2022

 Happy New Year!

Let's hope 2022 is better than 2021

Key Senate race

Former GOP congressman faces Trump squeeze in key Senate race

Former Rep. Mark Walker's looming decision: whether to drop down and run in a House primary, or continue his uphill bid against a Trump-endorsed rival.

By NATALIE ALLISON

Mark Walker has been here before.

Stuck in political no man’s land, facing an upcoming filing deadline, with his hopes of becoming a senator all but dashed and the boundaries of his familiar former House district in question.

The former congressman’s Senate bid remains in limbo after former President Donald Trump earlier this month privately offered to endorse Walker to run for a newly drawn House seat instead. Also looming is a legal challenge to North Carolina’s map, which could result in the new district being abruptly redrawn to become heavily Democratic.

Now Walker, who served three terms in the House and is a distant third in a three-way GOP primary, is once again a candidate in search of a race he can win. Walker is trailing Trump-endorsed Rep. Ted Budd and former Gov. Pat McCrory in both support and fundraising for the Senate seat.

A politician whose career plans have repeatedly been eviscerated since 2019, Walker’s situation is complicated by the fact that he just isn’t interested in following the conventional rulebook for the game of politics, instead willing to alienate key players and kingmakers as he goes his own way.

When it works, the results for Walker have been spectacular. When it doesn’t work, so have the consequences.

“I’ll put my pride on the table, but I won’t put my principles,” Walker said in an interview earlier this month, days after Trump made the offer.

“On paper,” Walker said, running for the House again “makes a lot of sense.”

But Walker isn’t someone whose political decisions come down to logic and the input of consultants. The former Baptist pastor must feel it in his heart — just like when he walked down from the nosebleed section at the 2012 Republican convention in Tampa, onto the floor of the arena, and sensed God tell him he had to run for Congress.

Then he won, against the odds.

“So I’m going to do what I believe is the best thing to do,” Walker said of his current conundrum. “Does it cost me millions of dollars in super PAC money? Probably so. But I know if I can beat the system, it allows me to get up there like we did last time and go and serve uninhibited.”

Trump allies had floated the House endorsement proposal to Walker for a couple weeks before their Dec. 4 meeting at Trump’s private Florida club, though Walker — with no realistic path to victory in the Senate race — initially declined because the deal involved endorsing Budd, he told donors. The stipulation was later removed.

Two years ago, he drew the short straw in a court-ordered map redraw that made Walker’s congressional district heavily Democratic to reverse Republicans’ gerrymandering, leaving him with no good options for 2020. Walker could have primaried Budd for a neighboring House seat, though the Club for Growth pledged to back Budd financially — as they’re doing with at least $10 million in the current Senate race.

He could have primaried Sen. Thom Tillis — a proposal Walker publicly floated twice in 2019, before announcing he wouldn’t seek office at all the following year, instead looking to an open Senate seat in 2022.

Despite Walker suggesting at the time that he would have Trump’s endorsement in 2022 and entering the Senate race before his rivals, Walker was caught off guard when Trump announced at a June rally he was backing Budd.

Staying in the race, Walker admits, requires him to successfully forge his own path. It’s an approach that got him to Congress, but one that would be nearly impossible to replicate on a statewide level without significant funding.

“You’ve got the Trump lane in one aspect, and you’ve got the former governor, who I believe has the Karl Rove camp in his lane,” Walker said, referring to McCrory. “And we’re having to build our own path to be able to build the fundraising, to be able to build the name ID."

While McCrory’s staff maintains that Walker exiting the race would have little impact on the outcome, a Club for Growth poll released last week showed Budd with a narrow lead — a statistical tie at 47 percent to McCrory’s 43 percent — in a two-way matchup. Polling commission by the Club this fall showed Budd still had not commanded a lead in the three-way primary, earning 33 percent support to McCrory’s 36 percent, while Walker had 13 percent of the vote.

“I don’t think they’re concerned for my political future,” Walker said of parties encouraging him to run for the House. “I think they’re concerned that Ted’s numbers aren’t where they need to be. He’s got everything in the world, and he’s still at 30 percent.”

Budd's campaign declined to comment on the record for this story.

It’s no secret in North Carolina political circles that the relationship between Walker and Budd is strained. Already at odds after Walker floated running against Budd for the House last cycle, Walker resents that his former House colleague butted into the 2022 Senate race and occupied the Trump lane Walker had tried to claim for himself, according to several people familiar with the situation.

That's part of a pattern of skirmishes between Walker and the GOP establishment. He launched his political career in 2013 as a church pastor with a plan to primary popular GOP Rep. Howard Coble, then a 30-year incumbent, and later teasing a challenge to Tillis.

And while he has courted Trump’s support, Walker’s brand of Christian conservatism has eschewed full-blown Trumpism. In 2016, Walker condemned Trump’s remarks about sexual assault captured on tape by Access Hollywood, calling them “vile” and adding that “America deserves better.”

In August 2020 and on his way out of Congress, Walker made headlines by becoming the first high-profile Republican to call on Jerry Falwell Jr. to resign as president of Liberty University — where Walker served on a music faculty advisory board — after a photo surfaced of Falwell, a close Trump ally, with his pants unzipped and his arm around his wife’s assistant.

“I’m an everyday guy. My world is made up of simple people I love and care about,” Walker said, his voice breaking from emotion. “I’m just a grassroots guy who’s had extraordinary opportunity, but I’ve not done it the way I’m supposed to do it inside the system — and sometimes that bites you.

“I’ll walk away before I have to do that.”

Walking away would mean the middle-class 52-year-old rebuilding a career and finding a new job. And believing that his God-ordained vocation is to influence policy in Washington, Walker has no plans to soon return to full-time ministry.

Walker has successfully defied the establishment before. In a 2014 primary runoff, he beat out Coble’s endorsed successor, Phil Berger Jr.— the son of the state Senate president pro tem and now a state Supreme Court justice.

In January before the May primary that year, Walker’s congressional campaign had just $9,000 cash on hand, far less than Berger’s.

Throughout his political career, from the time he signaled he was willing to challenge Coble, Walker has demonstrated a mentality that “the rules don’t apply to him, and no one’s going to take it personal,” said one North Carolina Republican who is familiar with the former congressman’s career.

“That’s become problematic for him, specifically over the last two to three years.”

Walker quickly emerged as a leader in Congress, becoming chair of the Republican Study Committee after his first term, and then vice chair of the House Republican Conference in 2019.

But months after his threat to primary Tillis, the state’s GOP establishment came for him, offering up Walker’s House seat to mollify the state Supreme Court, which ordered legislators to draw a fairer congressional map. Tillis is a former speaker of the state House — and, among the state’s congressional delegation, Walker had fewer friends in Raleigh even before he mused publicly about taking on their former leader.

“Generally, the legislature tends to look out for members of its own party when they redraw, particularly congressional maps,” said Michael Bitzer, a North Carolina political commentator and professor of politics and history at Catawba University. “Usually, those folks have some deep connections with members of the General Assembly. Maybe Walker just didn’t have that attachment to legislators when he was sacrificed in 2019.”

While Walker takes the holidays to come up with a decision about his campaign plans, he is still waiting for Trump’s public endorsement for the House seat.

“If he stays in, he hurts Budd, no question about it,” said Doug Heye, a Republican strategist and North Carolina native who is a past communications director for the Republican National Committee. “He’s not taking votes from McCrory. He’s only taking them from Budd.”

As part of the arrangement reached at the Mar-a-Lago meeting, which was attended by Club for Growth President David McIntosh, Rep. Madison Cawthorn (R-N.C.) and congressional candidate Bo Hines, Hines would move his campaign from the 7th District to the 4th with Trump’s endorsement, while Trump would back Walker to run in the 7th, much of which he previously represented. Hines has also not yet announced his plans.

“I think for most realists, it’s a matter of when, not if, he decides to drop out of the Senate race,” Bitzer said of Walker. “It would be a minor miracle to pull off an upset of that magnitude.”

Convicted

Ghislaine Maxwell convicted in Epstein sex abuse case

She faces the likelihood of years in prison.

By ASSOCIATED PRESS

The British socialite Ghislaine Maxwell was convicted Wednesday of luring teenage girls to be sexually abused by the American millionaire Jeffrey Epstein.

The verdict capped a monthlong trial featuring sordid accounts of the sexual exploitation of girls as young as 14, told by four women who described being abused as teens in the 1990s and early 2000s at Epstein’s palatial homes in Florida, New York and New Mexico.

Jurors deliberated for five full days before finding Maxwell guilty of five of six counts. As the verdict was read, Maxwell was largely stoic behind a black mask. She stood with her hands folded as the jury filed out, and glanced at her siblings — faithfully in attendance each day of the trial — as she herself was led from the courtroom. She did not hug her lawyers on the way out, a marked change from previous days during which Maxwell and her team were often physically affectionate with one another.

She faces the likelihood of years in prison — an outcome long sought by women who spent years fighting in civil courts to hold Maxwell accountable for her role in recruiting and grooming Epstein’s teenage victims and sometimes joining in the sexual abuse.

The defense had insisted Maxwell was a victim of a vindictive prosecution devised to deliver justice to women deprived of their main villain when Epstein killed himself while awaiting trial in 2019.

During the trial, prosecutors called 24 witnesses to give jurors a picture of life inside Epstein’s homes — a subject of public fascination and speculation ever since his 2006 arrest in Florida in a child sex case.

A housekeeper testified he was expected to be “blind, deaf and dumb” about the private lives of Epstein, a financier who cultivated friendships with influential politicians and business tycoons, and Maxwell, who had led a jet-setting lifestyle as the favorite child of a media mogul.

Pilots took the witness stand and dropped the names of luminaries — Britain’s Prince Andrew, Bill Clinton, Donald Trump — who flew on Epstein’s private jets.

Jurors saw physical evidence like a folding massage table once used by Epstein and a “black book” that listed contact information for some of the victims under the heading “massages.”

There were bank records showing he had transferred $30.7 million to Maxwell, his longtime companion — onetime girlfriend, later employee.

But the core of the prosecution was the testimony of four women who said they were victimized by Maxwell and Epstein at tender ages.

Three testified using first names or pseudonyms to protect their privacy: Jane, a television actress; Kate, a former model from Great Britain; and Carolyn, now a mom recovering from drug addiction. The fourth was Annie Farmer, a psychologist who chose to use her real name after being vocal about her allegations in recent years.

They echoed one another in their descriptions of Maxwell’s behavior: She used charm and gifts to gain their trust, taking an interest in their adolescent challenges and giving them assurances that Epstein could use his wealth and connections to fulfill their dreams.

They said the script would darken when Maxwell coaxed them into giving massages to Epstein that turned sexual, encounters she played off as normal: After one sexual massage, Kate, then 17, said Maxwell asked her if she’d had fun and told her: “You are such a good girl.”

Carolyn testified that she was one of several underprivileged teens who lived near Epstein’s Florida home in the early 2000s and took up an offer to give massages in exchange for $100 bills, which prosecutors described as “a pyramid of abuse.”

Maxwell made all the arrangements, Carolyn told the jury, even though she knew the girl was only 14 at the time.

Jane said in 1994, when she was only 14, she was instructed to follow Epstein into a pool house at his Palm Beach estate, where he masturbated on her.

Two charges, including the lone count on which Maxwell was acquitted, applied only to Jane.

“I was frozen in fear,” she told the jury, adding that assault was the first time she had ever seen a penis. She also directly accused Maxwell of participating in her abuse.

Maxwell’s lawyer asked Jane why it had taken so long to come forward.

“I was scared,” she said, choking back tears. “I was embarrassed, ashamed. I didn’t want anybody to know any of this about me.”

The last to testify, Farmer described how Maxwell touched her breasts while giving her a massage at Epstein’s New Mexico ranch and how Epstein unexpectedly crawled into bed and pressed himself against her.

Maxwell, 60, vehemently denied the charges through her lawyers.

Still, she declined to take the risk of testifying, telling the judge: “The government has not proven its case beyond a reasonable doubt so there is no reason for me to testify.”

“The charges against Ghislaine Maxwell are for things that Jeffrey Epstein did,” one of Maxwell’s lawyers, Bobbi Sternheim, emphasized to the jury. “But she is not Jeffrey Epstein and she is not like Jeffrey Epstein.”

Maxwell’s legal team questioned whether the accusers’ memories were faulty, or had been influenced by lawyers seeking big payouts from Maxwell and from Epstein’s estate in civil court.

During their two-day presentation, they called as a witness Elizabeth Loftus, a University of California Irvine professor who has testified as a memory expert for defense lawyers at about 300 trials, including the rape trial of movie mogul Harvey Weinstein.

She said memory can be contaminated by suggestions made by an interviewer, particularly law enforcement or the media.

Maxwell’s family complained she was under duress from harsh conditions at the Brooklyn jail where she’s been held since her arrest in July 2020. She had repeatedly, and futilely, sought bail, arguing that she was unable to adequately contribute to her defense.

Before Maxwell was taken from the courtroom, defense attorney Bobbi Sternheim asked that arrangements be made to give her a coronavirus booster shot, saying infection rates were rising dramatically at the lockup.

The legal fights involving Epstein and Maxwell are not over.

Maxwell still awaits trial on two counts of perjury.

Lawsuits involving the abuse allegations also continue, including one in which a woman not involved in the trial, Virginia Giuffre, says she was coerced into sexual encounters with Prince Andrew when she was 17. Andrew has denied her account and that lawsuit is not expected to come to trial for many months.

Shown effective

J&J's booster shown effective against Covid hospitalization

The results mark the first evidence of the effectiveness of such a vaccine boost while Omicron is circulating.

By POLITICO PRO STAFF

Two doses of Johnson & Johnson's Covid-19 vaccine provided up to 85 percent protection against hospitalization from the Omicron variant, researchers in South Africa reported on Thursday.

The study from the South African Medical Research Council evaluated a second booster shot in 69,092 health care workers from November 15 to December 20. Researchers observed that effectiveness preventing hospitalization rose from 63 percent to 84 percent within 14 days and then 85 percent one to two months post-boost.

The results mark the first evidence of the effectiveness of such a vaccine boost while Omicron is circulating and are important considering the increased reliance on the J&J vaccine in Africa, where the virus strain was first observed, the researchers wrote. The study has not been peer-reviewed.

The Food and Drug Administration authorized J&J boosters in October as part of a broader expansion of the country's booster campaign heading into the fall and winter. All J&J recipients who are at least two months past their shot may get a booster, a recognition of that vaccine's lower efficacy compared to the Pfizer-BioNTech and Moderna Covid shots. The one-dose J&J vaccine is authorized for people 18 and older.

J&J's shot has had limited uptake in the U.S. since the federal government paused its use in April over concerns about blood clotting post-inoculation. The company's U.S. production was also interrupted for months by problems at a contractor's plant.

J&J said prior to the emergence of Omicron, in October, that giving a second dose two months after the first increased protection against symptomatic moderate to severe Covid-19 to 94 percent, with 100 percent protection against severe illness.

Vaccine manufacturers and the Biden administration continue to evaluate whether booster shots should be considered part of the original Covid-19 vaccine regimen as the Omicron strain rapidly spreads across the country.

No secret...

America runs on bad jobs

By Anneken Tappe

The pandemic has been a wake-up call for America's job market.

After decades of relying on low-paying services jobs that come with few benefits, the coronavirus has made clear the nation needs to take care of its workers.

Hazard pay, paid sick leave, remote working options have all became hotly debated topics during the first wave of the pandemic. Companies like Amazon (AMZN), which also owns Whole Foods, grocery store chains Kroger (KR) or Albertsons temporarily provided hazard pay for their workers, for example.

Nearly two years into the outbreak in the United States, the conversation has shifted to a labor shortage -- businesses just can't find enough workers. Meanwhile, lawmakers and economists are trying to figure out what's still keeping people on the sidelines.

It's a complicated puzzle that includes pieces like child care and early retirement, but one lesson from the pandemic is that workers have had it with bad jobs.

A shock to the system

Covid is changing our relationship with work, Brookings' Stephanie Aaronson, director of the Economic Studies program, told CNN Business last month.

Economists believe this is the biggest shock to the labor market since World War II prompted a shift in labor force participation as more women entered the work force. But unlike 75 years ago, the labor force participation has fallen as a result of the pandemic.

At first, businesses laid employees off en masse as the economy shut down. When it began to reopen in the early summer of 2020, millions were rehired but some either never returned or didn't return for long.

In some industries in particular, workers seem to have had enough: Relatively low pay and job security, interacting with strangers during a health crisis and having to enforce safety protocols turned some workers off their jobs in areas like hospitality and food services.

Restaurants and some retailers raised wages or offered sign-on bonuses to fill their staffing needs. In some places in America, fast food chains advertised paying only a few cents more than the competition across the street to attract workers.

And yet -- as of October -- there were more than 11 million jobs available in the nation and not nearly enough bodies to fill them.

This is great for workers who can move to jobs with better pay or benefits.

Yet economists worry that some of the enticements employers currently offer to get staff in the door won't improve the pay of lower wage earners in the long term.

Paying workers their due

Wages are rising in America because businesses' need for workers is forcing them to pay up. That's unlikely to change any time soon.

Higher labor costs just become a regular part of what's driving up inflation in the coming years: Eating in a restaurant, for example, is already more expensive as food prices and staffing costs surge.

"It's a sticker shock when you actually have to pay the real value of something," said Kate Bahn, interim chief economist at the Washington Center for Equitable Growth.

This is especially true given the sheer number of services jobs Americans interact with every day, from food deliveries and coffees to go to various cleaning or janitorial services.

"Wages were not set based on market forces but based on power disparities," said Bahn, meaning that people at the lower end of the income spectrum traditionally didn't have the means or power to ask for just pay.

But the pandemic may have fundamentally changed this dynamic: The old power mismatch "reflects an unhealthy and fragile economy," said Bahn. "We have this once in a lifetime chance to do something about it."

Up to each state...

Pandemic battle is now primarily a state-level fight, Biden tells governors

Eugene Scott, Annabelle Timsit and Bryan Pietsch

The next steps in fighting the coronavirus pandemic have to be taken at the state level, President Joe Biden told a group of governors Monday.

"Look, there is no federal solution," he said after joining the White House covid-19 response team's regular call with the National Governors Association on Monday. "This gets solved at the state level."

In his first public remarks about the pandemic after Christmas, Biden sought to highlight what his administration is doing to respond to the omicron variant outbreak that is sweeping the United States and the world.

"We're mobilizing an additional 1,000 military doctors and nurses and medics to help staff hospitals," he said. "FEMA is deploying hundreds of ambulances and EMS crews to transport patients."

"The bottom line is we want to assure the American people that we're prepared," Biden added. "We know what it takes and as this group of bipartisan governors shown, we're going to get through it by working together."

The president also pointed out that the availability of vaccines has left Americans in a much safer place today than at the beginning of the pandemic.

In response to a question from Gov. Asa Hutchinson, R-Ark., about production and distribution by the federal government of rapid coronavirus tests, Biden said: "We just have to stay focused and continue to work together. My message to the governor is simple. If you need something, say something. And we're going to have your back in any way we can."

Lavish tax dodge

The peanut butter secret: A lavish tax dodge for the ultrawealthy

Jesse Drucker and Maureen Farrell

This is the story of the incredible cloning tax break.

In 2004, David Baszucki, fresh off a stint as a radio host in Santa Cruz, California, started a tiny video game company. It was eligible for a tax break that lets investors in small businesses avoid millions of dollars in capital gains taxes if the startups hit it big.

Today Baszucki’s company, Roblox, the maker of one of the world’s most popular video-gaming platforms, is valued at about $60 billion. Baszucki is worth an estimated $7 billion.

Yet he and his extended family are reaping big benefits from a tax break aimed at small businesses.

Baszucki and his relatives have been able to multiply the tax break at least 12 times. Among those poised to avoid millions of dollars in capital gains taxes are Baszucki’s wife, his four children, his mother-in-law and even his first cousin-in-law, according to securities filings and people with knowledge of the matter.

The tax break is known as the Qualified Small Business Stock, or QSBS, exemption. It allows early investors in companies in many industries to avoid taxes on at least $10 million in profits.

The goal, when it was established in the early 1990s, was to coax people to put money into small companies. But over the next three decades, it would be contorted into the latest tax dodge in Silicon Valley, where new billionaires seem to sprout each week.

Thanks to the ingenuity of the tax-avoidance industry, investors in hot tech companies are exponentially enlarging the tax break. The trick is to give shares in those companies to friends or relatives. Even though these recipients did not put their money into the companies, they nonetheless inherit the tax break, and a further $10 million or more in profits becomes tax-free.

The savings for the richest American families — who would otherwise face a 23.8% capital gains tax — can quickly swell into the tens of millions.

The maneuver, which is legal, is known as “stacking” because the tax breaks are piled on top of one another.

If you walk down University Avenue in Palo Alto, California, every person is involved in tech stacks, said Christopher Karachale, a tax lawyer at the law firm Hanson Bridgett in San Francisco. He said he had helped dozens of families multiply the QSBS tax benefit.

Early investors in some of Silicon Valley’s marquee startups — including Uber, Lyft, Airbnb, Zoom, Pinterest and DoorDash — have all replicated this tax exemption by giving shares to friends and family, according to people who worked or were briefed on the tax strategies.

So have partners at top venture capital firms like Andreessen Horowitz, who have figured out ways to claim tens of millions of dollars in tax exemptions for themselves and relatives year after year, according to industry officials and lawyers.

Representatives of those companies declined to comment or did not respond to requests for comment. A Lyft spokesperson said the company’s two co-founders did not take the tax benefit. A Roblox spokesperson declined to comment.

The story of the tax break is in many ways the story of U.S. tax policy writ large. Congress enacts a loophole-laden law whose benefits skew toward the ultrarich. Lobbyists defeat efforts to rein it in. Then creative tax specialists at law, accounting and Wall Street firms transform it into something far more generous than what lawmakers had contemplated.

“QSBS is an example of a provision that is on its face already outrageous,” said Daniel Hemel, a tax law professor at the University of Chicago. “But when you get smart tax lawyers in the room, the provision becomes, in practice, preposterous.”

Manoj Viswanathan, who is a director of the Center on Tax Law at the University of California, Hastings, estimates the tax break will cost the government at least $60 billion over the coming decade. But that does not include taxes avoided by stacking, and so the true cost of the tax break is probably many times higher.

The Biden administration has proposed shrinking the QSBS benefit by more than half. But the plan would not restrict wealthy investors from multiplying the tax break.

The likely result, said Paul Lee, chief tax strategist at Northern Trust Wealth Management, would be even more tax avoidance. “You’ll end up having more people doing more planning to multiply the exclusion,” he said.

Disqualifying the Ducks

The idea for this tax break came from the venture capital and biotech industries in the early 1990s. Venture capital firms were raking in huge profits from early investments in highflying startups like Gilead Sciences and MedImmune.

That stuck them with hefty capital gains tax bills. The QSBS exemption would shield at least a chunk of their future profits from taxation.

With the economy in a recession, Democrats branded the tax break as a boon to small businesses and an engine of job creation. In Congress, an original backer was Sen. Dale Bumpers, and he had the support of the National Venture Capital Association. “This is a modest tax incentive that holds great promise for hundreds of thousands of small firms with good ideas but not enough capital,” he said in early 1993.

Bumpers was friends with his fellow Arkansas Democrat, President Bill Clinton, whose new administration embraced the cause within weeks of taking power.

The exemption became law in August 1993. It allowed investors in eligible companies to avoid half the taxes on up to $10 million in capital gains (it would later be changed to eliminate all taxes on the $10 million) or 10 times what the investors paid for their shares.

There were a few restrictions. To be eligible for the tax break, investors had to hold the shares for at least five years. Industries like architecture and accounting were excluded. And, at least in theory, the companies could not be big; they had to have “gross assets” of $50 million or less at the time of the investments.

That number was not picked at random. At the time, a new professional hockey team, the Mighty Ducks of Anaheim, California, had just been created with a price tag of $50 million. The team was owned by the Walt Disney Co. Lawmakers feared that if Disney stood to benefit from the tax break, it risked a public backlash, according to a congressional aide who worked on the legislation.

The Internal Revenue Service does not publicly disclose data on how frequently the QSBS tax break is used. But tax lawyers said it was slow to gain popularity. It would be decades before Silicon Valley figured out how to fully exploit it.

A Flurry of Gifts

A few years after graduating from Stanford University in 1985, Baszucki started a software company, Knowledge Revolution. He sold it in 1998 for $20 million.

Around 2004, after a brief detour into radio, Baszucki teamed up with a former colleague, Erik Cassel, on a new venture. Mostly using Baszucki’s money, they spent two years writing the computer code that would become an early version of Roblox, which they publicly introduced in 2007.

Roblox was a hub for players to find and play video games featuring virtual pets, murder mysteries and much more. The platform allowed users to create games and receive a portion of whatever revenue the games generated.

About a decade ago, after outside investors had begun kicking in millions of dollars, Baszucki and his wife, Jan Ellison, gave Roblox shares to their four children and other family members, according to people familiar with the matter.

The gifts appeared to be the product of estate planning. If Roblox ever became a Silicon Valley powerhouse, the Baszuckis could avoid hundreds of millions of dollars in future gift and estate taxes because they gave away shares when the company was not worth much.

And because Roblox met the criteria for the small-business tax break, the gift recipients could also become eligible for millions of dollars in profits free of capital gains taxes.

Children for Tax Avoidance

In the past few years, a procession of blockbuster tech initial public offerings has showered Silicon Valley in more than $1 trillion of new wealth, according to Jay R. Ritter, a finance professor at the University of Florida. The unprecedented explosion and the corresponding tax bills have made the QSBS tax break more enticing.

Tax experts had discovered a big loophole. While the law said that the benefit was off-limits to people who bought shares from other investors, there was no similar restriction on people who received the shares as gifts.

If investors gave shares to family or friends, they, too, could be eligible for the tax break. And there were no limits on the number of gifts they could make.

Stacking was born — and it became a rite of passage for a select slice of Silicon Valley multimillionaires, according to lawyers, accountants and investors.

One tax adviser said he was helping a family, whose patriarch founded a publicly traded tech company, avoid any taxes on more than $150 million in profits by giving shares to more than seven of his children, among other maneuvers.

Karachale, the San Francisco tax lawyer, said he jokes to clients that they should have more children so they can avoid more taxes. “It’s so expensive to raise kids in the Bay Area; the only good justification to have another kid is to get another” QSBS exemption, he said.

Investment banks like Goldman Sachs and Morgan Stanley and law firms like McDermott Will & Emery have advised wealthy founders and their families on the strategy, according to bankers, lawyers and others.

Stacking has become so common that it has spawned other nicknames. One is “peanut buttering” — a reference to the ease with which the tax benefit can be spread among the original investor’s relatives.

‘An Act of Patriotism’

In 2015, Rachel Romer Carlson helped found an online education company, Guild Education, that was eligible for the QSBS tax break.

Guild was recently valued at nearly $4 billion, and Carlson owns about 15% of the company. She will face an enormous capital gains tax bill if and when she sells her stake. To mitigate that, she said, a tax adviser urged her to distribute her shares into trusts to multiply the exemptions.

“You can then take this an infinite number of times,” she recalled the lawyer saying. The adviser, whom she would not identify, told her that some lawyers will recommend creating 10 or more trusts but that his more conservative advice was to limit the number to five.

Carlson said she rejected the advice because she thought the strategy, while perfectly legal, sounded shady. “I believe paying taxes is an act of patriotism,” she said. (When she sold about $1 million worth of Guild shares last year, the QSBS exemption saved her roughly $200,000 in taxes.)

Venture capitalists that invest in startups — the same group that pushed for this tax break in the first place — potentially have the most to gain.

The founder of a successful startup might get this tax-free opportunity once in a lifetime. At large venture capital firms, the opportunity can present itself several times a year.

Partners at venture capital firms often acquire shares in the companies in which their firms invest. For each QSBS-eligible company that a partner has invested in, he can avoid capital gains taxes on at least $10 million of profits. If he gives shares to family members, those relatives get the tax break, too.

In a good year, partners at a large firm can collectively rack up more than $1 billion in tax-free profits, according to former partners at two major venture capital firms.

‘A Welcome Relief’

As the tax break’s popularity has grown, the strategies for exploiting it have grown more aggressive.

The QSBS tax break is limited to either $10 million in tax-free capital gains or 10 times the “basis” of the original investment. The tax basis is the cost of an investment — the money you spent or the assets you contributed in exchange for shares. One way to expand the value of the tax break is to find ways to inflate the basis.

The strategy is called “packing.”

Say you invested $1 million in a QSBS-eligible business called Little Company. Your basis would be $1 million, which means you would be eligible to avoid taxes on $10 million of future profits.

But let’s say you want to save more. Here is how you can pump up the basis. Little Company developed software patents, and you put those patents into a new company that you also own. The patents grow to be worth $5 million. Then you merge the two companies. The basis for your investment in the original Little Company has now soared to $6 million. That means you are eligible to avoid taxes on 10 times that — $60 million — even though your out-of-pocket investment remains $1 million.

One tax lawyer said he recently used such a strategy to help a pair of clients completely avoid taxes on more than $100 million in capital gains.

Another increasingly common strategy has been to put shares into multiple trusts that benefit the same children.

In August 2018, the Trump administration’s Treasury Department proposed regulations to curb such tax avoidance. The rules included hypothetical examples of abusive transactions in which children were given multiple trusts.

But opposition mounted quickly. The next month, the American College of Trust and Estate Counsel, a trade group of tax lawyers who advise the wealthy, wrote to the IRS that the proposal was “overbroad” and “an impermissible interpretation of the statute.”

By the time the Treasury’s rules were completed in early 2019, the proposed crackdown on trusts had been watered down.

It was, the accounting giant EY declared in an online alert, a “welcome relief.”

A Gift From Grandma

Roblox says that more than 47 million people use its platform each day. It has branched out beyond gaming, becoming a venue for virtual concerts by the likes of Lil Nas X.

In early 2020, Andreessen Horowitz and others invested $150 million in the company, valuing it at about $4 billion. Shares of tech companies were racing higher, and Roblox planned to go public in late 2020 or early 2021.

The Baszuckis were about to become billionaires.

The family took steps to help insulate their fortune from future federal taxes.

Giving away the shares before the IPO — which was likely to drive the stock’s value higher — would make it easier to avoid federal gift and estate taxes.

Baszucki and Ellison had already given away so many shares that future large gifts would be subject to the 40% gift tax. (A married couple can give about $23 million over their lifetime without incurring the tax.)

But Baszucki’s mother-in-law, Susan Elmore, had not. In fall 2020, she began giving away Roblox shares to about a dozen relatives, including Baszucki’s four children, according to people familiar with the matter.

Elmore’s nephew, Nolan Griswold, said he was among those to receive shares last fall.

Elmore’s shares were eligible for the QSBS exemption; now that exemption was replicated for the recipients of her gifts.

In March 2021, Roblox went public. Its market value hit $45 billion.

That day, Baszucki’s brother Gregory, whose large Roblox stake made him a billionaire, began selling shares. The resulting capital gains taxes could be defrayed in part by the QSBS exemption.

OK... It's only a movie.. NOT EVEN CLOSE TO REALLITY!!!!!!

The glaring problem with Netflix’s ‘Don’t Look Up,’ according to a Bay Area astronomer

Michelle Robertson

Netflix’s new Adam McKay comedy, “Don’t Look Up,” is intended to be a parable for the ills of modern society. The film follows two astronomers who have discovered that a giant comet will hit Earth, destroying it upon impact, and follows the slapdash, cringe-worthy response of the public, the media and the government. 

Might the comet be a stand-in for climate change? The COVID-19 pandemic? Capitalism? It can be read any which way. The fact remains that the odds of a massive “planet killer” hitting Earth are “infinitesimally small,” said Gerald McKeegan, an astronomer at the Chabot Space and Science Center in Oakland. 

But that’s not even the biggest problem with the science in the film, McKeegan said. 

“The most glaring mistake is the government cover-up,” the astronomer noted. “It becomes this government secret. That is just completely bogus.”

McKeegan pointed out that when a comet or asteroid is discovered, the data is “very much shared.” It’s even accessible to the public at a later stage in the process. 

“The government couldn’t keep it a secret even if it wanted to,” McKeegan said. “They may keep secret what response they’re contemplating, but the fact that a comet’s heading to Earth would very quickly become public knowledge.” 

When an observatory discovers a new comet, countless other observatories and scientific organizations jump in to confirm the discovery and conduct their own calculations. 

“There are over 300 observatories across the globe that track these. I routinely communicate with other observatories,” said McKeegan, who heads Chabot’s asteroid search and tracking program. “If someone spots a near-Earth asteroid, other observatories are attempting to confirm and track it within hours. There is a very large effort to find these things.”

McKeegan, who said he wasn’t a big fan of the movie in general, did pick up on the film’s often on-the-nose social and political commentary. He said he interpreted it “more as a parable of the early government response to the pandemic.” 

“It’s accurate in the sense that it sort of highlights the idea that scientists don’t always get believed and taken seriously,” he said. 

But the realism stops there.

McKeegan said the film’s depiction of a massive, multi-agency effort to deflect the comet with nuclear warheads would simply not come together in a matter of weeks. Such an effort would take months, if not years. 

Comet deflection is, however, a real subject of study in astronomy. While blowing up a comet with nuclear warheads or explosives is “not a good idea” (the comet would likely splinter into smaller, destructive chunks), there are a few systems in place in the event a dangerous comet ever gets too close to Earth.

McKeegan specifically cited an effort called the Double Asteroid Redirection Test (DART) mission, which is intended to test the technique of deflecting an asteroid. The DART mission is slated to cozy up to a near-Earth asteroid in September of next year and will deliberately impact it in an attempt to deflect the asteroid out of its orbit around a larger asteroid. 

“If you do that with enough lead time — we’re talking years — it takes a very small deflection of the asteroid’s orbit to cause it to miss the Earth,” McKeegan said. “That is tech that is available to us, and they are in the process of testing it right now.” 

Other methods for deflection include a gravity tracker in which you place a spacecraft in front of an asteroid or comet and the mutual gravitation between the two objects slowly pulls the comet or asteroid into a different orbit. 

“This science is well-established,” McKeegan said. “No one has actually done it, but it is a very conceivable method of deflecting an asteroid.” 

Scientists could also ostensibly put a rocket thruster on an asteroid to “push it out of the way.” 

But again, none of these techniques have actually been applied as there hasn’t been a need. If your takeaway from “Don’t Look Up” was a profound fear of an Earth-destroying comet, you can rest easy. The odds of a giant comet or asteroid obliterating Earth are incredibly small. It’s much more likely that the celestial object would burn up in the atmosphere before impact. 

In fact, Earth is actually more likely to be hit by an asteroid than a comet, McKeegan said. (The difference between the two objects is small: “A comet is mostly ice with a lot of rock and sand and dirt embedded in the ice. An asteroid is mostly rock, sand and dirt with a little bit of ice embedded in it.”)

The comet in “Don’t Look Up” is intended to come off as very, very big. But in reality, a comet between 6 and 9 kilometers is not “extraordinarily large,” McKeegan said.

“It is on the large size, typically comets are 3 to 6 kilometers in size,” he said. “But it’s not extraordinarily large.”

At one point in the film, the scientists describe the Dibiasky Comet, named for the scientist who discovered it (played by Jennifer Lawrence), as bigger than the asteroid that supposedly killed the dinosaurs, called the Chicxulub impactor. In actuality, the Chicxulub comet was at least 10 kilometers in size, therefore larger than the Dibiasky Comet. Oops. 

As for the prospect that a company such as Bash Cellular — a Tesla stand-in perhaps? — could mine such a comet, well, that’s not too far off from the actual science.

“It is true that asteroids and comets are often reservoirs of potentially valuable minerals and ores and so forth,” McKeegan said. “But no one has ever attempted to actually mine one, though there are some companies in their very early stages of development with that possibility.” 

Regardless, doing so would require a “huge investment.” “We’re talking billions of dollars,” McKeegan said. 

The overall takeaway from our conversation was that the movie should not be taken at face value. We can sleep soundly knowing a giant comet will likely not destroy the planet during our lifetimes — or our children’s or their children’s children. Watch it for the social commentary, in other words, and not the scientific accuracy. 

Disarray....

Chaos at Infowars: Alex Jones in legal, personal disarray to end 2021

Katie Dowd

After 25 years of spreading vitriol on Infowars, Alex Jones’ media empire has rarely been more volatile — and disastrous — than it is right now. The far-right media personality faces a slew of personal and professional catastrophes, from a relentless parade of self-inflicted legal trouble to a laughable partnership with an internet hypnotist. 

For much of his career, Jones has been able to evade financial consequences for spreading lies on his network. Up until now, the most severe penalty has been two public humiliations in 2017. That year, he was forced to apologize for and retract statements about James Alefantis, the owner of the pizzeria at the center of the “Pizzagate” conspiracy theory, and — believe it or not — the Chobani yogurt company. Jones claimed on-air that Chobani was linked to a sexual assault case involving children.

But consequences, potentially of a dire financial nature, are finally coming home to roost at Infowars. In late September, a Texas judge ruled that by failing to produce court-ordered evidence, Jones had by default lost a lawsuit filed by family members of Sandy Hook victims. The rare default judgment means the trial now skips straight to the penalty phase. Jones must pay damages in multiple lawsuits that allege he defamed victims of the 2012 Sandy Hook Elementary School shooting; Jones repeatedly claimed children didn’t die — 26 people, including 20 children, were killed at the school — and even baselessly speculated the school had been closed for years prior to the shooting as evidence the tragedy was staged. Since the lawsuits were filed, however, Jones has tried to minimize his earlier statements and now says he acknowledges people died at Sandy Hook. 

In November, a judge in Connecticut, where a separate defamation suit was filed, handed down another default judgment against Jones. Although Jones has ranted on-air that these default judgments are depriving him of his right to due process, he was given years to produce documents related to the cases and failed to do so. The Texas judge said his actions showed "flagrant bad faith and callous disregard for the responsibilities of discovery under the rules."

Jones doesn’t yet know how much he’ll be ordered to pay in each suit — juries will hear evidence and determine damages in the upcoming penalty phase — but the sum could threaten his livelihood. No one outside the company knows Infowars’ yearly earnings, but it’s clear Jones’ reach has waned significantly since he was banned from most major social media platforms in 2018. In what appears to be a flagrant attempt to raise funds for his legal woes, Jones recently launched “Reset Wars,” which he’s billed as the culmination of his decades of work. 

A look at the Reset Wars website shows a long, rambling letter from Jones that mixes New Age self-help and Jones’ usual brand of angry paranoia. 

“Right now, there’s an all-out war that the elites are taking part in to gain control over the entire world,” the site reads. “First, it will start with creating a global government in order to create a society that has zero choice but to listen to the power in charge. Then, it will move into an all-out assault on our minds, controlling what we think, say, and do. And finally, it will end with a war on our soul, to keep us separated from the power we can find within god.”

In exchange for the information to fight this imaginary war — which Jones writes he’s “risking my life … to share with you” — customers must pay $222. The content was created in partnership with Jake Ducey, an internet hypnotist who charges hundreds of dollars for programs that claim to “attract better health, abundant wealth, more love and everlasting gratitude” through “manifesting” of positive thoughts. 

“WARNING,” Ducey’s site reads, “Advertisers, schools, and many religious institutions don't want you to know these secrets because you'll no longer need their products or beliefs that continue to keep you feeling in lack.”

The partnership is particularly odd — and perhaps indicative of Jones’ desperation for any financial windfall — given Jones’ religious beliefs. Although he made his career as an anti-establishment political agitator, Jones’ diatribes are now more consistent with fundamentalist Christian extremism than any particular political ideology. On a recent episode of his show, Jones ranted about how vaccinating children allows the Christian devil to gain influence in the world. “When we societally allow the mass murder and maiming of our children, now happening, God will curse us and remove even more of God’s protection,” Jones said.

Jones regularly refers to battling the devil — and not in a metaphorical sense. He calls his perceived enemies “demons” and after news broke about the Sandy Hook default judgments, he told his listeners he was “high as a kite fighting Satan.” 

Among his current roster of foes is the House select committee tasked with investigating the Jan. 6 riots. On Dec. 20, Jones filed a lawsuit seeking to prevent the committee from subpoenaing him. The suit, in part, is attempting to stop phone records from being sent to the committee, but AT&T informed Jones they were sending those records on Dec. 16, four days before his lawsuit was filed. A similar filing from Michael Flynn was recently thrown out by a judge. 

Despite all the turmoil, the Infowars misinformation machine rolls on: On Tuesday, the website touted stories about an alien invasion meant to usher in the final phase of “the COVID scam” and Jeffrey Epstein running “baby blood farms.”

Fast change around....

Lake Tahoe's massive snowfall shatters 51-year-old record

Joshua Bote

As snow continues to dust Lake Tahoe, this December has seen record-breaking amounts of snowfall not recorded in the Tahoe area for decades.

According to the UC Berkeley Central Sierra Snow Lab, this snowstorm surpassed December 1970 as the snowiest December ever recorded by the institute Monday afternoon — and as of Tuesday, is nearing the mark for snowiest month ever recorded since 1970 — with more than 202 inches falling this month. The record was 238 inches in the month of January 2017.

Most major throughways in and out of Tahoe continue to be closed indefinitely because of downed trees, roads narrowed by snow, sleet and ice and a litany of other factors. And for the roads that are currently open, chains or snow tires are mandatory.

The National Weather Service’s Reno office said on Twitter that “one last storm” is set to pound Tahoe from Tuesday night through Wednesday morning. The temperature is also expected to descend to a frigid 10 degrees Wednesday night.

“Very cold air moving in, a frigid NYE and possibly another strong winter storm next week,” the office tweeted Tuesday morning. There is also a chance of snow starting next Monday, according to the National Weather Service's Tahoe forecast.

Christmas holiday

The death ride begins

From Sailing Anarchy

It can be a cruel way to spend your Christmas holiday. 

With the fastest few boats now finished and snug alongside, the rest of the Sydney-Hobart fleet can start worrying about when they’ll need to cross the line to score a podium place on handicap.

Sailing against the clock in the frustrating conditions down the Tasmanian coast, across Storm Bay and up the Derwent River can be a protracted agony.   

The race website, which is accessed by all competitors within internet range, helpfully now includes a “time to beat” calculation for every yacht still at sea with winning ambitions. Often those targets can seem out of reach but in this year’s slow race the possibilities are tantalizing.

Some of the TP52s have already finished. Ichi Ban beat Celestial home by 17 minutes but ended up a frustrating 3 minutes behind on IRC corrected time. Skipper Matt Allen’s hopes of a ‘three peat’ Hobart victory will now have to wait until next year.

Pictured above, and currently leading on IRC is the S&S34 Azzurro, one of the smallest yachts in the fleet. To win they’ll need to finish before 07:00 on December 31. With 200nm to go that’s a distinct possibility.

In second place (and only 21 miles closer to Hobart) the much larger veteran S&S Love & War would have to cross the line about 10 hours earlier, which is a more difficult challenge.

Bringing up the rear is Gun Runner, the tiny 1984 sloop owned by the Army Sailing Club and crewed by service volunteers with minimal offshore experience. They race to instill values of “courage, initiative, respect and teamwork”.  They might need all of those qualities. The boat still has 400 miles to sail and isn’t expected in Hobart before late on January 1. 

 – anarchist David

Giant Storms and High Clouds on Jupiter

What and where are these large ovals? They are rotating storm clouds on Jupiter imaged last month by NASA's Juno spacecraft. In general, higher clouds are lighter in color, and the lightest clouds visible are the relatively small clouds that dot the lower oval. At 50 kilometers across, however, even these light clouds are not small. They are so high up that they cast shadows on the swirling oval below. The featured image has been processed to enhance color and contrast. Large ovals are usually regions of high pressure that span over 1000 kilometers and can last for years. The largest oval on Jupiter is the Great Red Spot (not pictured), which has lasted for at least hundreds of years. Studying cloud dynamics on Jupiter with Juno images enables a better understanding of dangerous typhoons and hurricanes on Earth.

Excess Fuel

NASA Says Webb’s Excess Fuel Likely to Extend its Lifetime Expectations

Karen Fox

After a successful launch of NASA’s James Webb Space Telescope Dec. 25, and completion of two mid-course correction maneuvers, the Webb team has analyzed its initial trajectory and determined the observatory should have enough propellant to allow support of science operations in orbit for significantly more than a 10-year science lifetime.  (The minimum baseline for the mission is five years.)

The analysis shows that less propellant than originally planned for is needed to correct Webb’s  trajectory toward its final orbit around the second Lagrange point known as L2, a point of gravitational balance on the far side of Earth away from the Sun. Consequently, Webb will have much more than the baseline estimate of propellant – though many factors could ultimately affect Webb’s duration of operation.

Webb has rocket propellant onboard not only for midcourse correction and insertion into orbit around L2, but also for necessary functions during the life of the mission, including “station keeping” maneuvers – small thruster burns to adjust Webb’s orbit — as well as what’s known as momentum management, which maintains Webb’s orientation in space.

The extra propellant is largely due to the precision of the Arianespace Ariane 5 launch, which exceeded the requirements needed to put Webb on the right path, as well as the precision of the first mid-course correction maneuver – a relatively small, 65-minute burn after launch that added approximately 45 mph (20 meters/sec) to the observatory’s speed.  A second correction maneuver occurred on Dec. 27, adding around 6.3 mph (2.8 meters/sec) to the speed.

The accuracy of the launch trajectory had another result: the timing of the solar array deployment. That deployment was executed automatically after separation from the Ariane 5 based on a stored command to deploy either when Webb reached a certain attitude toward the Sun ideal for capturing sunlight to power the observatory – or automatically at 33 minutes after launch. Because Webb was already in the correct attitude after separation from the Ariane 5 second stage, the solar array was able to deploy about a minute and a half after separation, approximately 29 minutes after launch.

Former Senate leader

Harry Reid, former Senate leader, dead at 82

The hard-nosed Nevada Democrat employed his blunt manner in leading Senate Democrats.

By DAVID COHEN

Former Senate Majority Leader Harry Reid, a direct and dogged figure who converted the lessons of a hardscrabble childhood into a leadership role in national Democratic politics, died Tuesday. He was 82.

“I’m sure there are more people capable than I, better looking than me, better educated than me, smarter than me. But I’ve got the job. And I try to do the best I can with the job," Reid told POLITICO in December 2016, weeks before retiring from the Senate.

A former boxer who developed a rough-and-tumble approach to politics, the Nevada Democrat served five terms in the U.S. Senate and would be a particularly pivotal figure on Capitol Hill in two administrations, as an opposition figure pushing and prodding President George W. Bush and then as the Senate Majority Leader working to help President Barack Obama realize his agenda. Under his watch, Obama’s Affordable Care Act made it through a difficult legislative obstacle course and became law.

"He's got that curmudgeonly charm that is hard to replace," said Obama in March 2015.

Reid, who was the longest-serving senator in Nevada‘s history, had been battling pancreatic cancer. His wife, Landra Reid, released a statement Tuesday night, calling her husband a "devout family man and deeply loyal friend." They were married for 62 years.

President Joe Biden on Tuesday paid tribute to "a great American" and a "dear friend."

"If Harry said he would do something, he did it. If he gave you his word, you could bank on it. That’s how he got things done for the good of the country for decades," Biden said in a statement.

Reid was a "giant," Nevada Gov. Steve Sisolak said in a statement. "Perhaps what I appreciate most about Senator Reid's legacy is he never forgot who he was or where he came from," the Democratic governor said.

Harry Mason Reid was born in a town he would characterize in his autobiography as “a flyspeck on the map” and “a boomtown gone bust.”

“I come from a mining town,” he wrote with co-author Mark Warren in “The Good Fight: Hard Lessons from Searchlight to Washington.“ “But by the time I came along — December 2, 1939 — the leading industry of my hometown of Searchlight, Nevada, was no longer mining. It was prostitution.”

Reid’s father was a miner and his mother a laundress. Reid later wrote they had “zero” religion at home, but there was one figure his parents revered, President Franklin Delano Roosevelt. In a town of “hard rocks and inhospitable soil,” their home was built from railroad slats and had no hot water or indoor plumbing. At age 58, his father killed himself.

To attend high school, Harry had to go 45 miles to Henderson, where he was elected student body president, took up boxing, and met Landra Gould, who would become his wife in 1959.

Boxing would shape his outlook on life. “In a fight, you have nobody to help you,” he told Kevin Iole when selected to the Nevada Boxing Hall of Fame in 2018, adding: “It’s you and that guy across the ring.“

From Henderson, he went on to Southern Utah University, Utah State, and — since Nevada had no law school — George Washington University. His first stint in Washington, D.C., led to a job with the Capitol Police. “I would go to law school at GWU full-time and work full-time in uniform at the Capitol on the 3-to-11 shift,” he wrote in “The Good Fight.” He recalled feeling “pretty invisible.”

Reid returned to Nevada after law school, and was elected to the state Assembly at the age of 28. He never lacked for ambition; in 1974, he ran for the U.S. Senate but lost by 624 votes to Paul Laxalt.

In 1977, Gov. Mike O’Callaghan, Reid‘s old mentor and boxing coach, appointed him to lead the Nevada Gaming Commission, a job that required him to surrender all naivete he had about the state’s mob-ridden casinos. It was, Reid later wrote, “an intense, surreal time when it sometimes felt as if I’d wandered into some kind of terrible funhouse.” In 1981, a bomb was found attached to his wife’s car.

After his four-year term expired, he took another shot at D.C. and this time he won, capturing a House seat in 1982. At the end of his second House term, when Laxalt retired, Reid captured the Senate seat he had sought 12 years before.

He cultivated a reputation for gruff talk. “I speak bluntly,” Reid wrote in 2008. “Sometimes I can be impulsive. I believe something to be right, and I do it. And then I don’t worry about it. This has not necessarily served me well, but it is who I am. I can be no one else”

Years later, Nevada political journalist Jon Ralston looked at that 1986 campaign, marveling at how it had launched the Senate career of a man he called “a Machiavelli of malaprops.” Reid was, he said, “a thoroughly unprepossessing man and manifestly terrible candidate who nonetheless achieved unlikely campaign victories and went on to reach the pinnacle of congressional power.

In the Senate, Reid established himself as strongly partisan, a tough battler on Nevada and Western land management issues, and a liberal with some conservative leanings (such as on the issue of abortion). He sometimes came under fire on ethics issues, particularly in his fondness for Nevada interests, including the casino industry.

Reid also rapidly developed a reputation for direct insults, as when he challenged Ross Perot in a 1993 Senate hearing, not long after Perot had drawn almost 20 percent of the vote in the presidential election. “I think you should start checking your facts a little more, and stop listening to the applause so much,“ Reid told him.

Reid became part of the Democratic leadership in 1995, as co-chair of the Senate Democratic Policy Committee, then moved up to become his party’s whip in 1999. In November 2004, Reid watched in shock as presidential candidate John Kerry and Senate Minority Leader Tom Daschle were defeated — and instantly followed that by gathering the support he needed to become his party’s leader in Washington.

“By the turn of the millennium, Reid’s organization was formidable,” Ralston wrote in 2013. “He brought in talented Democratic operatives from around the country, as he grew more partisan, too, leaving behind any pretense that he was ‘independent like Nevada.‘ As he moved up in the Democratic hierarchy, Reid had to fly the partisan flag more often.”

Reid’s first big test was on President George W. Bush’s proposal to privatize Social Security, on which he led Democratic opposition that helped to ultimately doom the legislation. “We are not going to let Wall Street hijack Social Security. It won't happen,“ he told NBC‘s Tim Russert in 2004.

Democrats gained control of the Senate in 2006, propelling Reid to the position of majority leader. After the election, Reid became a more vocal critic of the Iraq War. Never a fan of Bush, he told the president, “Mr. President, this war cannot be won militarily. It is wrong to continue to send soldiers into a war that cannot be won militarily.”

Reid followed that up with a public pronouncement that the war was lost, something that Bush would later characterize as “one of the most irresponsible acts I witnessed in my eight years in Washington.” Bush and Reid did not often find themselves on the same side, though Reid was credited In October 2008 with skillfully rescuing a bailout package that had gone down to defeat in the House.

When one of the junior members of his caucus was elected to succeed Bush, Reid became one of the strongest advocates for Barack Obama’s initiatives, including his efforts to shepherd Obama’s 2009 stimulus package and pass what came to be known as Obamacare. It wasn’t always easy, as Reid had spoken skeptically of Obama during the 2008 campaign, and, after he was elected, Obama kept a certain distance from Congress.

“Reid handled so much of the care and feeding of the caucus,” wrote Jonathan Alter in “The Center Holds: Obama and His Enemies,” “that Obama spoke even to Democratic senators he genuinely liked no more than than two or three times a year.”

For his part, Obama praised Reid’s leadership in the Senate. “Harry has the toughest job in Washington,” Obama told the New York Times in 2010. “He’s done as good a job as anybody could have done. He just grinds it out.”

Obama on Tuesday shared a letter he wrote to Reid toward the end of his life. Landra had asked Obama and others to write letters she could read to her husband.

"As different as we are, I think we both saw something of ourselves in each other — a couple of outsiders who had defied the odds and knew how to take a punch and cared about the little guy. And you know what, we made for a pretty good team," Obama wrote. "The world is better cause of what you’ve done. Not bad for a skinny, poor kid from Searchlight."

Former Republican House Speaker John Boehner on Tuesday recalled his "honest" friendship with Reid.

"We disagreed on many things, sometimes famously. But we were always honest with each other. In the years after we left public service, that honesty became a bond. Harry was a fighter until the end. RIP, my friend," he said in a statement.

Senate Minority Leader Mitch McConnell on Tuesday praised Reid's "legendary toughness, bluntness, and tenacity."

"I never doubted that Harry was always doing what he earnestly, deeply felt was right for Nevada and our country," McConnell said in a statement.

Senate Majority Leader Chuck Schumer called Reid "one of the most amazing individuals I have ever met."

“He was tough-as-nails strong, but caring and compassionate, and always went out of his way quietly to help people who needed help," Schumer said in a statement. "He was my leader, my mentor, one of my dearest friends."

Much maligned by tea party Republicans, Reid was the top Republican target in 2010. He had faced a tough challenge in 1998 from John Ensign, retaining his seat by a mere 234 votes. Reid got a boost when former state Assemblywoman Sharron Angle won the 2010 GOP primary over more-established Republican figures and soon began to implode.

“In the 20 years that I’ve been involved politically, I’ve never had the misfortune of working with such sheer, utter incompetence,” said Chris LaCivita, political director for the National Republican Senatorial Committee, of Angle’s campaign after Reid won by 5 percentage points.

That election, however, did leave Reid with a diminished majority and put the House in Republican hands. Legislative victories would be harder to come by. In 2013, in acknowledgment of that reality, Reid and his fellow Democrats changed the ground rules when it came to filibusters, greatly limiting their use when it came to presidential appointments. “The American people believe the Senate is broken, and I believe the American people are right,” Reid said. Republican Senate leader McConnell dubbed it a “power grab,“ though the Kentucky Republican would make use of those rules once Donald Trump was elected president in 2016.

“We had over 100 judges that we couldn’t get approved, so I had no choice,” Reid told the New York Times several years later. “Either Obama’s presidency would be a joke or Obama’s presidency would be one of fruition.”

Democrats lost the Senate majority in November 2014. Weeks later, the fitness aficionado — the boxer had over time become a marathon runner — sustained a major eye injury while exercising. The damage to his right eye was so severe he underwent multiple surgeries and sported an eye patch on the Hill.

In March 2015, he announced he would not seek a sixth Senate term. There was some speculation that he did so because he feared a tough battle in 2016, but Ralston dismissed that notion. “Reid is a lot of things: Brusque with everyone, master of strange locutions, nasty with his enemies. But one thing he is not is afraid,” he wrote.

Subsequent elections indicated Reid retained considerable influence on Nevada politics, helping to pull Democrats Catherine Cortez Masto and Jacky Rosen over the finish line in closely contested Senate elections in 2016 and 2018. Their victories were seen as a tribute to Reid’s political strength.

“It’s the only state in the nation,” Marc Caputo wrote in 2019, “whose U.S. senators are both women and where women constitute the majority of the state Legislature and congressional delegation — a triumph of progressivism and political organization powered by former Senate Majority Leader Harry Reid’s vaunted political machine.“

Reid also remained a critic of President Donald Trump and his old foes in Congress. “People are under the false impression that Trump created the Republican Congress. Wrong. They created him, they created him," he said in 2017.

Really disgusting...

Republicans eye new front in education wars: Making school board races partisan

“We’re out there trying to elect good conservatives," says one Florida lawmaker.

By ANDREW ATTERBURY and JUAN PEREZ JR.

Republicans across America are pressing local jurisdictions and state lawmakers to make typically sleepy school board races into politicized, partisan elections in an attempt to gain more statewide control and swing them to victory in the 2022 midterms.

Tennessee lawmakers in October approved a measure that allows school board candidates to list their party affiliation on the ballot. Arizona and Missouri legislators are weighing similar proposals. And GOP lawmakers in Florida will push a measure in an upcoming legislative session that would pave the way for partisan school board races statewide, potentially creating new primary elections that could further inflame the debate about how to teach kids.

The issue is about to spread to other states: The center-right American Enterprise Institute is urging conservatives to “strongly consider” allowing partisan affiliations to appear on ballots next to school board candidates’ names, as part of broader efforts to boost voter turnout for the contests. A coalition of conservative leaders — including representatives of Heritage Foundation, Manhattan Institute and Kenneth Marcus, the Education Department civil rights chief under former Secretary Betsy DeVos — have separately called for on-cycle school board elections as part of sweeping efforts to “end critical race theory in schools.”

In Florida, school boards are among the last elected officials who blocked policies of Gov. Ron DeSantis. If Republicans succeed in pushing the state to strip school board elections of their nonpartisan status and gain more representation on school boards, they could break the last holdouts who regularly defy the governor.

“We’re out there trying to elect good conservatives that will follow essentially the governor’s mission as it relates to education,” said Sen. Joe Gruters (R-Sarasota), the state Senate’s education chair who also leads the Republican Party of Florida.

“When you have a leader like DeSantis come out and say that there should be no lockdowns, if you have a Republican elected official, you would think they would probably give him the consideration and probably go along with what he asked.”

The latest attempts for making school board races partisan affairs come as education has been thrust into the spotlight amid the pandemic and the high profile victory of Gov.-elect Glenn Youngkin in Virginia, who campaigned on a promise to give parents more say in their kids’ education. It also comes as other crucial battleground issues are bubbling up in education, including classroom lessons on history and race — a subject that has emerged as a boogeyman for GOP policymakers in numerous states who are condemning efforts to teach young people about the nation’s history of discrimination.

With all of these policies converging, there have been clear disconnects among state and local leaders, and even parents, over how to educate their children. Republicans are openly embracing parental rights as a key factor shaping policy in D.C. and many statehouses — seen in proposals to strengthen protections for parents against schools.

“There’s a major underestimation nationwide, even on the political side, that these parents are really frustrated,” said Bridget Ziegler, a Sarasota County school board member who is also the wife of the Florida GOP vice chair.

New momentum

These divides have brought new energy to a long-running debate on the role of overt partisanship in school board campaigns, as prominent conservative groups have called this year for major shifts in the timing of board elections and for voters to see party labels on their school board ballots.

“Including party labels in school board elections seems like a commonsense reform that would give voters more information, while also potentially increasing participation and enhancing local accountability,” wrote Aaron Churchill of the conservative Thomas B. Fordham Institute in August. “But such a change would be an uphill battle.”

The debate is no longer theoretical in Tennessee, which, like most states, once prohibited expressly partisan school board election. Tennessee’s law, signed by Republican Gov. Bill Lee in November, allows local political parties to put forward candidates that are openly Republican, Democrat or Independent.

Tennessee’s law is softer than lawmakers’ original pitch to require partisan school board elections in the state. Yet it has set off a flurry of activity by county politicians who are moving to enact the law and notable divides among local school boards that disagree with it.

“This is not something that has been done in Tennessee. I don’t think it’s healthy, and I think that’s a rather universal thought among the school boards in Tennessee,” Jim Welch, president of the Kingsport Board of Education, said last month as members approved a resolution that said partisan elections could “create division among the board and shift the focus away from the needs of the students.”

Partisan labels aside, nothing is stopping political parties from getting involved in school disputes. Texas Republicans this month announced the party’s plans to boost conservative candidates in nonpartisan school board and municipal elections. The party’s vice-chair described the effort as “one of the most consequential initiatives our party can undertake.”

Making school board races partisan could make an already heated political landscape even more contentious, said Martin West, a professor of education at the Harvard Graduate School of Education.

While partisanship could rally the base and drive turn out, it also could ratchet up the polarization that’s already at a fever pitch.

“I do think party labels would produce more informed voters,” West said. “But, at the same time, it would likely accelerate emerging trend of nationalization of local education politics.”

Although Republicans are making a concerted effort to leverage education as an issue influential to voters, West isn’t convinced schools will play a determining role in the 2022 midterms. He claims that he hasn’t seen conclusive evidence of any “seismic shift” in the public’s thinking on education and that school board activism playing out locally could be more about “vocal minority” than a mass movement.

West said it doesn’t matter how the 2021 elections are interpreted because leaders in both parties have already accepted the narrative that education was key and are acting upon that.

Yet according to a recent poll by the Democratic Governors Association, education was the “number one” issue in Virginia that motivated Biden voters to switch and align with Youngkin, who delivered a major upset to Democrats by winning Virginia’s gubernatorial race.

Florida’s education battle

Florida this fall was also the scene of a high-profile education clash between DeSantis, the Biden administration and school boards that broke from the Republican governor’s policies. During a monthslong fight in the fall over mask mandates, some of the state’s biggest school districts defied the popular GOP governor, who in turn steered state officials to block any schools from requiring masks as a means to combat the Delta strain and empower parents to make decisions for their children.

Amid this fight, Gruters introduced a bill in the Senate that would ask voters on the 2022 ballot if they want partisan school board elections. He and other Republicans said that supplying voters with party affiliation of such candidates would lead to better transparency while Democrats argue that it could lead to violence against school officials who have come under fire for resisting DeSantis.

Democrats, who are in the minority in the state legislature, are also concerned that voters with no party affiliation will be shut out of primary elections. Florida, along with more than a dozen other states, holds closed primaries, meaning only registered voters can cast ballots in party primary elections. About 3.8 million voters, or 26 percent, of Florida’s residents are not affiliated with a party.

State Sen. Annette Taddeo, a Democrat who is running for governor, previously told state senators that she’s worried making school board races partisan could disenfranchise voters.

But regardless of the fight over partisan school board elections, Ziegler is convinced education will continue to keep the attention of parents and locals who feel betrayed by the school board members who disobeyed DeSantis. She predicted the effects of the pandemic will inspire new candidates to run and could reshape the landscape for boards in the state.

“You can bet all day long that you’re going to see more people voting in school board races,” Ziegler said.

Madden

John Madden, Hall of Fame coach and broadcaster, dies at 85

The NFL said he died unexpectedly and did not detail a cause.

By ASSOCIATED PRESS

John Madden, the Hall of Fame coach turned broadcaster whose exuberant calls combined with simple explanations provided a weekly soundtrack to NFL games for three decades, died Tuesday morning, the NFL said. He was 85.

The league said he died unexpectedly and did not detail a cause.

Madden gained fame in a decadelong stint as the coach of the renegade Oakland Raiders, making it to seven AFC title games and winning the Super Bowl following the 1976 season. He compiled a 103-32-7 regular-season record, and his .759 winning percentage is the best among NFL coaches with more than 100 games.

But it was his work after prematurely retiring as coach at age 42 that made Madden truly a household name. He educated a football nation with his use of the telestrator on broadcasts; entertained millions with his interjections of “Boom!” and “Doink!” throughout games; was an omnipresent pitchman selling restaurants, hardware stores and beer; became the face of “Madden NFL Football,” one of the most successful sports video games of all-time; and was a best-selling author.

Most of all, he was the preeminent television sports analyst for most of his three decades calling games, winning an unprecedented 16 Emmy Awards for outstanding sports analyst/personality, and covering 11 Super Bowls for four networks from 1979-2009.

“People always ask, are you a coach or a broadcaster or a video game guy?” he said when was elected to the Pro Football Hall of Fame. “I’m a coach, always been a coach.”

He started his broadcasting career at CBS after leaving coaching in great part because of his fear of flying. He and Pat Summerall became the network’s top announcing duo. Madden then helped give Fox credibility as a major network when he moved there in 1994, and went on to call prime-time games at ABC and NBC before retiring following Pittsburgh’s thrilling 27-23 win over Arizona in the 2009 Super Bowl.

Burly and a little unkempt, Madden earned a place in America’s heart with a likable, unpretentious style that was refreshing in a sports world of spiraling salaries and prima donna stars. He rode from game to game in his own bus because he suffered from claustrophobia and had stopped flying. For a time, Madden gave out a “turducken” — a chicken stuffed inside a duck stuffed inside a turkey — to the outstanding player in the Thanksgiving game that he called.

“Nobody loved football more than Coach. He was football,” NFL Commissioner Roger Goodell said in a statement. “He was an incredible sounding board to me and so many others. There will never be another John Madden, and we will forever be indebted to him for all he did to make football and the NFL what it is today.”

When he finally retired from the broadcast booth, leaving NBC's “Sunday Night Football,” colleagues universally praised Madden’s passion for the sport, his preparation and his ability to explain an often-complicated game in down-to-earth terms.

“No one has made the sport more interesting, more relevant and more enjoyable to watch and listen to than John,” play-by-play announcer Al Michaels said at the time.

For anyone who heard Madden exclaim “Boom!” while breaking down a play, his love of the game was obvious.

“For me, TV is really an extension of coaching,” Madden wrote in “Hey, Wait a Minute! (I Wrote a Book!).”

“My knowledge of football has come from coaching. And on TV, all I’m trying to do is pass on some of that knowledge to viewers.”

Madden was raised in Daly City, California. He played on both the offensive and defensive lines for Cal Poly in 1957-58 and earned his bachelor’s and master’s degrees from the school.

Madden was chosen to the all-conference team and was drafted by the Philadelphia Eagles, but a knee injury ended his hopes of a pro playing career. Instead, Madden got into coaching, first at Hancock Junior College and then as defensive coordinator at San Diego State.

Al Davis brought him to the Raiders as a linebackers coach in 1967, and Oakland went to the Super Bowl in his first year in the pros. He replaced John Rauch as head coach after the 1968 season at age 32, beginning a remarkable 10-year run.

With his demonstrative demeanor on the sideline and disheveled look, Madden was the ideal coach for the collection of castoffs and misfits that made up those Raiders teams.

“Sometimes guys were disciplinarians in things that didn’t make any difference. I was a disciplinarian in jumping offsides; I hated that,” Madden once said. “Being in bad position and missing tackles, those things. I wasn’t, ‘Your hair has to be combed.’”

The Raiders responded.

“I always thought his strong suit was his style of coaching,” quarterback Ken Stabler once said. “John just had a great knack for letting us be what we wanted to be, on the field and off the field. ... How do you repay him for being that way? You win for him.”

And boy, did they ever. Many years, the only problem was the playoffs.

Madden went 12-1-1 in his first season, losing the AFL title game 17-7 to Kansas City. That pattern repeated itself during his tenure; the Raiders won the division title in seven of his first eight seasons, but went 1-6 in conference title games during that span.

Still, Madden’s Raiders played in some of the sport’s most memorable games of the 1970s, games that helped change rules in the NFL. There was the “Holy Roller” in 1978, when Stabler purposely fumbled forward before being sacked on the final play. The ball rolled and was batted to the end zone before Dave Casper recovered it for the winning touchdown against San Diego.

The most famous of those games went against the Raiders in the 1972 playoffs at Pittsburgh. With the Raiders leading 7-6 and 22 seconds left, the Steelers had a fourth-and-10 from their 40. Terry Bradshaw’s desperation pass deflected off either Oakland’s Jack Tatum or Pittsburgh’s Frenchy Fuqua to Franco Harris, who caught it at his shoe tops and ran in for a TD.

In those days, a pass that bounced off an offensive player directly to a teammate was illegal, and the debate continues to this day over which player it hit. The catch, of course, was dubbed the “Immaculate Reception.”

Oakland finally broke through with a loaded team in 1976 that had Stabler at quarterback; Fred Biletnikoff and Cliff Branch at receiver; tight end Dave Casper; Hall of Fame offensive linemen Gene Upshaw and Art Shell; and a defense that included Willie Brown, Ted Hendricks, Tatum, John Matuszak, Otis Sistrunk and George Atkinson.

The Raiders went 13-1, losing only a blowout at New England in Week 4. They paid the Patriots back with a 24-21 win in their first playoff game and got over the AFC title game hump with a 24-7 win over the hated Steelers, who were crippled by injuries.

Oakland won it all with a 32-14 Super Bowl romp against Minnesota.

“Players loved playing for him,” Shell said. “He made it fun for us in camp and fun for us in the regular season. All he asked is that we be on time and play like hell when it was time to play.”

Madden battled an ulcer the following season, when the Raiders once again lost in the AFC title game. He retired from coaching at age 42 after a 9-7 season in 1978.

Shortened quarantine timeframe?????

Flight attendants fume as CDC gives airlines what they want on quarantine change

Just days before the CDC announced the change, the airline industry united to press for a shortened quarantine timeframe.

By TANYA SNYDER and HAILEY FUCHS

A union for flight attendants is accusing the CDC of loosening rules for quarantine after Covid-19 exposure at the behest of the airline industry, as the Omicron variant continues to rage across the globe.

"We said we wanted to hear from medical professionals on the best guidance for quarantine, not from corporate America advocating for a shortened period due to staffing shortages,” said Association of Flight Attendants-CWA International President Sara Nelson following the CDC announcement shortening the recommended quarantine duration from 10 days to five days.

“The CDC gave a medical explanation about why the agency has decided to reduce the quarantine requirements from 10 to five days, but the fact that it aligns with the number of days pushed by corporate America is less than reassuring,” Nelson said.

And, just days before the CDC announced the change, the airline industry united to press for a shortened quarantine timeframe, saying a 10-day isolation requirement may “exacerbate personnel shortages and create significant disruptions to our workforce and operations.” Indeed, U.S. airlines have had a raft of flight cancellations as the busy holiday travel season crashed into the rise of the virulent Omicron variant.

“As an industry, we stand ready to partner with the CDC to make scientifically sound policy decisions and work with you to collect empirical data necessary to appropriately monitor any guideline modifications,” Airlines for America President and CEO Nicholas Calio said in a letter addressed to CDC Director Rochelle Walensky.

Delta Air Lines, the first to request the change to a five-day quarantine period, also noted that current guidance “was developed in 2020 when the pandemic was in a different phase without effective vaccines and treatments.”

Though their messaging to the administration came to a head last week, airlines have been lobbying to shape Covid-19 quarantine protocols for far longer.

For months, that outreach has cast a wide net, from Congress to the Executive Office of the President. According to publicly available disclosures, Airlines for America — whose members include the largest U.S. airlines as well as cargo giants FedEx and UPS — reported outreach to the CDC, Executive Office of the President, Congress and federal agencies on Covid-19 quarantines, among other issues, during the last three quarters.

Earlier this year, UPS had lobbied Congress and federal agencies, including the Federal Aviation Administration, to exempt crew members from quarantine and testing requirements. Hawaiian Airlines and American Airlines also reported outreach to the Executive Office of the President, Congress and federal agencies on a host of issues that included quarantines. Atlas Air Worldwide Holdings, which flies a bulk of Amazon's cargo, and United Airlines lobbied the House and the Senate.

The updated CDC guidance shortened the recommended time for isolation for all people with asymptomatic cases of Covid, vaccinated or not, saying the change was “motivated by science demonstrating that the majority of SARS-CoV-2 transmission occurs early in the course of illness, generally in the 1-2 days prior to onset of symptoms and the 2-3 days after.“ The agency also shortened the quarantine period for people exposed to Covid.