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Unformatted text preview: WSJ For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or . Can Biden Hold the Democrats Together? REVIEW America’s Best Road-Trip Burgers OFF DUTY THE WALL STREET JOURNAL WEEKEND SATURDAY/SUNDAY, AUGUST 15 - 16, 2020 ~ VOL. CCLXXVI NO. 39 * * * * * * * * WSJ.com Heat Wave Threatens to Worsen Southern California Blazes What’s News World-Wide he diplomatic breakthrough between Israel and the United Arab Emirates caps more than a quarter-century of deepening, but largely secret, business and security ties between the two countries. A1, A7  A former FBI lawyer is expected to plead guilty on a charge of altering a document used to seek the continued surveillance of a former Trump campaign adviser. A3  The top two officials at Homeland Security were invalidly appointed to their acting roles and are ineligible to be serving in their positions, the GAO said. A6  Belarus opposition leader Tikhanovskaya re-emerged after fleeing the country, calling for new protests. A8 Business & Finance  Federal prosecutors have opened a criminal probe into whether a senior NASA official improperly told a highranking Boeing executive about the status of a lunarlander contract, spurring the company to revise its bid. A1  Americans’ shopping surpassed pre-pandemic levels last month, but the U.S. economy still faces threats as it digs out of a recession. A1 . INFERNO: Dry vegetation fed three wildfires near Los Angeles amid warnings Friday that the risk of new blazes was high during a statewide heat wave. Above, firefighters survey the Ranch Fire in the San Gabriel Mountains near Azusa, Calif. A6 Retail Sales Top Precrisis Pace, But Risks to Recovery Remain BY JOSH MITCHELL AND SUZANNE KAPNER Americans’ shopping surpassed pre-pandemic levels last month, but the U.S. economy still faces threats as it digs out of a severe recession. Retail sales—reflecting what households spent at service stations, stores, restaurants and online—rose 1.2% in July, the Commerce Department said Friday. That marked the third Secret Ties Paved Way For U.A.E., Israel Deal no  Germany’s stock-market regulator allowed its staff to trade shares in Wirecard while the agency was investigating the firm. A1  The CEO of the firm behind “Fortnite” is now spearheading a battle that app developers have waged for years against Apple and Google. B1  Buffett’s Berkshire unloaded billions of dollars of bank stocks as the U.S. economy reeled during the coronavirus lockdown. B1  U.S. stocks ended the week roughly where they started, leaving the S&P 500 hovering just below its February record. B11  A federal judge denied a motion filed by GM to revive its civil-racketeering lawsuit against Fiat Chrysler. B3  Canada’s antitrust watchdog said it has launched a civil investigation into Amazon.com. B3 NOONAN The Rise Of Kamala Harris A13 CONTENTS Books..................... C7-12 Food......................... D6-7 Gear & Gadgets D9-10 Heard on Street...B12 Markets..................... B11 Obituaries................. A9 Opinion............... A11-13 Sports....................... A14 Style & Fashion D2-3 Travel........................... D5 U.S. News........ A2-3,6 Weather................... A14 World News....... A7-9 > s 2020 Dow Jones & Company, Inc. All Rights Reserved Federal prosecutors have opened a criminal probe into whether a senior NASA official improperly told a high-ranking Boeing Co. executive about the status of a lunar-lander contract, spurring the company to revise its bid, according to people familiar with the investigation. ly  New coronavirus cases appeared to be falling in much of the U.S., as the government made preparations for a possible vaccine. A3 co Fo m rp m er er s ci on al a l us , e on  Trump issued an order calling on TikTok’s Chinese owner to divest itself of the app’s U.S. operations, setting a 90-day deadline. A9 U.S. Probes BoeingNASA Contacts Investigation zeroes in on bid status a former space agency official shared with executive n-  Election officials in some states are voicing concerns that recent changes at the Postal Service might slow voting by mail, with the agency warning all states about timely deliveries of ballots sent close to Election Day. A5 APU GOMES/AGENCE FRANCE-PRESSE/GETTY IMAGES T HHHH $5.00 BY DION NISSENBAUM BEIRUT—The diplomatic breakthrough between Israel and the United Arab Emirates caps more than a quarter-century of deepening—but largely secret—business and security ties between the two countries that signal a major shift in the geopolitics of the Middle East. A major driver bringing the Israelis and Emiratis together has been their shared distrust of Iran, which they view as a destabilizing force in the region, and their concern about its growing military capabilities. That drove increasing intelligence cooperation between the two, according to current and former U.S. officials. Business connections also grew. Even though the two nations didn’t maintain direct air or telecommunications links, deals got done. It became possible to hear Israeli businessmen quietly speaking Hebrew in certain Dubai hotels. “This was more or less something that has developed, I would say, organically” and in “many, many areas,” said Anwar Gargash, Emirati minister of state for foreign affairs. This week, he said, the establishment of diplomatic relations transformed it into “something tangible.” Thursday’s agreement now paves the way for other Arab Please turn to page A7  Many Palestinians see the deal as a betrayal.................. A7  Move puts pressure on Saudi Arabia to follow suit............ A7 More recent evidence suggests households moderated spending in certain areas. One factor: the July 31 expiration of an enhanced unemployment benefit. That benefit, authorized by Congress in March, had boosted jobless workers’ weekly income by $600 a week, and many households spent it. Facing a deadlock over a new stimulus plan, President Trump has acted to replace the payments with a $300-a-week consecutive monthly gain as the U.S. strived to reopen its economy as much as possible despite the challenges posed by the coronavirus pandemic. After accounting for seasonal factors, sales were 1.7% higher compared to February, the month before the pandemic shut down much of the economy. Consumers last month boosted spending on electronics and appliances, health products and restaurant meals. benefit, but it isn’t expected to reach workers for weeks. “There’s a lot of talk about the recovery as if they’ve declared the recession dead already,” said Amy Crews Cutts, head of consultancy AC Cutts & Associates. “I think we are not clear from a recession, and the stops and starts that are hapPlease turn to page A2  Heard on the Street: Consumer recovery may be spent......... B12 Facebook Hate-Speech Rules Collide With Indian Politics By Andy Pasztor, Andrew Tangel and Aruna Viswanatha The grand-jury investigation, which hasn’t been previously reported, is being led by the U.S. attorney’s office for the District of Columbia and is focused on communication that occurred early this year outside established contracting channels, these people said. Prosecutors, they said, are looking into contacts between Doug Loverro, before he resigned as head of NASA’s human-exploration programs in May, and Jim Chilton, senior vice president of Boeing’s space and launch division. Mr. Loverro, who wasn’t part of NASA’s official contracting staff, informed Mr. Chilton that the Chicago aerospace giant was about to be eliminated from the competition based on cost and techniPlease turn to page A2 EXCHANGE Company executive opposed move to ban controversial politician BY NEWLEY PURNELL AND JEFF HORWITZ In Facebook posts and public appearances, Indian politician T. Raja Singh has said Rohingya Muslim immigrants should be shot, called Muslims traitors and threatened to raze mosques. Facebook Inc. employees charged with policing the platform were watching. By March of this year, they concluded Mr. Singh not only had violated the company’s hate-speech rules but qualified as dangerous, a designation that takes into account a person’s offplatform activities, according to current and former Facebook employees familiar with the matter. Given India’s history of communal violence and recent religious tensions, they argued, his rhetoric could lead to real-world violence, and he should be permanently banned from the company’s platforms world-wide, according to the current and former employees, a punishment that in the U.S. has been doled out to radio host Alex Jones, Nation of Islam leader Louis Farrakhan and numerous white supremacist organizations. Yet Mr. Singh, a member of Indian Prime Minister Narendra Modi’s Hindu nationalist party, is still active on Facebook and Instagram, where he has hundreds of thousands of followers. The company’s top public-policy executive in the country, Ankhi Das, opposed Please turn to page A10 Tired of Talking With the People In Your Family? Try the Dog i i i Owners use buttons, recorded words to help pets communicate; ‘Go! Golf cart!’ BY CORDILIA JAMES Kaili Smalley says it took 18 days to get her 8-year-old German shepherd to talk to her. The New York University grad student was back home in Idaho, with time on her hands after her internship was canceled. In July she bought the cheapest recording devices with buttons that she could find with the intention of chatting with her dog, Gracie. She tried rubbing treats and water on the buttons in an effort to teach Gracie to press them whenever she wanted ei- ther, but nothing worked. It wasn’t until a family reunion that Gracie saw another dog press the button and was hooked. Now she can’t stop talking. “It’s boosted morale in my household,” Ms. Smalley, 27, says. Pet lovers were captivated when speech-language pathologist Christina Hunger last year claimed to have taught her dog Stella how to communicate using augmentative and alternative communication, or AAC. This is often used to help peoPlease turn to page A10 TECH EXODUS Some workers leave San Francisco to work remotely forever. B1 Regulators in Germany Traded Wirecard Stock BY PATRICIA KOWSMANN AND RUTH BENDER BERLIN—Germany’s stockmarket regulator allowed its staff to trade Wirecard AG shares while it was investigating the company, putting the spotlight again on an agency that has come under scrutiny for ignoring red flags about the now insolvent fintech giant for a decade. In the first six months of 2020, 2.4% of all financial transactions undertaken by employees of BaFin, the regulator, were in Wirecard shares and derivatives, Germany’s finance ministry said in a written response to questions by opposition lawmakers that was seen by The Wall Street Journal. This was up from 1.7% in the entire year before. BaFin has said it opened a market manipulation investigation into Wirecard at the end of January 2019. BaFin said the movement in financial transactions wasn’t unusual, and that the trades had been disclosed and authorized by supervisors at BaFin. In what could be Europe’s largest accounting scandal in decades, Wirecard filed for insolvency in June after disclosing that more than $2 billion of its cash supposedly held in escrow accounts probably didn’t exist. The company’s market value has dropped to Please turn to page A6 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or . * *** U.S. NEWS THE WALL STREET JOURNAL. THE NUMBERS | By Jo Craven McGinty The Wrong Side of a Hurricane Is Its Right One and raises new questions about Boeing’s decision-making and internal contracting safeguards. Several mid-level Boeing officials, including an attorney, were pushed out of the company as a result of the controversy, people familiar with the personnel changes said. The company has taken steps to improve compliance training following the episode, said a person briefed on Boeing’s internal response. Boeing, which faces a separate criminal probe into its development of the 737 MAX passenger jet, declined to comment on the investigation or on behalf of Mr. Chilton. A NASA spokesman said it is “inappropriate to discuss personnel actions” but added, “We are confident in our procurement process.” A spokeswoman for the U.S. attorney’s office didn’t respond to requests for comment. Mr. Loverro’s lawyers couldn’t be reached for comment. no Boeing, NASA Face Probe Continued from Page One cal evaluations, according to some of the people. Within days, Boeing submitted a revised proposal, they said. The National Aeronautics and Space Administration formally determined the bid changes came too late to be considered, and three other companies won contracts in April totaling nearly $1 billion. The investigation is in the early stages, according to the people familiar with it, and it isn’t known whether the probe will result in a criminal case. Regardless of how it ends, the investigation heightens scrutiny of Mr. Loverro’s conduct everyone felt the same thrust. “People to the left of the track would not have experienced those winds,” Mr. McNoldy said. Storm surges also are worse on the right side of a hurricane and might be amplified by a full moon’s tidal effect. Source: NOAA days, OpenTable data show. The data firm Affinity Solutions, which analyzes creditcard spending, said overall retail spending, excluding car purchases, rose in early August compared to July, though consumers cut back on certain categories such as furniture, health-care products and construction materials. Foot traffic to retail stores declined six weeks ago, coinciding with the receipt of the last batch of stimulus checks, a sep- arate part of the pandemic relief that funneled as much as $1,200 to individuals, according to Aneta Markowska, the chief financial economist at Jefferies Group LLC. The firm parses data from location-tracking company SafeGraph Inc., and since then has found that foot traffic has remained fairly steady, despite the end of additional unemployment benefits. Shawn Hall spent her stimulus check as soon as she received it in April on bills and rent. The 48-year-old Charlotte, N.C., resident has been earning less as a self-employed education consultant, and she is hoping Congress passes another round of aid to help her make ends meet. Meanwhile, she has cut back on dining out and Starbucks lattes. Many households have used federal pandemic aid to pay bills and build up savings. As shutdowns have extended for months, consumers have started to spend some of their money, particularly on bigticket items and projects like refurbishing their homes. Business has been steady for Joff Masukawa, a self-employed life-sciences consultant in his 50s from Washington, D.C. He bought a 1950s ranch house in Laurel Park, N.C., in May so that his mother could move out of a senior-living community. In July, he bought a refrigerator, stove, dishwasher and microwave for it. “What I’m not buying are clothes,” he said. “I’m not buying anything going out to eat. I’m not going to bars. The only entertainment we spend money on is really cable-internet service and then the various streaming things.” —David Harrison contributed to this article. Isaías wind speeds Hurricane force Tropical-storm force 39–57 mph 58–73 74 and greater Tropical Storm Category 1 Path of the eye of Hurricane Isaías Aug. 5 Atlantic Ocean Aug. 4 Aug. 3 Aug. 2 Aug. 1 I saias made landfall under a full moon, and about 50 miles away, Wilmington, N.C., experienced the highest storm surges it has ever recorded, with water levels reaching 4.19 feet over normal high tide, breaking the record set during Hurricane Florence in 2018. Overall, an estimated 3.6 million customers lost power during the storm, and for Consolidated Edison Inc., the utility that serves New York City, it was the largest number of outages since Hurricane Sandy—by then a superstorm—brutalized the Northeast in 2012. “We’re trying to get people to make less of the hurricane category,” Mr. Cline said, “and actually see more of what the potential impacts are.” As the storm watchers say, there’s more to the story than the category. THE WALL STREET JOURNAL (USPS 664-880) (Eastern Edition ISSN 0099-9660) (Central Edition ISSN 1092-0935) (Western Edition ISSN 0193-2241) Editorial and publication headquarters: 1211 Avenue of the Americas, New York, N.Y. 10036 Published daily except Sundays and general legal holidays. Periodicals postage paid at New York, N.Y., and other mailing offices. Postmaster: Send address changes to The Wall Street Journal, 200 Burnett Rd., Chicopee, MA 01020. All Advertising published in The Wall Street Journal is subject to the applicable rate card, copies of which are available from the Advertising Services Department, Dow Jones & Co. Inc., 1211 Avenue of the Americas, New York, N.Y. 10036. The Journal reserves the right not to accept an advertiser’s order. Only publication of an advertisement shall constitute final acceptance of the advertiser’s order. Letters to the Editor: Fax: 212-416-2891; email: [email protected] Need assistance with your subscription? By web: customercenter.wsj.com; By email: [email protected] By phone: 1-800-JOURNAL (1-800-568-7625) Reprints & licensing: By email: [email protected] By phone: 1-800-843-0008 WSJ back issues and framed pages: wsjshop.com Our newspapers are 100% sourced from sustainably certified mills. GOT A TIP FOR US? SUBMIT IT AT WSJ.COM/TIPS Retail Rebound Retail sales rose past pre-pandemic levels, driven by nonstore retail and food sales, as bars and restaurants have lagged. Retail and food service sales $550 billion RECESSION 500 450 Change in sales, from January 50% Nonstore retailers 25 Total 400 -25 350 -50 300 Grocery Clothing Motor vehicles Bars and restaurants 0 Just retail -75 250 2008 '10 -100 '15 '20 Jan. July Note: Seasonally adjusted. Source: Census Bureau Mr. Loverro has told investigators he was trying to help the lunar-lander program and taxpayers rather than pursuing anything ill-intended, according to some of the people familiar with the investigation, by reducing the likelihood that the bidding process would be slowed by potential challenges or appeals to the outcome. Mr. Loverro’s communications with Boeing, and the company’s actions after the communications, prompted complaints within parts of NASA, the people familiar with the inquiry said. The complaints sparked a previously reported probe by the agency’s inspector general into whether Boeing gained unusual insight or any advantage in the competition. Weeks after the awards were announced, Mr. Loverro stepped down as an associate administrator under pressure from NASA leadership. In a farewell message to staff sent on May 19, Mr. Lov- erro suggested he had overstepped his authority or otherwise might have run afoul of contracting rules. He wrote that “risk-taking is part of the job description” of someone in his role. Without elaborating, the message said, “I took such a risk earlier in the year because I judged it necessary to fulfill our mission.” Then-NASA official Doug Loverro in December 2019. After Mr. Loverro left, some of these people said, prosecutors opened their probe into whether procurement integrity laws were violated, requesting written statements and issuing at least one subpoena. The inspector general’s civil inquiry has been on hold pending resolution of the criminal probe, according to people familiar with both inquiries. A spokeswoman for the inspector general declined to comment. In his statements to NASA and Justice Department investigators, these people said, Mr. Loverro indicated his goal was to prevent disruptions to NASA’s lander plans. Prosecutors also are looking at his contact with another bidder, these people said, without identifying that party. Bot...
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