Business
Russia Strikes Danube Port, Escalating Attacks on Ukraine Grain Routes
Russia for the first time on Monday attacked a port on the Danube River in Ukraine, close to the Romanian border, Ukrainian and Romanian officials said, destroying a grain hangar in an escalation of its efforts to cripple Kyiv’s agriculture and risking a more direct confrontation with the United States and its European allies.
The assault on the port in the town of Reni, across the river from Romania, a NATO member, targeted Kyiv’s alternative export routes for grain to reach world markets, days after Russia terminated a deal that had enabled Ukraine to ship its grain across the Black Sea. The attack is the closest Moscow has come to hitting the military alliance’s territory since Russia’s full-scale invasion of Ukraine last year.
The port strike came amid two drone attacks in central Moscow on Monday morning that Russian officials blamed on Ukrainian forces. At least two nonresidential buildings were hit about 4 a.m. local time, Mayor Sergei Sobyanin of Moscow said on the Telegram messaging app. He added that there had been no “serious damage or casualties.”
Ukrainian and Romanian officials denounced the port strike, with President Klaus Iohannis of Romania condemning the attack on Ukrainian infrastructure close to his country’s borders. He said on Twitter that the “recent escalation poses serious risks to the security in the Black Sea,” as well as affecting Ukrainian grain shipments and global food security.
Romania’s Defense Ministry said it was maintaining a posture of “enhanced vigilance” with its allies along the alliance’s eastern flank. But the ministry added in a statement that “there are no potential direct military threats against our national territory or Romania’s territorial waters.”
Since the Kremlin pulled out of the Black Sea Grain Initiative last week, its forces have launched a barrage of attacks nearly every night on the city of Odesa — which is about 130 miles from Reni — and its Black Sea port, destroying grain stocks and infrastructure. Those attacks, along with Moscow’s warning that it would consider any ship approaching Ukraine’s Black Sea ports as potentially carrying military cargo, made Ukraine’s alternative grain routes more vital.
Ukraine, a major producer of grain and other food crops, has been exporting around two million metric tons of grain per month through its Danube ports, according to Benoît Fayaud, the deputy executive director of Stratégie Grains, an agricultural economy research firm.
The attack in Reni, about 70 miles from the coast, could deter commercial vessels from using the port in the short term and raise the cost of insurance, Mr. Fayaud said.
Global wheat prices rose by around 5.5 percent in Monday morning trading.
The Moscow and Danube attacks occurred amid a grinding war that has seen Ukraine mount a slow counteroffensive to take back territory seized by Russian forces. Kyiv has rarely admitted to attacking Russian territory far from the front line, but the drone strike in Moscow was not the first since the war began.
In May, eight drones targeted Moscow, the Russian capital, shattering windows in three residential buildings and injuring two residents, according to officials. The strikes confronted Muscovites with the reality of Russia’s war in Ukraine, which President Vladimir V. Putin had worked to shield from their daily lives. That assault came after Russian forces had launched another in a series of overnight attacks on Kyiv, the Ukrainian capital.
After the drone strikes on Monday, videos verified by The New York Times showed damage in at least two locations near the Moskva River in southern Moscow. One building struck is about a block from the Russian National Defense Management Center, an imposing structure used to conduct “centralized combat management of the Russian armed forces,” according to the ministry’s website.
Smoke could be seen rising from the top floors of a high-rise building housing a French home-improvement chain. Other footage showed damage to several structures along Komsomolsky Prospect — an avenue that runs through one of the most upscale parts of central Moscow and that is close to the Defense Ministry — including the building housing the Military University and the Central Military Band, a performance group of the Russian Armed Forces.
It was not possible to determine whether drones had caused the damage. But the authorities blocked off part of Komsomolsky Prospect after finding one of the drones there, state news media reported. The Russian authorities said they had destroyed two drones.
Later on Monday, another drone crashed near a residential building in the Pervomaiskoe district of Moscow, but no injuries were immediately reported, according to local news outlets.
The Danube port attack occurred over the course of four hours, Oleh Kiper, the head of the regional military administration in that area of Ukraine, wrote on Telegram. Ukraine’s air defenses shot down three drones, he said, adding that seven people were wounded, three from shrapnel. One had serious injuries.
Mike Lee, director of Green Square Agro Consultancy, which specializes in the Black Sea and Eastern Europe, called the attack on Reni a “massive escalation” by Moscow in terms of the effect it could have on Ukraine’s ability to use alternative routes for its exports.
Russia fired last year on western Ukraine near the border with Poland, also a NATO member, but had not hit Ukrainian facilities so close to territory covered by the military alliance’s commitment to respond jointly to an attack on a member state. NATO and Poland said that what had detonated a few miles outside Ukraine’s border in November most likely had been a remnant of a Ukrainian surface-to-air missile, though U.S. and NATO officials still held Russia responsible as the aggressor.
Cheerleaders of Russia’s war praised the strikes on the port as a further step toward destroying Ukraine’s economy and blocking what they described as Western arms deliveries.
They said that Kyiv had been taking advantage of the port’s proximity to NATO territory — and the fact that ships can approach it along the Danube without sailing through Ukrainian waters in the Black Sea — as a way of continuing to export grain and other goods during the war.
“It looks like they’re blocking this way of evading the sea blockade of Kyiv,” a Russian talk show host, Olga Skabeyeva, said on the Rossiya state television channel. “And soon they’ll completely deny Ukraine access to the Black Sea.”
A popular pro-war blog, known as Rybar, also claimed that the Reni port was being used to supply Ukraine’s military, along with exporting grain.
On Monday, the F.S.B., Russia’s successor to the K.G.B., claimed that it had evidence that Ukraine imported explosives in May across the Black Sea to one of its Danube ports. The claim could not be independently verified.
The Danube River delta, a network of waterways crisscrossing the border region of Moldova, Romania and Ukraine, had been rarely used to export Ukrainian grain before the invasion, but over the past year, it has become indispensable.
The grain deal first brokered by the United Nations and Turkey last year covered a trio of major Black Sea ports, and enabled Ukraine to ship more than 30 million tons of grain. At the same time, smaller ports on the Danube that were not part of the deal were able to send out shipments that wended their way to the Black Sea and on to international destinations.
Those routes — as well as overland pathways — became vital after Russia terminated the Black Sea deal, saying its demands had to be met. Moscow had complained bitterly that the deal was biased toward Kyiv and that Western sanctions that restricted the sale of its own agricultural products should be lifted, among other demands.
The United Nations has said that Russia’s attempts to stop Ukraine’s exports would exacerbate a hunger crisis faced by some countries in Africa and the Middle East. Ukraine exports grain via road and rail into European Union countries, as well as via the Danube ports.
Since the start of the war, Ukraine has sent more than 20 million tons of grain to foreign markets through Romania and millions more by train through Poland, a inflow that infuriated East European farmers who said it drove down local prices. After protests in some E.U. countries, the bloc allowed Bulgaria, Hungary, Poland, Romania and Slovakia to ban domestic sales of Ukrainian wheat, corn, rapeseed and sunflower seeds, though it continued to allow the transit of those items for export elsewhere.
The ban is expected to end on Sept. 15. Last week, ministers from those five countries called for the bans to be extended.
On Monday, President Volodymyr Zelensky of Ukraine pushed back on that idea, saying on Telegram that extending the ban would be “unacceptable in any form.”
Yurii Shyvala, Anton Troianovski and Gabriela Sá Pessoa contributed reporting.
Bezos, Zuckerberg and Coke at the inauguration
Corporate America had already raced to donate big sums to Donald Trump’s record-breaking inaugural fund. Now some of its leaders appear eager to jockey for prominent positions at the inauguration next week.
It’s a new reminder that for some of the nation’s biggest businesses, forging close ties to a president-elect who is promising hard-hitting policies like tariffs is a priority this time around.
Jeff Bezos and Mark Zuckerberg are expected to be on the inauguration dais, according to NBC News, alongside Elon Musk and several cabinet picks.
The presence of Musk isn’t a surprise, given the Tesla chief’s significant support of and huge influence over Trump. But the other tech moguls have only more recently been seen as supporters of the administration. (Indeed, Bezos frequently sparred with Trump during his first presidential term.)
It’s the latest effort by Bezos and Zuckerberg to burnish their Trump credentials. At the DealBook Summit in December, Bezos — whose Amazon has faced scrutiny under the Biden administration and whose Blue Origin is hoping to win government rocket contracts — said that he was “very hopeful” about Trump’s efforts to reduce regulation.
And Zuckerberg recently announced significant changes to Meta’s content moderation policy, including relaxing restrictions on speech seen as protecting groups including L.G.B.T.Q. people that won praise from Trump and other conservatives. On the inauguration front, Zuckerberg is also co-hosting a reception alongside the longtime Trump backers Miriam Adelson, Tilman Fertitta and Todd Ricketts.
Both tech moguls have visited Mar-a-Lago since the election, with Zuckerberg having done so more than once.
Coca-Cola took a different tack. The drinks giant’s C.E.O., James Quincey, gave Trump what an aide called the “first ever Presidential Commemorative Inaugural Diet Coke bottle.”
More broadly, business leaders want a piece of the inauguration action. The Times previously reported that the Trump inaugural fund had surpassed $170 million, a record, and that even major donors have been wait-listed for events.
Others are throwing unofficial events around Washington, including an “Inaugural Crypto Ball” that will feature Snoop Dogg, with tickets starting at $5,000, The Wall Street Journal reports.
It’s a reminder that C.E.O.s are reading the room, and preparing their companies for a president who has proposed creating an “External Revenue Service” to oversee what he has promised will be wide-ranging tariffs.
David Urban, a longtime Trump adviser who’s hosting a pre-inauguration event, told The Journal, “This is the world order, and if we’re going to succeed, we need to get with the world order.”
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In other Trump news: The president-elect is expected to appear via videoconference at the World Economic Forum in Davos, Switzerland, which starts on Inauguration Day, according to Semafor.
HERE’S WHAT’S HAPPENING
Investors brace for the latest inflation data. The Consumer Price Index report, due out at 8:30 a.m. Eastern, is expected to show that inflation ticked up last month, most likely because of climbing food and fuel costs. Global bond markets have been rattled as slow progress on slowing inflation has prompted the Fed to slash its forecast for interest rate cuts.
More Trump cabinet picks will appear before the Senate on Wednesday. Senator Marco Rubio of Florida, the choice for secretary of state, is expected to field questions about his views on the Middle East, Ukraine and China, but is expected to be confirmed. Russell Vought, the pick to run the Office of Management and Budget, will most likely be asked about his advocacy for drastically shrinking the federal government, a key Trump objective. And Sean Duffy, the Fox Business host chosen to lead the Transportation Department, will probably face questions on how he would oversee matters including aviation safety and autonomous vehicles, the latter of which is a priority for Elon Musk.
Meta plans to lay off another 5 percent of its employees. Mark Zuckerberg, the tech giant’s C.E.O., told staff members to prepare for “extensive performance-based cuts” as the company braces for “an intense year.” The social media giant faces intense competition in the race to commercialize artificial intelligence.
A new bill would give TikTok a reprieve from a ban in the United States. Senator Ed Markey, Democrat of Massachusetts, said he planned to introduce the Extend the TikTok Deadline Act, which would give the video platform 270 additional days to be divested from its Chinese parent, ByteDance before being blacklisted. It’s the latest effort to buy TikTok time, as the app faces a Jan. 19 deadline set by a law; President-elect Donald Trump has opposed the potential ban as well.
A question of succession
JPMorgan Chase and BlackRock, the giant money manager, just reported earnings. (In short: Both handily beat analyst expectations.)
But the Wall Street giants are likely to face questioning on a particular issue on Wednesday: Which top lieutenants are in line to replace their larger-than-life C.E.O.s, Jamie Dimon and Larry Fink.
Who’s out:
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Daniel Pinto, who had long been Dimon’s right-hand man, said he would officially drop his responsibilities as JPMorgan’s C.O.O. in June and retire at the end of 2026. Jenn Piepszak, the co-C.E.O. of the company’s core commercial and investment bank, has become C.O.O.
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And Mark Wiedman, the head of BlackRock’s global client business and a top contender to succeed Fink, is planning to leave, according to news reports.
What Wall Street is gossiping about JPMorgan: Even in taking the C.O.O. role, JPMorgan said that Piepszak wasn’t interested in succeeding Dimon “at this time.” DealBook hears that while she genuinely appears not to want to pursue the top job, the phrasing covers her in case she changes her mind.
For now, that means the most likely candidates for the top spot are Marianne Lake, the company’s head of consumer and community banking; Troy Rohrbaugh, the other co-head of the commercial and investment bank; and Doug Petno, a co-head of global banking.
The buzz around BlackRock: Wiedman reportedly didn’t want to keep waiting to succeed Fink and is expected to seek a C.E.O. position elsewhere. (So sudden was his departure that he’s forfeiting about $8 million worth of stock options and, according to The Wall Street Journal, he doesn’t have another job lined up yet.)
Fink said on CNBC on Wednesday that Wiedman’s departure had been in the works for some time, with the executive having expressed a desire to leave about six months ago.
Other candidates to take over for Fink include Martin Small, BlackRock’s C.F.O.; Rob Goldstein, the firm’s C.O.O.; and Rachel Lord, the head of international.
But Dimon and Fink aren’t going anywhere just yet. Dimon, 68, said only last year that he might not be in the role in five years. And Fink, 72, said in July that he was working on succession planning: “When I do believe the next generation is ready, I’m out.”
The S.E.C. gets in a final shot at Musk
Another battle between Elon Musk and the S.E.C. erupted on Tuesday, with the agency suing the tech mogul over his 2022 purchase of Twitter.
It’s unclear what happens to the lawsuit once President-elect Donald Trump, who counts Musk as a close ally, takes office. But the agency’s reputation as an independent watchdog may be at stake.
A recap: The S.E.C. accused Musk of violating securities laws in his $44 billion acquisition of the social media company.
The agency said that Musk had failed to disclose his Twitter ownership stake for a pivotal 11-day stretch before revealing his intentions to purchase the company. That breach allowed him to buy up at least $150 million worth of Twitter shares at a lower price — to the detriment of existing shareholders, the agency argues.
The S.E.C. isn’t just seeking to fine Musk. It wants him to pay back the windfall. “That’s unusual,” Ann Lipton, a professor at Tulane Law School, told DealBook.
Alex Spiro, Musk’s lawyer, called the latest action a “sham” and accused the agency of waging a “multiyear campaign of harassment” against him.
The showdown sets up a tough question for the S.E.C. Will Paul Atkins, the president-elect’s widely respected pick to lead the agency, drop the case? Such a move could call the bedrock principle of S.E.C. independence into question.
Jay Clayton, who led the agency during Trump’s first term, earned the respect of the business community for running it in a largely drama-free manner. It was under Clayton that the S.E.C. sued Musk over his statements about taking Tesla private.
Musk, who is set to become Trump’s cost-cutting czar and is expected to have office space in the White House complex, has called for the “comprehensive overhaul” of agencies like the S.E.C. The billionaire said he would also like to see “punitive action against those individuals who have abused their regulatory power for personal and political gain.”
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In related news: The Consumer Financial Protection Bureau sued Capital One, accusing it of cheating its depositors out of $2 billion in interest payments.
THE SPEED READ
Deals
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DAZN, the streaming network backed by the billionaire businessman Len Blavatnik, is closing in on funding from Saudi Arabia’s sovereign wealth fund as the kingdom continues to expand its sports footprint. (NYT)
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The Justice Department sued KKR, accusing the investment giant of withholding information during government reviews for several of its deals. KKR filed a countersuit. (Bloomberg)
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OpenAI added Adebayo Ogunlesi, the billionaire co-founder of the infrastructure investment firm Global Infrastructure Partners, to its board. (FT)
Politics and policy
Best of the rest
We’d like your feedback! Please email thoughts and suggestions to dealbook@nytimes.com.
As wildfires continue to burn around Southern California, thousands of business owners, homeowners and renters are confronting the daunting challenge of rebuilding from the ashes. For some number of them, the road ahead will be all the more difficult because they didn’t have any or enough insurance to cover their losses. For them, the U.S. Small Business Administration is a possible lifeline.
The SBA, which offers emergency loans to businesses, homeowners, renters and nonprofits, is among the few relief options for those who don’t have insurance or are underinsured. Uninsured Angelenos can also apply for disaster assistance through the Federal Emergency Management Agency, or FEMA.
The current wildfires are ravaging a state that was already in the midst of a home insurance crisis. Thousands of homeowners have lost their insurance in recent years as providers pull out of fire-prone areas and jack up their prices in the face of rising risk.
“For those who are not going to get that insurance payout, this is available,” Small Business Administration head Isabella Casillas Guzman said in an interview during a recent trip to the fire areas. “The loans are intended to fill gaps, and that is very broad.”
About one-third of businesses don’t have insurance and three-quarters are underinsured, Guzman said.
“There will be residual effects around the whole community,” she said. “Insurance will not cover this disaster.”
Businesses, nonprofits and small agricultural cooperatives can apply for an economic injury loan or a physical damage loan through SBA. Homeowners are eligible for physical damage loans. Economic injury loans are intended to help businesses meet ordinary financial demands, while physical damage loans provide funds for repairs and restoration. People can apply online and loans must be repaid within 30 years.
Renters can receive up to $100,000 in assistance, homeowners up to $500,000 and businesses up to $2 million, according to Guzman. Homeowners and renters who cannot get access to credit elsewhere can qualify for loans with a interest rate of 2.5%. The SBA determines an applicant has no credit available elsewhere if they do not have other funds to pay for disaster recovery and cannot borrow from nongovernment sources.
Interest rates for homeowners and renters who do have access to credit elsewhere are just over 5%. Loans for businesses could come with interest rates of 4% or 8% depending on whether the business has other credit options.
An applicant must show they are able to repay their loan and have a credit history acceptable to the SBA in order to be approved. The loans became available following President Biden’s declaration of a major disaster in California.
“We’ve already received hundreds of applications from individuals and businesses interested in exploring additional support,” Guzman said. “We know the economic disruption may not be contained to the footprint of any evacuation zones or power outages.”
People who don’t have insurance or whose insurance doesn’t cover the entirety of their losses are eligible for loans, Guzman said. While many will use the funds to start from scratch after losing their property to the fires, businesses that are still standing can also apply for support to cover lost revenue.
Guzman was not able to estimate the total value of loans they expect to offer in California but said the organization is on solid financial footing after temporarily running out of funds in October.
“Funding has been replenished by Congress, and we expect to be able to coordinate closely with Congress,” Guzman said. “We’re fully funded and in a good position to provide support.”
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.”
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