of public funds, association to commit crimes and legitimation of capital, among other crimes.

The other five detainees were identified as Tomeu Vadell, vice president of Refining Operations; Alirio Zambrano, vice president and general manager of the Corpus Christi Refinery; Jorge Toledo, Vice President of Supply and Marketing; Gustavo Cardenas, Vice President of Strategic Relations with Shareholders and Government, and Jose Luis Zambrano; Vice President of Shared Services.

Last month, a senior executive of PDVSA and a dozen officials were arrested for alleged embezzlement.

But members of the Venezuelan opposition argue that recent investigations do not demonstrate a genuine intention of the government to eradicate corruption, but only reflect internal struggles of PDVSA.

VOA Latin America contributed to this report.


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US Sues to Stop AT&T’s Takeover of Time Warner

The U.S. Justice Department is suing to stop AT&T’s multi-billion dollar bid to take over another communications giant, Time Warner, calling it illegal and likening it to extortion.

“The $108 billion acquisition would substantially lessen competition, resulting in higher prices and less innovation for millions of Americans,” a Justice Department statement said Monday.

“The combined company would use its control over Time Warner’s valuable and highly popular networks to hinder its rivals by forcing them to pay hundreds of millions of dollars more per year for the right to distribute those networks.”

CNN, HBO top Time Warner products

Time Warner’s products include CNN, HBO, TNT, The Cartoon Network, and Cinemax — these networks broadcast highly popular newscasts, movies, comedy and drama series, and sports.

AT&T and its subsidiary DirectTV distribute these programs, as well as others, thorough cable and satellite.

The Justice Department decries the possibility of AT&T not just controlling television productions, but also the means of bringing them into people’s homes.

In its lawsuit, it threw AT&T’s words right back at the communications giant, noting that AT&T recognizes that distributors with control over the shows “have the incentive and ability to use … that control as a weapon to hinder competition.”

It also cited a DirectTV statement saying distributors can withhold programs from their rivals and “use such threats to demand higher prices and more favorable terms.”

Assured transaction would be approved

AT&T’s CEO Randall Stephenson told reporters the Justice Department’s lawsuit “stretches the reach of anti-trust law to the breaking point.”

He said the “best legal minds in the country” assured AT&T that the transaction would be approved and said the government is discarding decades of legal precedent.

AT&T and Time Warner are not direct competitors, and AT&T says government regulators have routinely approved such mergers.

President Donald Trump has made no secret of his contempt for one of Time Warner’s crown jewels — CNN, the Cable News Network — because of his perception of CNN being a liberal biased provider of “fake news,” including direct attacks against his administration.

Trump vowed during last year’s presidential campaign to block the merger.

Stephenson called the matter “the elephant in the room,” saying he said he “frankly does not know” if the White House disdain for CNN is at the heart of the Justice Department lawsuit.

But he said a proposal that Time Warner sell-off CNN as part of a settlement with the Trump Justice Department would be a “non-starter.”


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Technology Companies, Retailers Send US Stock Indexes Higher

U.S. stocks are higher Monday as technology and industrial companies, banks and retailers all make modest gains. Drugmakers and other health care companies are trading lower. Companies that make opioid pain medications are down sharply after the government released a much higher estimate of the costs of the ongoing addiction crisis.

Keeping score

The Standard & Poor’s 500 index picked up 5 points, or 0.2 percent, to 2,584 as of 2:15 p.m. Eastern time. The Dow Jones industrial average gained 94 points, or 0.4 percent, to 23,452. The Nasdaq composite advanced 7 points, or 0.1 percent, to 6,789. The Russell 2000 index of smaller-company stocks edged up 6 points, or 0.4 percent, to 1,499.

Tech tie-up

Chipmaker Marvell Technology Group said it will buy competitor Cavium for $6 billion in the latest deal in the semiconductor industry. Cavium climbed $7.48, or 9.9 percent, to $83.31 and it is up 22 percent over the last two weeks on reports Marvell would make a bid. Marvell rose $1.02, or 5 percent, to $21.31.

Other technology companies climbed as well. IBM added $2.01, or 1.3 percent, to $150.98 and Applied Materials picked up $1.12, or 2 percent, to $57.61. Cisco Systems gained 55 cents, or 1.5 percent, to $36.45.

Retail rising again

Retailers continued to move higher. They climbed last week following solid quarterly reports from Wal-Mart, Gap and Ross Stores. That’s given investors hope that shoppers are ready to spend more money. Home improvement retailer Home Depot rose $2.68, or 1.6 percent, to $170.42 and clothing company PVH rose $2.90, or 2.2 percent, to $136.02. Sporting goods retailer Hibbett Sports, after a 15-percent surge Friday, added $1.85, or 10.8 percent, to $18.95.

General electric slide

Industrial companies rose, as 3M gained $2.56, or 1.1 percent, to $231.92 and Boeing added $2.39 to $264.65.

General Electric missed out on those gains as investors continued to wonder about the company’s direction. On Sunday, the Wall Street Journal said that directors with energy and financial backgrounds, as well as GE’s two longest-tenured directors, are likely to leave the board as it shifts its focus away from those industries. The company said earlier this month that it will reduce the number of directors to 12 from the current 18.

GE lost 24 cents, or 1.3 percent, to $17.97.

Drugmaker downturn

A White House group said the opioid drug epidemic cost the U.S. $504 billion in 2016, far larger than other recent estimates, and companies that make those pain medications traded sharply lower.

Last year a separate estimate said the crisis cost the country $78.5 billion in 2013, including lost productivity and health care and criminal justice spending. The Council of Economic Advisers said the new figure reflects the worsening crisis and that earlier figures didn’t calculate deaths or include the use of illegal drugs.

Teva Pharmaceutical Industries fell 77 cents, or 5.6 percent, to $13.07 and Allergan gave up $3.78, or 2.2 percent, to $171.10. Endo International lost 26 cents, or 3.5 percent, to $7.28. Insys Therapeutics shed 20 cents, or 3.6 percent, to $6.18. Executives including Insys’ founder and its former CEO have been charged with offering kickbacks to doctors to get them to prescribe its fentanyl spray Subsys. Its stock traded above $40 in mid-2015.

Merck-y future?

Merck stumbled after Genentech, a unit of Swiss drugmaker Roche, reported positive results from a study of its drug Tecentriq as a primary treatment for lung cancer. Genentech said patients who were given Tecentriq as part of their treatment regimen were less likely to die or see their cancer get worse.

The results could affect sales of Merck’s drug Keytruda and Bristol-Myers Squibb’s Opdivo. Merck fell $1.10, or 2 percent, to $54.10 and Bristol-Myers Squibb lost 66 cents, or 1.1 percent, to $60.63.

Energy

Benchmark U.S. crude fell 50 cents to $56.05 a barrel in New York. Brent crude, which is used to price international oils, dropped 67 cents, or 1.1 percent, to $62.05 a barrel in London.

Currencies

The dollar rose to 112.64 yen from 112.13 yen late Friday. The euro slipped to $1.1737 from $1.1796 after a group of German political parties couldn’t agree to form a government, which might mean new elections are on the way. A weaker euro is good for companies that export a lot of products, and the German DAX was up 0.7 percent while France’s CAC 40 rose 0.5 percent. The FTSE 100 in Britain added 0.2 percent. In Japan, the Nikkei 225 index lost 0.6 percent and South Korea’s Kospi shed 0.3 percent. Hong Kong’s Hang Seng index added 0.2 percent.

Bonds

Bond prices edged lower. The yield on the 10-year Treasury note rose to 2.37 percent from 2.35 percent.

Metals

Gold slumped $21.20, or 1.6 percent, to $1,275.30 an ounce. Silver sank 53 cents, or 3.1 percent, to $16.84 an ounce. Copper gained 3 cents to $3.09 a pound.


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Yellen to Leave Fed Board When New Leader Sworn In

Fed Chair Janet Yellen says she will leave the U.S. central bank’s board when her successor is sworn in early next year.

Jerome Powell was chosen by President Donald Trump to head the Federal Reserve when Yellen’s term expires. Powell must be confirmed by the U.S. Senate before he can take office, but analysts say his approach to managing interest rates is similar to Yellen’s. She is credited with managing the economy in ways that boosted recovery from the 2007 recession and cut unemployment in half.

In her resignation letter to Trump, Yellen said she is “gratified that the financial system is much stronger than a decade ago.” She also noted “substantial improvement in the economy since the crisis.”

Yellen is the first woman to lead the Fed, and was a member of its board of governors before taking the leadership role. Her term on the board does not officially expire until 2024, and she could have stayed on if she wished to do so.

Candidate Trump criticized Yellen during his campaign, but praised her work after he became president.

Yellen has served as vice chair of the Fed, president of the Federal Reserve Bank of San Francisco, and head of President Bill Clinton’s Council of Economic Advisers. She has researched and taught economics at the University of California at Berkeley.


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US State of Nebraska OKs Keystone Oil Pipeline Route

Regulators in the U.S. state of Nebraska have voted to approve a route for TransCanada Corp’s Keystone XL pipeline – the last major obstacle to complete the oil pipeline that President Donald Trump has supported.

The regulatory body, which by state law could not consider the risk of leaks or potential environmental impacts, voted to approve the project just days after a leak in a separate pipeline – also named “Keystone” – spilled 5,000 barrels of oil in the nearby state of South Dakota.

The 3-2 decision by the Nebraska Public Service Commission is likely to be challenged in court by environmental activists in the nearly decade-long debate surrounding TransCanada’s project linking Canada’s Alberta oil sands to refineries in the United States.

The commission’s vote does not approve TransCanada’s proposed route, but a modified one which could prove more costly and difficult to build. It was not immediately clear whether the corporation would go through with the project as it considers its commercial viability.

In 2015, the Obama administration rejected construction of the pipeline, saying it would detract from America’s global leadership on issues related to climate change.

But the Trump administration overturned the decision in March, saying that the pipeline is safer than other methods used to transport oil, and calling its completion “long overdue.”

The 1,900-kilometer-long pipeline is designed to transport up to 830,000 barrels per day of tar sand oil from Alberta, Canada, to Nebraska, where it would then enter existing pipelines to the Gulf Coast refineries.

The pipeline construction sparked months of protests by Native Americans and activist groups, who say the project could pollute local water supplies.


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Bitcoin Hits Record High After Smashing Through $8,000 for First Time

Bitcoin hit a new record high on Monday after smashing through the $8,000 level for the first time over the weekend, marking an almost 50 percent climb in just eight days.

The new high came after leading U.S. payments company Square Inc. said late last week that it had started allowing select customers to buy and sell bitcoins on its Cash app.

Bitcoin traded as high as $8,197.81 on the Luxembourg-based Bitstamp exchange, up over 2 percent on the day and around 48 percent up since dipping to $5,555 on Nov. 12.

An eye-watering eightfold increase in the value of the volatile cryptocurrency since the start of the year has led to multiple warnings that the market is in a bubble, and institutional investors are broadly staying away.

Retail investors, however, as well as some hedge funds and family offices, are piling into the market. The “market cap” of all cryptocurrencies hit an all-time high of over $242 billion on Monday, according to trade website Coinmarketcap.


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With Little Movement, NAFTA Talks Said to Run Risk of Stalemate

Talks to update the North American Free Trade Agreement appeared to be in danger of grinding toward a stalemate amid complaints of U.S. negotiators’ inflexibility, people familiar with the process said on Sunday.

The United States, Canada and Mexico are holding the fifth of seven planned rounds of talks to modernize NAFTA, which U.S. President Donald Trump blames for job losses and big trade deficits for his country.

Time is running short to reach a deal before the March 2018 start of Mexico’s presidential elections, and lack of progress in the current round could put the schedule at risk.

“The talks are really not going anywhere,” Jerry Dias, president of Unifor, the largest Canadian private-sector union, told reporters after meeting with Canada’s chief negotiator on Sunday. “As long as the United States is taking the position they are, this is a colossal waste of time,” said Dias, who is advising the government and regularly meets the Canadian team.

Hanging over the negotiations is the very real threat that Trump could make good on a threat to scrap NAFTA.

Canada and Mexico object to a number of demands the U.S. side unveiled during the fourth round last month, including for a five-year sunset clause that would force frequent renegotiation of the trade pact, far more stringent automotive content rules and radical changes to dispute settlement mechanisms.

Calls for greater US flexibility

“Our internal view as of this morning is that if any progress is to be made, the United States needs to show some flexibility and a willingness to do a deal,” said a Canadian source with knowledge of the talks.

“We are seeing no signs of flexibility now,” added the source, who requested anonymity given the sensitivity of the situation. However, a NAFTA country official familiar with the talks said Canada had not yet submitted any counterproposals to the U.S. demands.

Dias said the United States was showing some signs of flexibility over its sunset clause proposal after Mexican officials floated a plan for a “rigorous evaluation” of the trade pact, but without an automatic expiration.

U.S. negotiating objectives that were updated on Friday appeared to accommodate the Mexican proposal, saying the revised NAFTA should “provide a mechanism for ensuring that the Parties assess the benefits of the Agreement on a periodic basis.”

Canada and Mexico are also unhappy about U.S. demands that half the content of North American-built autos come from the United States, coupled with a much higher 85 percent North American content threshold. Officials are due to discuss the issue from Sunday through the end of the fifth round on Tuesday, Flavio Volpe, president of the Canada’s Automotive Parts Manufacturers’ Association, said there was little chance of making substantial progress on autos in Mexico City, as the U.S. demands were still not fully understood.

“I don’t expect a heavy negotiation here,” he said in an interview on the sidelines of the talks.


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Britain to Submit ‘Brexit Bill’ Proposal Before December EU Meeting

Britain will submit its proposals on how to settle its financial obligations to the European Union before an EU Council meeting next month, finance minister Philip Hammond said on Sunday.

British Prime Minister Theresa May was told on Friday that there was more work to be done to unlock Brexit talks, as the European Union repeated an early December deadline for her to move on the divorce bill.

“We will make our proposals to the European Union in time for the council,” Hammond told the BBC.

Last week, May met fellow leaders on the sidelines of an EU summit in Gothenburg, Sweden, to try to break the deadlock over how much Britain will pay on leaving the bloc in 16 months.

 

She signaled again that she would increase an initial offer that is estimated at some 20 billion euros ($24 billion), about a third of what Brussels wants.


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European Cities Battle Fiercely for Top Agencies Leaving UK

Brexit is still well over year away but two European cities on Monday will already be celebrating Britain’s departure from the European Union.

 

Two major EU agencies now in London — the European Medicines Agency and the European Banking Authority — must move to a new EU city because Britain is leaving the bloc. The two prizes are being hotly fought over by most of the EU’s other 27 nations.

 

Despite all the rigid rules and conditions the bloc imposed to try to make it a fair, objective decision, the process has turned into a deeply political beauty contest — part Olympic host city bidding, part Eurovision Song Contest.

 

It will culminate in a secret vote Monday at EU headquarters in Brussels that some say could be tainted by vote trading.

 

The move involves tens of millions in annual funding, about 1,000 top jobs with many more indirectly linked, prestige around the world and plenty of bragging rights for whichever leader can bring home the agencies.

 

“I will throw my full weight behind this,” French President Emmanuel Macron said when he visited Lille, which is seeking to host the EMA once Britain leaves in the EU in March 2019. “Now is the final rush.”

 

At an EU summit Friday in Goteborg, Sweden, leaders were lobbying each other to get support for their bids.

 

The EMA is responsible for the scientific evaluation, supervision and safety monitoring of medicines in the EU. It has around 890 staff and hosts more than 500 scientific meetings every year, attracting about 36,000 experts.

 

The EBA, which has around 180 staff, monitors the regulation and supervision of Europe’s banking sector.

 

With bids coming in from everywhere — from the newest member states to the EU’s founding nations — who gets what agency will also give an indication of EU’s future outlook.

 

The EU was created as club of six founding nations some 60 years ago, so it’s logical that a great many key EU institutions are still in nations like Germany, France and Belgium. But as the bloc kept expanded east and south into the 21st century, these new member states see a prime opportunity now to claim one of these cherished EU headquarters, which cover everything from food safety to judicial cooperation to fisheries policy.

 

Romania and Bulgaria were the last to join the EU in 2007 and have no headquarters. Both now want the EMA — as does the tiny island nation of Malta.

 

“We deserve this. Because as we all know, Romania is an EU member with rights and obligations equal with all the rest of the member states,” said Rodica Nassar of Romania’s Healthcare Ministry.

 

But personnel at the EMA and EBA are highly skilled professionals, and many could be reluctant to move their careers and families from London to less prestigious locations.

 

“You have to imagine, for example, for the banking authority, which relies on basically 200 very high-level experts in banking regulatory matters to move to another place,” said Karel Lannoo of the CEPS think tank. “First of all, to motivate these people to move elsewhere. And then if you don’t manage to motivate these people, to find competent experts in another city.”

 

As the vote nears, Milan and Bratislava are the favorites to win the EMA, with Frankfurt, and perhaps Dublin, leading the way for the EBA.

 

 


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