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Power Sheet: Free Trade Advocates Get a Much-Needed Boost

Writer Tory Newmyer (@torynewmyer) is filling in for Geoff Colvin this week.

Free trade advocates don’t have a lot to feel encouraged about these days. The two major presidential candidates are jockeying for the same anti-trade position, a reflection of how politically toxic its become to back new international deals. And in that context, though big business groups are leaning hard on Congress to pass the 12-nation Trans Pacific Partnership by the end of the year, its prospects are dim.

But a flicker of hope emerged from an unlikely place this week. In southeastern Wisconsin on Tuesday, House Speaker Paul Ryan demolished a Republican primary challenger who sought to make Ryan’s support for the Obama administration’s trade push a key issue. And on the western side of the state, Democratic Rep. Ron Kind buried a primary challenger from the left who likewise focused his bid on Kind’s TPP support. Both incumbents won by more than 60 points. Back in April, when the state hosted its presidential primaries, Texas Sen. Ted Cruz and Donald Trump, both TPP foes, collected 83 percent of the Republican vote between them; among Democrats, longtime trade critic Vermont Sen. Bernie Sanders carried all but one of the state’s 72 counties against Hillary Clinton.

Kind, chairman of the business-friendly New Democrat Coalition in the House, sees validation for trade advocates in his victory. “I’m very happy with the outcome, because I was challenged by a Bernie Sanders-type candidate, who was just all anti-trade, all anti-TPP,” the 9-term incumbent tells Fortune. “I’m here in the upper Midwest, an industrialized state like Wisconsin, and I wasn’t afraid to talk about the importance of this and what it could mean for job creation back home. And people got it and overwhelmingly came out and supported my reelect.”

Kind and Ryan had advantages beyond the strength of their arguments in the trade debate. Both are affable, practiced pols, well-known to their constituents and facing first-time challengers. And each had a major edge in cash, with Kind out-raising his opponent by roughly 60-to-1, and Ryan besting his by 17-to-1. Meanwhile, Ryan isn’t cheerleading for a swift TPP revival: In an interview with Wisconsin Public Radio last week, he said the Pacific Rim pact won’t get a vote this year because it doesn’t have the support to pass. But in a brutal year for trade boosters, runaway victories by two key allies show the cause isn’t yet a new third rail.

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What We’re Reading Today

Valeant Pharmaceuticals under criminal investigation
U.S. prosecutors are looking into whether Valeant defrauded insurers by failing to disclose its relationship with specialty pharmacy Philidor, which it used to side-step reimbursement rejections on its drugs. Former CEO Michael Pearson ran the company at the time when the relationship with Philidor became public; it’s unclear if he’s part of the investigation. But as current CEO Joseph Papa tries to move the company past the distrust, it will be difficult with the investigation moving forward. Valeant cut ties with Philidor last year.  Fortune

Chris Christie Aide: The Governor lied 
A filing in the U.S. District Court of Newark includes a text that New Jersey Governor’s aide Christina Genovese Renna that reads “He just flat out lied.” The text was written as Christie spoke to reporters about whether or not senior aides knew about a plot to disrupt traffic on the George Washington Bridge. While other aides have said Christie knew more than he had led on, Renna is the first to say he lied about the incident. Prosecutors claim the two lanes on the bridge were closed in backlash against Democratic mayor of Fort Lee, N.J. for not backing Christie. NYT

Fifth Third fires chief legal officer… 
…due to her relationship with Fannie Mae CEO Timothy Mayopoulos. The bank had said Heather Russell left the bank due to a “conflict of interest” in her personal affairs. Now Russell says that the bank terminated her due to the relationship, even though she claims to have never had any interactions with Fannie Mae while conducting business. Both Russell and Mayopoulos are separated from their spouses. WSJ

Apple gets outbid
When Tim Cook‘s Apple announced it would offer up to $200,000 for vulnerabilities in its software found by hackers, it marked a drastic change in strategy for the tech company. But another has come along, offering up to $500,000 for the same vulnerabilities. Exodus Intelligence, a boutique firm, will then sell intel to companies about the bugs for a yearly subscription.  Fortune

Building a Better Leader

The downside to networking too much
If the hobnobbing distracts you from your work or duties, then your company can suffer as the networking turns into wasting time.  Inc.

Delta is dealing with every CEO’s worst nightmare
An inexplicable computer system failure can destroy even some of the best laid plans. Fortune

In order to bolster creativity…
…come up with a lot of ideas, as opposed to limiting your thoughts to a couple big breakthroughs. It’s what many great inventors have done. McKinsey

World Affairs

Democrats expect greater impact from Russia hack
The Russian hack of the Democratic National Committee, which led to the resignation of Chairwoman Debbie Wasserman Schultz, is more widespread than initially thought. At least 100 Democratic officials and groups were also hacked, leading to expectations of more leaks. The primary targets include those affiliated with Hillary Clinton‘s campaign, forcing party leaders to prepare for more embarrassing emails to leak out as November nears. NYT

Brazil Senate votes for impeachment trial
Amidst the Olympic Games in Rio, Brazil’s Senate voted 59 to 21 in favor of holding an impeachment trial for President Dilma Rousseff due to suspicion of questionable accounting practices. The trial is expected to take place at the end of the month, then the Senate will need a two-thirds vote to oust Rousseff from office. Michel Temer has presided over the presidency while Rousseff awaits her trial, and would replace her until the 2018 elections, if she’s removed. BBC

Turkey to U.S.: Give us Gulen
Turkey President Recep Tayyip Erdogan seemed to issue the U.S. an ultimatum, saying America must decide between its relationship with Turkey or cleric Fethullah Gulen. The cleric, who is in exile in Pennsylvania, has been accused by Erdogan of orchestrating the attempted coup to overthrow the government last month. The U.S., so far, has denied Turkey’s request for extradition, due to a lack of evidence of Gulen’s involvement and the vitriolic statements made by Erdogan. CNN

Up or Out

Google Ventures founder Bill Maris has decided to step away. David Krane will overtake Maris’s duties within GV. Re/code

Fortune Reads and Videos

Apple’s App Store could double in size by 2020
But Apple will have to deploy machine learning in order to help customers navigate the over 5 million apps, says app marketing firm Sensor Tower. Fortune

Verizon’s new head of wireless…
…enters Twitter war with Sprint. Except Ronan Dunne hasn’t even started his job yet. Fortune

Millennials are more likely to want to work for a company…
…that’s charitable than Baby Boombers or Gen-Xers. It also impacts their buying habits, as well. Fortune

Panera CEO to rivals: Clean up kids meals
Ron Shaich and Panera will issue a promise to remove artificial flavors, marketing gimmicks and sugary drinks from kids meals. It wants rivals to follow suit. Fortune

Happy Birthday

Masayoshi Son, founder and CEO of SoftBank, turns 59 today.  SoftBank

Founder and CEO of FedEx Frederick Smith turns 72.  Academy of Achievement

Steve Wozniak, co-founder of Apple, turns 66 today.  Biography

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Produced by Ryan Derousseau