Business
Charles Kernaghan, Scourge of Sweatshops, Is Dead at 74
Charles Kernaghan, who with a single-minded ardour and tireless power uncovered the prevalence of sweatshop-made items in America’s toy sections, shops and movie star style traces, died on June 1 at his residence in Manhattan. He was 74.
His sister, Maryellen Kernaghan, introduced the loss of life however didn’t present a trigger.
Because the longtime director of a shoestring group referred to as the Nationwide Labor Committee, Mr. Kernaghan was among the many first activists to point out that the seemingly magical drop in costs for a variety of shopper items within the Eighties and ’90s was a results of American firms’ shift of manufacturing to growing nations, the place employees typically toiled in harmful situations for pennies an hour.
He specialised within the high-profile takedown, going after manufacturers like Nike, Disney and Walmart. He focused Bratz dolls, Eddie Bauer out of doors put on and Microsoft wi-fi mice. In 2007 he confirmed that crucifixes bought at St. Patrick’s Cathedral in Manhattan got here from a Chinese language sweatshop.
A self-described introvert, Mr. Kernaghan turned a special particular person in entrance of an viewers. He might communicate for hours, rattling off tales and knowledge in a method that gave a human face to the free-trade debate.
“He had a worldview, which is that behind all of the comfortable discuss of the attire {industry} and company social duty was the truth is a brutal, exploitative {industry} that was based mostly on a world race to the underside, and he took it upon himself to show that hypocrisy,” Mark Levinson, the chief economist at Employees United and the Service Workers Worldwide Union, mentioned in a telephone interview. “And he did it brilliantly.”
Mr. Kernaghan’s first huge exposé got here in 1992, when he and his colleagues confirmed how American assist backed the development of sweatshops within the growing world. Their report, which offered the premise for a “60 Minutes” phase, led to laws banning U.S. help for factories that don’t meet labor and security requirements.
In 1995, after spending months investigating El Salvadoran factories that provided the Hole, he launched a report displaying how a lot the attire firm relied on sweatshop labor. To ram his level residence, he took one of many employees, a 15-year-old woman named Judith Viera, on a 14-city talking tour.
At first, the Hole denied his allegations; then it blamed its suppliers. However after protests erupted in opposition to the corporate, it agreed to permit impartial screens into the vegetation.
Whereas Mr. Kernaghan was on a analysis journey to a Hole provider in Honduras, a employee slipped him a tag with a special title on it: that of the tv host Kathie Lee Gifford. She was incomes $9 million a yr licensing her title to a model bought at Walmart, and boasting that a part of the proceeds went to charity.
Mr. Kernaghan did extra digging, and in April 1996 he instructed Congress what he had discovered: To make Ms. Gifford’s clothes, ladies as younger as 15 labored for 31 cents an hour, 75 hours per week.
Two days later, Ms. Gifford, on her present “Reside With Regis and Kathie Lee,” fought again tears as she tried to defend herself, calling Mr. Kernaghan’s testimony “a vicious assault.”
However she finally agreed to permit screens, and Mr. Kernaghan — now often called “the person who made Kathie Lee cry” — turned a drive for the attire {industry} to reckon with. In 1997 he rented a airplane to fly over the Academy Awards ceremony in Los Angeles, trailing a banner that learn, “Disney Makes use of Sweatshops.”
“Charlie had a knack for publicity,” Jo-Ann Mort, a communications guide who labored with garment-industry unions, mentioned in a telephone interview. “He knew easy methods to get public consideration on the difficulty.”
When he wasn’t in Central America or Asia, he was touring the lecture circuit. He gave as much as 85 speeches a yr, typically with a sweatshop employee in tow, or with a bag from which he would pull a T-shirt or sweater and yell, “There’s blood on this garment!”
He typically spoke on faculty campuses, and within the late Nineties he helped encourage the scholar anti-sweatshop motion, which in flip turned a big a part of the anti-free-trade coalition of the 2000s.
“He was a dynamic orator who might debate anybody on these points,” mentioned Peter Romer-Friedman, a civil rights lawyer who helped lead the campus anti-sweatshop motion as an undergraduate on the College of Michigan, and who considers Mr. Kernaghan a mentor. “He was only one these guys, you could possibly really feel the fervour right down to his bones.”
Charles Patrick Kernaghan was born on April 2, 1948, in Brooklyn. His father, Andrew, was a Scottish immigrant who put in acoustic tiles, and his mom, Mary (Znojemsky) Kernaghan, was a volunteer social employee born in what was then Czechoslovakia.
His mother and father instilled in Charles a robust sense of social justice: They fostered greater than 20 youngsters, they usually pushed him, his sister and his brother towards community-focused careers. (His sister labored for a nonprofit, and his brother, John, who died in 1990, was a Jesuit priest).
His sister is his solely fast survivor.
Mr. Kernaghan acquired a level in psychology from Loyola College in Chicago in 1970, and a grasp’s in the identical topic from the New Faculty for Social Analysis in Manhattan in 1975. He later taught at Duquesne College, in Pittsburgh, however he quickly deserted his educational aspirations.
For some time, he drifted. In America and through prolonged journeys by Europe and the Center East, he labored as a carpenter, a steward and a stevedore; at one level he drove a cab late at evening in New York Metropolis, with a hatchet on his dashboard to dissuade robbers.
He additionally took up images, aspiring to make use of his digicam to disclose social injustice. In 1985 Mr. Kernaghan joined a peace march in El Salvador, organized to protest government-sanctioned violence in opposition to clergymen and labor leaders. He introduced his tools, and a number of other of his pictures appeared in main newspapers, together with The New York Instances.
It was throughout that journey that he first encountered members of the Nationwide Labor Committee in Help of Democracy and Human Rights in El Salvador, a tiny New York-based group that operated out of workplace area offered by a garment employees union. By it, he turned energetic within the motion to show America’s position in supporting right-wing violence in Central America, and he finally joined the committee’s employees. He turned director in 1990.
As he deepened his involvement, Mr. Kernaghan started to obtain threatening telephone calls telling him to cease his activism. One evening in 1988, he was asleep in his Manhattan residence when a person got here by the window, introduced, “I’m going to kill you,” and stabbed him within the chest with a bread knife.
Medics took Mr. Kernaghan to the hospital, however when medical doctors instructed him that he didn’t have any life-threatening accidents, he slipped out and was again at work a couple of days later. The assailant was by no means caught.
Mr. Kernaghan’s group moved in 2008 to Pittsburgh on the invitation of the United Metal Employees union. It additionally modified its title to the much less unwieldy Institute for International Labor and Human Rights.
He introduced his retirement in 2017. However he insisted that there was extra work to be achieved.
“If our garments might discuss,” he instructed The Pittsburgh Submit-Gazette in 2012, “they might be screaming.”
Business
Cookies, Cocktails and Mushrooms on the Menu as Justices Hear Bank Fraud Case
In a lively Supreme Court argument on Tuesday that included references to cookies, cocktails and toxic mushrooms, the justices tried to find the line between misleading statements and outright lies in the case of a Chicago politician convicted of making false statements to bank regulators.
The case concerned Patrick Daley Thompson, a former Chicago alderman who is the grandson of one former mayor, Richard J. Daley, and the nephew of another, Richard M. Daley. He conceded that he had misled the regulators but said his statements fell short of the outright falsehoods he said were required to make them criminal.
The justices peppered the lawyers with colorful questions that tried to tease out the difference between false and misleading statements.
Chief Justice John G. Roberts Jr. asked whether a motorist pulled over on suspicion of driving while impaired said something false by stating that he had had one cocktail while omitting that he had also drunk four glasses of wine.
Caroline A. Flynn, a lawyer for the federal government, said that a jury could find the statement to be false because “the officer was asking for a complete account of how much the person had had to drink.”
Justice Ketanji Brown Jackson asked about a child who admitted to eating three cookies when she had consumed 10.
Ms. Flynn said context mattered.
“If the mom had said, ‘Did you eat all the cookies,’ or ‘how many cookies did you eat,’ and the child says, ‘I ate three cookies’ when she ate 10, that’s a false statement,” Ms. Flynn said. “But, if the mom says, ‘Did you eat any cookies,’ and the child says three, that’s not an understatement in response to a specific numerical inquiry.”
Justice Sonia Sotomayor asked whether it was false to label toxic mushrooms as “a hundred percent natural.” Ms. Flynn did not give a direct response.
The case before the court, Thompson v. United States, No. 23-1095, started when Mr. Thompson took out three loans from Washington Federal Bank for Savings between 2011 and 2014. He used the first, for $110,000, to finance a law firm. He used the next loan, for $20,000, to pay a tax bill. He used the third, for $89,000, to repay a debt to another bank.
He made a single payment on the loans, for $390 in 2012. The bank, which did not press him for further payments, went under in 2017.
When the Federal Deposit Insurance Corporation and a loan servicer it had hired sought repayment of the loans plus interest, amounting to about $270,000, Mr. Thompson told them he had borrowed $110,000, which was true in a narrow sense but incomplete.
After negotiations, Mr. Thompson in 2018 paid back the principal but not the interest. More than two years later, federal prosecutors charged him with violating a law making it a crime to give “any false statement or report” to influence the F.D.I.C.
He was convicted and ordered to repay the interest, amounting to about $50,000. He served four months in prison.
Chris C. Gair, a lawyer for Mr. Thompson, said his client’s statements were accurate in context, an assertion that met with skepticism. Justice Elena Kagan noted that the jury had found the statements were false and that a ruling in Mr. Thompson’s favor would require a court to rule that no reasonable juror could have come to that conclusion.
Justices Neil M. Gorsuch and Brett M. Kavanaugh said that issue was not before the court, which had agreed to decide the legal question of whether the federal law, as a general matter, covered misleading statements. Lower courts, they said, could decide whether Mr. Thompson had been properly convicted.
Justice Samuel A. Alito Jr. asked for an example of a misleading statement that was not false. Mr. Gair, who was presenting his first Supreme Court argument, responded by talking about himself.
“If I go back and change my website and say ‘40 years of litigation experience’ and then in bold caps say ‘Supreme Court advocate,’” he said, “that would be, after today, a true statement. It would be misleading to anybody who was thinking about whether to hire me.”
Justice Alito said such a statement was, at most, mildly misleading. But Justice Kagan was impressed.
“Well, it is, though, the humblest answer I’ve ever heard from the Supreme Court podium,” she said, to laughter. “So good show on that one.”
Business
SEC probes B. Riley loan to founder, deals with franchise group
B. Riley Financial Inc. received more demands for information from federal regulators about its dealings with now-bankrupt Franchise Group as well as a personal loan for Chairman and co-founder Bryant Riley.
The Los Angeles-based investment firm and Riley each received additional subpoenas in November from the U.S. Securities and Exchange Commission seeking documents and information about Franchise Group, or FRG, the retail company that was once one of its biggest investments before its collapse last year, according to a long-delayed quarterly filing. The agency also wants to know more about Riley’s pledge of B. Riley shares as collateral for a personal loan, the filing shows.
B. Riley previously received SEC subpoenas in July for information about its dealings with ex-FRG chief executive Brian Kahn, part of a long-running probe that has rocked B. Riley and helped push its shares to their lowest in more than a decade. Bryant Riley, who founded the company in 1997 and built it into one of the biggest U.S. investment firms beyond Wall Street, has been forced to sell assets and raise cash to ease creditors’ concerns.
The firm and Riley “are responding to the subpoenas and are fully cooperating with the SEC,” according to the filing. The company said the subpoenas don’t mean the SEC has determined any violations of law have occurred.
Shares in B. Riley jumped more than 25% in New York trading after the company’s overdue quarterly filing gave investors their first formal look at the firm’s performance in more than half a year. The data included a net loss of more than $435 million for the three months ended June 30. The shares through Monday had plunged more than 80% in the past 12 months, trading for less than $4 each.
B. Riley and Kahn — a longstanding client and friend of Riley’s — teamed up in 2023 to take FRG private in a $2.8-billion deal. The transaction soon came under pressure when Kahn was tagged as an unindicted co-conspirator by authorities in the collapse of an unrelated hedge fund called Prophecy Asset Management, which led to a fraud conviction for one of the fund’s executives.
Kahn has said he didn’t do anything wrong, that he wasn’t aware of any fraud at Prophecy and that he was among those who lost money in the collapse. But federal investigations into his role have spilled over into his dealings with B. Riley and its chairman, who have said internal probes found they “had no involvement with, or knowledge of, any alleged misconduct concerning Mr. Kahn or any of his affiliates.”
FRG filed for Chapter 11 bankruptcy in November, a move that led to hundreds of millions of dollars of losses for B. Riley. The collapse made Riley “personally sick,” he said at the time.
One of the biggest financial problems to arise from the FRG deal was a loan that B. Riley made to Kahn for about $200 million, which was secured against FRG shares. With that company’s collapse into bankruptcy in November wiping out equity holders, the value of the remaining collateral for this debt has now dwindled to only about $2 million, the filing shows.
Griffin writes for Bloomberg.
Business
Starbucks Reverses Its Open-Door Policy for Bathroom Use and Lounging
Starbucks will require people visiting its coffee shops to buy something in order to stay or to use its bathrooms, the company announced in a letter sent to store managers on Monday.
The new policy, outlined in a Code of Conduct, will be enacted later this month and applies to the company’s cafes, patios and bathrooms.
“Implementing a Coffeehouse Code of Conduct is something most retailers already have and is a practical step that helps us prioritize our paying customers who want to sit and enjoy our cafes or need to use the restroom during their visit,” Jaci Anderson, a Starbucks spokeswoman, said in an emailed statement.
Ms. Anderson said that by outlining expectations for customers the company “can create a better environment for everyone.”
The Code of Conduct will be displayed in every store and prohibit behaviors including discrimination, harassment, smoking and panhandling.
People who violate the rules will be asked to leave the store, and employees may call law enforcement, the policy says.
Before implementation of the new policy begins on Jan. 27, store managers will be given 40 hours to prepare stores and workers, according to the company. There will also be training sessions for staff.
This training time will be used to prepare for other new practices, too, including asking customers if they want their drink to stay or to go and offering unlimited free refills of hot or iced coffee to customers who order a drink to stay.
The changes are part of an attempt by the company to prioritize customers and make the stores more inviting, Sara Trilling, the president of Starbucks North America, said in a letter to store managers.
“We know from customers that access to comfortable seating and a clean, safe environment is critical to the Starbucks experience they love,” she wrote. “We’ve also heard from you, our partners, that there is a need to reset expectations for how our spaces should be used, and who uses them.”
The changes come as the company responds to declining sales, falling stock prices and grumbling from activist investors. In August, the company appointed a new chief executive, Brian Niccol.
Mr. Niccol outlined changes the company needed to make in a video in October. “We will simplify our overly complex menu, fix our pricing architecture and ensure that every customer feels Starbucks is worth it every single time they visit,” he said.
The new purchase requirement reverses a policy Starbucks instituted in 2018 that said people could use its cafes and bathrooms even if they had not bought something.
The earlier policy was introduced a month after two Black men were arrested in a Philadelphia Starbucks while waiting to meet another man for a business meeting.
Officials said that the men had asked to use the bathroom, but that an employee had refused the request because they had not purchased anything. An employee then called the police, and part of the ensuing encounter was recorded on video and viewed by millions of people online, prompting boycotts and protests.
In 2022, Howard Schultz, the Starbucks chief executive at the time, said that the company was reconsidering the open-bathroom policy.
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