Tuesday, 21st March

By Geoffrey Smith
March 21, 2017

Good morning,

Welcome to the first day of spring. The end in is sight for the month that, according to Garrison Keillor, “God made so that people who don’t drink could know what a hangover feels like.”

It probably won’t feel much like springtime in the White House, however, after a day when FBI director James Comey confirmed for the first time that it is investigating possible links between the Trump campaign and Russian intelligence services last year. The confirmation is all the more notable for the fact that the FBI rarely confirms the existence of ongoing investigations, except where there is an overriding public interest.

Comey also said there was “no information” to support President Donald Trump’s claim that his predecessor eavesdropped on him. He then added insult to injury by refuting a tweet sent during the hearing in which Trump claimed that “The NSA and FBI tell Congress that Russia did not influence electoral process.” (The clip Trump attached to the tweet was a specific denial of vote-tampering in key swing states that he won in November, rather than a broad denial of Russian influence on the campaign.)

So the investigation is real, not fake, and because it is counter-intelligence work, it will take a long time to be concluded. It may yet all end in nothing, the presumption of innocence must be maintained, and the burden of proof for those looking to discredit the President is substantial. But it will, at best, be a long-running and hugely unwelcome distraction from the tasks of rolling back regulation, replacing the Affordable Care Act, and rejuvenating the country’s infrastructure.

 

News below.

Geoffrey Smith
@geoffreytsmith
geoffrey.smith@fortune.com

Top News

Macron Favored After First French TV Debate

The euro hit a six-week high against the dollar after the centrist, pro-EU Emmanuel Macron emerged as the winner from the first of France’s presidential debates, according to polls of those who watched. A victory in May for Macron, who left the administration of Francois Hollande after Socialist Party traditionalists watered down his labor market reforms, would be a significant victory for Europe’s traditional mainstream and an important defeat for populists on both extremes of the political spectrum. However, the campaign has been a wild ride so far and still has a month to run. Time

iPads Have No Constitutional Rights

The U.S. banned electronic devices bigger than a cellphone from the cabins of flights arriving from eight largely Muslim countries (Egypt, Jordan, Kuwait, Saudi Arabia, Morocco, Qatar, Turkey and the UAE). The Department of Homeland Security said the move was a response to “evaluated intelligence,” but gave few further details. Islamist terrorists have repeatedly targeted civil aviation in recent years with some success (notably the Russian Metrojet disaster in 2015). However, banning devices with lithium-ion batteries to the hold carries risks of its own. Fortune

Google Embarrassed By Ad Scandal

Google apologized Monday for a snowballing scandal in the U.K. over the shortcomings of its programmatic ad technology. The supposed cutting edge of advertising has routinely put ads from mainstream brands like clothing retailer Marks & Spencer and even the U.K. government on YouTube clips promoting anti-semitism, homophobia, and worse. WPP said it was consulting with clients on how to stop their brands being tarnished, while Publicis said it was reviewing its relationship with Google. Fortune

China Threatens More Capital Controls

The tension between Chinese business’s increasingly global ambitions and Beijing’s paranoia about financial stability continues to ratchet up. State media said the government may publish new rules later this year spelling out where it will allow Chinese companies to invest abroad, and where not. Outbound foreign investment fell over 52% year-on-year in the first two months of 2017 as Beijing made it increasingly difficult to move money out of the country. The renminbi is conspicuously one of the few currencies that hasn’t rallied much against the dollar in the last week. Fortune



Around the Water Cooler

Son Edges Closer to Apple, Drops Rubin Project

Masayoshi Son’s Softbank dropped a planned $100 million investment in a smartphone startup founded by Android creator Andy Rubin, partly because Son wants to forge a closer relationship with Apple, The Wall Street Journal reported. It cited people familiar with the matter. The investment would have valued Rubin’s new startup, Essential Products, at $1 billion. The development comes soon after Apple agreed to commit $1 billion to Softbank’s $100 billion Vision Fund, which may launch as early as this month, according to the WSJ. Elsewhere, Softbank also committed to a $300 million investment in office-sharing company WeWork, according to Reuters. That’s well below the $1 billion previously touted, although the details are still to emerge. WSJ, subscription required

David Rockefeller, Banker and Philanthropist

David Rockefeller, the last surviving grandchild of Standard Oil founder and ‘robber baron’ John D. Rockefeller, died aged 101. Rockefeller had become a high-profile philanthropist (giving away over $2 billion in his lifetime) after a career in banking that became inextricably linked with U.S. foreign policy. He believed in the power of trade to improve political relations even with pariahs such as Chile’s Augusto Pinochet, the Soviet Union, or the Shah of Iran, a belief that made him lots of enemies at home and abroad. Despite his philanthropy, he never lost Grandpappy’s knack of making money: a Mark Rothko painting he bought for $10,000 in 1960 was sold for more than $72 million in 2007. Fortune

Target to Open NYC Flagship Store

Target is to open a flagship store in the shadows of the Empire State Building in Manhattan this fall, in what will be the biggest test yet of the smaller format that the discount retailer is betting on to return to growth. Comparable sales have fallen year-on-year in the last three quarters. The 43,000 square-foot store in Herald Square, a stone’s throw from Macy’s famous 34th St. location, will be one of 30 stores Target will open in 2017, the bulk of which will be in a smaller format than its suburban big-boxes. The smaller stores aim to reach urban dwellers, who tend to be more affluent but are also underserved by Target, as well as tourists in cities like New York and San Francisco. Fortune

Gates, Buffett and Bezos Head the Rich List

Microsoft founder Bill Gates was still the world’s richest man in 2016, with a fortune estimated by Forbes at $86 billion. Warren Buffett ($75.6 billion) and Amazon CEO Jeff Bezos ($72.8 billion) followed, while Facebook’s Mark Zuckerberg came in fifth at $56 billion. High office has done nothing for President Donald Trump’s net worth, according to Forbes: he slipped 220 places to 554 on the list, and now has to get by on a mere $3.5 billion. The U.S. accounted for 565 of the 2,043 billionaires listed, 183 of them from the technology sector. Fortune

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