The 100 Most Sustainable U.S. Companies

By Leslie P. Norton

     Illustration by Tyler Comrie 

How much of a company’s journey toward sustainability is driven by the personal passions of its CEO? Based on the conversations Barron’s had recently with several corporate chieftains, quite a lot. That’s one of the insights from our second annual sustainability ranking of public companies.

Consider Voya Financial(ticker: VOYA), the insurer and retirement-savings company that vaulted to No. 6 this year from No. 46 last year. Even before Voya separated from Dutch parent ING and went public in 2013, its CEO was already planning something fairly radical: diversity in its management ranks and gender parity on the board. “We very consciously wanted to send a message that diversity and inclusion were very high on our list,” Rod Martin, Voya’s chief executive, told Barron’s. To Martin, it was the right thing to do—“there’s so much evidence that companies that have done this perform better.” By 2018, Voya had diversified its board; half of the executive committee members were women, and the stock had beaten the S&P 500 index twofold.

Or consider Hubert Joly of No. 1–ranked Best Buy(BBY). He dates his sustainability commitment to when he was a child in France and saw the environmental damage being done to the Alps. He traces it through early adulthood as he developed a spiritual practice, and then to an encounter with a worldly client when he was a young McKinsey consultant.

For investors, it has paid off. In a tough 2018, in which the S&P 500 lost 4.2% and the Russell 1000 fell 4.6%, the 100 most sustainable companies on our list lost 3.2%. Calvert Research and Management, the sustainability powerhouse owned by Eaton Vance(EV), compiled Barron’s list, basing the rankings on hundreds of metrics that address environmental, social, and corporate governance, or ESG, factors. “We’re beginning to get more and more recognition from the markets,” says Calvert CEO John Streur. “Companies can be differentiated based on how well they manage their environmental and social impact, and the strength of their governance. The list shows who’s creating a better company, long term, for long-term investors.”


There are significant changes in the top 10 from last year, including the entry of Voya, and Best Buy’s ascent to No. 1 from third last year. You might notice that some of the top companies are headquartered in California. That makes sense: The state is home to tough environmental regulations and governance initiatives. “You can’t say it’s causal, but it’s explanatory,” Streur says.

To create the rankings, Calvert analyzed the 1,000 largest publicly held U.S. companies (by stock market value) and scored them on more than 200 key indicators and 28 issues. Calvert then sorted the data into five key categories: shareholders, employees, customers, planet, and community. (The shareholders category might include executive compensation, for example, and the customers category might include data security or product safety.) Each corporation received a rating from zero to 100 in each category.

Finally, Calvert produced a single rating for all of the companies, weighted according to how material each category is for their industry: Emissions are less critical for a bank’s score than they are for a trucking company’s, for example. It also excluded companies that didn’t meet the Calvert Principles for Responsible Investment.

The 100 Most Sustainable U.S. Companies
Illustration by Lynne Carty

The lowest overall score in the universe was 27; the median was 55. The average score for the best 100 was 66.6, leaving room for improvement. What’s more, the best 100 scored marginally worse than the previous year’s, which averaged 68.7. While scores rose as companies boosted diversity, says Calvert analyst Chris Madden, Calvert also increased penalties for companies with late filings, restatements, or other actions that could concern shareholders.

Separately, we asked Calvert for a list of the most sustainable publicly traded companies outside the U.S. You can see it in the nearby table.

Across the U.S., sustainability has become a priority in many areas. This year, California’s new law mandating that companies based there have at least one woman board member takes effect. Other states, such as New Jersey, are considering similar legislation, on the theory that diverse boards perform better and are less susceptible to groupthink. Institutional Shareholder Services predicts that the number of all-male boards, now at an all-time low, will continue to decline. Boards, once somnolent, are being asked to address a variety of risks, such as those from climate change, or other ESG concerns and behavior that can influence corporate performance. Technology companies, for example, are increasingly scrutinized over their protection of user data. The pressure isn’t coming just from progressive states: Much of it is being driven by professional money managers, who are adding ESG factors to their investment strategies.

No. 1-ranked Best Buy, headquartered outside Minneapolis, moved up from third last year. Its shares fell 20% last year amid concerns that its multiyear makeover may have peaked, but are still up more than 200% since Joly took over as CEO in 2012. Further gains aren’t out of the question: Best Buy is the last man standing in consumer-electronics retailing. It has even joined with to sell Alexa-enabled Fire TVs in stores. Best Buy has done all of this while practicing sustainability: It helps customers recycle old appliances and electronics, to recover rare earths, gold, copper, and plastic. Its Geek Squad helps extend the lives of old devices and appliances. Geek Squad members now drive to clients in a Prius, cutting the firm’s emissions footprint. The retailer scored 100 on the Human Rights Campaign Foundation’s corporate equality index. It’s on the climate A list of the CDP, formerly known as the Carbon Disclosure Project, and made it onto the Dow Jones Sustainability Index for the eighth year in a row.

The 100 Most Sustainable U.S. Companies
Illustration by Lynne Carty

“Sustainability is embedded in everything we do,” Joly says. He grew up in Nancy, France; his parents took him skiing in the Alps, where the glaciers were already receding. In business school, he became friendly with two Jesuit monks. The future CEO began to meditate, and wrote articles about the purpose of work. In the early ’90s, when Joly was a young McKinsey consultant, a client told him, “If you believe the only thing for a company to do is generate shareholder value, you’re going to be in trouble. You need to 1) have a great team, 2) have happy customers, and 3) generate returns. But it’s the first priority that generates the second, which generates the third. Making money is the outcome.”

Today, Joly says, “sustainability is integral to each element of our strategy. It starts with the purpose of the company—not to make money, but to contribute to the common good, and, specifically, to enrich lives through technology by addressing key human needs—and not burning the place to make a profit.”

No. 2 is networking giant Cisco Systems(CSCO), down from No. 1 last year. Cisco shares jumped 17% in 2018, as the company beat expectations every quarter. Its weighted average score is just under Best Buy’s: Calvert praised the San Jose, Calif., company for “best-in-class data security and privacy controls, including recognizing data privacy and security as a human right, external certification on privacy controls, and incorporating privacy by design principles into product development.” By 2022, Cisco plans to reduce greenhouse-gas emissions by 60% from 2007 levels. Renewable energy now accounts for 80% of its electricity consumption, and it has widespread waste-reduction programs.

CEO Chuck Robbins tells Barron’s that “I’ve been really focused on more of the social issues” recently. In March, Cisco made a commitment to spend $50 million to fight homelessness in Silicon Valley, part of a wider initiative with the Kaiser Permanente health-care system. To ensure a workforce that will need Cisco products, it created Cisco Network Academies, which boasts 9.2 million graduates and has 1.9 million students enrolled today. The tech giant has committed to educating another 10 million students globally over the next five years. Says Robbins: “If you can connect someone and educate someone, you provide them opportunity to participate in this global economy.”

No. 3–ranked Agilent Technologies(A) vaulted up from 17; shares of the laboratory instrument and software maker gained 2% in 2018. Agilent, a former unit of Hewlett-Packard ,has a dense, detailed corporate social-responsibility report that includes information such as the organization’s direct and indirect greenhouse-gas emissions, by weight.

The 100 Most Sustainable U.S. Companies
Illustration by Lynne Carty

CEO Mike McMullen joined Hewlett-Packard in 1984 as a freshly minted Wharton M.B.A. “I said I want to be with a company that makes a difference in the world,” he recalls. Customers of Santa Clara, Calif.–based Agilent include labs that test for environmental and water safety: 85% have their own sustainability goals. Many are fans of new Agilent products like Intuvo, a gas chromatography system that uses 50% less electricity. Agilent has increased energy efficiency by 40% and cut its carbon footprint by 25%. The firm doubled its maternity leave last year, to 13 weeks. Next month, a third of its independent directors will be female. The firm also gives employees a paid week off for volunteer work. Says McMullen: “This is a performance-driven culture. Having an energized, aligned workforce is how you get great results.”

HP Inc.(HPQ) itself is No. 4, up from No. 5. Silicon Valley’s original garage startup, founded 80 years ago, has benefited from robust sales of personal computers and printers, thanks to increased demand from corporate buyers and popular demand for gaming devices. Among other things, Calvert praises HP Inc. for robust corporate governance, a thorough e-waste recycling program (45% to 70% of its ink cartridges are made of recycled plastic), and a commitment to develop skills and improve the well-being of a half-million factory workers by 2025, via initiatives including leadership and career-development programs focused on women. The compensation plan of every member of HP Inc.’s leadership team has sustainability-related objectives.

Last year, HP Inc. received $700 million of additional business—“specifically, all things being equal, because our sustainability programs were stronger” than rivals’, says Stuart Pann, head of the company’s supply chain. “The line that connects this to shareholder value is our customers—they are asking for what we’re doing in this area, and [they] value it.”

Rounding out the top 5 is Dallas-based chip maker Texas Instruments(TXN), up from No. 6. TI has reduced water consumption by 5%—significant because it already recycles 30% of the water it uses in manufacturing. In sixth place, as mentioned, is Voya Financial. No. 7 is Oakland, Calif.–headquartered Clorox(CLX), the ninth-place finisher in 2018. Under CEO Benno Dorer, Clorox has produced strong transparency around the ingredients in its products, has robust product-safety assessments, and already has exceeded its goal of cutting greenhouse-gas emissions 20% by 2020.

The 100 Most Sustainable U.S. Companies
Illustration by Lynne Carty 

Vaulting to No. 8 from No. 75 is Chicago industrial-supplies company W.W. Grainger(GWW), which has reduced greenhouse-gas emissions by 20% on its way to 33% by 2020, and is the only industrial supplier to participate in an Environmental Protection Agency initiative to trim emissions from freight transportation. No. 9 is Chicago-based Motorola Solutions(MSI), up from the 13th spot last year. At No. 10 is Milwaukee-based staffing outfit ManpowerGroup(MAN).

Among the companies that fell in the rankings is Microsoft(MSFT), which slipped to No. 43 from a top-10 ranking as it faced discrimination and harassment lawsuits. One case alleges discrimination toward about 8,630 female employees. Microsoft didn’t return requests for comment. Also edged out of the top 10 was Oshkosh(OSK), now No. 17 amid concerns about the trucking company’s pay policies. Oshkosh did not reply to a request for comment.

When Dutch insurer ING flirted with bankruptcy after the financial crisis, it began shedding assets, including Voya. Preparing for the initial public offering allowed Voya CEO Martin and his colleagues to rethink the company. Martin was committed to diversity and gender parity on the theory that it improves decision-making and profitability. “We could no longer dial the Netherlands and ask them to send another billion dollars,” he says. “We tried to think through the outcomes and characteristics if we started a new company.”

The 100 Most Sustainable U.S. Companies
Illustration by Lynne Carty

Worried about being branded politically correct, he and fellow executives talked about the initiatives less candidly in the early days. As the program gained traction, they grew more confident. Today, 40% of the independent directors are women. Voya has received a number of plaudits for sustainability. Management reports regularly to the board on the issue, and creates an annual report card that it shares with the board and with customers. The company is moving fast, completing several of 23 corporate social-responsibility goals it has set for 2020. “In 2½ years, we went from no women and diversity to coequal,” he observes. “It has reflected itself in our ability to recruit and retain talent.”

Today, Martin is routinely asked by executives and directors from other firms how Voya did it. Sometimes, they tell him that their fellow leaders are opposed. “That’s a bunch of excuses,” Martin tells them. “You’re going to be in the crosshairs of these things. Lead. It’s a great outcome.”

Ocean Shipping Rates Plunge: Just A Blip Or The End Of Globalization?

by John Rubino

The Baltic Dry Index represents the cost of renting an ocean-going container ship to move goods from, say, Chinese factories to the Port of Los Angeles. The more stuff being made and sold, the higher the demand for such ships, and thus the higher the price to rent one. And vice versa.

This is definitely one of the vice versa times. After rising to robust levels in mid-2018 the Baltic Dry Index has since plunged by about two-thirds.

Baltic Dry Index ocean shipping rates

Here’s a brief article on the subject from today’s Wall Street Journal:

Free-Falling Freight Rates Spell Trouble For Shipping  
Dry bulk shipowners face a long period of uncertainty as spot prices collapse and China shipments shrink. 
A slowing global economy, coupled with weak demand from China over the Lunar New Year and from Brazil after Vale SA’s iron ore disaster, is dragging shipping rates to near record lows, and few in the industry expect things to improve any time soon. 
Brokers in Singapore and London said capesize vessels, the largest ships that move bulk commodities like iron ore, coal and aluminum, were chartered in the spot market for as low as $8,200 a day on Thursday, a $500 decline from Wednesday. Break-even costs for carriers can be as high as $15,000 a day, and daily rates in the capesize market hovered above $20,000 last year. 
“Everyone is looking for a catalyst to push the market up, but it’s not there,” said a Singapore bróker. 
The Baltic Dry Index, which tracks the cost of moving bulk commodities and is considered a leading indicator of global trade, is down more than 50% since the start of the year. 
The long Lunar New Year holiday in early February is one of the slowest periods in commodities trading as factories in China, the world’s biggest importer of raw materials, shut down. But ship executives say the bulk seaborne freight business is more broadly suffering from the lowest demand in two years, while China’s trade tussle with the U.S. is making the market more volatile. 
“A long slowdown in the Chinese economy will hurt commodity demand and send shipping rates sharply lower,” Bloomberg Intelligence industry analyst Rahul Kapoor said. 
The Vale iron ore disaster in Brazil in January, in which a mining dam burst, triggering a flood that killed at least 150 people and left close to 200 more missing and feared dead, created a new source of uncertainty. 

Vale has suspended production at a number of sites, removing 40 million tons of annual output, or 11% of the giant miner’s total production in 2017. 
The reduced sailings could affect dry bulk owners, including China Cosco Bulk Shipping Co. Ltd, Norway’s Golden Ocean Group and Greece’s Diana Shipping Inc. 
“The Vale void will be largely covered by iron ore shipments out of Australia,” the Singapore broker said, “but Brazil generally commands higher freight rates so there is no good news.” 
China has resumed importing soybeans from the U.S., a sign of progress in talks between Washington and Beijing. But the 540,000 metric tons of shipments from the U.S. in January were less than half the monthly average last year. 
“If you are a bulk owner, you can no longer depend solely on China to make money, and that’s a seismic shift,” said a London broker.

So there are some specific, possibly temporary things going on here. The US/China trade war is slowing shipments between those countries while a Brazilian iron ore mine disaster is cutting shipments of that commodity for the time being.

Assuming the trade war ends and Vale’s Brazilian mine recovers, it’s reasonable to see this as the bottom for shipping rates – a forecast that shippers who need to double current prices just to break even fervently hope is true.

But there are also broader forces at work. The trade war isn’t just a piece of political theater for the US. We really do need factories to come back home if we want to avoid a populist and/or socialist revolution. And next generation manufacturing tech like 3D printers will in any event move production closer to end users, lowering the need for at least some of today’s shipping.

It’s possible, in other words, that the whole free trade/mobile capital/cheap labor/long supply chain Age of Globalization, with its assumption of unlimited rich-country demand and plentiful cheap energy for transport was just an artifact of a very specific time. It was so cheap and easy to move things around that building toys or TVs wherever labor was cheapest and shipping them to wherever the money resided made financial sense. 

That might not be a permanent state of affairs, and if it’s not, those giant ships won’t be the only stranded capital out there.

The Global Slowdown Could Soon Hit Home

By Randall W. Forsyth

The Global Slowdown Could Soon Hit Home Photograph by Sean Gallup/Getty Images

No man is an island, as John Donne famously wrote, but the U.S. increasingly seems to be surrounded by slowing economies nearly everywhere else. That divide, which began to open in 2018, is becoming more acute this year.

From the euro zone to Oceania, estimates of gross domestic product were ratcheted down this week, sending interest rates lower around the globe. Rather than being bullish for risky assets like stocks and corporate bonds, the retreat in borrowing costs ought to serve as a warning about sputtering global growth.

As of last week, nearly $9 trillion of global debt securities had negative yields, half again as much as late last year, according to Bloomberg data charted by Deutsche Bank. The yield on the 10-year German Bund, the European benchmark, sank below nine basis points, or 0.09%, from over 50 basis points last October. The 10-year Japanese government bond yield sank a couple of basis points below zero last week.

Such yields indicate an extreme desire by investors to stash their cash in havens (it helps that global government bond markets have greater capacity than mattresses) amid increased signs of deceleration abroad. The European Commission lowered its estimate of 2019 GDP growth for the euro zone by nearly a third, to 1.3% from 1.9%. Italy is already in recession, while German growth is faltering as its export-dependent economy is being hampered by a slowing China, which in turn is a result of increased trade frictions and its domestic deceleration.

Elsewhere, Australia’s central bank lowered its outlook for growth, while India’s central bank cut interest rates in a surprise move.

Amid these signs of sputtering growth, the U.S. Treasury 10-year yield dropped to a 13-month low of 2.63% while short-term borrowing costs eased, in effect undoing half of the Federal Reserve’s December 25-basis-point interest-rate hike. And while the major U.S. stock market gauges extended their advance over the past seven weeks, last week saw a trivial gain of less than 1%, reflecting a midweek swoon over global growth worries.

The equity market’s rise over that span can be viewed as a relief rally following December’s swoon, as the Fed shifted last month to a “patient” stance regarding future rate increases and greater potential flexibility about shrinking its balance sheet. While that attitude adjustment bolstered bullishness in the equity markets, Peter Boockvar, chief investment officer at Bleakley Advisory Group, observed that the decline in global bond yields in reaction to slower growth should remind investors why the Fed altered its stance in the first place.

Politics continue to hang over the markets as well, with another possible federal government shutdown looming on Friday. There’s little expectation of a replay of the previous shutdown fiasco, given that nobody gained anything from it. Markets were also upset by President Donald Trump’s admission that he won’t be getting together with President Xi Jinping of China before the March 1 deadline for the increase in tariffs on $250 billion of Chinese goods to 25% from 10%. While the timing of the eventual meeting of the leaders of the world’s two biggest economies may be uncertain, Cowen’s Washington watcher Chris Krueger predicts a “huge victory for Trump.”

The most recent monthly U.S. trade data show why further curbs are in nobody’s interest. The U.S. deficit shrank to $49.3 billion in November from $55.7 billion in October, which would mathematically boost fourth-quarter GDP (currently estimated to have grown at a 2.4% annual rate). But the smaller shortfall was due to a 2.9% drop in imports, a sign of slower U.S. demand, while exports fell 0.6%, reflecting sluggish demand abroad.

“The U.S. economy still appears to be sailing on serenely while the rest of the world economy sinks like a stone,” write the forecasters at Capital Economics. America remains a relatively closed and service-oriented economy, but the advisory firm suggests that eventually what’s happening overseas won’t stay there. That suggests the Fed’s patience is prudent, it concludes.

But that may not be sufficient to spur gains in risky assets beyond the rebound seen since December’s debacle.

Michael Cohen tells Congress that Trump is a ‘conman’

On Capitol Hill, ex-lawyer testifies that president misled on Russia business links

Demetri Sevastopulo in Hanoi and Courtney Weaver in Washington

© AP

Michael Cohen, the longtime lawyer and fixer for Donald Trump, on Wednesday told Congress his former boss is a “conman” who indirectly told him to lie about business his real estate empire was seeking in Russia during the presidential race.

In an opening statement Mr Cohen delivered to the House oversight committee, he also accused the former New York property mogul of being a “racist” and a “cheat”.

Mr Cohen’s voice cracked as he talked about his family: “To my Laura, my Sami, and my Jake, there is nothing I wouldn’t do to protect you.” But he gathered momentum as he levied some of his worst accusations against Mr Trump.

“Since taking office, he has become the worst version of himself. He is capable of behaving kindly, but he is not kind. He is capable of committing acts of generosity, but he is not generous. He is capable of being loyal, but he is fundamentally disloyal.”

Mr Cohen provided the committee with a series of evidence of alleged wrongdoings by Mr Trump.

Among the documents were a copy of the $35,000 cheque Mr Trump sent from his personal bank account that Mr Cohen said was to reimburse him for hush money payments to cover up an affair with an adult film actress, and copies of letters Mr Cohen says he sent at Mr Trump’s behest to the president’s high school, colleges and the College Board threatening them not to release his grades or SAT scores.

He claimed that Mr Trump had skirted the Vietnam draft by falsely claiming he received deferment due to a bone spur, while telling Mr Cohen in private that he “did not got to Vietnam” because he “was not stupid”.

“I find it ironic, President Trump, that you are in Vietnam right now,” Mr Cohen quipped.

Some Republicans tried to portray Mr Cohen as an unreliable witness who is seeking revenge against the president for not coming to his defence. Mr Cohen, who was known as “Fido” because of his fierce loyalty, once said he would “take a bullet” to protect his former boss.

At the hearing’s outset, Jim Jordan, the committee’s ranking Republican member, used his opening remarks to mock the committee’s chairman, Elijah Cummings, for choosing to invite Mr Cohen to appear before the committee despite the fact that Mr Cohen is set to begin a three-year prison sentence in May for charges, including providing false testimony to Congress.

“This is the first time a convicted perjurer has been brought back to be a star witness in a hearing,” Mr Jordan said.

Mr Cummings, meanwhile, accused Republicans of attempting to block the American people from hearing Mr Cohen’s testimony.

“They have a right to hear Mr Cohen,” he said. He pledged Mr Cohen’s hearing was the beginning of the committee’s fresh investigation into potential wrongdoings by Mr Trump and his associates, particularly with regards to Russia and the 2016 election.

“Mr Cohen’s testimony is the beginning of the process — not the end,” he said.

Alexandria Ocasio-Cortez arrived at the House oversight committee to hear testimony from Michael Cohen © AFP

The testimony comes as Mr Trump meets North Korean leader Kim Jong Un in Hanoi for a second summit to discuss denuclearisation on the Korean peninsula. The president responded on Twitter, insisting Mr Cohen was “lying in order to reduce his prison time”.

Mr Cohen, who pleaded guilty to lying to Congress when he told lawmakers Mr Trump was no longer seeking to build a Trump Tower in Moscow during the 2016 race, told the committee that he wanted to correct the record.

“The last time I appeared before Congress, I came to protect Mr Trump. Today, I’m here to tell the truth about Mr Trump,” he said, adding that negotiations about the Moscow project continued “for months during the [presidential] campaign”.

“Mr Trump did not directly tell me to lie to Congress. That’s not how he operates,” Mr Cohen said. “In conversations we had during the campaign, at the same time I was actively negotiating in Russia for him, he would look me in the eye and tell me there’s no business in Russia and then go out and lie to the American people by saying the same thing. In his way, he was telling me to lie.”

Mr Cohen added Mr Trump asked him about the status of the Moscow Tower project six times during the first half of 2016, when the Republican presidential primary was in full swing.“Mr Trump knew of and directed the Trump Moscow negotiations throughout the campaign and lied about it. He lied about it because he never expected to win the election. He also lied about it because he stood to make hundreds of millions of dollars on the Moscow real estate project.”

Mr Cohen appeared on Capitol Hill shortly after Mr Trump had dinner with Mr Kim on Wednesday in Hanoi.

Mr Trump responded shortly before the dinner, attempting to undermine Mr Cohen’s credibility as a witness. “Michael Cohen was one of many lawyers who represented me (unfortunately). He had other clients also. He was just disbarred by the State Supreme Court for lying & fraud,” Mr Trump wrote. “He did bad things unrelated to Trump. He is lying in order to reduce his prison time.”

Earlier, Sarah Sanders, the White House press secretary, responded to suggestions Mr Cohen would accuse Mr Trump of criminal conduct by saying: “It’s laughable that anyone would take a convicted liar like Cohen at his word, and pathetic to see him given yet another opportunity to spread his lies.”

Mr Cohen will begin a three-year prison sentence in early May after pleading guilty to eight criminal counts. One of those charges related to his involvement in a scheme to pay two women, including adult film actress Stormy Daniels, not to make public claims that Mr Trump had affairs with them after his marriage to his current wife Melania.

Federal prosecutors have alleged Mr Cohen made the payments “at the direction” of Mr Trump.

The congressional testimony comes amid reports that Robert Mueller, the special prosecutor investigating the role that Russia played in the 2016 election, is preparing to wrap up his investigation.

Mr Cohen said he had spoken to the special counsel’s office on seven occasions.

He described Mr Trump taking a call over speakerphone from Roger Stone, the political operative and longtime friend of Mr Trump, shortly before the Democratic convention in July 2016. Mr Mueller has charged Mr Stone with seven counts related to congressional testimony he gave about his efforts to contact WikiLeaks during the 2016 race.

The probe has also looked at possible contacts between the Trump presidential campaign and the Kremlin, and also whether Mr Trump attempted to obstruct justice when he fired James Comey as director of the FBI.

Asked during the hearing whether Mr Trump could have colluded with Moscow, Mr Cohen stated that Mr Trump was a person who “will do what is necessary” to win, and said he did not rule out the possibility that Mr Trump or members of his campaign had co-ordinated Russia.

“I wouldn’t use the word colluding. Was there something odd about the back-and-forth praise with President Putin? Yes . . . There are just so many dots that all seem to lead to the same direction.

“Mr Stone told Mr Trump that he had just gotten off the phone with [WikiLeaks founder] Julian Assange and that Mr Assange told Mr Stone that, within a couple of days, there would be a massive dump of emails that would damage Hillary Clinton’s campaign,” Mr Cohen said. “Mr Trump responded by stating to the effect of ‘wouldn’t that be great’.”

At times, the hearing turned contentious with Republican and Democratic members shouting over one another and interrupting, as some Republicans on the committee attempted to discredit their Democratic colleagues as well as the star witness.

In his statement, Mr Cohen accused Mr Trump of being a “cheat” and said he was providing the committee with Mr Trump’s financial statements from 2011-2013. He said Mr Trump gave the documents to Deutsche Bank as part of an effort to seek a loan to buy the Buffalo Bills, an American football team.

“It was my experience that Mr Trump inflated his total assets when it served his purposes, such as trying to be listed among the wealthiest people in Forbes, and deflated his assets to reduce his real estate taxes,” he said.

Mr Cohen also alleged that Mr Trump knew in advance about the release of hacked emails from the Democratic National Committee that were seen as damaging to Hillary Clinton and her presidential campaign.

Mr Cohen also accused his former boss of being a “racist” who once asserted that black people would never vote for him “because they were too stupid”. He said the country had seen Mr Trump court white supremacists but that he was “even worse” in private.

“He once asked me if I could name a country run by a black person that wasn’t a ‘shithole’,” Mr Cohen said. “This was when Barack Obama was president of the United States.”

In the 20-page opening statement, Mr Cohen claimed Mr Trump ran for president not because he believed he could win — which Mr Cohen said the then New York mogul did not — but to enhance his brand.

“Mr Trump would often say, this campaign was going to be the ‘greatest infomercial in political history’.”

How to Avoid a War in Venezuela

When the United States chose to recognize Juan Guaidó as Venezuela’s president – along with a group of Latin American countries – and ban oil trade with the Maduro government, it was betting that the pressure would be sufficient to topple the regime quickly. So, now what?

Jeffrey D. Sachs , Francisco Rodríguez

 venezuelan security forces

NEW YORK – One month after Juan Guaidó, the speaker of Venezuela’s National Assembly, said he was assuming the powers of the Venezuelan presidency, currently held by Nicolás Maduro, the country’s political crisis remains far from over. Tensions have escalated to the point that a full-blown civil war – a seemingly implausible scenario just weeks ago – is now becoming increasingly possible. At least four people died and hundreds were injured in violent clashes at Venezuela’s borders last weekend as government forces opened fire on an attempt by the opposition to bring aid convoys into the country.

The Maduro regime is authoritarian, militarized, and ready to kill civilians to maintain power. The society is bitterly divided between the revolutionaries inspired by Hugo Chávez, Maduro’s predecessor, and a large and aggrieved opposition. Each side despises the other. The question is therefore a complex and practical one: what to do to help guide Venezuela away from civil war and toward a peaceful and democratic future?

On this great challenge, US President Donald Trump’s administration has gravely miscalculated. When the United States chose to recognize Guaidó as Venezuela’s president – along with a group of Latin American countries – and ban oil trade with the Maduro government, it was betting that the pressure would be sufficient to topple the regime. As a former senior US official told the Wall Street Journal, “they thought it was a 24-hour operation.”

This type of miscalculation predates the Trump administration. In mid-2011, President Barack Obama and Secretary of State Hillary Clinton announced that Syrian President Bashar al-Assad must “step aside.” Similarly, in 2003, George W. Bush declared “Mission Accomplished” shortly after the US invasion of Iraq. All of these cases reflect the arrogance of a superpower that repeatedly overlooks local realities.

Maduro’s ability to withstand intense US pressure is not a surprise to close observers of Venezuela’s military. The centralized structures of command and control of military intelligence, as well as the personal interests of senior officers who control major chunks of the economy, make it highly unlikely that the army will turn on Maduro. US provocation might create a schism between military commanders and more junior officers, but that would only make the plunge into a bloody civil war more likely. To date, there have been no defections among high-ranking officers with direct control of troops.

Faced with the prospect that regime change will not come quickly, the Trump administration and some parts of Venezuela’s opposition have begun seriously considering military action. Echoing language recently used in a speech by Trump, Guaidó wrote on Saturday that he would formally request the international community to “keep all options open.” Similarly, Republican Senator Marco Rubio, who has acted as a self-appointed guru for Trump on Venezuela, warned on Twitter that Maduro’s actions had opened the door to “multilateral actions not on the table just 24 hours ago.”

Actually, these ideas appear to have been on Trump’s mind for some time. As former acting FBI director Andrew G. McCabe revealed recently in his book The Threat, Trump said in a 2017 meeting that he thought the US should be going to war with Venezuela. McCabe quotes Trump as saying: “They have all that oil and they’re right on our back door.” The comments echo Trump’s 2011 statement that Obama let himself get “ripped off” by not demanding half of Libya’s oil in exchange for US help in overthrowing dictator Muammar el-Qaddafi.

US military interventions are not driven only by economic and business interests. Being tough on Maduro is also highly popular with many Cuban-American and Venezuelan-American voters in Rubio’s home state of Florida, which will be a key battleground in the 2020 presidential election.

Advocates of US military intervention regularly cite the cases of Panama and Grenada as precedents for rapid US-led regime change. Yet, in contrast to those two countries, Venezuela has a well-armed military of more than 100,000 soldiers. Of course, the US could defeat the Venezuelan army, but one need not be blind to the atrocities of authoritarian regimes to understand that, as has happened repeatedly in US wars in the Middle East, attempts to overthrow such regimes often end in catastrophe.

Even without military intervention, US sanctions policies, if sustained, are bound to create a famine. By cutting off Venezuela’s oil trade with the US and threatening to sanction non-US firms that do business with Venezuela’s state-owned oil company, the Trump administration has created one of the most punitive economic sanctions regimes in recent history. But rather than provoking a coup, economically isolating a country that essentially feeds itself with its oil export revenues could lead to mass hunger instead.

Venezuela’s neighbors and world leaders must put aside the US military option. Venezuela needs mediation leading to new elections, not war. It also needs an urgent, interim period of political truce in 2019 to end the devastating hyperinflation, restore flows of foodstuffs and medicines, and reconstitute the electoral rolls and institutions for a peaceful and credible election in 2020.

A pragmatic approach might involve the current government continuing to control the army, while technocrats backed by the opposition take control over finances, the central bank, planning, humanitarian relief, health services, and foreign affairs. Both sides would agree to a timeline for a national election in 2020, and to an internationally supervised demilitarization of daily life, with a restoration of civil and political rights and physical security in the country.

The United Nations Security Council should oversee such a solution. Chapter VII of the UN Charter gives the Security Council the mandate to “determine the existence of any threat to the peace, breach of the peace, or act of aggression” and to take actions to “restore international peace and security.” The Security Council is also the right venue pragmatically, as the US, China, and Russia all have financial and political interests in finding a peaceful solution in Venezuela. All three countries could readily agree to a path to elections in 2020. Encouragingly, Pope Francis and the governments of Mexico and Uruguay have also offered to help facilitate mediation to find a peaceful way forward.

Trump and other US leaders say that the time for negotiation has passed. They believe in a short, quick war if necessary. World leaders – and those in Latin American countries first and foremost – should open their eyes to the risks of a devastating war, one that could last for years and spread widely.

Jeffrey D. Sachs, Professor of Sustainable Development andProfessor of Health Policy and Management at Columbia University,is Director of Columbia’s Center for Sustainable Development andof the UN Sustainable Development Solutions Network. His books include The End of Poverty, Common Wealth, The Age of Sustainable Development, Building the New American Economy, and most recently, A New Foreign Policy: Beyond American Exceptionalism.
Francisco Rodríguez, Chief Economist at Torino Economics, served as adviser to former Venezuelan presidential candidate Henri Falcón.

Niall Ferguson joins blockchain project Ampleforth

By: Jemima Kelly

Ampleforth: not just an ideal school to send your kids if you're Catholic and can afford it, but also, "an ideal money". More specifically (and perplexingly):

A decentralised store of value protocol that is volatile in price and supply at launch, but is strictly better than Bitcoin at steady state because it converges on a stable unit of account.

And Niall Ferguson, the rightwing British historian and who once called himself a "fully paid-up member of the neo-imperialist gang", has joined its advisory board. A bit late to the crypto party? Maybe. But this isn't the first time Ferguson has dipped his toes into the world of crypto. He suggested last year in a Bank of England seminar that cryptocurrencies were "the financial system of the future". He also said he felt it's "only a matter of time before the next financial crisis".

A potential answer, apparently, is stablecoins. These are digital currencies that run on blockchains, but that don't float freely. Instead, they are pegged to fiat currencies like the dollar, or currency baskets like the IMF's Special Drawing Rights, either via the (supposed) backing of those currencies, or via the magic of an algorithmic central bank that expands and contracts the money supply to keep the price stable. Ampleforth is trying the latter.

Here's Ferguson, quoted in the press release:

The idea of reinventing money excites me. Bitcoin, currently, is incapable of being ‘money’ that can be a means of payment. But at the same time, I am doubtful of fiat-pegged stablecoins. As someone who is deeply interested in financial innovation, I’m attracted by Ampleforth's mission to reinvent money in a way that protects individual freedom and to create a payments system that treats everyone equally.

But how does this free and equal system work, we hear you ask? Well, it's quite simple really:

Ampleforth is a digital asset protocol that moves volatility from unit price to unit count and achieves price stability by algorithmically expanding and contracting supply among holders based on demand... Ampleforth employs an algorithmic supply policy to democratise the issuance of money and create assets with independent value.

Capiche? Good. Essentially, the idea is that Ampleforth -- named after the character in George Orwell's 1984 who is responsible for translating poetry into Newspeak -- would be pegged to the dollar by means of a "smart contract" that would pump "Amples" into the system when its price topped a dollar, and withdraw them when the exchange rate fell below $1 per Ample.

It’s easy to see why Ferguson might have been attracted to such a project. In his 2008 book The Ascent of Money, he writes:

If the financial system has a defect, it is that it reflects and magnifies what we human beings are like. Money amplifies our tendency to overreact, to swing from exuberance when things are going well to deep depression when they go wrong. Booms and busts are products, at root, of our emotional volatility.

If any of the Ampleforth stuff is sounding familiar to you, it might be because we wrote about a similar algorithmic stablecoin with academic backing last year: Basis, which was had John Taylor on its board. (Basis is now bygone, having returned what was left of the $133m it had raised from investors.)

Ampleforth is a little different from Basis, but not very. It is cleverly not pushing the idea of "bond tokens" or "share tokens" which, as Basis found, might make the SEC nervous. Also, it acknowledges that it will be "volatile in price and supply at launch" (though it doesn't acknowledge that volatility might extend beyond the launch).

We asked Nicholas Weaver, computer science lecturer at Berkeley, for his thoughts, who told us:

The Basis concept, recapitulated here, is fundamentally flawed. This is a dumb central bank currency peg, which only lasts until someone figures out how to make money destroying the peg.

We're not sure how much time this advisory role requires, nor the nature or scale of the compensation (we have asked). But Ferguson probably has some time on his hands since resigning from a senior leadership role at a Stanford University free speech programme, Cardinal Conversations, last year. We wonder whether he has commissioned any "opposition research" on the host of stablecoin rivals that Ampleforth must try to compete with.

The Steele Papers

Dossier at Heart of Trump Scandal Still Dogs President

By Christoph Scheuermann and Jörg Schmitt

At the heart of Donald Trump's Russia scandal is a mysterious dossier prepared by a former British intelligence agent. Many of the suspicions in the papers have been confirmed and have hounded his presidency for two years now.

Donald Trump and Vladimir Putin

The story of the intelligence report that has dogged, threatened and angered Donald Trump since the beginning of his term in office began in a sparsely furnished office in central London, just a stone's throw away from Buckingham Palace. The room has gray carpeting, bare walls and, at its center, a conference table made of dark wood. Displayed on a sideboard are matryoshka dolls with painted portraits of Russian authors -- Tolstoy, Gogol and Dostoyevsky -- as souvenirs from Moscow. The noise of people typing on a keyboard emanates from the adjacent room. This is the home of Orbis Business Intelligence, a kind of miniature intelligence agency for the private sector. The firm is run by two British men, Christopher Steele and Christopher Burrows.

Steele and Burrows have more in common than just the same first name. Both have gray hair, an inconspicuous appearance and a posh middle-class accent. Steele is 54 and lives in the county of Surrey, Burrows is 60 and lives in York. They're about as English as it gets. Before they established their company 10 years ago, they worked for the British foreign intelligence service, MI6. Steele was an undercover agent in Moscow for a number of years, and later headed the agency's Russia desk; Burrows was stationed in India, Greece and Brussels. Both served as spies for Her Majesty's government.

The difference between the two is that Steele won't talk, at least not publicly. Burrows spoke one year ago to The New Yorker -- and now he's agreed to be interviewed by DER SPIEGEL.

Steele is the author of the dossier on Donald Trump and his entourage that was leaked to the public two years ago, shortly before the inauguration of the 45th president of the United States. In the report, the former spook cites high-ranking sources from Russia who make scandalous allegations. They say that Trump was wooed and backed by Putin's regime for years, and they accuse his election team of colluding with the Russians in the summer of 2016 in a bid to tarnish Hillary Clinton's reputation and win the election.

For over two years now, the Russia affair has been hanging like a dark cloud over Trump's presidency. In a report published on Jan. 26, The New York Times listed more than 100 contacts that Trump and his allies had with Russia, such as meetings, emails and text messages, just in the period of time between the launching of his candidacy and the day of his inauguration.

Meanwhile, special counsel Robert Mueller has indicted 34 suspects, including Trump's former campaign manager, Paul Manafort, who is mentioned in the Steele dossier along with many other Trump allies. The most recent indictment was filed by Mueller on Jan. 24 against Roger Stone, a longtime Trump adviser. Stone is accused of witnesses tampering and making false statements to a congressional committee about his communications with WikiLeaks, which published emails stolen from the Democratic National Committee during the presidential election campaign. Stone denies the allegations.

Steele's Russia dossier lies at the heart of the scandal. It reads today like a preview of everything that has happened since then. Many of the names that dominate the Trump-Russia affair appeared for the first time in the report, like Aras Agalarov, for example, a Russian property mogul. There's also Trump's former lawyer Michael Cohen, former campaign adviser Carter Page, Trump's former national security adviser, Michael Flynn, and Rosneft Chairman Igor Ivanovich Sechin. They all appear in Steele's report -- and they've all become important for Robert Mueller's investigation.

The 35-page dossier consists of 17 individual reports that Steele wrote between June and December 2016. The report was commissioned by a Washington-based political research and intelligence firm called Fusion GPS. The investigation was initially ordered by a major Republican donor to gather material against Trump, but it was later funded by the Democrats.

Steele alerted the FBI to his suspicions back in July 2016. Together with the findings of the FBI, the dossier blew open the scandal. Steele is ultimately responsible for a good deal of the investigative work that led to the appointment of a special investigator. Aspects of Steele's report that seemed incredible and inconceivable over two years ago now sound far more plausible.

The most vulgar and still unconfirmed allegation is listed right at the beginning of the dossier, on Page 2. According to Steele's sources, Trump stayed in the presidential suite of the Moscow Ritz-Carlton Hotel and reportedly looked on as prostitutes gave each other golden showers on a bed in which Barack Obama had once slept. One informant said that the Russian authorities had collected "enough embarrassing material" to blackmail Trump.

Trump denies the allegations. Last week, he took to Twitter again to denounce Steele's dossier, which he claims was paid for by Clinton, as "fake and unverified." The paper continues to hound him.

The story of the Trump-Russia dossier vacillates between an espionage thriller and a mafia movie set in London, Berlin, Prague, Moscow, New York and Washington. Key figures include former British agents Steele and Burrows; Trump's former associate Michael Cohen; journalist Ben Smith, the editor-in-chief of BuzzFeed News, which decided two years ago to publish the dossier; and Carter Page, a pro-Russian consultant who has received death threats.

I. The Spies

Christopher Burrows is the kind of intelligence agent who quickly charms people. He's cultured, well-read, has a penchant for the fine arts and can fluently converse in Greek, German and French. He's sitting in a café in Berlin, not far from Savignyplatz, and he's here on a rather unpleasant business matter. Burrows' firm is engaged in a legal battle with the German company Bilfinger over 150,000 euros in outstanding fees for an investigation commissioned by the company.

Burrows knows Berlin from previous stays. He came to the city as a student in the late 1970s and served as a member of the British Embassy staff in the mid-1980s. Speaking in German, he orders calf's liver, Berlin style. Then he says: "We didn't expect the findings on Russia to reach the public."

This is the second time that he has spoken publicly on the matter, the first time being last year in an interview with a journalist from The New Yorker. Burrows says it annoys him that the report is referred to as a "dossier" when "it's actually information that is referred to as 'raw intelligence' in intelligence circles." He says the reports are in large part a summary of tips from sources that Steele knew from his time in Russia -- a mixture of knowledge, rumor and hearsay, not a "dossier."

He goes on to say that an intelligence agency would enrich the findings with data, test probabilities and write analyses. It's an elaborate process. But Steele is not an intelligence agency. His company employs eight people. Steele is a man with good contacts.

His job was to investigate whether and -- if they actually did it -- how Trump's people colluded with the Russians. When he found information that confirmed this theory, he informed the U.S. authorities. "We were concerned about national security," says Burrows. After all, as he points out, it concerned a presidential candidate who may have been manipulated by Russia.

Steele and Burrows are convinced that spies from friendly powers should assist each other if they suspect foul play. Both men move in a world of people who work in the shadows, deal with sensitive information and go to the office in the morning with the knowledge that they carry the weight of the world on their shoulders. They see themselves as indispensable, but, as with Christopher Steele, are not prepared to speak openly about it. They're not really spies - they're more like business people.

Burrows says: "We also informed the German authorities when we received information that terrorists were mingling with Syrian refugees."

Steele's first report to his client was submitted on June 20, 2016, and the second dates from July 26. In early August both of these reports were handed over to FBI agents in Rome. Steele's findings made their way into the ongoing U.S. investigations into Trump's election campaign team.

II. The Witness

For years, Michael Cohen was the self-proclaimed "fixer" in the Trump organization, sort of like a crime-scene cleanup man who shows up when the boss has messed up again. He has the compact and pugnacious strut of an amateur boxer who expects somebody to take a swing at him at any moment. Only 17 months ago, he said that he would take a bullet for Trump. Now he's cooperating with Mueller and has become the key witness in the affair.

Cohen's story shows to what extent the dossier anticipated developments that did not come to the attention of the public until months and, in some cases, years later. Steele's suspicions were staggering. During the election campaign, Cohen allegedly took part in a clandestine meeting with envoys dispatched by the Russian president. According to Steele's source -- who is the friend of a "Kremlin insider," -- the meeting with the Russians took place in Prague, sometime in August or September 2016. Cohen maintains to this day that he has never been to Prague.

Cohen is also an interesting minor character in this saga because he has sparked so many new scandals. First his name appeared in the Trump-Russia dossier, then last year he said that, acting on orders from Trump, he paid $130,000 in hush money to a porn star to cover up their alleged affair.

According to the dossier, Cohen and three other Trump emissaries met with people in Prague, including a man named Oleg Solodukhin. The meeting allegedly had to do with paying off Romanian hackers who, under the direction of the Kremlin, had been working to undermine the Clinton campaign. Cohen and Solodukhin reportedly discussed how they could funnel the money to the hackers and how the cooperation between Trump and Putin's people could be covered up.

Steele wrote that Trump's people and the Russians agreed at the meeting that the Romanian hackers should go into hiding and "other operatives should head for a bolt-hole in Plovdiv, Bulgaria where they should 'lay low.'"

What a story! -- that is, if it's true. Trump's lawyer allegedly conspired with the Kremlin. If this can be proved, it would amount to treason, but so far there is no concrete proof.

Late last year, the U.S. newspaper publishing group McClatchy reported that one of Cohen's mobile phones had logged on to a cell phone tower near Prague at the time in question. The journalists referred to four anonymous sources. But Cohen has repeatedly stated that he has never been to Prague or anywhere else in the Czech Republic.

Oleg Solodukhin, the alleged contact from Russia, works for a Russian government agency in Prague. Western agencies have reason to believe that the agency has close ties to the Russian intelligence service. In a written statement to DER SPIEGEL, Solodukhin denies having met Cohen or anyone else from Trump's entourage. He also says that he has never worked for intelligence agencies.

Neither Steele nor Burrows are willing to comment on the individual allegations in the dossier. Close associates of theirs, though, say that the two men are fairly certain that Cohen was in Prague in late summer. There is no proof, they admit, but there are indications that a meeting may have taken place. Cohen could have flown to Germany in a private jet and landed at an airfield in Bavaria, from where he could have crossed the Czech border without being checked. Cohen's lawyer declined to comment on this and instead made reference to Cohen's statement from August 2017, in which he denies all allegations.

This fits with a story currently circulating among intelligence officials in Europe. Acting "on behalf of an affiliated agency," the Czech intelligence agency purportedly planned to observe a meeting between Solodukhin and another individual. But the surveillance was reportedly called off "because the matter was too sensitive and the security precautions surrounding the meeting were too tight." The Russians had "taken countermeasures." The Czechs were allegedly not informed by their foreign partners of the reason behind the operation or who might possibly attend the meeting.

The Prague story was so important to Steele that he wrote an update on Cohen five weeks after Trump's election victory. This was the last of his 17 reports, dated Dec. 13, 2016. His previous reports were already on the desk of then-FBI Director James Comey. The Steele dossier started to make the rounds in Washington.

III. The Journalist

The headquarters of BuzzFeed News is located on the fifth floor of an office building not far from the East Village in New York. An assistant leads the way along rows of workstations, all occupied by journalists, and motions toward a conference room with glass walls. Slips of paper, books and notes lie scattered on the table, and a half-empty bottle of whiskey stands on a shelf.

Ben Smith apologizes for being late -- he just gave a TV interview. The previous evening, BuzzFeed reported that Cohen told special counsel Robert Mueller he had been instructed by Trump to lie to Congress about a real estate project in Moscow. The news sent shockwaves through Washington, even though the special counsel quickly denied the story. Cohen, as usual, was making headlines.

Smith says he learned about the existence of the dossier before Christmas 2016. He was not the first journalist to hear about Steele's investigations. At the time, Steele had traveled to Washington and informed a select group of reporters. In late October, Mother Jones magazine published an article outlining Steele's findings. Smith was determined to get his hands on the dossier.

BuzzFeed News can't be compared with The New York Times. The website is colorful, plastered with photos, and it occasionally tips into gaudiness. It's immediately apparent that much of the workforce here is under 50. At the same time, Smith endeavors to publish investigative reporting. "We've been reporting aggressively on the Russia scandal for more than two years," he says.

In late December 2016, Smith dispatched a reporter to Washington to find Steele's dossier. Parts of it had made their way into the hands of members of Congress. The journalist hit pay dirt with a staff member at the think tank of the now deceased Senator John McCain. Shortly thereafter, Smith had the dossier in his hands and set out to verify the information.

"We put a lot of reporters on it," says Smith. A team tackled the fact-checking, but it wasn't easy. Many claims were difficult to verify working under pressure and with limited resources, especially without a direct line to Trump or Putin. A BuzzFeed reporter flew to Prague with a photo of Michael Cohen and asked hotel staff if they recognized the man. Then, while their reporting efforts were in full swing, a CNN report broke that was the first to mention "memos" by a former intelligence agent.

This was on Jan. 10, 2017. Smith said: Let's post the dossier online.

It was one of the most momentous journalistic decisions of recent years. A secret report alleging that a newly elected president had won the election with the help of the Kremlin was suddenly revealed to the eyes of the world. The big difference here was that these sensational findings originated not from a government or an intelligence agency, but instead from the interview notes of a former spook with friends in Russia.

"It was a big deal for us to release the dossier," says Smith, adding that the American public had a right to see the original document. When Steele wrote his reports, says Smith, the Americans knew hardly anything about Russian attempts to influence the election. "In the summer of 2016, these were explosive accusations."

This sparked a race among American journalists to land exclusive stories. It looked as if Trump's presidency was hanging by a thread even before he was sworn into office. Less than two weeks after taking office, Trump fired National Security Advisor Michael Flynn because he had lied about his contacts to the Russian ambassador -- and in May, the president dismissed FBI Director James Comey, presumably in the hope of burying the investigation. Then came Mueller.

BuzzFeed continues to benefit from the dossier, and Smith's reporters are still getting mileage out of Steele's findings today.

IV. The Adviser

Carter Page was at the airport in Boston, waiting for a flight to the Middle East, when Smith published the Steele dossier. Page is a wiry, baldheaded man who gets red in the face when he's nervous. He was in the U.S. Navy, worked at an investment bank and finally joined the Trump team as a foreign policy adviser specializing in the energy sector and Russia.

Looking back, Page says: "I was just a minor player -- an unpaid volunteer."

Steele wrote on Page 9 of the dossier that Page secretly met with the head of Russian oil and gas giant Rosneft during the summer of 2016. The two men allegedly discussed the possibility of easing sanctions that the U.S. Treasury had imposed against the Rosneft CEO and other associates of Putin. On Page 30 of the dossier, it says that Page was offered Rosneft shares if Trump lifted the sanctions.

Page denies everything: the meeting with the Rosneft boss, the financial offer and the discussion about a more favorable U.S. foreign policy toward Moscow. His theory: "Mr. Steele was hired to influence an election." In other words, not to benefit Trump, but to help Hillary Clinton.

Early last week, he agreed to a short phone call, which ended up lasting a half-hour. He also sent text messages and emails to DER SPIEGEL with links to websites and documents as evidence of his innocence. Page says that Steele was fed false information by European intelligence agents to pave the way for a war against Russia. He says that he lived in Russia for three years, adding: "I know the truth."

It was a meandering interview. Page has the ability to dodge a question with such a profusion of words that you forget what it was you were asking. He refused to say from where he was making the call, citing the death threats that he has received. "I'm in the United States," was all he could say.

Has he ever met the head of Rosneft?

"Never," he said.

Has he spoken to others at Rosneft?

"Let me mention someone who I've met. He works for Gazprom and his name is Gerhard Schröder."

He never had anything to do with the people at Rosneft?

"OK, on July 6, 2016, I was in Moscow at a party thrown by an American bank. There were dozens of people there. By coincidence, I struck up a conversation with a guy from Rosneft. It was a real big deal." He means this ironically.

What remains certain is that Page was one of the campaign team members with connections to Moscow. Steele has documented this. Page's proximity to Putin's people is another piece in the Russia puzzle because it reveals how close the contacts to Moscow were within Trump's entourage.

Page is still dealing with the aftershocks of the dossier and he's embroiled in legal skirmishes. Among Russian experts in Washington he has a reputation for being a hopeless Putin apologist. Six years ago, two Russian undercover agents in New York tried to recruit him as an informant -- that's documented because the FBI had wiretapped the phone call at the time.

What did the Russians have to say about page? He's an "idiot."

V. The Consequences

Chris Burrows, the former spy and Steele partner, orders a cup of coffee after his meal. He says that the weeks following the publication of the dossier were the worst of his life. Photographers and camera teams camped out in front of his office, and eventually also at the door to his house in York. "My wife took the children and headed north to stay with friends for a few days. I spent a night at my eldest daughter's place in London."

Steele was harder hit. His picture was all over the newspapers, TV and internet. He went into hiding for two months, slept at friends' houses and grew a full beard so he wouldn't be recognized. "What worried him the most was his three cats," says Burrows. "We were under siege and didn't know if a maniac wanted to get at our throats." They suspected that an Israeli detective agency run by former Mossad agents had been hired to track them down.

The excitement has since died down. The two former spooks are able to resume their work, even though the publication of the dossier has meant that they have been called to testify in lawsuits involving the Russian Alfa Bank and entrepreneur Aleksey Gubarev. The number of requests for their services has risen, says Burrows. Ultimately, the dossier has been good for business.

Michael Cohen, Trump's former associate, was sentenced last December to three years in jail. He'll start serving his term in March. Cohen says that he and his family felt "threatened" by Trump and, in a surprise move, he decided to cancel a planned public congressional testimony. It sounded like something out of The Sopranos. This Friday, he is expected to testify in a closed-door session before the Senate Intelligence Committee.

Steele's reports on Russia remain astonishingly newsworthy two years after they were released. It seems that every week there is a yet another breaking news story that stems from something in the dossier. Now it's up to Robert Mueller to separate truth from fiction.

Friends of Steele say that the former agent believes that "80 to 90 percent" of the contents of the dossier are true. Perhaps a source here and there has made a mistake or exaggerated, but they argue that the main points of his findings have been confirmed. This is especially true when it comes to the extent that Russia exerted influence on the presidential election. They point out that Trump allowed himself to be compromised by his business dealings in Russia, as confirmed by countless revelations that have surfaced since the dossier was published.

And what about the allegation that Trump hired prostitutes to urinate on a hotel bed in Moscow where the Obamas once slept? Even people close to Steele doubt that proof of this will ever be found. Steele always gives the same response to this question: "The sources for this were good."

Translated from the German by Paul Cohen

The Brexit delusion of creating ‘Singapore upon Thames’

Promoting a small Asian city-state as a model for Britain is magical thinking

Martin Wolf

Singapore is not a laissez faire paradise © Bloomberg

Inside two months, the UK might have crashed out of the EU into a “no deal” limbo. What happens then? For some Brexiters, the answer seems to be to blame this disaster on the EU and then turn the UK into Singapore, or what they imagine Singapore to be. These people are right on one thing: Singapore has been a great economic success. But it is not a laissez faire paradise. On the contrary, its success has been built on hard work, forced sacrifices and a (relatively benign) authoritarianism. We should learn from Singapore, but must not think it a plausible model for the UK’s future.

Of the economic successes of the UK’s former colony, there is no doubt. By 1980, Singapore’s real gross domestic product per head had converged on the UK’s. By 2018, it was more than twice as high. According to the IMF, Singapore’s real GDP per head is fourth in the world (after Qatar, Macau and Luxembourg).

As a city-state with a tiny domestic market, Singapore’s future lay in attracting foreign multinationals and skills. With no domestic market to speak of, free trade was an obvious choice. But free trade is not laissez faire. Singapore promoted new industries. It continues to have large shareholdings via Temasek, its sovereign wealth fund.

Singapore has exploited a superb location in the fast-growing Asian region, its increasingly high-quality workforce and low taxes to turn itself into a premier hub for international business. But it has also participated actively in regional integration via the Association of Southeast Asian Nations. Crucially, the reliability of Singapore’s “offer” to the world is underpinned by the fact that just one highly competent governing party has ruled it throughout its history as an independent country.

Among complementary explanations for Singapore’s fast growth is that it invests so much: between 2008 and 2018, it invested an average of 29 per cent of GDP, while the UK invested a mere 17 per cent. This also helps explain why Singapore’s infrastructure is exceptional. Singapore had a staggering savings rate of 47 per cent of GDP in those years, against the UK’s miserable 12 per cent. Singapore’s gross savings rates are heavily distorted by inclusion of the profits of multinationals. Yet even savings rates in “indigenous GDP” have been around 30 per cent.

One explanation for these high savings is the “central provident fund”, which compels workers and employers to contribute 37 per cent of wages and salaries up to age 55. People use this money for house purchases, health and pensions: it is Singapore’s alternative to a redistributive welfare state. Another explanation is fiscal surpluses: between 2008 and 2018, these averaged 5 per cent of GDP. Amazingly, Singapore’s net international assets reached 340 per cent of gross national income in 2017.

How can anybody imagine this is a credible model for Brexit Britain? Far from being able to offer stability to global businesses, the UK is busily blowing up the basis on which many of them came to the UK. Far from guaranteeing favourable access to its most important regional economic arrangement, the UK is leaving it, possibly without any deal at all. And, far from being a city-state of 5.6m people, the UK is a geographically, socially and politically diverse democratic polity of 66m. Its future should not — and will not — be determined by people and businesses enticed by turning it into nothing more than a haven of low taxation and light regulation. That cannot stand.

It would be wrong to argue that the UK lacks everything Singapore possesses. Its civil service is non-corrupt, for example, and the rule of law remains entrenched. It would be quite wrong, too, to argue that the UK is unable to learn a great deal from Singapore. Indeed, it would be a good idea for the UK to learn from successes elsewhere. A determined effort to raise abysmally low savings and investment rates, improve infrastructure and transform educational standards, all hallmarks of Singapore’s development, would be highly desirable. Singapore has also raised home ownership to an extraordinary rate of 91 per cent. All these are achievements from which the UK could seek to learn. But they also demand difficult political choices and sacrifices.

The idea that eliminating tariffs and regulations and slashing taxes will deliver broadly-shared prosperity in post-Brexit Britain is a fantasy.

The Singapore example is far more complex and nuanced than that. The two economies and polities are starting from quite different places, with different histories and different possibilities. To believe otherwise is magical thinking. To inflict magical thinking on the lives of real people is an unforgivable political sin.