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Corporations gave over $50M to voting restriction backers

Associated Press

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Corporations gave over $50M to voting restriction backers

When executives from Coca-Cola and Delta Air Lines spoke out against Georgia’s new voting law as unduly restrictive last week, it seemed to signal a new activism springing from corporate America.

But if leaders of the nation’s most prominent companies are going to reject lawmakers who support restrictive voting measures, they will have to abruptly reverse course.

State legislators across the country who have pushed for new voting restrictions, and also seized on former President Donald Trump’s baseless claims of election fraud, have reaped more than $50 million in corporate donations in recent years, according to a new report by Public Citizen, a Washington-based government watchdog group.

Telecom giant AT&T was the most prolific, donating over $800,000 since 2015 to authors of proposed restrictions, cosponsors of such measures, or those who voted in favor of the bills, the report found. Other top donors during the same period include Comcast, Philip Morris USA, UnitedHealth Group, Walmart, Verizon, General Motors and Pfizer.

The money may not have been given with voting laws in mind, but it nonetheless helped cement Republican control in statehouses where many of the prohibitive measures are now moving forward.

Whether companies continue to give to these lawmakers will test how far risk-averse corporate leaders are willing to go in their increasingly forceful criticism of the restrictive efforts, which voting rights groups have excoriated as an attack on democracy.

“It really is corporate America, as a whole, that is funding these politicians,” said Mike Tanglis, one of the authors of the report. “It seems many are trying to hide under a rock and hope that this issue passes.”

More than 120 companies detailed in the report previously said they would rethink their donations to members of Congress who, acting on the same falsehoods as the state lawmakers, objected to the certification of President Joe Biden’s win following the deadly attack on the U.S. Capitol by Trump supporters.

The tension is most evident now in Georgia, where a far-reaching new voting law has drawn an intense national scrutiny, prompting the criticism from Delta and Coca-Cola. On Friday, MLB announced it would no longer host the 2021 All-Star Game in Atlanta.

Yet it’s unclear whether this aggressive new posture will extend to corporate campaign donation practices. And early indicators show there is risk.

Georgia’s Republican-controlled House voted to strip Delta of a tax break worth tens of millions of dollars annually for their criticism of the new law, though the action was rendered moot after the GOP Senate failed to take it up before the legislative session adjourned.

What is certain, though, is that withholding corporate donations to state-level candidates, like many companies did at the federal level, would have a far greater impact in statehouses.

“A contribution of $5,000 to a U.S. senator who is raising $30 million is a drop in a bucket. But in some of these state races, a few thousand dollars can buy a lot of ad time,” said Tanglis. “If corporate America is going to say that (Trump’s) lie is unacceptable on the federal level, what about on the state level?”

Public Citizen analyzed about 245 voting restriction bills proposed before March 1. They culled a list of sponsors and cosponsors, while also analyzing vote roll calls. Then they cross-referenced the data with state-level donation records dating back to 2015, which included money from company political action committees, as well as direct contributions from corporate treasuries.

Among their findings:

— Companies donated at least $50 million to lawmakers who supported voting restrictions, including $22 million in the 2020 campaign cycle.

— At least 81 Fortune 100 companies have given a combined total of $7.7 million to supporters of the restrictions.

— Nearly half of all Fortune 500 companies donated a combined total of $12.8 million to supporters of the restrictions.

— About three-quarters of the companies that changed their donation policies after the U.S. Capitol attack have also given to lawmakers who supported voting rights restrictions.

— More than 60 companies have given at least $100,000 to lawmakers who supported the restrictions.

— Separately, industry groups and trade associations contributed an additional $36 million to the lawmakers, $16 million of which was given during the 2020 cycle.

In response, AT&T said “the right to vote is sacred” but declined to say whether the company would withhold donations to state lawmakers as they did for members of Congress who objected to Biden’s win.

“We understand that election laws are complicated, not our company’s expertise and ultimately the responsibility of elected officials. But, as a company, we have a responsibility to engage,” AT&T CEO John Stankey said in a statement.

Verizon CEO Hans Vestberg said in a statement, “We strongly oppose the passage of any legislation or the adoption of any measure that would make it harder” to vote. But he stopped short of pledging any specific action.

Comcast said in a statement that “efforts to limit or impede access to this vital constitutional right for any citizen are not consistent with our values.” The company would not comment on whether it would evaluate its giving to lawmakers who support the measures.

Altria, the parent company of Philip Morris USA, said in a statement that “every eligible voter should be able to exercise their right to vote” and pledged to monitor lawmakers’ “alignment with our political contribution guiding principles when making future contribution decisions.”

Other companies listed in the report declined to comment or did not respond to inquiries from The Associated Press.

On Monday, Senate Minority Leader Mitch McConnell urged companies to resist what he called a “coordinated campaign by powerful and wealthy people to mislead and bully the American people.”

“Our private sector must stop taking cues from the Outrage-Industrial Complex,” the Kentucky Republican said in a statement. “Americans do not need or want big business to amplify … or react to every manufactured controversy with frantic left-wing signaling.”

Pressure has been particularly intense in Georgia, where Republican Gov. Brian Kemp recently signed a sweeping new law that bans people from handing out food or water to voters waiting in line and allows the Republican-controlled State Election Board to remove and replace county election officials, among many other provisions.

Two of the top corporate contribution recipients detailed in Public Citizen’s report were among the sponsors of the measure.

Since 2015, Republican state Sen. Jeff Mullis has collected more than $869,000 in donation from corporate PACs. Among his top corporate donors were AT&T ($15,900) and UnitedHealth Group ($12,900), according to the report. Mullis is chair of the Georgia Senate’s Rules Committee, which plays a key role in determining which bills make it to the floor for a vote.

Republican state Sen. Butch Miller, another sponsor of the bill, has received at least $729,000 in corporate donations since 2015. Among his top corporate givers are UnitedHealth Group ($15,700) and AT&T ($13,600), the report states.

Miller and Mullis did not respond to requests for comment.


WASHINGTON (AP) — By BRIAN SLODYSKO

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Telecoms

SK Telecom to be split into two, holding company to oversee non-mobile biz

Karim Hussami

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SK Telecom to be split into two

South Korea’s largest mobile carrier SK Telecom Co. will split into two separate entities. It said it will create a new holding company for its non-mobile subsidiaries to accelerate growth in promising fields and tighten its grip on its chipmaking unit, SK Hynix Inc.

The horizontal spin-off is aimed at increasing enterprise and shareholder value, the operator said. The plan will leave the surviving company focused on its telecom business (tentatively named ‘AI & Digital Infra Company’) and the spin-off company taking over the memory business and new ventures (tentatively named ‘ICT Investment Company’).

Surviving entity

After the spin-off, SK Telecom will be divided into a surviving entity that will succeed its telecom business as a mobile network operator (MNO), and a new entity that is essentially an investment firm to seek new opportunities in non-telecom sectors.

The telecom operator’s spinoff plan had been widely expected after CEO Park Jung-ho said in a shareholders meeting last month that the company would overhaul its governance structure amid a slump in its share price in recent years.

SK Telecom’s share price had been in stalemate at the end of 2020 from the previous year at 238,000 won.

While SK Hynix has made active investments in the past, such as acquiring Intel’s NAND memory business in October last year for US$9 billion, its parent SK Group wants to tighten its grip on the chipmaker and help it aggressively expand investments.

The remaining entity will focus on the mobile carrier’s traditional telecom business and expand to new sectors, such as artificial intelligence and data centers.

The mobile carrier said it will decide on the details of the spinoff within the first half of this year.

Areas of interest

SK Telecom’s surviving entity will focus on artificial intelligence (AI) and digital infrastructure in addition to its current mobile and network businesses.

The entity will have SK Broadband Inc., the Internet service provider, as a subsidiary and will continue the current telecom and IPTV businesses.

The surviving company will also expand into a number of new areas such as cloud, data center and AI-based subscription segments. 

No merger

The latest announcement comes as the mobile carrier’s non-mobile subsidiaries have rapidly grown to account for 24 percent of the company’s total operating profit last year.

The subsidiaries have also formed global partnerships to boost their presence in the local market, with T Map Mobility joining hands with U.S. ride-hailing firm Uber Technologies Inc. to form a taxi-hailing joint venture in South Korea.

11Street has teamed up with Amazon.com Inc. with plans to offer the U.S. retail giant’s products to South Korean consumers.

SK Telecom is also preparing initial public offerings for app market unit ONE Store as well as security firm ADT Caps Co.

While analysts have speculated that the corporate revamp would eventually lead to a merger between SK Inc., the holding company for SK Group, and SK Telecom’s new holding company to elevate the status of SK Hynix in the conglomerate, the mobile carrier rejected the claim.

“There are no plans for a merger,” SK Telecom said in a statement.

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Telecoms

Italy to increase EU broadband funding by 60 percent

Karim Hussami

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broadband

Italy aims to spend almost 7 billion euros ($8.33 billion) in European recovery funds on ultra-fast networks, up to a 60 percent increase from a previous goal, as ministers lay out alternatives to a long-delayed single national broadband plan.

The total funds for boosting digitalization amount to some 49 billion euros, up from a previous 46.3 billion euros, including investments in public administration and grants for small and medium-sized companies, one of the sources added on condition of anonymity.

The government of Mario Draghi, which took office in February, is revising a national Recovery and Resilience Plan (RRP) that would entitle it to some 206 billion euros by 2026 from an EU program to help nations hardest hit by coronavirus.

Rome planned to raise the amount spent on 5G and broadband satellite infrastructure to 6.7 billion euros from 4.2 billion euros earmarked in January by the previous government.

In addition, the government is also devising alternatives to a previous plan to merge the fixed-line access network of former monopoly Telecom Italia (TIM) with those of smaller rival Open Fiber.

TIM has repeatedly said it would not agree to owning less than 50 percent of any combined entity – something that could trigger regulatory issues.

Under this project, TIM would not fold its primary network – connecting switching center to street cabinets – into the venture, preventing the former phone monopoly having a majority stake.

Draghi’s ministers are discussing an alternative plan to use EU funds to roll out fast broadband networks across Italy’s 20 regions using the best technologies available, including Fixed Wireless Access (FWA) systems, the sources said.

Italy ranked fourth to last in the European Union for digital competitiveness in 2019, the Digital Economy and Society Index (DESI) compiled by the European Commission found.

Open Fiber is jointly controlled by Italy’s biggest utility Enel and state lender Cassa Depositi e Prestiti (CDP). CDP is TIM’s No. 2 shareholder behind France’s Vivendi

Both options under discussion leave the door open to co-investment schemes allowing operators to build their own networks in some areas and have commercial agreements elsewhere.

TIM has repeatedly said it would not agree to owning less than 50 percent of any combined entity – something that could trigger regulatory issues.

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Japan’s Toshiba president steps down amid acquisition talks

Associated Press

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Japan's Toshiba president steps down amid acquisition talks

The president of Toshiba Corp. stepped down Wednesday, a week after the the Japanese technology and manufacturing giant said it was studying an acquisition proposal from a global fund where he previously worked.

Nobuaki Kurumatani tendered his resignation at a board meeting, and the board accepted, effective Wednesday, Tokyo-based Toshiba said in a statement.

Kurumatani headed the Japan operations of CVC Capital Partners, which proposed the acquisition last week, before taking his post as chief executive of Toshiba in 2018.

Some questions had been raised, both within and outside Tokyo-based Toshiba, about Kurumatani leading the board discussions on the acquisition.

Kurumatani did not attend the online news conference, where two board members explained his resignation and fielded questions.

A company official read his statement that said the resignation was for personal reasons.

“Toshiba is a wonderful company and is Japan’s precious wealth. I love Toshiba deeply,” Kurumatani said in his message.

The CVC deal is estimated to be worth 2 trillion yen ($18 billion) and will turn Toshiba private. Toshiba had said it was giving it “careful consideration.” Osamu Nagayama, a board member, told reporters the proposal lacked details and could not yet be evaluated.

Trading in the company’s shares was suspended when the news hit last week. Shares of Toshiba, whose sprawling business includes making elevators and railways, shot up on the CVC news and have been trading at nearly 5,000 yen ($46).

CVC is a European private equity firm, based in Luxembourg, which has committed nearly $162 billion in funds, managing more than 300 investors. It has declined to comment on the acquisition proposal or the president’s resignation.

But speculation has been growing other funds may offer better prices.

Kurumatani will be replaced as chief executive and president by his predecessor, Satoshi Tsunakawa, who remained on the board, first as COO and currently chairman.

Tsunakawa oversaw some of the recent financial challenges at Toshiba. Before becoming CEO, in his previous stint from 2016, he had headed Toshiba’s medical systems business, now a group company of Japanese camera and equipment maker Canon.

Tsunakawa told reporters Toshiba was ready to embark on growth as “an infrastructure services company.” He promised to work in the interests of shareholders, employees and society overall, and continue to strengthen governance.

“We stand behind the principle of ‘Do the right thing,’ ” he said, delivering the motto in English.

Toshiba, founded in 1875, was long revered as one of Japan’s respected brands, developing the nation’s first radar and microwaves, electric rice cookers and laptop computers.

It also invented flash memory, the ubiquitous computer chips that store and retain data for digital cameras, cell phones and other gadgets. Toshiba no longer makes laptops, and it has sold its computer chips division.

The company’s fortunes began to crumble over its heavy investment in nuclear power. After the March 2011 nuclear disaster in Fukushima, costs of the business ballooned because of growing safety concerns. Some nations are turning toward sustainable energy.

Toshiba also had massive losses from the nuclear power operations of U.S. manufacturer Westinghouse, which Toshiba acquired in 2006. Westinghouse filed for bankruptcy protection in 2017.

In Japan, Toshiba is decommissioning nuclear plants, including the one in Fukushima, where the tsunami 10 years ago set off multiple reactor meltdowns.

In 2015, Toshiba acknowledged it had been systematically falsifying its books since 2008, as managers tried to meet overly ambitious targets. An outside investigation found it had inflated profits and hid massive expenses.

TOKYO (AP) — BY Yuri Kageyama

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