Venezuela Arrests Two Chevron Executives Amid Oil Purge

Chevron said on Tuesday two of its executives were arrested in Venezuela, a rare move likely to spook foreign energy firms still operating in the OPEC nation stricken by hyperinflation, shortages and crime.

Venezuelan Sebin intelligence agents burst into the Petropiar joint venture’s office in the coastal city of Puerto La Cruz on Monday and arrested the two Venezuelan employees for alleged wrongdoing, a half-dozen sources with knowledge of the detentions told Reuters.

Venezuela’s Information Ministry and state oil company PDVSA did not respond to a request for information about the detentions, which come amid a crackdown on alleged graft in the oil sector.

One of the detainees, Carlos Algarra, is a Venezuelan chemical engineer and expert in oil upgrading whom Chevron had brought in from its Argentina operations. The other, Rene Vasquez, is a procurement adviser, according to his LinkedIn profile.

Arrests comfirmed

The U.S. company confirmed the arrests, which are believed to be the first to affect a foreign oil company’s direct employees.

“Chevron Global Technology Services Company is aware that two of its Venezuelan-based employees have been arrested by local authorities,” Chevron said in a statement.

“We have contacted the local authorities to understand the basis of the detention and to ensure the safety and wellbeing of these employees. Our legal team is evaluating the situation and working towards the timely release of these employees.”

Disagreements lead to arrests

A Chevron spokeswoman declined to provide further details on the case or the status of its operations. The U.S. State Department did not immediately respond to a request for comment.

The executives were arrested after disagreements with their PDVSA counterparts over procurement processes, two of the sources said.

The arrests highlight risks for foreign companies in Venezuela, home to the world’s biggest crude reserves but heaving under a fifth straight year of recession. Some insiders say a fracturing ruling elite is using the purge to wage turf wars or settle scores.

“Our view has been that oil industry companies would do well to be cautious and stop assuming that good relations with PDVSA can last forever due to a common interest in pumping oil,” said Raul Gallegos, associate director with the consultancy Control Risks. “The level of corruption in PDVSA, especially under a military administration, can and will trump production logic.”

Other oil executives jailed

President Nicolas Maduro since last year has overseen the arrest of dozens of oil executives, including the former energy minister and PDVSA president.

The purge comes years after industry analysts began criticizing PDVSA for widespread graft. The government long decried such accusations as “smear campaigns.” But last year, Maduro changed his tone and started blaming “thieves” for rampant graft in the oil sector and an economic crisis that has spawned malnutrition, disease and emigration.

Vowing a cleanup, Maduro replaced many jailed executives with soldiers, but the unpopular management has spurred a wave of resignations.


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IRS Website Crashes as US Tax Deadline Looms

Americans who waited until the last day to file their federal taxes faced a major hurdle hours before the midnight deadline. 

The Internal Revenue Service website’s “Direct Pay” page, which allows filers to pay their taxes directly from their bank account free of charge, crashed Tuesday. 

The IRS still expects Americans to pay their taxes but U.S. Treasury Secretary Steve Mnuchin said extensions would be granted to those affected when the site was up again.

“We’ll make sure taxpayers have extensions once the system comes up to make sure they can use it and it in no way impacts people paying their taxes,” Mnuchin told reporters in New Hampshire. “It was just a technical issue we’re working through — a high-volume technical issue that impacted the system.”

For most of Tuesday, the message on the Direct Pay page described a “Planned Outage: April 17, 2018 – December 31, 9999.”The IRS removed the link to that page later in the day.

Pages on the IRS website used to view account information, make a direct payment or set up a payment plan were all not functioning most of the day Tuesday.

It’s unclear when and why the failure occurred.

President Donald Trump’s top economic adviser, Larry Kudlow, offered a deadpan reaction when asked about the failure.

“The IRS is crashing? Sounds horrible. Really bad,” he said during a briefing with reporters in West Palm Beach, Florida. “I hope it gets fixed.”


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Airlines Agency Backs Creation of Global Drone Registry 

Concerned by a rise in near misses by unmanned aircraft and commercial jets, the world’s airlines back development of a U.N.-led global registry for drones, an executive of their trade group said Tuesday.

The International Air Transport Association backs efforts by the U.N. aviation agency to develop such a registry, which could also help track the number of incidents involving drones and jets, said Rob Eagles, IATA’s director of air traffic management infrastructure.

IATA would consider collaborating with the International Civil Aviation  Organization (ICAO) with using the registry for data analysis to improve safety.

ICAO is developing the registry as part of broader efforts to come up with common rules for flying and tracking unmanned aircraft.

“One of the important things we would like to see on a registry as well is the compilation of data which would include incident and accident reporting,” Eagles said in an interview on the sidelines of IATA’s Safety and Flight Ops Conference in Montreal.

Airlines and airport operators are looking to drone registries, geo-fencing technology and stiffer penalties for operating drones near airports. They hope these steps will ensure flying remains safe as hobbyists and companies like

Amazon.com use more drones.

More close calls

In Britain, the number of near misses between drones and aircraft more than tripled between 2015 and 2017, with 92 incidents recorded last year, according to the U.K. Airprox Board.

Air New Zealand said last month that a flight from Tokyo with 278 passengers and crew on board encountered a drone estimated to be just 5 meters away from the Boeing 777-200 jet during its descent into Auckland.

A single registry would create a one-stop shop that would allow law enforcement to remotely identify and track unmanned aircraft, along with their operators and owners.

It’s not yet clear what kind of drones would be listed in the registry, although IATA would support inclusion of most drones, including large unmanned aircraft and smaller ones used for commercial and industrial purposes, Eagles said.

“The intention at present is to merge this activity into the ICAO registry for manned aircraft, so that the sector has a single consolidated registry network,” ICAO spokesman Anthony Philbin said by email.


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Starbucks Closing All Company-owned Stores for Anti-bias Training

Starbucks said Tuesday it will close all of its more than 8,000 company-owned U.S. stores on May 29 to educate employees about racial bias in an attempt to prevent more acts of discrimination.

The announcement was made days after the arrest of two African American men who sat in a Starbucks in the northeastern city of Philadelphia. The arrests were captured on video and widely circulated on social media, triggering protests and calls for a boycott.

“I’ve spent the past few days in Philadelphia with my leadership team listening to the community, learning what we did wrong and the steps we need to take to fix it,” said CEO Kevin Johnson. “Closing our stores for racial bias training is just one step in a journey that requires dedication from every level of our company and partnerships in our local communities.”

The coffeehouse chain, which is also closing its corporate offices on May 29, said a curriculum is being developed for its 175,000 employees, with assistance from several racial bias training experts. They include Equal Justice Initiative executive director Bryan Stevenson, NAACP Legal Defense Education Fund president Sherrilyn Ifill and former attorney general Eric Holder.

The two men who were arrested were later released because of a lack of evidence that a crime had been committed. Philadelphia media reported the men had been waiting for a friend at the time of their arrests.

Starbucks said the employee who called police on the men no longer worked at that location.

Johnson, who met with the men, called the arrests “reprehensible.”


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Cambridge Analytica ex-CEO Refuses to Testify in UK

Cambridge Analytica’s ex-CEO, Alexander Nix, has refused to testify before the U.K. Parliament’s media committee, citing British authorities’ investigation into his former company’s alleged misuse of data from millions of Facebook accounts in political campaigns.

Committee Chairman Damian Collins announced Nix’s decision a day before his scheduled appearance but flatly rejected the notion that he should be let off the hook, saying Nix hasn’t been charged with a crime and there are no active legal proceedings against him.

“There is therefore no legal reason why Mr. Nix cannot appear,” Collins said in a statement. “The committee is minded to issue a formal summons for him to appear on a named day in the very near future.”

Nix gave evidence to the committee in February, but was recalled after former Cambridge Analytica staffer Christopher Wylie sparked a global debate over electronic privacy when he alleged the company used data from millions of Facebook accounts to help U.S. President Donald Trump’s 2016 election campaign. Wylie worked on Cambridge Analytica’s “information operations” in 2014 and 2015.

Wylie has also said the official campaign backing Britain’s exit from the European Union had access to the Facebook data.

Cambridge Analytica has previously said that none of the Facebook data it acquired from an academic researcher was used in the Trump campaign. The company also says it did no paid or unpaid work on the Brexit campaign. The company did not respond to requests for comment from The Associated Press on Tuesday.

The Information Commissioner’s Office said Tuesday that it had written to Nix to “invite him” to be interviewed by investigators. The office is investigating Facebook and 30 other organizations over their use of data and analytics.

“Our investigation is looking at whether criminal and civil offences have been committed under the Data Protection Act,” the office said in a statement.

Nix’s refusal to appear comes as the seriousness of the British inquiry becomes more evident.

Facebook has said it directed Cambridge Analytica to delete all of the data harvested from user accounts as soon as it learned of the problem.

But former Cambridge Analytica business development director Brittany Kaiser testified Tuesday that the U.S. tech giant didn’t really try to verify Cambridge Analytica’s assurances that it had done so.

“I find it incredibly irresponsible that a company with as much money as Facebook … had no due diligence mechanisms in place for protecting the data of U.K. citizens, U.S. citizens or their users in general,” she said.

Kaiser suggested that the number of individuals whose Facebook data was misused could be far higher than the 87 million acknowledged by the Silicon Valley giant.

In an atmosphere where data abuse was rife, Kaiser told lawmakers she believed the leadership of the Leave.EU campaign had combined data from members of the U.K. Independence Party and customers from two insurance companies, Eldon Insurance and GoSkippy Insurance. The data was then sent the University of Mississippi for analysis.

“If the personal data of U.K. citizens who just wanted to buy car insurance was used by GoSkippy and Eldon Insurance for political purposes, as may have been the case, people clearly did not opt in for their data to be used in this way by Leave.EU,” she said in written testimony to the committee.

Leave.EU’s communications director, Andy Wigmore, called Kaiser’s statements a “litany of lies.”

It is how the data was used that alarms some members of the committee and has captured the attention of the public.

An expert on propaganda told the committee Monday that Cambridge Analytica used techniques developed by the Nazis to help Trump’s presidential campaign, turning Muslims and immigrants into an “artificial enemy” to win support from fearful voters.

University of Essex lecturer Emma Briant, who has for a decade studied the SCL Group – a conglomerate of companies, including Cambridge Analytica – interviewed company founder Nigel Oakes when she was doing research for a book. Oakes compared Trump’s tactics to those of Nazi leader Adolf Hitler in singling out Jews for reprisals.

“Hitler attacked the Jews, because … the people didn’t like the Jews,” he said on tapes of the interview conducted with Briant. “He could just use them to . leverage an artificial enemy. Well that’s exactly what Trump did. He leveraged a Muslim.”


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Europe’s Venture Capitalists Embrace Virtual Currency Craze

Some of Europe’s biggest venture capital firms are buying into sales of new virtual coins or asking their investors to give them the freedom to do so, in a sign of mainstream investor backing for the booming but controversial crowd-funding tool.

Germany’s HV Holtzbrinck Ventures, which has more than 1 billion euros ($1.23 billion) under management, is talking to its investors about changing the terms of its next fund so it can buy tokens directly, Jan Miczaika, a partner at the firm, told Reuters.

Lakestar, the Zurich-based firm run by Klaus Hommels, has made at least four investments in crypto and blockchain-related businesses since early 2017, among them ShapeShift, an exchange, and Blockchain, a wallet provider, and it is preparing to invest in a combination of coin and equity stakes in more.

Smaller and newer funds like BlueYard Capital and Fabric Ventures are focusing specifically on investments around blockchain — a distributed ledger technology that can remove the need for centralizing institutions — often by buying virtual coins.

Venture capitalists usually take equity stakes in start-ups, gaining a say in how the company is run and legal and governance certainties over their investments. Buying into initial coin offerings (ICOs), as the sale of digital tokens is known, can be far more risky. They offer little more than a promise the tokens will be worth more in future.

But with hundreds of start-ups — ICOs last year raised $6.3 billion — seeking to raise capital for new projects, investors say that to gain access to cutting-edge technology they need the flexibility to compete.

“It’s the internet in the early 1990s, you have to experiment,” said Nicolas Brand, a partner at Lakestar. “I have to find the best way of backing the best entrepreneurs and we need to be agile in how we invest.”

Regulators have raised serious questions about the transparency of ICOs and the risks of scams, although authorities in countries from Switzerland to France have disclosed plans to attract new launches.

Supporters say blockchain will disrupt industries from finance to logistics and that ICOs are a novel way of crowd-funding.

Tokens are the route to make money. They embody the idea that consumers will need to own and use them to buy services, from playing computer games to online shopping. When demand for those products spreads, the token prices will rise, creating value for earlier owners like venture capitalists.

“The [blockchain] technology is very exciting. Ninety-five percent of the tokens will go to zero. On the other hand, the other 5 percent are very interesting and could go on to revolutioniZe the market,” said Miczaika at HV Holtzbrinck.

Equity to ICO

Unlike some big U.S. funds, most big European venture capitalists are avoiding the world’s biggest ICO, by messaging app Telegram, people familiar with the funds say, citing concerns about the amount — a reported $1.7 billion — it has raised.

Broader worries about the quality of teams looking to cash in on ICOs are common, and some funds say that far from being a threat to the venture capital model, most ICOs are a fad.

Those that survive will find themselves wanting the support and hand-holding that conventional venture investment offers.

“We need to get our heads around ICOs, but I don’t see it as a threat. I don’t think I’ve missed a company which I wish I’d invested in but couldn’t because it did an ICO,” said Suranga Chandratillake, partner at London-based Balderton Capital.

To date, venture activity has focused on crypto companies like HV Holtzbrinck’s investment in ICO platform Upvest or Point Nine Capital’s stake in peer-to-peer bitcoin lender Bitbond, which tapped into the crypto-trading craze and followed on from a series of investments by well-known U.S. venture funds.

Investors said the next round of activity would target projects offering the building blocks for blockchain’s development, such as software development networks. They will benefit if the largely unproven technology matures.

Buying into the coins is necessary for aligning themselves to such projects, they argue.

“We came to the conclusion that if we really want to do decentralized tokens we have to be a part of it,” said Ciaran O’Leary, who co-founded Berlin-based BlueYard and invested in the 2017 ICO by data storage network Filecoin, which was worth an estimated $200 million.

Risks

ICOs also present major governance and legal concerns, including how to store coins safely after several large hacks.

To keep their investments safe, venture firms are looking at storing coins offline or in wallets where no transaction can take place without the agreement of multiple individuals.

Max Mersch, a partner at Fabric Ventures, said his firm had also introduced multi-year lock-ups prohibiting quick dumping of coins, to encourage longer-term investment horizons and so partners had time to shape governance.

Risks aside, venture capitalists say the potential impact of tokens is too hard to ignore.

“A token is a very powerful innovation and in the best token projects, the fund-raising is actually a byproduct,” said Lakestar’s Brand said. “The token is about activating network effects on steroids,” he said, predicting they would have the power to take on “rival monoliths like Facebook”.


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More Than 100 Parts for NASA’s Orion Capsule to Be 3-D Printed

More than 100 parts for U.S. space agency NASA’s deep-space capsule Orion will be made by 3-D printers, using technology that experts say will eventually become key to efforts to send humans to Mars.

U.S. defense contractor Lockheed Martin, 3-D printing specialist Stratasys, and engineering firm PADT have developed the parts using new materials that can withstand the extreme temperatures and chemical exposure of deep-space missions, Stratasys said Tuesday.

“In space, for instance, materials will build up a charge. If that was to shock the electronics on a space craft, there could be significant damage,” Scott Sevcik, Vice President Manufacturing Solutions at Stratasys told Reuters.

3-D printing, or additive manufacturing, has been used for making prototypes across a range of industries for many years, but is being increasingly eyed for scale production.

The technology can help make light-weight parts made of plastics more quickly and cheaply than traditional assembly lines that require major investments into equipment.

“But even more significant is that we have more freedom with the design … parts can look more organic, more skeletal,” Sevcik said.

Stratasys’ partner Lockheed Martin said the use of 3-D printing on the Orion project would also pay off at other parts of its business.

“We look to apply benefits across our programs — missile defense, satellites, planetary probes, especially as we create more and more common products,” said Brian Kaplun, additive manufacturing manager at Lockheed Martin Space.

Orion is part of NASA’s follow-up program to the now-retired space shuttles that will allow astronauts to travel beyond the International Space Station, which flies about 260 miles (420 km) above Earth.

The agency’s European counterpart, ESA, has suggested that moon rock and Mars dust could be used to 3-D print structures and tools, which could significantly reduce the cost of future space missions because less material would need to be brought along from Earth.


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IMF: World Economy Expands Next 2 Years; Growth Fades After 2020

International Monetary Fund experts say the global economy will continue growing well for the next two years, but expect expansion to slow after 2020.

IMF research director Maurice Obstfeld said Tuesday fading trade could hurt growth and, “The first shots in a potential trade war have now been fired.” He repeated a warning the international rules that nurtured “unprecedented” economic growth after World War II are at risk of being “torn apart.”

Many economists worry that Trump administration efforts to slap tariffs on China and other U.S. trading partners are sparking retaliatory taxes on U.S.-made products that raise the cost of trading and hurt demand, stifling economic growth. Administration officials disagree, and insist their trade and tax policies will boost growth and not spark soaring deficits.

Trade squabbles are a key issue this week as top economic officials and experts gather from 189 nations in Washington for meetings of the IMF and the World Bank.

Obstfeld and his colleagues are also worried that efforts to stimulate economic recovery from the 2008 recession, such as low interest rates and massive purchases of bonds, are now ending. They put the current global growth rate at 2.9 percent, and say this moment of good growth is the time to make changes in tax and other policies that will help economies weather inevitable future downturns.

Growth in advanced economies like the United States is hampered by an aging population with larger numbers of people retiring and leaving the workforce. Slow growth in productivity and high levels of government and private debt are also threats to future growth.

The IMF predicts the world’s second-largest economy, China, will expand at a 6.6 percent rate this year and 6.4 percent in 2019. The global lender says China will continue changing its economic focus from investment and manufacturing toward consumption and services, but warns that a rising debt clouds the nation’s medium-term outlook.

 


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US, Global Tech Firms Vow Not to Aid Governments in Cyberattacks

Microsoft, Facebook and more than 30 other global technology companies on Tuesday announced a joint pledge not to assist any government in offensive cyberattacks.

The Cybersecurity Tech Accord, which vows to protect all customers from attacks regardless of geopolitical or criminal motive, follows a year that witnessed an unprecedented level of destructive cyberattacks, including the global WannaCry worm and the devastating NotPetya attack.

“The devastating attacks from the past year demonstrate that cybersecurity is not just about what any single company can do but also about what we can all do together,” Microsoft President Brad Smith said in a statement. “This tech sector accord will help us take a principled path toward more effective steps to work together and defend customers around the world.”

Smith, who helped lead efforts to organize the accord, was expected to discuss the alliance in a speech on Tuesday at the RSA cybersecurity conference in San Francisco.

The accord also promised to establish new formal and informal partnerships within the industry and with security researchers to share threats and coordinate vulnerability disclosures.

The pledge builds on an idea for a so-called Digital Geneva Convention Smith rolled out at least year’s RSA conference, a proposal to create an international body to protect civilians from state-sponsored hacking.

Countries, Smith said then, should develop global rules for cyberattacks similar to those established for armed conflict at the 1949 Geneva Convention that followed World War Two.

In addition to Microsoft and Facebook, 32 other companies signed the pledge, including Cisco, Juniper Networks, Oracle, Nokia, SAP, Dell and cybersecurity firms Symantec, FireEye and Trend Micro.

The list of companies does not include any from Russia, China, Iran or North Korea, widely viewed as the most active in launching destructive cyberattacks against their foes.

Major U.S. technology companies Amazon, Apple, Alphabet and Twitter also did not sign the pledge.


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Tech Firms to Be Forced to Give Police Overseas Data Under EU Proposal

Technology companies such as Google, Microsoft and Facebook will be forced to hand over users’ data to European law enforcement officials even when it is stored on servers outside the bloc, under a law proposed by the EU on Tuesday.

The law would allow European prosecutors to force companies to turn over data such as emails, text messages and pictures stored online in another country, within 10 days or as little as six hours in urgent cases.

The European Union executive says the proposed law, which would apply to data stored inside and outside the bloc, is necessary because current legal procedures between countries to obtain such electronic evidence can drag on for months.

“Electronic evidence is increasingly important in criminal proceedings,” said European Commission Vice-President Frans Timmermans.

“We cannot allow criminals and terrorists to exploit modern and electronic communication technologies to hide their criminal actions and evade justice.”

Digital borders are a growing global issue in an era where big companies operate so-called cloud networks of giant data centers, which mean that an individual’s data can reside anywhere.

Technology companies have found themselves torn between protecting consumers’ privacy while cooperating with law enforcement. The political pressure has intensified after Islamist-inspired attacks across Europe in recent years.

The United States recently moved to address the same problem, passing a law making it clear that U.S. judges could issue warrants for data held abroad while giving companies an avenue to object if the request conflicts with foreign law.

Prosecutors and police will have to ask a judge to approve their request for electronic evidence where it concerns more sensitive data, such as the actual content of messages, emails, pictures and videos.

Fraught with complexity

The proposal will apply only in cases where crimes carry a minimum jail sentence of three years. In cases of cyber crime there will be no minimum penalty requirement.

Where companies find themselves in a conflict-of-law situation because the country where data is stored forbids them from handing it over to a foreign authority, they will be able to challenge the seizure request.

However, such extraterritorial rules are fraught with complexity, legal and privacy experts warn.

In the United States, for example, certain companies are prohibited from disclosing information to foreign governments, while in Europe consumers’ data privacy is strictly protected and companies are restricted in how they can transfer data outside the bloc.

“The Commission is proposing dangerous shortcuts to allow national authorities to obtain people’s data directly from companies, basically turning them into judicial authorities,” said Maryant Fernandez Perez, senior policy adviser at campaign group European Digital Rights.

Ultimately, the Commission hopes to start talks with the United States on a deal to help law enforcement authorities to seize evidence held on each other’s territories.

“We always think it’s useful to have an EU-U.S. coordinated approach instead of a French-U.S. approach, a Belgian-U.S. approach because that leads to fragmentation,” a Commission official said.


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