Trump Threw the Stimulus a Curveball

https://www.nytimes.com/2020/12/23/business/dealbook/trump-stimulus-veto.html

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Not even a day after lawmakers agreed on a $900 billion stimulus package, President Trump called it a “disgrace” and suggested that he might reject the heavily negotiated bill at the eleventh hour.

“It has almost nothing to do with Covid,” he said in a video posted online that attacked the initiative on multiple fronts. He criticized the combining of the stimulus with a broader spending bill that would fund various government functions, and demanded that direct payments to Americans be more than doubled, to $2,000 from $600. That’s despite the deal having been negotiated by Treasury Secretary Steven Mnuchin and Senate Republicans having resisted sizable direct checks.

Mr. Trump suggested that unless the funding provisions were carved out and the direct payouts increased, he would reject the package (though he didn’t use the word veto).

Reactions to the threat were split:

Trump administration officials were stunned, while lawmakers worried about the federal government shutting down on Dec. 29 if the president doesn’t sign the bill. Both parties are also concerned about the politics of holding up federal aid as they prepare for runoff elections in Georgia that could determine control of the Senate.

Democratic leaders egged Mr. Trump on, hoping to enlist him as an unlikely ally in providing more direct aid to Americans. House Speaker Nancy Pelosi retweeted Mr. Trump’s message, adding, “The President has agreed to $2,000 — Democrats are ready to bring this to the Floor this week by unanimous consent. Let’s do it!”

Congress could still push through the existing deal. The House and Senate each approved the bill with overwhelming majorities, meaning that they could override a veto. Lawmakers are already preparing to push through a military spending bill that Mr. Trump has threatened to reject because it doesn’t eliminate a legal liability shield for internet platforms.

This would require cooperation between Democrats and Republicans, and it’s unclear how hard Democrats will push for the increased direct payouts.

Market futures were up this morning, suggesting that investors were shrugging off Mr. Trump’s threat.

France reopens its border with Britain for freight. Passage of goods between the two countries was allowed to resume this morning after Britain agreed to conduct mass coronavirus testing of truck drivers. The move is aimed at relieving growing bottlenecks at British ports after the nation disclosed the growing spread of a more transmissible virus variant within its borders.

Pfizer nears a deal to sell more Covid-19 vaccine doses to the U.S. The potential agreement could provide tens of millions additional vaccinations, in exchange for a government directive giving the drug maker better access to manufacturing supplies.

The latest in Big Tech’s antitrust battles. Facebook reportedly offered to help social media rivals in an effort avoid regulatory lawsuits, The Washington Post reports. (The authorities rejected the proposal.) And here’s a deep dive by The Wall Street Journal into how Amazon has waged war against rivals big and small as the feds investigate its competitive practices.

Companies can now raise money in direct listings. The S.E.C. gave the New York Stock Exchange permission for the new rule, which bypasses the traditional I.P.O. process. Silicon Valley skeptics of I.P.O.s hailed the move: “I can’t imagine” why any company would prefer an initial offering over a direct listing, said the venture capitalist Bill Gurley.

Loretta Lynch will investigate a feud atop the Washington Football Team. The N.F.L.’s hiring of the onetime Obama attorney general comes as the team’s majority owner, Dan Snyder, accuses a minority partner of trying to smear him in an effort to force a sale of the franchise.

Elon Musk set tongues wagging yesterday when he tweeted that he had approached Apple’s Tim Cook about a sale of the electric carmaker during its “darkest days.” The entreaty didn’t bear fruit in the slightest.

“He refused to take the meeting,” Mr. Musk tweeted of Mr. Cook. Though the timing of the offer isn’t clear, it may have been in mid-2017, when Tesla was struggling to produce its Model 3 cars and came within a month of bankruptcy.

An acquisition then would have been a steal, according to Mr. Musk: Tesla was then at “1/10 of our current value.” Tesla’s market cap is currently just shy of $607 billion.

Our question: Whom else did Tesla approach for help during that time? Have any ideas? Send them our way.

The revelation followed news reports about Apple’s own self-driving car plans, including word that the iPhone maker hopes to introduce an electric vehicle as soon as 2024. Investors don’t seem to mind its overlooking of Tesla, though: Apple’s shares closed up nearly 3 percent yesterday, even after Mr. Musk’s tweet.

The Justice Department sued Walmart yesterday over its role in the opioid epidemic, accusing the company’s network of pharmacies of ignoring “glaringly obvious red flags” in dispensing the drugs. The retail giant is the latest company to be blamed for a health crisis that has killed 750,000 people over the past two decades.

The feds said Walmart knew its system for flagging questionable prescriptions was faulty. They said the retailer had ignored indicators like dosage amounts so large that, if taken as dispensed, would probably have been lethal. The company’s pharmacists warned its compliance unit of a “shady” doctor who wrote opioid prescriptions, the Justice Department said, yet the retailer continued to fill thousands of that doctor’s opioid prescriptions.

Walmart says it was simply filling prescriptions written by authorized doctors, and that ignoring them would have put “pharmacists and pharmacies between a rock and a hard place.” (In October, Walmart preemptively sued the federal government, accusing regulators of trying to minimize their own failings in preventing the epidemic.)

The lawsuit is the latest effort to assign blame to corporate America for the crisis:

Drug manufacturers including Purdue Pharma, Mallinckrodt and Insys Therapeutics have been accused of playing down the drugs’ risks. All three filed for bankruptcy protection amid a wave of litigation, and Purdue, which makes OxyContin, pleaded guilty to federal criminal charges last month. (Members of Purdue’s founding Sackler family denied responsibility in a congressional hearing this month.)

Drug distributors like McKesson, Cardinal Health and AmerisourceBergen have agreed to pay billions to settle accusations that they helped retailers circumvent limits on opioid purchases. All have denied wrongdoing.

Retailers including CVS, Walgreens and Rite Aid are facing a lawsuit that accuses them of rewarding pharmacists with the highest sales volumes and promoting opioids as safe and effective. The chains themselves blame doctors who ordered the subscriptions.

Rosemary Vrablic, the Deutsche Bank executive who was President Trump’s key contact at the German lender, which arranged hundreds of millions of dollars in loans to his family’s business, is stepping down.

Why Ms. Vrablic is leaving isn’t clear. But her departure and that of a colleague, Dominic Scalzi, came as Deutsche Bank has scrutinized a $1.5 million Park Avenue apartment purchase by the two and another employee. The seller was a company linked at the time to Jared Kushner, Mr. Trump’s son-in-law.

The timing is tough for Mr. Trump:

His ties to the lender — which was willing to work with him even while most others would not — are the subject of congressional, civil and criminal investigations that could intensify once he leaves the White House.

Mr. Trump also owes Deutsche Bank about $330 million for loans that Ms. Vrablic helped secure and that he personally guaranteed. They come due in 2023 and 2024.

Special purpose acquisition vehicles are the hottest thing in M.&A. right now, drawing in a host of unusual players. (Paul Ryan, anyone?) One of the newest is Marquee Raine Acquisition Corp., a partnership between the merchant bank Raine and Marquee Sports, a holding company run by the Chicago Cubs’ owners. Its top executives tell DealBook why their $373 million SPAC is different — and why they believe it will succeed.

The back story: Last summer, Crane Kenney, the Cubs’ president, called Raine executives about potentially forming a SPAC. Mr. Kenney — who helped the club’s owners, the Ricketts family, build Marquee into a business empire with a regional sports network and real estate investments — said he had been holding talks with companies that made sense as potential investments.

At that time, Raine wasn’t sure about the surging popularity in blank-check funds. “A lot of companies that we typically talk to were still looking at it as an also-ran product,” said Brett Varsov, Raine’s head of M.&A. But the bank changed its mind this year, and talks to form the blank-check fund began in April. Its financing closed last week.

Mr. Kenney and Mr. Varsov are the fund’s co-C.E.O.s.

Having a major operator onboard is a big selling point. Unlike many SPACs that rely on retired C.E.O.s as advisers, Marquee Raine will draw on Marquee Sports’s 500 employees to run a business. Raine will also bring the resources of its 130-person firm, from investment banking to growth investing.

What Marquee Raine is — and isn’t — looking to buy: Given its partners’ expertise, the fund is seeking targets in media and sports. That could include gambling and betting (Raine was an early backer of DraftKings, which went public via SPAC) plus at-home and live entertainment and health, wellness and fitness companies, Mr. Varsov said.

What’s not on the menu is another sports team, despite another SPAC’s pursuit of the Boston Red Sox’s parent company. “I don’t think they make great public companies,” Mr. Kenney said, citing issues like their volatile earnings.

Deals

The insurer Oscar Health, whose founders include Joshua Kushner, the brother of Jared Kushner, has filed to go public. (Bloomberg)

Group Nine Media, the parent company of PopSugar, said it planned to strike deals in the digital media industry. (NYT)

Politics and policy

A potential U.S. offer of immunity to Crown Prince Mohammed bin Salman of Saudi Arabia over a federal lawsuit led to the dismissal of a case that accuses the prince of directing the killing of Jamal Khashoggi. (NYT)

Tech

Twitter says it won’t automatically transfer the @POTUS account’s 33 million followers once the account is handed over to the Biden administration. (WSJ)

Tesla’s efforts to build a huge car factory in Germany have been stalled by a court order protecting the habitat of sand lizards. (FT)

Best of the rest

WeWork’s response to its failed I.P.O. may have helped the co-working company survive the pandemic. (Vox)

News you (hopefully) won’t have to use: how to improve the odds that a holiday gift delivery will arrive on time. (WaPo)

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