- Environmental, social, governance investing an ‘undemocratic tax’ on economy, Reyes says KSL.com
- Republican states move to block giant asset manager’s ESG push for utility companies The Hill
- Hearing Wrap Up: ESG Agenda Prioritizes Leftist Ideology Over the Interests of the American People – United States House Committee on Oversight and Accountability House Committee on Oversight and Reform |
- ESG and climate change: ‘Woke capitalism’ or smart business? USA TODAY
- Texas Republicans take ESG battle to insurers The Hill
- View Full Coverage on Google News
Tag Archives: governance
Fresenius Medical Care proposes to its shareholders to change its legal form to simplify the governance structure and strengthen shareholder rights – Fresenius Medical Care
- Fresenius Medical Care proposes to its shareholders to change its legal form to simplify the governance structure and strengthen shareholder rights Fresenius Medical Care
- Germany’s Fresenius to simplify structure, flags potential profit fall Yahoo Finance
- Breakingviews – Fresenius takes tentative step on road to breakup Reuters
- Fresenius Medical Care delivers against FY22 expectations, sets strategic focus and accelerates transformation Fresenius Medical Care
- Fresenius Slides as Earnings Disappoint, Clouding CEO’s Revamp Bloomberg
- View Full Coverage on Google News
Avaya Veers Toward Bankruptcy Filing
Avaya Holdings Corp. is nearing a chapter 11 bankruptcy filing to restructure its balance sheet as it looks to turn around its business and move past problems surrounding the company’s accounting, people familiar with the matter said.
Avaya disclosed earlier this week it has reviewed various restructuring proposals from competing creditor groups. One plan, supported by a senior lender group including Apollo Global Management , would significantly reduce Avaya’s debt load through chapter 11, wipe out shareholders and, pending the completion of an internal investigation into controls over financial reporting, provide directors and executives with releases from potential litigation.
Kohl’s CEO Michelle Gass Resigns to Join Levi Strauss
Kohl’s Corp.
KSS 7.80%
Chief Executive
Michelle Gass
is leaving the department-store chain early next month to join
Levi Strauss
LEVI -2.12%
& Co. with plans to have her take over as the jeans maker’s CEO.
At Kohl’s, Ms. Gass has been under attack from activist investors for sales declines and a steep drop in the company’s stock price. In September, activist investor Ancora Holdings Inc., urged the company to replace Ms. Gass and its chairman. Kohl’s shares, down nearly 40% on the year, jumped 8% in early Tuesday trading.
Ms. Gass will leave Kohl’s Dec. 2 and join Levi Jan. 2, where she will serve as president with oversight of Levi’s brand and global digital and commercial operations. The 54-year-old will succeed Levi’s CEO
Chip Bergh
within 18 months, the company said. Mr. Bergh, who is 65 years old, has run Levi Strauss since 2011.
Kohl’s appointed
Tom Kingsbury
to serve as interim CEO until a permanent successor is named. Mr. Kingsbury is a former
Burlington Stores Inc.
CEO who joined Kohl’s board in 2021 as part of a settlement with activists. In a statement, Ancora said it was the right time to find new leadership and it was pleased that Mr. Kingsbury was the interim CEO.
Kohl’s also released preliminary results for the quarter ended Oct. 29. The company said that same-store sales decreased 6.9% compared with a year earlier. Net sales fell 7.2%. The company earned 82 cents a share compared with $1.65 a share.
It plans to report full results on Nov. 17.
Kohl’s, with roughly 1,100 stores, has struggled to attract shoppers amid rising competition from discounters, fast-fashion chains and online competitors. Earlier this year, Kohl’s scrapped plans to sell itself to the owner of Vitamin Shoppe—in a debt-funded deal initially worth $8 billion but later reduced. The company’s market capitalization has fallen to around $3 billion.
Ms. Gass wasn’t schooled in the art of selling clothes. She studied chemical engineering at Worcester Polytechnic Institute and received a master’s in business administration from the University of Washington. She then spent six years honing her marketing skills at
Procter & Gamble Co.
before joining
Starbucks Corp.
in 1996.
When she departed the coffee chain after nearly 17 years, founder
Howard Schultz
credited her with helping develop such products as the Frappuccino.
Ms. Gass joined Kohl’s in 2013 as chief customer officer with responsibility for marketing and the e-commerce business. In 2015, her role expanded to chief merchandising officer, and in 2018 she took over as CEO and joined the board.
Ms. Gass had some early success at the helm of Kohl’s, telling her team that they needed to think differently and shouldn’t be afraid to try new ideas. She formed a partnership with
Amazon.com Inc.
that allowed shoppers to use Kohl’s stores to return goods bought at the online retailer. Last year, she wooed Sephora away from JCPenney, where it had operated shops for more than a decade.
She overhauled the merchandise, dropping poorly performing brands such as Dana Buchman, and bringing in new ones, including Tommy Hilfiger, Eddie Bauer and Cole Haan. She expanded the selection of activewear from brands such as
Nike Inc.,
Adidas AG and
Under Armour Inc.
Ms. Gass also simplified discounts and pricing and is refurbishing stores. The company is on track to repurchase $1.3 billion in stock in the current fiscal year.
Yet, the moves haven’t improved Kohl’s business enough to satisfy some shareholders. While sales initially increased, they had started to decline even before the pandemic forced retailers to temporarily shut stores and kept consumers homebound. The company has faced two years with activist investors calling for board changes.
—Dean Seal and Lauren Thomas contributed to this article.
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Dan Loeb’s Third Point Calls for Disney to Spin Off ESPN, Refresh Board
Activist investor
Dan Loeb’s
Third Point LLC has bought a new stake in Walt
Disney Co.
DIS 2.57%
and is calling on the media company to buy the rest of Hulu, explore spinning off ESPN and refresh its board.
Mr. Loeb on Monday said his firm, which liquidated a large Disney stake earlier this year, has repurchased a “significant stake” in the company and sent a letter to Disney Chief Executive
Bob Chapek
urging the company to engage with Third Point on a number of issues.
Mr. Loeb praised growth in Disney’s streaming subscriber base, but also wanted Disney to more aggressively cut costs and consider a number of steps to shake up its portfolio.
The investor’s calls come at an inflection point for Disney and the streaming industry at large, which enjoyed torrential growth during Covid-19 but now face headwinds that include financial losses, domestic subscriber saturation and the introduction of new ad-supported tiers.
Mr. Loeb also now represents a fresh challenge for Mr. Chapek, who assumed the CEO job in February 2020, one month before Covid-19 shut down his company’s theme parks and the nation’s movie theaters. Earlier this year, Mr. Chapek found himself under fire from his own employees and Florida Gov.
Ron DeSantis
over his response to the state’s bill known by opponents as the “Don’t Say Gay” legislation.
Mr. Chapek was renewed to a three-year contract this summer, and recent subscriber growth in Disney’s flagship service, Disney+, has shown the company is advancing on the streaming industry’s dominant player,
Netflix Inc.
A spinoff of ESPN—itself a source of paying subscribers through its ESPN+ offering—would radically alter Disney’s presence in the streaming ecosystem.
“We welcome the views of all our investors,” Disney said in response to Third Point’s letter. The company said its board has been continuously refreshed, “with an average tenure of four years.”
Third Point is pushing Disney to “make every attempt” to buy up
Comcast Corp.’s
CMCSA 1.26%
remaining minority stake in the streaming giant Hulu before its contractual deadline in early 2024. Under a 2019 agreement, Comcast can require Disney to purchase its NBCUniversal subsidiary’s one-third stake in Hulu by that deadline for at least $9 billion, assuming the streaming service has an equity value greater than $27.5 billion.
“We believe that it would even be prudent for Disney to pay a modest premium to accelerate the integration but are cognizant that the seller may have an unreasonable price expectation at this time,” Mr. Loeb’s letter says.
Disney and Comcast have been in a dispute over the value of Hulu, The Wall Street Journal previously reported. When Disney took majority control of Hulu in 2019, the service was valued at a minimum of $27.5 billion. Comcast believes the value of Hulu is now closer to $70 billion, people familiar with the matter have said.
The two companies have already started to unwind some aspects of their partnership. Comcast’s NBCUniversal earlier this year exercised an option to exit its content-sharing agreement with Disney, the Journal reported. Content from NBCUniversal that previously would have gone to Hulu after airing on NBC and NBC-owned cable channels will now go directly to Peacock, NBCU’s streaming service.
Mr. Loeb’s letter also states that there is a “strong case to be made” that Disney should spin off its ESPN business to shareholders to alleviate leverage at the parent company, despite ESPN’s centrality to the company’s streaming offerings and the significant free cash flow it generates.
Mr. Loeb suggests that synergies between Disney and ESPN could be replicated through contractual arrangements. A spinoff would drive better long-term value for Disney shareholders and result in a business “no longer haunted by the specter of cord-cutting,” the letter says.
Cord-cutting has driven Disney to make drastic changes to its business model in the past. In the summer of 2015, former Disney CEO
Robert Iger
acknowledged that the company was seeing “some subscriber losses” to ESPN. One year later, ESPN lost two million subscribers, dropping to its lowest count since 2005.
That steady decline became an albatross on Disney’s stock price, which fell as investors feared a future in which ESPN—once a top moneymaker—fell in relevance and revenue.
ESPN’s troubles—and Wall Street’s response to them—were one reason Mr. Iger would decide to launch his own streaming service. Disney+ premiered in the fall of 2019, and its rocketing growth in its first 18 months caused Disney shares to rise even as Covid-19 wrecked other parts of the business.
Hollywood has been rampant with rumors about the future of ESPN since those first indications of subscriber losses, with rivals speculating that a spinoff or sale was in its future. Today, the sports network is one of three core components of Disney’s streaming bundle, along with Disney+ and Hulu.
Disney+ has 152.1 million subscribers as of the most recent quarter, ESPN+ has 22.8 million and Hulu has 46.2 million.
Mr. Loeb’s letter also urges the company to rethink the makeup of its board and consider a list of potential new members that Third Point has compiled. It also advocates for a wide-ranging cost-cutting program and the continuation of Disney’s pandemic-era suspension of cash dividend payments.
Mr. Loeb has been a thorn in the side of studio chiefs before. In 2013, he bought a stake in
Sony Group Corp.
and publicly criticized the company’s movie arm, Sony Pictures Entertainment. He called on the company to make cuts to the division and introduce “discipline and accountability.”
Soon after Mr. Loeb’s disclosure of a 7% stake, Sony Pictures’ then-CEO pledged to find at least $350 million in annual savings. Mr. Loeb sold his stake about a year later, but has called on Sony to make changes to its entertainment division in the years since.
Last week, Disney reported better-than-expected earnings and added 14.4 million new subscribers to its Disney+ streaming service, many of which came to the service amid its expansion internationally.
The company’s new customer additions brought its total at all of its streaming services, including Disney+, Hulu and ESPN+, to 221.1 million subscribers, which puts Disney’s streaming total narrowly ahead of rival Netflix Inc., which last month reported it had 220.67 million subscribers.
Disney’s share price is up more than 12% in the past week, but remains down about 20% since the start of the year, amid a broad pullback in technology and media stocks.
Last week, Disney also announced price increases to its streaming services, including for its planned ad-supported tier of Disney+, a move that industry executives and analysts said is intended to help drive profitability at its streamers.
Disney, whose direct-to-consumer segment has lost more than $7 billion since Disney+ launched in late 2019, predicts that Disney+ will achieve profitability by September 2024.
“We have plenty of room on price value,” Mr. Chapek said last week.
Third Point previously held 4.1 million shares of Disney and successfully pushed the company to suspend its $3 billion annual dividend and plow the funds instead into the streaming business.
But by the first quarter of this year, the hedge fund had completely exited its position. Mr. Loeb had become worried that it would take years for Disney’s streaming business to reap the profits needed to boost the company’s share price, a person familiar with his thinking told The Wall Street Journal in May.
Write to Dean Seal at dean.seal@wsj.com and Erich Schwartzel at erich.schwartzel@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Elon Musk’s Inner Circle Rocked by Fight Over His $230 Billion Fortune
Mr. Birchall, a straight-laced, 48-year-old wealth manager who rose to become Mr. Musk’s top deputy and the head of his family office, had growing concerns about a new power player in the
Tesla Inc.
TSLA 0.74%
CEO’s orbit.
Mr. Musk was increasingly relying on a new adviser, a 34-year-old, Russian-born ex-professional gambler named
Igor Kurganov.
Mr. Kurganov spent some of the pandemic sleeping in Mr. Musk’s home, where they chatted late into the night about how the world’s richest person might use his fortune to help shape the planet through a giving strategy known as “effective altruism.”
Mr. Kurganov had no experience in finance or security but was suddenly a central figure in both areas for Mr. Musk. He had moved from London to Texas and replaced some of Mr. Musk’s protection detail with new hires of his own. Not long after, the Tesla CEO told Mr. Birchall that he was so taken by the younger man’s ideas that he wanted to leave him in charge of his charitable giving, dispersing funds from Mr. Musk’s vast private fortune, currently around $230 billion, as he saw fit.
“Elon,” Mr. Birchall told his boss, according to three people briefed afterward. “You can’t.”
The clash between the two men, and their dueling efforts to gain the upper hand with Mr. Musk, provides a peek into the often tumultuous private workings of Mr. Musk’s inner circle. As Mr. Musk’s breakneck, $44 billion bid for Twitter shows, the entrepreneur can be prone to quick decisions, ones that he can reverse just as quickly as he makes them. That deal is now in peril, with Mr. Musk trying to walk away and
TWTR 4.00%
suing him to complete it.
All the while he is egged on by a rotating crew of investors, underlings and ever-changing friends whose power and personal wealth is closely tied to their proximity to Mr. Musk, according to people who do business with him.
Two men in particular have pulled the Tesla CEO in opposing directions.
Mr. Birchall is an Eagle Scout and practicing Mormon who doesn’t smoke or drink and grew up traveling California as part of a song-and-dance troupe called “The Birchall Family Singers.” He declined to be interviewed through a representative of Mr. Musk’s foundation.
Mr. Kurganov is a high-roller with a reported more than $18 million in poker winnings, with long hair and beard and a peaceful demeanor. He has said in a podcast interview that he dropped out of college because he was smoking too much marijuana. He didn’t respond to requests for comment.
Last winter, Mr. Musk came to a compromise between the two. He allowed Mr. Kurganov to oversee $5.7 billion in Tesla shares that the CEO pledged late last year to eventually donate to charity. The rest of Mr. Musk’s overall fortune remained under Mr. Birchall’s purview.
That decision wasn’t, however, the end of the fracas.
This account is based on interviews with more than a dozen people close to Messrs. Musk, Birchall and Kurganov, including associates of the Musk Foundation and investors.
Ultimate fixer
For a man of immense resources, Mr. Musk is a minnow in the world of big-dollar philanthropy. Compared with other magnates such as
Microsoft Corp.
co-founder
Bill Gates
and
Amazon.com Inc.
founder
Jeff Bezos,
whose wealth, like Mr. Musk’s, is tied up in shares of their companies, Mr. Musk has said little concrete about his approach to giving. He didn’t respond to requests for comment.
Mr. Musk’s personal foundation gave away $23.6 million in fiscal 2020, the most recent year for which data is available, filings show. That represented roughly 0.02% of his net worth as of the end of that year, according to Forbes rankings.
Though Mr. Musk is known to favor his own counsel most of all, the man in charge of his foundation since 2016 has been Mr. Birchall, one of the longest standing in his inner circle.
The alliance reflects Mr. Birchall’s role as the ultimate fixer for Mr. Musk, taking care of matters large and small. In addition to handling billions in assets, Mr. Birchall in 2018 under a pseudonym registered the website www.justballs.com, for example, after Mr. Musk mused online that he might want to own the domain name someday, legal documents show.
Mr. Birchall entered the technology world through finance. After his brief singing stint with his siblings—he is one of 11 children—he attended Brigham Young University.
He then spent a year at Merrill Lynch, where he was discharged for what the firm described in a filing as “sending correspondence to a client without management approval.”
Mr. Birchall eventually moved into private wealth and crossed paths with Mr. Musk about a decade ago while working as a client adviser in
Morgan Stanley’s
southern California offices. There, he impressed Mr. Musk by helping arrange hundreds of millions of dollars of loans from the investment bank at a time when the Tesla co-founder was strapped for cash, a person close to Mr. Musk says. When Mr. Musk started a private firm to manage his own money roughly six years ago, he tapped Mr. Birchall to run it.
Mr. Birchall’s work for Mr. Musk has at times led him into strange public controversies and lawsuits. After a British spelunker criticized Mr. Musk’s offer to help rescue a youth soccer team trapped in a flooded Thailand cave in 2018, Mr. Birchall created a fake email address under the name “James Brickhouse” to hire a private investigator to investigate the man, according to court documents.
Mr. Musk subsequently called the man “pedo guy” in a tweet, though he later apologized and said it was a joking taunt. The spelunker unsuccessfully sued Mr. Musk for defamation in a Los Angeles federal court.
In addition to his role helping manage Mr. Musk’s fortune, Mr. Birchall is also a director of his tunneling startup, Boring Co., and chief executive officer of Mr. Musk’s Neuralink, which aims to make a brain implant that could be used by quadriplegic patients to control a computer or other devices.
When Mr. Musk announced in 2020 he would move from California to Texas, Mr. Birchall moved his family there, too. He has since become the closest thing Mr. Musk has to a public face in the Texas capital, handling business and attending events on Mr. Musk’s behalf.
“No one else you reach out to who is close to Elon is going to return your calls,” says Tyson Tuttle, former chief executive of Austin semiconductor manufacturer Silicon Valley Labs.
‘Make big moves’
Mr. Kurganov first became friendly with Mr. Musk socially.
Born in Russia but raised in Germany from age 4 by parents who were engineers by trade, Mr. Kurganov grew up in a working class, immigrant household, according to an interview he gave to the Paul Phua Poker podcast.
In his 20s, he gained a level of fame as a professional poker player. Beginning around a decade ago, he began playing high-stakes tournaments in Las Vegas and racking up wins, fellow poker players say. He earned particular renown in 2012 when he won a €1,080,000 purse in Monte Carlo.
He was known as an aggressive player, and had the respect of his fellow pros, the players say. “Igor had a willingness to play a lot of hands and make big moves,” says one of them, Dan Smith.
Though he was spending much of his time in Las Vegas, his personality didn’t match the city’s loud stereotypes. One person who knows him says he was often drawn into long, philosophical conversations on topics such as the rise of artificial intelligence in poker. Mr. Kurganov was concerned that a computer program could be built that could beat even the most talented human player.
Ging Masinda, a Las Vegas marketer and acquaintance of Mr. Kurganov, says the flashiest thing about him is that he sometimes wears eyeliner. “There’s a kid in him,” she says.
In a 2015 interview on the Poker Life Podcast, he said he was developing an accounting app for poker players. He also co-founded the organization Raising for Effective Giving, designed to help poker players, as well as fantasy-sports players and finance professionals, find the right charities to which to donate their winnings, according to archived webpages.
REG was focused on effective altruism, an approach to giving that suggests that inherently subjective qualities such as relative charitable need can be quantified. It’s still a niche approach, because many charitable experts say it can encourage an impersonal, utilitarian approach to complicated moral issues.
Mr. Kurganov’s social life, the fellow poker players say, revolved around his longtime partner, fellow professional poker player Liv Boeree. Ms. Boeree has long been friends with the recording artist Grimes, who was first romantically linked to Mr. Musk in 2018. Around the same time, Mr. Musk made Ms. Boeree one of the handful of people he follows on Twitter.
“She was elated” about the follow, according to Joe Stapleton, a poker commentator who spoke to her about it.
The two couples began spending time together. Messrs. Musk and Kurganov bonded over a shared love of Burning Man, the free-spirited desert festival that both regularly attend. Ms. Boeree, meanwhile, stayed close with Grimes; the two women posted photos together on social media. Ms. Boeree didn’t respond to requests for comment, and Grimes, whose legal name is Claire Boucher, couldn’t be reached.
The introduction to Mr. Musk came as Mr. Kurganov was soon to retire from professional poker with millions in personal winnings. Yet his poker accounting app had never gotten off the ground, and REG remained small-fry in terms of the amount of money it directed.
REG said on its website that it directed $3.1 million in charitable giving in 2019, the most recent year mentioned, which the organization said “reflects all donations that have been significantly influenced by us.” The amount couldn’t be independently verified. REG didn’t respond to requests for comment.
When the pandemic hit, Messrs. Kurganov and Musk became closer. Mr. Kurganov laid out a vision in which he might be able to help Mr. Musk combine his interest in science and his vast fortune, for the greater good.
Mr. Musk, known to be open to new ideas, was intrigued by the prospect of an approach to giving that no other major donor had yet tried, according to people familiar with the matter. He gave Mr. Kurganov a job vetting grant requests from his foundation.
When Mr. Musk moved to Texas, Mr. Kurganov and Ms. Boeree soon followed.
‘Donation decisions’
By last August, two years after retiring from poker, Mr. Kurganov had an official email address at the Musk Foundation and was heavily involved in the charity. That month, he corresponded with Chris Carberry, CEO of the nonprofit Explore Mars Inc. The group was looking to raise $600,000 to spirit an Afghan girls robotics team out of the war-torn country.
Mr. Kurganov was skeptical about the cost. “Regarding the price breakdown, what I’m trying to find out is what the expenses will be specifically—I imagine there are additional costs to simply the flight costs, but am still surprised that the total cost scales linearly with the number of people,” he wrote in an email reviewed by The Wall Street Journal.
Mr. Carberry, who didn’t respond to requests for comment, was disappointed but not dissuaded. In another email, also reviewed by the Journal, he wrote to an associate “We have worked effectively with Igor in the recent past. Igor makes the day-to-day donation decisions.”
To Mr. Birchall, that was an untenable situation. He was legally head of the foundation, and as he saw it, Mr. Kurganov was a newcomer who suddenly had immense influence on what to do with Mr. Musk’s money, he told people.
Mr. Birchall also learned that a Federal Bureau of Investigation agent had begun making preliminary inquiries into Mr. Kurganov as part of his job to watch for foreign interference in U.S. companies, people familiar with the matter say. The FBI agent was concerned that a newcomer had so quickly been welcomed into Mr. Musk’s inner circle, the people say.
Mr. Kurganov hasn’t been accused of wrongdoing. An FBI spokesperson didn’t respond to a request for comment.
Mr. Birchall, alarmed that Mr. Musk could be drawn into a federal investigation, this spring again pressed his internal case against Mr. Kurganov, people familiar with the matter say. It was inappropriate, in Mr. Birchall’s view, for Mr. Kurganov to have a central role in the $5.7 billion in shares that Mr. Musk had promised to donate.
During this period, Mr. Birchall was a constant presence at Mr. Musk’s side as his boss pursued Twitter. He helped line up billions of dollars in financing and spoke to shareholders and investors on Mr. Musk’s behalf about the future of the social-networking service.
By spring, the Tesla CEO’s bid for Twitter required him to put up tens of billions of dollars in personal funding and was consuming much of his attention. Meanwhile, Tesla’s stock was dropping as the broader market pulled back, pinching Mr. Musk’s net worth.
Mr. Birchall in May asked Mr. Musk to remove Mr. Kurganov from his post at the foundation.
Mr. Musk agreed to let Mr. Kurganov go, the representative of the foundation says.
None of Mr. Musk’s money was ultimately spent on projects related to effective altruism, the representative says, and Mr. Kurganov’s Musk Foundation email was switched off roughly six weeks ago.
—Elisa Cho and Rebecca Elliott contributed to this article.
Write to Rob Copeland at rob.copeland@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
SEC to Propose More Disclosure Requirements for ESG Funds
WASHINGTON—Regulators proposed new requirements for investment funds that tap into public angst about climate change or social justice, in an effort to address concerns about “greenwashing” by asset managers seeking higher fees.
The Securities and Exchange Commission voted Wednesday to issue two proposals that aim to give investors more information about mutual funds, exchange-traded funds and similar vehicles that take into account so-called ESG—meaning environmental, social and corporate-governance–factors. One of the proposed rules would broaden the SEC’s rules governing fund names, while the other would increase disclosure requirements for funds with an ESG focus.
Disinformation Governance Board ‘paused’ after just 3 weeks
In naming the 33-year-old Jankowicz to run the newly created board, the administration chose someone with extensive experience in field of disinformation, which has emerged as an urgent and important issue. The author of the books “How to Be a Woman Online” and “How to Lose the Information War,” her career also featured stints at multiple nonpartisan think tanks and nonprofits and included work that focused on strengthening democratic institutions. Within the small community of disinformation researchers, her work was well-regarded.
But within hours of news of her appointment, Jankowicz was thrust into the spotlight by the very forces she dedicated her career to combating. The board itself and DHS received criticism for both its somewhat ominous name and scant details of specific mission (Homeland Security Secretary Alejandro Mayorkas said it “could have done a better job of communicating what it is and what it isn’t”), but Jankowicz was on the receiving end of the harshest attacks, with her role mischaracterized as she became a primary target on the right-wing Internet. She has been subject to an unrelenting barrage of harassment and abuse while unchecked misrepresentations of her work continue to go viral.
Now, just three weeks after its announcement, the Disinformation Governance Board is being “paused,” according to multiple employees at DHS, capping a back-and-forth week of decisions that changed during the course of reporting of this story. On Monday, DHS decided to shut down the board, according to multiple people with knowledge of the situation. By Tuesday morning, Jankowicz had drafted a resignation letter in response to the board’s dissolution.
But Tuesday night, Jankowicz was pulled into an urgent call with DHS officials who gave her the choice to stay on, even as the department’s work was put on hold because of the backlash it faced, according to multiple people with knowledge of the call. Working groups within DHS focused on mis-, dis- and mal-information have been suspended. The board could still be shut down pending a review from the Homeland Security Advisory Council; Jankowicz is evaluating her position within the department.
“Nina Jankowicz has been subjected to unjustified and vile personal attacks and physical threats,” a DHS spokesperson told The Post in a statement. “In congressional hearings and in media interviews, the Secretary has repeatedly defended her as eminently qualified and underscored the importance of the Department’s disinformation work, and he will continue to do so.”
Jankowicz has not spoken publicly about her position since the day it was announced.
Jankowicz’s experience is a prime example of how the right-wing Internet apparatus operates, where far-right influencers attempt to identify a target, present a narrative and then repeat mischaracterizations across social media and websites with the aim of discrediting and attacking anyone who seeks to challenge them. It also shows what happens when institutions, when confronted with these attacks, don’t respond effectively.
Those familiar with the board’s inner workings, including DHS employees and Capitol Hill staffers, along with experts on disinformation, say Jankowicz was set up to fail by an administration that was unsure of its messaging and unprepared to counteract a coordinated online campaign against her.
Just hours after Jankowicz tweeted about her new job, far-right influencer Jack Posobiec posted tweets accusing the Biden administration of creating a “Ministry of Truth.” Posobiec’s 1.7 million followers quickly sprung into action. By the end of the day, there were at least 53,235 posts on Twitter mentioning “Disinformation Governance Board,” many referencing Jankowicz by name, according to a report by Advance Democracy, a nonpartisan, nonprofit organization that conducts public-interest research. In the days following, that number skyrocketed.
The board was created to study best practices in combating the harmful effects of disinformation and to help DHS counter viral lies and propaganda that could threaten domestic security. Unlike the “Ministry of Truth” in George Orwell’s “1984” that became a derogatory comparison point, neither the board nor Jankowicz had any power or ability to declare what is true or false, or compel Internet providers, social media platforms or public schools to take action against certain types of speech. In fact, the board itself had no power or authority to make any operational decisions.
“The Board’s purpose has been grossly mischaracterized; it will not police speech,” the DHS spokesperson said. “Quite the opposite, its focus is to ensure that freedom of speech is protected.”
Posobiec’s early tweets shaped the narrative and Jankowicz was positioned as the primary target. Republican lawmakers echoed Posobiec’s framing and amplified it to their audiences. U.S. Senate hopeful and Missouri Attorney General Eric Schmitt and Rep. Andrew S. Clyde (R-Ga.) both posted similar tweets to Posobiec. Former congresswoman Tulsi Gabbard (D-Hawaii) also posted a video repeating Posobiec’s statements.
The week following the announcement, approximately 70 percent of Fox News’ one-hour segments mentioned either Jankowicz or the board, with correspondents frequently deriding the board as a “Ministry of Truth,” according to Advance Democracy. The Fox News coverage was referenced in some of the most popular posts on Facebook and Twitter criticizing Jankowicz.
Dozens of websites including Breitbart, the Post Millennial, the Daily Caller and the New York Post began mining Jankowicz’s past social media posts and publishing articles to generate controversy. Some were simply mocking, making fun of her for parodying a song from “Mary Poppins” to talk about misinformation. In another instance, a performance where Jankowicz sings a popular musical theater song about a person’s desire to become rich and powerful, was misrepresented to imply that Jankowicz herself was after money and power and would sleep with men to get it.
As this online campaign played out, DHS and the Biden administration struggled to counter the repeated attacks.
The weekend after her hiring was announced, Homeland Security Secretary Alejandro Mayorkas attempted to clarify the board’s mission and defended Jankowicz’s credentials. He did a round of TV news interviews and testified about the board during House and Senate committee hearings. A forceful defense of Jankowicz was noticeably absent online, where the attacks against her were concentrated. White House press secretary Jen Psaki debunked false claims about the board during two news briefings and touted Jankowicz as “an expert on online disinformation,” but it had little effect on the growing campaign against her.
“These smears leveled by bad-faith, right-wing actors against a deeply qualified expert and against efforts to better combat human smuggling and domestic terrorism are disgusting,” deputy White House press secretary Andrew Bates told The Post on Tuesday.
As she endured the attacks, Jankowicz herself was told to stay silent. After attempting to defend herself on Twitter April 27, she was told by DHS officials to not issue any further public statements, according to multiple people close to her.
Democratic lawmakers, legislative staff and other administration employees who sought to defend Jankowicz were caught flat-footed. Administration officials did not brief the relevant congressional staff and committees ahead of the board’s launch, and members of Congress who had expressed interest in disinformation weren’t given a detailed explanation about how it would operate. A fact sheet released by DHS on May 2 did nothing to quell the outrage that had been building on the Internet, nor did it clarify much of what the board would actually be doing or Jankowicz’s role in it.
DHS staffers have also grown frustrated. With the department’s suspension of intra-departmental working groups focused on mis-, dis- and mal-information, some officials said it was an overreaction that gave too much credence to bad-faith actors. A 15-year veteran of the department, who spoke on the condition of anonymity because he was not authorized to comment publicly, called the DHS response to the controversy “mind-boggling.” “I’ve never seen the department react like this before,” he said.
A textbook disinformation campaign
Experts say that right-wing disinformation and smear campaigns regularly follow the same playbook and that it’s crucial that the public and leaders of institutions, especially in the government, the media and educational bodies, understand more fully how these cycles operate.
The campaigns invariably start with identifying a person to characterize as a villain. Attacking faceless institutions is difficult, so a figurehead (almost always a woman or person of color) is found to serve as its face. Whether that person has actual power within that institution is often immaterial. By discrediting those made to represent institutions they seek to bring down, they discredit the institution itself.
Harassment and reputational harm is core to the attack strategy. Institutions often treat reputational harm and online attacks as a personnel matter, one that unlucky employees should simply endure quietly.
Jankowicz’s case is a perfect example of this system at work, said Emerson T. Brooking, a resident senior fellow at the Atlantic Council’s Digital Forensic Research Lab. “They try to define people by these single, decontextualized moments,” Brooking said. “In Nina’s case it’s a few TikTok videos, or one or two comments out of thousands of public appearances. They fixate on these small instances and they define this villain.”
The worst thing any institution can do in the face of such attacks is remain quiet, several disinformation researchers said.
“You never want to be silent, because then the people putting out the disinformation own the narrative,” said Mark Jacobson, assistant dean at Syracuse University’s Maxwell School of Citizenship and Public Affairs, who has researched propaganda, political warfare and disinformation for over 30 years. “You need to have a factual and equally emotional counternarrative. A fact sheet is not a narrative.”
Not responding with a highly compelling counternarrative, or not getting out ahead of these campaigns to begin with, Jacobson explained, can “give them an air of legitimacy.” He said he was frustrated by the Biden administration’s lack of a loud and vocal response to what Jankowicz was going through. “Saying it’s amateur hour is cliche, but it’s amateur hour,” he said of the administration’s inaction.
The fallout from the campaign against Jankowicz can be seen in the escalating attacks. Violent threats against her are flourishing online, according to Advance Democracy. Users on far-right social media platforms continue to use misogynistic and bigoted language in posts about Jankowicz, with many users calling for violence.
In response to one post on Gab featuring a video of Tucker Carlson discussing Jankowicz, users commented: “Time to kill them all.” Another post featuring Carlson’s coverage of Jankowicz was shared to a right-wing forum with the caption “This is the point where we have to draw the line.” Comments said Jankowicz should be “greeted with Mr. 12 Gauge Slugs.” An April 30 post on Gab featuring a tweet by Rep. Lauren Boebert (R-Colo.) telling her followers “this is the hill to die on,” sparked replies that were flooded with threats to Jankowicz’s life. “It’d be easier if we had a large group of trained assassins to take a lot of the [government] bastards out first,” one user wrote.
“The irony is that Nina’s role was to come up with strategies for the department to counter this type of campaign, and now they’ve just succumbed to it themselves,” said one Hill staffer with knowledge of the situation who spoke on the condition of anonymity because they were not authorized to speak on the issue. “They didn’t even fight, they just rolled over.”
DHS staffers worried that the way Jankowicz’s situation was mishandled could hurt their ability to recruit future talent at a time when white nationalist violence is thriving and the midterm elections are approaching.
“We’re going to need another Nina down the road,” said one DHS staffer who spoke on the condition of anonymity because he was not at liberty to comment. “And anyone who takes that position is going to be vulnerable to a disinformation campaign or attack.
Big Four Accounting Firms Come Under Regulator’s Scrutiny
WASHINGTON—Regulators are carrying out a sweeping investigation of conflicts of interest at the nation’s largest accounting firms, asking whether consulting and other nonaudit services they sell undermine their ability to conduct independent reviews of public companies’ financials, according to people familiar with the matter.
The Securities and Exchange Commission probe highlights the agency’s new focus on financial-market gatekeepers such as accountants, bankers and lawyers. These firms help companies raise capital and communicate with shareholders, but also have duties under federal investor-protection laws. Auditors are a shareholder’s first line of defense against sloppy or dodgy accounting.
Big Four Accounting Firms Come Under Regulator’s Scrutiny
WASHINGTON—Regulators are carrying out a sweeping investigation of conflicts of interest at the nation’s largest accounting firms, asking whether consulting and other nonaudit services they sell undermine their ability to conduct independent reviews of public companies’ financials, according to people familiar with the matter.
The Securities and Exchange Commission probe highlights the agency’s new focus on financial-market gatekeepers such as accountants, bankers and lawyers. These firms help companies raise capital and communicate with shareholders, but also have duties under federal investor-protection laws. Auditors are a shareholder’s first line of defense against sloppy or dodgy accounting.