Tag Archives: Elections / Voting

As Amazon.com flexes its muscle, Seattle moves to curb corporate political donations

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SEATTLE (Reuters) – Seattle, the Pacific Northwest city where home-grown online retailer Amazon.com has increasingly flexed its political muscle, is expected to approve on Monday legislation banning political contributions by companies with at least 5% foreign ownership.

FILE PHOTO: People take in the view from the top of the Space Needle in this aerial photo in Seattle, Washington, U.S. March 21, 2019. Picture taken March 21, 2019. REUTERS/Lindsey Wasson

The move is likely to trigger renewed debate on the legality of corporate donations in U.S. elections while drawing an immediate court challenge.

A six-member committee of Seattle City Council has already unanimously approved the measure, making it almost certain that the full nine-member council will pass it on Monday.

The bill is widely viewed as aimed at reining in political spending from companies such as Amazon.com (AMZN.O). Amazon, Seattle’s largest employer, donated a record $1.5 million to back a slate of pro-business candidates in the November council elections – a campaign that was largely unsuccessful.

At least 9% of Amazon’s stock is owned by foreign investors, according to financial data provider Refinitiv.

A spokesman for Amazon, which has been butting heads with the city for two years over attempts to levy more taxes on the company, declined to comment.

“What they are proposing is likely an unconstitutional backdoor ban on U.S. companies speaking about local elections,” Jim Manley, an attorney with the conservative Pacific Legal Foundation, told Reuters.

The U.S. Supreme Court’s 2010 Citizens United ruling struck down limits on political contributions by corporations or unions. Companies and unions may not give money directly to campaigns but may spend unlimited amounts on ads and other means.

The legislation before the Seattle City Council says that companies that have at least 5% of their shares held by foreigners, or 1% by a single foreigner, are subject to foreign influence and therefore cannot participate in elections.

Amazon’s $1.5 million political donation for Seattle’s November elections represented more than half of the nearly $2.7 million raised by a Super Pac for those elections. Four years ago, Amazon donated $25,000.

Super Pacs may accept unlimited contributions from any non-foreign source.

Amazon began to prominently flex its political muscle in May 2018 when the Seattle council approved an employee “head tax” on the city’s largest companies, in order to combat a housing crisis. Just four weeks later, the City Council repealed the tax after a coalition of businesses, with Amazon at the forefront, mounted a well-financed campaign for a referendum to repeal the tax.

Seattle is not the first city to take aim at campaign spending. St. Petersburg, Florida, approved a similar ordinance on foreign-influenced corporations in 2017 that has not yet been challenged in court.

(This story has been refiled to fix typo in 5th paragraph).

Our Standards:The Thomson Reuters Trust Principles.

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Carmakers race higher, Johnson jitters for sterling

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LONDON (Reuters) – A speeding autos sector and hopes for even lower borrowing costs buoyed world stocks on Tuesday, while a brief sterling rally proved short-lived as hard-Brexit advocate Boris Johnson was confirmed as Britain’s new prime minister.

FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, July 22, 2019. REUTERS/Staff/File Photo

Corporate results from oil bellwether Halliburton, Swiss bank UBS and Apple supplier AMS had all helped Europe’s morning mood though it was a 4% surge from the auto sector that provided the real torque. [.EU]

German parts makers Hella and French peer Faurecia surged as much as 6% and tire maker Continental leapt 5.8% despite another profit warning, putting the sector on track for its best day since Jan. [.EU]

The region-wide STOXX 600 benchmark added over 1% while Wall Street’s main markets were expected to open 0.3%-0.4% higher later after a flurry of largely upbeat earnings from the likes of Coca-Cola and United Technologies. [.N]

“The results are coming in and have helped the market today and we are still under the influence of interest rates,” said Francois Savary, the chief investment officer of Prime Partners, referring to expectations of U.S. and ECB rate cuts.

He also said Wall Street earnings had provided no scares so far and this week’s results from Facebook, Amazon.com and Google parent Alphabet would “drive the market up the road”.

Ahead of the U.S. open, the International Monetary Fund lowered its forecast for global growth this year and next, warning that more U.S.-China tariffs, auto tariffs or a disorderly Brexit could further slow the world economy.

Among currencies, the dollar reached a two-week high after U.S. President Donald Trump and congressional leaders agreed on Monday to a two-year extension of the U.S. debt limit, ending the threat a government default later this year. [/FRX]

The New Zealand dollar led G10 losses after its central bank said it had “begun scoping a project to refresh our unconventional monetary policy strategy and implementation”, although it added it was at a very early stage.

Britain’s pound was the other notable mover as it slid back towards the mid $1.24 region having briefly rallied after eurosceptic Johnson was elected as the replacement for outgoing Prime Minister Theresa May.

Concern that Britain will crash out of the European Union without a withdrawal agreement have grown since Johnson said he would pull Britain out on Oct. 31 “do or die”.

The pound traded 0.2% weaker at $1.2445, near last week’s 27-month low of $1.2382, having made it as high as $1.2481.

Credit ratings agency Moody’s and investment Goldman Sachs both warned the risk of a no-deal Brexit was now higher.

“With Boris Johnson at the helm, the tail risks are likely to intensify ─ well into October,” Goldman said.

“We raise our odds on a ‘no deal Brexit from 15% to 20%, and we reduce our odds on ‘no Brexit’ at all from 40% to 35%.”

The euro fell too to $1.1189, although rather than Brexit it was weighed down more by the likelihood of even more negative ECB interest rates in the coming months. The central bank meets on Thursday.

“It is going to take a bold stroke by the ECB to both satisfy markets clamoring for incremental easing and make a difference to the economy, all the while remaining inside its institutional setting and not destabilizing the financial system,” wrote Carl Weinberg, chief international economist at High Frequency Economics.

SUMMER HOT SPOTS

Europe’s government bonds barely budged, with investors largely happy to sit on their hands having seen their yields slumping since the start of the year.

U.S. yields did tick fractionally higher in response to the debt ceiling deal but Germany’s 10-year bond yield, the benchmark for the euro zone, was down a basis point, at minus 0.35% and not far from the record low -0.40% posted at the start of the month.

The next events to watch include a vote on Thursday in the Spanish parliament on the future government. Caretaker Prime Minister Pedro Sanchez failed in his first attempt on Tuesday to get parliament’s backing to form a government, leaving him two days to try and strike a deal with the far-left Unidas Podemos.

There was also a rumored meeting between the leaders of the two squabbling parties who make up Italy’s coalition government, 5-Star Movement’s Luigi Di Maio and League’s Matteo Salvini.

“Investors are waiting to see whether this government will survive,” said DZ Bank strategist Daniel Lenz. “One possibility is that the coalition continues but both agree to replace (Giuseppe) Conte as prime minister, which would be a very bad signal.”

Conte is widely seen as a moderating influence on the anti-establishment Italian government, particularly in terms of its relationship with Brussels.

FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville/File Photo

In commodities, Brent crude edged lower to reach $63 per barrel, having shot up 1.2% the day before on concern over possible supply disruptions after Iran seized a British tanker last week. [O/R]

U.S. West Texas Intermediate crude slipped 23 cents to $55.99. “The response of oil prices to the seizure of a British oil tanker by armed Iranian forces near the Strait of Hormuz has been amazingly muted so far,” said Carsten Fritsch, analyst at Commerzbank.

“It appears that the majority of market participants are convinced that there will be no open conflict between the West and Iran.”

Additional reporting by Shinichi Saoshiro in Tokyo, Alex Lawyer and Abhinav Ramnarayan in London, editing by Larry King and Frances Kerry

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