Business
Ignacio E. Lozano Jr., longtime La Opinión publisher, dies at 96
Ignacio E. Lozano Jr. loved to tell the story about arriving in Los Angeles in 1948 from the University of Notre Dame with a journalism degree, taking a look at his family’s business — and immediately fearing it was doomed.
His father, Ignacio E. Lozano Sr., was a pioneering publisher who founded a Spanish-language daily in San Antonio before launching La Opinión in Los Angeles on Mexican Independence Day in 1926. His broadsheet quickly earned a following in L.A. and beyond by serving as a portal back home to the hundreds of thousands of Mexican immigrants who, like him, had fled their country’s political chaos and settled in Southern California.
Lozano Jr. became associate publisher under his father, then at the age of 27 succeeded him as publisher after the elder Lozano died of cancer. The way the young heir saw it, though, La Opinión’s days were numbered. Mexican migration to the United States had slowed, and second-generation Mexicans didn’t seem to crave the same news their parents did.
“The Mexican-American would be totally assimilated into the community,” Lozano told The Times in 1976. “They would no longer speak, much less read, Spanish.”
Fortunately for the family business, he was wrong.
Lozano died Wednesday in Los Angeles of age-related complications. He was 96.
In the decades after his serendipitously erroneous prediction, migration from Latin America radically transformed Los Angeles and made Spanish the city’s second language. La Opinión under Lozano expanded from focusing largely on foreign news to covering local issues important to Latinos that the English-language media either ignored or grossly misinterpreted.
As La Opinión’s influence spread and Latino migration continued, government officials sought Lozano’s counsel. He was named a consultant to the U.S. State Department by President Lyndon Johnson, was appointed to the Council of the Californias by then-Gov. Ronald Reagan, and joined President Richard Nixon’s Advisory Council on Spanish-Speaking Americans.
His political rise reached an apogee in 1976, when President Gerald Ford appointed Lozano as U.S. ambassador to El Salvador. He and his wife embarked to the Central American country, leaving La Opinión in the hands of their son and daughter, Jose Ignacio and Leticia.
Lozano stayed in that position for only nine months, but what he saw profoundly affected him. Catholic priests and liberal government officials were being kidnapped and murdered with impunity, and the American Embassy had to deal with increasing requests for asylum from people afraid that they might be next.
He warned a House subcommittee in 1977 about the “campaign of vilification” the Salvadoran government was waging against the Roman Catholic Church, which would culminate three years later in the assassination of Archbishop Óscar Romero, whom Lozano knew personally.
After stepping down as ambassador, Lozano returned to La Opinión. He knew Los Angeles would receive an unprecedented influx of refugees from Central America, and asked his staff to be ready.
“He allowed me to do the journalism that I wanted to do and we needed to do,” said J. Gerardo López, who joined La Opinión as a reporter in 1977 and worked there for 27 years, the last nine as executive editor. When López one day remarked offhandedly to Lozano — whom he affectionately referred to as mi gran jefazo (my big boss-man) — that congressional hearings on immigration were about to start, Lozano told him to get on a plane to Washington, D.C. By then, La Opinión was one of the largest Spanish-language newspapers in the United States.
“That type of confidence — who gives it to you?” said López. “It wasn’t necessary to talk to him about issues or stories — they gushed out of him.”
In 2006, after receiving a lifetime achievement award from the newspaper El País in Madrid to mark La Opinión’s 80th anniversary, Lozano said in an interview with the paper he’d since retired from: “The interests of a businessman aren’t always the same of the community in general. But in the case of our family and [newspaper], I believe that our interests coincided with those of all the Hispanic community.”
“He saw that ahead of others,” said retired USC journalism professor Félix Gutiérrez, who got to know Lozano in the 1980s. “He was aware of the impact of, the importance of, what he was doing and the community that he was serving.”
“Dad understood that our community needed a vehicle that could represent their voice, their interests and also communicate to the broader audience in Los Angeles the incredible contributions that we were making,” said Monica Cecilia Lozano, his daughter. She, like her three siblings, followed in their father’s path to work at La Opinión and its parent company, ImpreMedia.
Lozano stepped down as publisher in 1986, handing the position to son Jose Ignacio — but Lozano’s influence was just beginning. He sat on corporate boards where he was frequently the only Latino in the room, including for Bank of America, Walt Disney Co., National Public Radio and his alma mater. He advised CEOs and community leaders alike, and cheered on as his children took La Opinión into the digital age and covered the continued rise of Latinos in L.A. and beyond.
“He was wealthy, he was well-liked, but he never, never forgot the people who bought his newspapers and whom he sought to represent,” said Antonia Hernández, former president of the Mexican American Legal Defense and Educational Fund as well as the California Community Foundation, nonprofits on whose boards Lozano sat. “He was the epitome of corporate business success and having pride in being Mexican American.”
Young people, Hernández continued, “say that’s no big thing. Hell, when you’re from a community where no one pays attention to you and treats you as insignificant, that’s a hell of a lot.”
Ignacio Eugenio Lozano Jr. was born in San Antonio in 1926, the same year his father debuted La Opinión. The son was raised in the Alamo City until he left for college. When he arrived in Los Angeles, Ignacio Jr. told his father he would never return to their hometown.
Ignacio Sr. instilled in his son early on the philosophy that he told The Times in 1987 his paper tried to live up to every day: “Being honest with our readers. Playing it straight in our dealings with the political world, not allowing influence by our advertisers, trying to present the news as honestly as we can.”
In 1953, Lozano Jr. took over a newspaper with a new printing plant, a circulation of 12,000 and existential challenges. The paper under his father had covered local issues overlooked or vilified by L.A.’s English-language newspapers, like the forced deportations of Mexican and American citizens during the 1930s, the Zoot Suit Riots in 1943, and the 1949 election of Edward Roybal, the first Latino member of the L.A. City Council since the 19th century. But La Opinión was still mostly oriented toward Mexico.
Circulation growth had slowed. Competition emerged with Spanish-language radio and the debut of television station KMEX Channel 34 in 1962. The younger Lozano decided he needed to reorient his paper to focus on L.A.
“It is no longer a Mexican newspaper published in Los Angeles,” he told The Times in 1976, “but an American newspaper which happens to be published in Spanish.”
He hired more reporters, expanded coverage into Orange County, and urged his writers to find stories and issues that would explain Southern California and the United States to the Latin Americans who were coming in increasing numbers to the region after the loosening of immigration laws in 1965.
“He started thinking about the newspaper as not just a newspaper, but as a spotlight on the community as an entity in itself,” said Jose Ignacio Lozano, who began working in the printing press in high school and eventually left college to work alongside his dad full time after Lozano told him the best way to impact Latinos was “by running this newspaper.”
“People would read it and they would pass it along,” said Gutiérrez, the USC professor, who was part of the underground Chicano press in the late 1960s, a scene that La Opinión covered. “It wasn’t a read-and-toss-it type of paper.”
La Opinión’s success made Lozano one of the wealthiest Latinos in the United States — he liked to commute in his Porsche from his Lido Isle home to his paper’s downtown L.A. offices. It also made him Los Angeles royalty. For decades, his family hosted luncheons at the Dorothy Chandler Pavilion attended by the city’s political and Latino elite to simultaneously celebrate La Opinión’s anniversary and Mexican Independence Day. He golfed in Scotland, belonged to the Newport Beach Yacht Club, and flew his plane to tailgate at Notre Dame before football games.
At home, Lozano required that his children speak only Spanish and be proud of their Mexican roots in then ultra-white Orange County. He also pushed them to follow his lead — not just professionally, but by giving back to Latinos.
His philanthropic interests included the Boy Scouts, college scholarships at his alma mater, and the world of theater; while on the board of directors of South Coast Repertory, Lozano successfully pushed for the Hispanic Playwrights Project to help Latino writers develop works, an innovative program that was the first of its kind in the U.S.
“I’ve been ‘the Latino’ on enough mainstream community organizations,” Lozano told the Times in 1987. “It’s time I devoted more attention to things that interest me as a Latino, things that show an interest in the Latino community and culture.”
His noblesse oblige masked a steely newsman who stood by his publication and industry whenever they were under attack.
Lozano was deeply shaken by the 1970 killing of his friend Ruben Salazar as the Los Angeles Times columnist was covering the Chicano Moratorium in East Los Angeles. The following year, La Opinión’s front office was bombed as part of a string of explosions at Spanish-language media entities that Los Angeles police never solved.
Left-leaning activists would complain that the paper was too conservative and was missing important stories. Lozano once invited them into his office so they could let him have it. He heard them out, then went through the clippings they had brought and calmly showed where they were wrong. With nothing to say in response, the activists left.
Lozano served for years as head of the Inter American Press Assn., which advocates for a free press across Latin America. “When you look at the ways some of our colleagues have to live in other parts of the world, you give thanks to God and to the U.S. Constitution,” he told The Times in 1978.
That belief was tested in 1981, when La Opinión photographer Octavio Gomez told his bosses that Immigration and Naturalization Service agents had intimidated and assaulted him as he covered anti-deportation protests.
The paper complained to the local U.S. district attorney’s office, and when immigration officials denied the allegations and said their agents were just doing their job, Lozano sued the agency. In 1985, U.S. District Court Judge Mariana R. Pfaelzer awarded Gomez and La Opinión $300,000 and described the behavior of the immigration agents as “outrageous and … intentional.”
“While we appreciate the damages that were awarded, the most important thing in this case was the principle,” Lozano told The Times. “We do not want our [reporters and photographers] to be intimidated by immigration officials.”
By the time Lozano stepped down as publisher the following year, La Opinión’s circulation had increased to 70,000. He remained on the governing board of the paper for a few years, and engineered a 50-50 partnership in 1990 with the Los Angeles Times’ parent company that allowed his family to maintain editorial oversight.
While he no longer had a day-to-day involvement in the paper after his retirement, Lozano’s example of advocating for Latinos via reporting always loomed large for La Opinión staff and leadership. It proved especially influential in 1994, when anti-immigrant sentiment stoked by Republican leaders led to the passage of Proposition 187, which sought to make life miserable for undocumented immigrants. La Opinión aggressively covered the ballot initiative and the movement against it. The coverage pleased the patriarch, who left the GOP.
“I thought it was time for us to help our readers become active citizens, those who weren’t citizens to become citizens, and those who were citizens to register to vote and become part of the community, calling their own shots for what was best for them,” Lozano said of the coverage, speaking in a documentary made for the 90th anniversary of La Opinión.
But by then, the Lozanos were no longer involved in the paper. They had taken back full control of La Opinión in 2004, then merged with El Diario/La Prensa in New York with plans for a Spanish-language news empire. Circulation reached about 125,000. But the vicissitudes of journalism in the online era caught up with the family. A Argentine newspaper bought a controlling interest in ImpreMedia in 2012 and took it over outright in 2016.
The day that happened, Monica Lozano went to her dad to break the news, expecting to hear his disappointment. “He told me, ‘Monica, it is extraordinary that in this day and age, it has been family-held and -operated for as long as it has. To do what we have done for as long as we had done is extremely meaningful. Be proud of that legacy.’”
Lozano was preceded in death in 2018 by Marta Navarro Lozano, his wife of 67 years. He is survived by his daughters Monica Cecilia Lozano and Leticia Eugenia Lozano, his sons Jose Ignacio Lozano and Francisco Antonio Lozano, and nine grandchildren. A celebration of life is planned for sometime in 2024.
Business
4 Takeaways From the Arguments Before the Supreme Court in the TikTok Case
The Supreme Court on Friday grappled over a law that could determine the fate of TikTok, an enormously popular social media platform that has about 170 million users.
Congress enacted the law out of concern that the app, whose owner is based in China, is susceptible to the influence of the Chinese government and posed a national risk. The measure would effectively ban TikTok from operating in the United States unless its owner, ByteDance, sells it by Jan. 19.
Here are some key takeaways:
The court appeared likely to uphold the law.
While the justices across the ideological spectrum asked tough questions of both sides, the overall tone and thrust appeared to suggest greater skepticism toward the arguments by lawyers for TikTok and its users that the First Amendment barred Congress from enacting the law.
The questioning opened with two conservative members of the court, Justice Clarence Thomas and Chief Justice John G. Roberts Jr., suggesting that it was not TikTok, an American company, but its Chinese parent company, ByteDance, that was directly affected by the law.
Another conservative, Justice Brett M. Kavanaugh, focused on the risk that the Chinese government could use information TikTok is gathering on tens of millions of American teenagers and twentysomethings to eventually “develop spies, turn people, blackmail people” when they grow older and go to work for national security agencies or the military.
Justice Elena Kagan, a liberal, asked why TikTok could not just create or buy another algorithm rather than using ByteDance’s.
And another liberal, Justice Ketanji Brown Jackson, said she believed the law was less about speech than about association. She suggested that barring TikTok from associating with a Chinese company was akin to barring Americans from associating with foreign terrorist groups for national security reasons. (The Supreme Court has upheld that as constitutional.)
Still, several justices were skeptical about a major part of the government’s justification for the law: the risk that China might “covertly” make TikTok manipulate the content shown to Americans or collect user data to achieve its geopolitical aims.
Both Justice Kagan and Justice Neil M. Gorsuch, a conservative, stressed that everybody now knows that China is behind TikTok. They appeared interested in whether the government’s interest in preventing “covert” leveraging of the platform by a foreign adversary could be achieved in a less heavy-handed manner, like appending a label warning users of that risk.
Lawyers for TikTok and for its users argued that the law is unconstitutional.
Two lawyers argued that the law violates the First Amendment: Noel Francisco, representing both TikTok and ByteDance, and Jeffrey Fisher, representing TikTok users. Both suggested that concerns about potential manipulation by the Chinese government of the information American users see on the platform were insufficient to justify the law.
Mr. Francisco contended that the government in a free country “has no valid interest in preventing foreign propaganda” and cannot constitutionally try to keep Americans from being “persuaded by Chinese misinformation.” That is targeting the content of speech, which the First Amendment does not permit, he said.
Mr. Fisher asserted that fears that China might use its control over the platform to promote posts sowing doubts about democracy or pushing pro-China and anti-American views were a weaker justification for interfering in free speech than concerns about foreign terrorism.
“The government just doesn’t get to say ‘national security’ and the case is over,” Mr. Fisher said, adding, “It’s not enough to say ‘national security’ — you have to say ‘what is the real harm?’”
The Biden administration defended Congress’s right to enact the law.
The solicitor general, Elizabeth B. Prelogar, argued that Congress had lawful authority to enact the statute and that it did not violate the First Amendment. She said it was important to recognize that the law leaves speech on TikTok unrestricted once the platform is freed from foreign control.
“All of the same speech that’s happening on TikTok could happen post-divestiture,” she said. “The act doesn’t regulate that at all. So it’s not saying you can’t have pro-China speech, you can’t have anti-American speech. It’s not regulating the algorithm.”
She added: “TikTok, if it were able to do so, could use precisely the same algorithm to display the same content by the same users. All the act is doing is trying to surgically remove the ability of a foreign adversary nation to get our data and to be able to exercise control over the platform.”
The court appears unlikely to wait for Trump.
President-elect Donald J. Trump has asked the Supreme Court to issue an injunction delaying the law from taking effect until after he assumes office on Jan. 20.
Mr. Trump once shared the view that Chinese control of TikTok was an intolerable national security risk, but reversed course around the time he met with a billionaire Republican donor with a stake in its parent company.
If the court does uphold the law, TikTok would effectively be banned in the United States on Jan. 19, Mr. Francisco said. He reiterated a request that the court temporarily pause the law from taking effect to push back that deadline, saying it would “simply buy everybody a little breathing space.” It might be a “different world” for TikTok after Jan. 20, he added.
But there was scant focus by the justices on that idea, suggesting that they did not take it seriously. Mr. Trump’s brief requesting that the court punt the issue past the end of President Biden’s term so he could handle it — signed by his pick to be the next solicitor general, D. John Sauer — was long on rhetoric extolling Mr. Trump, but short on substance.
Business
'We will not be closing.' Amid the fires, employers and employees walk a fine line between work and safety
When Brigitte Tran arrived Wednesday morning at the Rodeo Drive boutique where she works as a sales associate, she was on edge.
Smoke from multiple wildfires raging across Los Angeles County billowed overhead. The luxury shopping corridor usually bustling with tourists appeared a ghost town.
Tran’s co-worker texted their boss to let her know neighboring stores had closed, and described the acrid smoke in the air. But the woman, at home in Orange County, did not seem to grasp their concerns. “We will not be closing unless the mall instructs us to close,” she replied.
Tran, who, fearing professional repercussions, asked that her place of work not be named, grew more anxious as the hours ticked by. Around 3 p.m., she and the two other employees working that day mutinied. They packed up, told the security guard to head home, and locked the doors a few hours before closing time.
As the wildfires have raged across Los Angeles County, choking the air, closing schools and forcing tens of thousands of people to evacuate, employers and employees alike have had to manage a difficult balancing act between work and well being. Some employers responded swiftly to the crisis, shutting down offices and shifting to remote work, providing outdoor workers with masks and other protective equipment, and offering support for employees forced to evacuate. Others have been less adept, clumsy in their communications or wholly unmoved by worker concerns — sparking anger among their ranks as a result.
The fires have underscored the need for companies to have a clear plan in place to respond to emergencies, said Jonathan Porter, a meteorologist at private weather forecaster AccuWeather. The obligation, he said, goes beyond monitoring whether an office is in an evacuation zone. For example, as the current devastation unfolds, businesses should be aware of the “copious amounts of dangerous smoke that’s wafting into the air” and be prepared to provide outdoor workers with quality respirators or move them away from polluted air.
Some employers gave employees flexibility. Snap, the Santa Monica-based creator of the photo messaging app Snapchat, for example, kept its offices open on Wednesday but encouraged employees to work remotely, said a company spokesperson.
Others changed course after fielding criticism.
An announcement by UCLA that the campus would remain open for classes and regular operations on Wednesday drew anger from some instructors and students on social media.
Victor Narro, project director for the UCLA Labor Center and a lecturer on campus, said in a post on X he would ignore UCLA’s mandate and hold an optional class online.
“Students have been up all night panicked about sleeping through evacuation orders, winds still high, branches falling all over Westwood, power outages across city, & our new chancellor (on his 2nd day) thought this should be his first bold call…” wrote Nour Joudah, an assistant professor in UCLA’s Asian American Studies Department, in another X post.
That evening, UCLA changed course as conditions worsened, announcing it would close campus.
On Saturday, UCLA Chancellor Julio Frenk released a statement saying classes would be held remotely for at least another week and campus operations would be curtailed. “We ask for continued flexibility and understanding as we all work through these difficult times,” Frenk wrote.
But for many workers, the chaos of the last few dayshas left them feeling like they are fending for themselves.
Tim Hernandez, a driver with Amazon Flex, an on-demand Uber-like program in which people use their own cars to deliver packages, was assigned a route Tuesday along the Pacific Coast Highway toward Malibu, which was rife with closures.
When he questioned whether making the delivery was safe, he said dispatchers at a Amazon facility in Camarillo brushed him off, leaving him to choose between concerns for his safety and worries that his rating in the Flex app would be hurt if he refused to go. He decided to try to make the deliveries, battling gusts of wind that knocked him over at one point. He lost cell signal, however, and was forced to return to the warehouse without completing the vast majority.
And when he arrived for his shift Tuesday, Alfred Muñoz, 43, an Amazon delivery driver who works out of a warehouse in the City of Industry, said he was handed an N95 mask but given little other instruction.
“It was just kind of business as usual,” Muñoz said.
High package counts and the number of stops on his assigned routes this week have made work even more difficult. On Tuesday, with wind gusts whipping debris around making it difficult to see, he had about 180 stops and 290 packages to deliver. On Thursday, the air thick with smoke and ash, he had more than 300 packages.
He woke up Thursday morning with a bloody nose and a sooty black crust in the corners of his eyes.
In response to a request for comment, Montana MacLachlan, an Amazon spokesperson, said the company was “closely monitoring the wildfires across Southern California and adjusting our operations to keep our employees and those delivering for us safe.”
“If a driver arrives at a delivery location and the conditions are not safe to make a delivery, they are not expected to do so and the driver’s performance will not be impacted,” she said.
At the Brentwood location of popular Italian eatery Jon & Vinny’s, staff complained of headaches and sore throats in a text message group chat. An employee, who asked not to be named fearing retaliation at work, said that on Tuesday, staff huddled around an iPad with a fire map pulled up to keep an eye on the expanding evacuation zone. From the front of the restaurant, they could see the glow of the Palisades fire.
The employee said they were frustrated management kept the restaurant open when the perimeter of the mandatory evacuation zone was just two blocks away. On Wednesday, every server scheduled to work called in to say they were not coming, the employee said.
A spokesperson for Joint Venture Restaurant Group, which owns Jon & Vinny’s, did not immediately respond to a request for comment.
During natural disasters and extreme weather, employers’ choices can sometimes mean life or death, said David Michaels, a professor at the Milken Institute School of Public Health and a former assistant secretary of labor for the Occupational Safety and Health Administration.
He pointed to recent floods from Hurricane Helene that killed several workers at a plastics manufacturer. The tragedy has drawn scrutiny from state investigators, and a wrongful death lawsuit accuses the company of requiring employees to stay on site amid flooding after they requested permission to leave.
“It’s incumbent on employers to ensure the safety of their workers,” Michaels said. “The safety of their employees must take precedence over business concerns.”
Yasha Timenovich, 48, a driver for rideshare app Lyft and food delivery platform DoorDash, is more worried about declining earnings than on-the-job safety. With many restaurants and other businesses closed and would-be customers fleeing the city, he said that rides and deliveries have been slow. Traffic patterns have been strange and unpredictable with families piling into vehicles to flee fires.
Timenovich, who faced an order to evacuate his Hollywood apartment with his fiance and 6-year-old daughter Wednesday night, said he planned to stay with relatives for a few days in San Luis Obispo, where he hopes business will be better.
“I’m going to get out of here because it’s too crazy with these fires,” Timenovich said.
Business
Scott Bessent, Trump’s Billionaire Treasury Pick, Will Shed Assets to Avoid Conflicts
Scott Bessent, the billionaire hedge fund manager whom President-elect Donald J. Trump picked to be his Treasury secretary, plans to divest from dozens of funds, trusts and investments in preparation to become the nation’s top economic policymaker.
Those plans were released on Saturday along with the publication of an ethics agreement and financial disclosures that Mr. Bessent submitted ahead of his Senate confirmation hearing next Thursday.
The documents show the extent of the wealth of Mr. Bessent, whose assets and investments appear to be worth in excess of $700 million. Mr. Bessent was formerly the top investor for the billionaire liberal philanthropist George Soros and has been a major Republican donor and adviser to Mr. Trump.
If confirmed as Treasury secretary, Mr. Bessent, 62, will steer Mr. Trump’s economic agenda of cutting taxes, rolling back regulations and imposing tariffs as he seeks to renegotiate trade deals. He will also play a central role in the Trump administration’s expected embrace of cryptocurrencies such as Bitcoin.
Although Mr. Trump won the election by appealing to working-class voters who have been dogged by high prices, he has turned to wealthy Wall Street investors such as Mr. Bessent and Howard Lutnick, a billionaire banker whom he tapped to be commerce secretary, to lead his economic team. Linda McMahon, another billionaire, has been picked as education secretary, and Elon Musk, the world’s richest man, is leading an unofficial agency known as the Department of Government Efficiency.
In a letter to the Treasury Department’s ethics office, Mr. Bessent outlined the steps he would take to “avoid any actual or apparent conflict of interest in the event that I am confirmed for the position of secretary of the Department of Treasury.”
Mr. Bessent said he would shutter Key Square Capital Management, the investment firm that he founded, and resign from his Bessent-Freeman Family Foundation and from Rockefeller University, where he has been chairman of the investment committee.
The financial disclosure form, which provides ranges for the value of his assets, reveals that Mr. Bessent owns as much as $25 million of farmland in North Dakota, which earns an income from soybean and corn production. He also owns a property in the Bahamas that is worth as much as $25 million. Last November, Mr. Bessent put his historic pink mansion in Charleston, S.C., on the market for $22.5 million.
Mr. Bessent is selling several investments that could pose potential conflicts of interest including a Bitcoin exchange-traded fund; an account that trades the renminbi, China’s currency; and his stake in All Seasons, a conservative publisher. He also has a margin loan, or line of credit, with Goldman Sachs of more than $50 million.
As an investor, Mr. Bessent has long wagered on the rising strength of the dollar and has betted against, or “shorted,” the renminbi, according to a person familiar with Mr. Bessent’s strategy who spoke on condition of anonymity to discuss his portfolio. Mr. Bessent gained notoriety in the 1990s by betting against the British pound and earning his firm, Soros Fund Management, $1 billion. He also made a high-profile bet against the Japanese yen.
Mr. Bessent, who will be overseeing the U.S. Treasury market, holds over $100 million in Treasury bills.
Cabinet officials are required to divest certain holdings and investments to avoid the potential for conflicts of interest. Although this can be an onerous process, it has some potential tax benefits.
The tax code contains a provision that allows securities to be sold and the capital gains tax on such sales deferred if the full proceeds are used to buy Treasury securities and certain money-market funds. The tax continues to be deferred until the securities or money-market funds are sold.
Even while adhering to the ethics guidelines, questions about conflicts of interest can still emerge.
Mr. Trump’s Treasury secretary during his first term, Steven Mnuchin, divested from his Hollywood film production company after joining the administration. However, as he was negotiating a trade deal in 2018 with China — an important market for the U.S. film industry — ethics watchdogs raised questions about whether Mr. Mnuchin had conflicts because he had sold his interest in the company to his wife.
Mr. Bessent was chosen for the Treasury after an internal tussle among Mr. Trump’s aides over the job. Mr. Lutnick, Mr. Trump’s transition team co-chair and the chief executive of Cantor Fitzgerald, made a late pitch to secure the Treasury secretary role for himself before Mr. Trump picked him to be Commerce secretary.
During that fight, which spilled into view, critics of Mr. Bessent circulated documents disparaging his performance as a hedge fund manager.
Mr. Bessent’s most recent hedge fund, Key Square Capital, launched to much fanfare in 2016, garnering $4.5 billion in investor money, including $2 billion from Mr. Soros, but manages much less now. A fund he ran in the early 2000s had a similarly unremarkable performance.
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