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The Morning Risk Report: NRA Fails to Stop Former Ad Agency From Cooperating With New York Probe
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NRA Chief Executive Wayne LaPierre. PHOTO: EVAN VUCCI/ASSOCIATED PRESS
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Good morning. In a legal blow to the National Rifle Association, a New York state judge ruled that the gun-rights group can’t stop its former ad agency from cooperating with a state regulatory probe into the NRA’s financial dealings with its own top officials.
The ruling Monday came in response to a lawsuit filed in September by New York Attorney General Letitia James, whose office has been investigating the NRA’s compliance with rules governing nonprofits. The NRA has said it will fully cooperate with any probe into its finances.
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The attorney general’s office had sought a court order to enforce a subpoena it had issued last year to Ackerman McQueen, which for decades had been the NRA’s ad agency until a bitter split last year that has sparked litigation between the two former close partners.
The NRA and Ackerman worked very closely together before the split, and Ackerman has copious amounts of information on the NRA’s financial arrangements with its top officials.
Leaked NRA letters, for example, show that the ad agency spent more than $542,000 on luxury clothing and travel for NRA Chief Executive Wayne LaPierre over more than a decade. The agency also was closely involved in an abortive 2018 NRA plan to buy Mr. LaPierre a $6 million Dallas-area mansion. The NRA has said the mansion purchase never happened and the expenses were justified for business purposes.
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Companies Sharpen Their Measurement of Ethics and Culture
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More companies are conducting stand-alone assessments of their corporate culture to understand the underlying dynamics of their workplace, according to Ethisphere, an ethics and advisory firm. Sixty-seven percent of companies on Ethisphere’s 2020 list of most ethical companies, due out today, conducted a stand-alone culture survey, up 5 percentage points from 2017, according to the firm.
A stand-alone assessment of corporate culture is important because it can provide companies with a more precise understanding of employee perceptions, according to Tim Erblich, Ethisphere’s chief executive.
Most companies will do an employee engagement survey, he said. But those surveys tend to cover a host of other topics. Isolating the culture questions can help reduce bias in the results, Mr. Erblich said.
Imagine a survey that mixes, say, two questions about culture with 80 questions about benefits and other workplace factors. “Depending on where you put the questions, if you put them next to benefits and [compensation]—nobody is ever happy about that—you don’t get a true measure,” Mr. Erblich said.
—Kristin Broughton
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Companies Lack Due Diligence on Human Rights, Environment: EU
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Just above one-third of companies are undertaking due diligence that takes into account all human rights and environmental impacts, according to a study from the European Commission.
The Commission says the study, which reviewed 334 respondents from all sectors and sizes operating in the European Union and globally, demonstrates there needs to be EU-wide legislation requiring due diligence on human rights and environmental impacts.
“Companies told us they believe that EU rules would here provide legal certainty and a harmonized standard for businesses' duty to respect people and the planet,” says Didier Reynders, commissioner for justice.
—Dieter Holger
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All e-cigarette manufacturers must submit their vaping products for Food and Drug Administration review by May 12 to continue selling them in the U.S. after that date. PHOTO: GABBY JONES/BLOOMBERG NEWS
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Juul Labs plans to present to federal regulators a new version of its vaporizer designed to unlock only for users at least 21 years old, according to people familiar with the matter. The controversial e-cigarette maker will propose the next-generation device as part of an application that the company must file to keep its products in the U.S. market. All manufacturers must submit their vaping products for Food and Drug Administration review by May 12 to continue selling them in the U.S. after that date.
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The Supreme Court suggested it was unlikely to block a planned natural-gas pipeline from running under a section of a major East Coast hiking trail. At issue is the planned Atlantic Coast Pipeline, which would transport natural gas from West Virginia across 600 miles to sites in Virginia and North Carolina. The project, a partnership in which Dominion Energy and Duke Energy are major investors, is designed to reach East Coast markets and respond to demand for cleaner-burning fuel.
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Top officials in college sports are worried that female athletes stand to lose under a new system in which college players can make endorsement deals, saying they will be reduced to afterthoughts while male football and basketball players reap the rewards. There’s one problem: that’s news to many female athletes and their backers. “They want to use women as a human shield to prevent them from having to pay men,” said Andy Schwarz, a labor economist who has consulted in cases challenging NCAA rules.
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Shoppers in a Milan supermarket wore masks Monday as concern about the coronavirus grows in Italy. PHOTO: IPA/ABACA PRESS/ZUMA PRESS
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The World Health Organization said Monday it isn’t yet clear whether the new coronavirus, which has sparked large outbreaks in several countries, can be stopped from spreading further.
Yet the agency said the virus isn’t causing a pandemic so far, and the epidemic it sparked in China has peaked and the number of new cases there is declining. A pandemic indicates widespread transmission on multiple continents, according to the WHO.
Federal Reserve officials said it was too soon to know how the fallout from the coronavirus, which weighed heavily on global markets Monday, would ripple through the U.S. economy and whether it would force a return to interest-rate cuts later this year.
A coronavirus outbreak in northern Italy, the largest outside of Asia, threatens to tip the country’s economy into recession and further drag on Europe’s faltering growth.
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Major oil companies are working hard to articulate a vision for their future, but the energy sector’s poor performance shows that many investors aren’t buying it.
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Companies including Royal Dutch Shell, BP and Total have launched plans to turn themselves into lower-carbon businesses. But with low oil prices pressuring the industry’s economics and many investors saying it is too early to know whether the intended transformations will generate significant returns, there is growing skepticism on Wall Street over the sector’s future.
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Then-CEO Dennis Muilenburg presented Boeing’s board of directors to shareholders at the company’s annual meeting in April 2019. PHOTO: JOHN GRESS/PRESS POOL
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Boeing said it has nominated two new outside directors with safety and engineering experience, amid scrutiny of the board’s oversight of the prolonged 737 MAX crisis. The aerospace giant said Monday the new board nominees are Akhil Johri, who until recently was finance chief at aerospace manufacturer United Technologies Corp., and Steve Mollenkopf, chief executive of leading chip maker Qualcomm Inc. Boeing’s board has come under scrutiny from U.S. lawmakers and investors for its role overseeing the launch of the MAX nearly a decade ago and its reaction to two crashes that claimed 346 lives.
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HSBC said it would continue looking for a new chief executive while it considers permanently appointing interim CEO Noel Quinn, after UniCredit SpA boss Jean Pierre Mustier withdrew from talks about the job. HSBC’s board started looking for a new CEO last fall, after ousting former head John Flint and installing Mr. Quinn.
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Facebook’s probe into suspicious content supporting Sen. Bernie Sanders comes amid hypersensitivity to potential social-media manipulation. PHOTO: DREW ANGERER/GETTY IMAGES
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Facebook in recent weeks investigated suspicious content supporting Vermont Sen. Bernie Sanders’s presidential campaign, according to people familiar with the matter. But the company was unable to substantiate claims that Trump supporters or Russian actors were involved in any inauthentic activity. Some in Facebook’s leadership were briefed recently on the investigation, some of the people said. It couldn’t be learned whether the probe is continuing.
Facebook spokesman Andy Stone said the company investigated a claim by an outside researcher over suspicious pro-Sanders content, among regular reports it generally receives from the research community. While Facebook actively monitors its platform for political disinformation, not all internal inquiries are escalated to senior officials, as this one was, people familiar with the matter said.
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A pipeline under construction. An alert from the Department of Homeland Security shows the energy sector’s vulnerability to hackers. PHOTO: MATT ROURKE/ASSOCIATED PRESS
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The energy sector remains vulnerable to cyberattacks despite years of threats, as illustrated by an alert issued last week by the Department of Homeland Security.
The alert from the department’s Cybersecurity and Infrastructure Security Agency described a ransomware attack on an unnamed natural-gas pipeline operator that halted operations for two days while staff shut down, then restored, systems. The alert said that although staff didn’t lose control of operations, the company didn’t have a plan in place for responding to a cyberattack.
“This incident is just the latest example of the risk ransomware and other cyber threats can pose to industrial control systems, and of the importance of implementing cybersecurity measures to guard against this risk,” a CISA spokesperson said.
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HP’s net revenue fell to $14.62 billion from $14.71 billion.
PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS
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HP pledged to buy $15 billion worth of stock, with at least $8 billion of that in the first year, to tackle a hostile takeover from Xerox Holdings. HP called Xerox’s proposal “a fundamentally flawed value exchange” that “created an irresponsible capital structure” and overstates potential savings and productivity gains from merging the companies.
Palo Alto, Calif.-based HP on Monday said it was reaching out to Xerox “to explore if there is a combination that creates value for HP shareholders that is additive to HP’s strategic and financial plan.”
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Amazon is rolling out its checkout-free “Go” technology in a large grocery store and plans to license the cashierless system to other retailers.
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