Law And More

Apollo Continues Pivot into Sustainability - Focus on Transition to Non-Fossil Sources of Energy and Game Theory

Recently, Apollo Global Management had announced it was creating the function of Chief Sustainability Officer.

The mission has been to review all investments in terms of its compliance with ESG criteria for Environment, Social and Governance principles. This Law and More article analyses the rewards and risks of that move.

On Friday, October 22nd, the financial giant expanded its reach and branding in sustainability. As it details in its press release it has bet big money on the energy transition to non-fossil sources. Here is the financialese:

"Apollo (NYSE: APO) today announced that funds managed by its affiliates (the “Apollo Funds”) have agreed to invest $824 million in a convertible equity portfolio financing agreement with NextEra Energy Partners, LP (NYSE: NEP) in a 2.5 GW renewable energy generation portfolio (the “Portfolio”). The Apollo Funds committed to the investment as part of the sale of 50% of the Portfolio from NextEra Energy Resources, LLC, a subsidiary of NextEra Energy, Inc. (NYSE: NEE) to NextEra Energy Partners."

That portfolio contains 13 utility-scale wind and solar assets. Of those, three facilitate battery storage. 

The transaction had been handled by law firms Allen & Overy and Paul Weiss. 

What does this mean?

Well. to begin with, it's a kind of what's called "virtue signaling." That is, the message is: We are on the right side of global values. Salvation for mankind entails the battery's replacing gasoline.

In addition, Apollo is leveraging its influence to confirm the importance of energy transition. That includes how investors should make their choices. Yes, investors, non-fossil fuels are the horse to bet on.

And, Apollo is positioning and packaging itself as being in the front lines of a business philosophy that goes by the umbrella term "ESG." Apollo publishes an annual report "The Apollo ESG Effect." Here you can read it. 

The stars are aligned that Apollo will impact the energy sector in a major way.

In the global corridors of influence what moves the dial on getting things done are the connections among the movers and shakers. Journalist Hedrick Smith explained those dynamics in his book "The Power Game."

It is interesting to note in Apollo's journey toward being the player in sustainability its long-time legal counsel has been law firm Paul Weiss. Yes, that firm oversaw this most recent transaction. 

The Paul Weiss Chairperson Brad Karp has been a first-mover in the law firm sector's embrace of ESG values. For example, it established the first ESG practice.

Also, on personal level, Karp has mobilized collective action throughout law firms to support causes associated with ESG values. They include push-back against suppression of voters' rights. Those initiatives reinforced Paul Weiss' presence for being a force field in social justice. That fits nicely where Apollo is heading. 

It also can be useful to observe that Apollo's actions may be based on a version of game theory. The genius John Nash brought the erudite discipline mainstream. Recently I have created material for a client on the implications of game theory for the crypto market. 

Essentially, game theory strategy is about optimizing outcomes through ensuring cooperation among those in the loop. That seems to be underlying how Apollo is going about sustainability. The self-interest of all the players is brilliantly locked in. 

Game theory is becoming an increasingly useful lens for assessing investing initiatives. Meanwhile, green is good. It's in the public interest. 

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More Dirt Dished about Bill Gates - Did WSJ Hold Story Until After His Daughter's Wedding?

"More than a decade earlier [than 2019 expose of inappropriate behavior], Microsoft executives discovered emails between Mr. Gates and a midlevel female employee at the company while Mr. Gates was still an employee at Microsoft and chairman of the board, according to people familiar with the matter. In the messages, the then-married Mr. Gates was flirtatious and propositioned the female employee, the people said." - The Wall Street Journal

That WSJ story by Emily Glazer was published today as an exlusive. Therefore, it is to be assumed that the research had been "in the can" before today. And maybe even a draft of the article composed and passed along through approval channes before today,

So, some of us ordinary people are wonding this: Was it in deference to a powerful, wealthy man that the article was not published unitl the man's daughter had celebrated her wedding?

Yesterday, a day before the article, Bill Gates and his former wife Melinda Gates walked Jennifer Gates down the aisle. It ws one of those billionaire special events. You bet, more dirt about Papa Bear could have marred the aura.

Of course, this is just speculation by an Everywoman.

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Mayer Brown: The Business of Politics

"Mayer Brown’s decision to step aside from a controversial representation in Hong Kong has led to a call for a 'China-wide boycott' after the law firm announced that it would no longer assist an effort to remove a monument commemorating the Tiananmen Square massacre." - Chris Opfer, Bloomberg Law, October 18, 2021.

The political situation, which involved pressure from those in Europe and the United States, has turned into a potential business crisis for that law firm.

This development should send a chill throughout the global law-firm sector. It should especially send a warning to progressive United States law firms committed to what they define as "social justice." In addition, corporations, which are increasingly taking social-justices stances, could also find themselves in a Mayer Brown like pickle.

Essentially what has gone down is that Mayer Brown caved to the international court of public opinion. That advocated that the law firm should not represent Hong Kong University's initiative to remove the "Pillar of Shame" monument. And that's what Mayer Brown did.

Now, former Hong Kong chief executive Chun-ying Leung responded. He went on social network Facebook and rallied both enterprises and non-commercial organizations to not conduct business with Mayer Brown. He summed up the situation as the law firm's being unreliable in its professional duties. That had been through abandoning its client Hong Kong University.

Obviously, this boycott tool could be used by other entities around the world to influence the behavior of law firms. Just like the businesses they represent during this time of questioning the purpose of a corporation law firms could also be targeted for retaliation for political stances. Currently law firms have aligned with causes ranging from voting rights to pro-choice in abortion. Can they stand up to extreme push-back against that politics?

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Mental Illness & Racism in Diagnosis - "Chicago Med"

Producer Dick Wolf achieved success by configuring the plots of his television franchises "ripped from the headlines."

Well, there aren't enough headlines about assigning the diagnosis of schizophrenia more often to blacks than to non-blacks. On the Wolf series "Chicago Med," that was played out. The young black had been misdiagnosed and therefore not effectively treated. Dr. Charles took the time to evaluate the situation. The new diagnosis was bipolar. That has a more promising prognosis and carries less stigma.

The good news is that this issue is getting more attention. The New York Times published an article on how frequently blacks in nursing homes are assigned that label. 

With good reason, blacks and their loved ones shouldn't trust the mental health system in America. 

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The Great Firing & Suspected Leaks: Will This Shut Faucet Gush to Media and Other Reflections on Turbulent Times

What may have begun is The Great Firing associated with alleged leaking to the media.

Consequently, media outlets could find that the usual insider tipsters might go silent.

Legal tabloids like Abovethelaw in the U.S. and RollonFriday in the UK had developed their brand and business from leaks from internal sources. If those go kaput so could lots of their traffic.

Simultaneously, employers could establish more effective detection systems to identify leakers. 

At Netflix, the black pregnant leader of the trans resource group has been fired, reports The Verge. That's because of a supsicion of an unauthorized transmission of confidential data to Bloomberg. It had been allegedly related to how much Netflix paid for Dave Cahppelle's "The Closer" and the audience reach. The group had planned a walkout on October 20. Usually Netflix is a transparent player which encourages candid conversations. This development may be atypical. Or it could signal a shift in the culture.

Earlier, Ashley Gjovik, a former senior engineering program manager, was terminated in relation to Apple's antileak stance, reports 365NewsChannel. The specifics of this had been vague at the time of her termination.

But a week after that on September 15, a letter arrived fom law firm O'Melveny & Myers. Its spelled out details of intellectual property she had been accused of leaking.

However, she is in her final year of law school and asserts that the antileak employee policy as well as the strict employee handbook is illegal. Prior to her termination she had been outspoken in her criticisms of Apple. One beef had been about its association with alleged toxic chemicals.

Accusations about leaking, particularly data related with trade secrets, could be the legal tool employers leverage to tame activist employees.

Meanwhile, as the Rock Center for Coporate Governance at Stanford found in its research, that worker unrest is a major concern to the general counsel. Here is my article on such an issue published in O'Dwyer Public Relations. 

Both corporations, including its in-house legal department, and the employees are swept up in the chaos of changing values related to capitalism.

The Milton Friedman orthodoxy of the primacy of shareholder value is breaking down. There are growing demands for a broader focus. That is, there should be accountability for stakeholders ranging from employees to planet earth. Those frequently are summed up under the umbrella term "ESG,' that is, Environmental Social Governance.

Among the many understandings of “ESG” Investopedia’s is the most user-friendly. Essentially, it classifies ESG as a set of criteria for producing metrics on:

• The company's environmental imprint on planet earth.
• Its accountability for the needs of all stakeholders.
• The rules for operating the macro affairs of the corporation. That is, governance. (Be it WeWork or Theranos the alleged lack of proper govenance has become high profile.)

This confusion and its legal, political, stock price, branding, employee relations, and community implications have set in play a new kind of practice in large law firms. The shorthand title for it is "ESG."

The first in that niche had been Paul Weiss. That had been way back in April 2020. Its chairperson Brad Karp picked up on the perfect storm brewing. Here is how Paul Weiss had configured its ESG practice:

"Business leaders face greater pressure to increase their organizations’ resilience while simultaneously addressing social issues of importance to stakeholders. Our advisory practice helps companies navigate the legal, business and political ramifications of developing and implementing ESG initiatives. We advise on matters such as stakeholder engagement, corporate governance, crisis management, corporate social responsibility, sustainability, diversity and inclusion, ethics and compliance."

During an interview with Bloomberg Law, Karp added that ESG was not only impacting corporations. It was also going to be a force field in law firms. He noted: "'ESG is going to affect every aspect of the law firm world, law firm operations, and the interaction with their clients going forward,' Karp said. 'The law firm community hasn’t picked up on how profound that will be.'”

A sign of this upheaval about the purpose of a corporation, my recent article in ST Magazine on sustainabiity is receiving  considerable attention. 

Another aspect of employee unrest is striking.

In a very open manner - not through supposed stealth leaking - workers again are resorting to walkouts. Those, such as at Deere, are stragetically timed for the worst time for the employers. This is the season of harvest for Deere customers and they could be left out there without the parts their equipment needs.

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Big Law - Some Rashomon Moments

From the time of Jeremy Blackman's satiric blog "Anonymous Lawyer" to current best-seller "The Caesars Palace Coup" Big Law has been vilified. That's the way it has been.

The partners are depicted as feudal lords.

Law firms defending the likes of Harvey Weinstein become fodder in media such as The New Yorker. 

The up and out system which results in only about one out of 10 associates making it to partner is interpreted as a destroyer of souls. There is no type of Greek Chorus chanting: Hey, you knew the deal when you looped in. 

Netflix is having a 10-part series derived from the novel "Partner Track." Negative, of course. 

And media sites such as RollonFriday and Abovethelaw which accept insider leaking from law firms are on side of the angels.

But that dark lens for viewing large law firms is only one. And Big Law isn't doing such as hot job pushing back on it through pro bono assignments, social justice outreach, and public-interest op-eds in The New York Times and The National Law Journal.

What those firms haven't unleashed is The Rashomon Factor.

As the Japanese film "Rashomon" showcased, there are myriad perspectives for interpreting just about everything. In that movie about a murder and a rape, the takeaway is how differently a number of people experienced it.

More recently, the film about flawed justice  in the 14th century "The Last Duel" also uses the Rashomon style. What is claimed to have happened - a rape - and the background events are configured into a variety of scenes of the same events. The story, incidentally, is true. 

Big Law has the resources to conjure up its own engaging Rashomon moments.

Do a 24/7 TikTok video of what goes on in law firms. Sure, block the confidential. And let the world decide if that's so bad. Viewers could be enchanted by the analogue of Tom Brady-type strategic planning and actual plays.

Follow a summer from the law office, back to law school, and back to the law office. Pan in on the struggles. Public opinion can assess the values of that world. The interesting part could be the shaping of a legal mind and resistance. Are humans wired not to think like lawyers? Add on a public interest tutorial on how do just that: Think like a lawyer.

Humor also is back in marketing communications. It's always been a power tool in messaging. Some will recall how presidential candidate Ronald Reagan blew up the age issue with a quip about Walter Mondale's "youth and inexperience." Here is a clip of that game-changer in the campaign.

Perfect would be an action-figure comic book. Let the world become engaged in how a chairperson like Larry Sonsini at Wilson Sonsini protects startups or Brad Karp at Paul Weiss mobilizes thousands of lawyers from law firms throughout America to work free on behalf of the victims of COVID. It's not only a prosecutor such as Jack McCoy from "Law & Order" who fights the good fight. 

And, yes, contract with designers (hopefully on a pro bono basis) to create video games about the weapons defense lawyers carry into combat. Empower players to make genius moves. Selling those games can provide funding for scholarships to law school for diverse students. 

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Lev Parnas - Alleged "Sopranos" Bravado

“'These men shoveled thousands and thousands of dollars of foreign money to U.S. politicians, laughing about how they were breaking the law along the way,' [Aline] Flodr [Assistant US Attorney] said in the prosecution’s opening statement in the trial [of Lev Parnas, et al. ]'"  - John Gerstein, Politico, October 15, 2021.

That hubris ethos mirrors the confident values of the members Sopranos tribe, especially as they enjoyed themselves at Bada Bing. 

And that could probably what irks the prosecution: scorn for the standard rules of law. Humor is one of the most cruel and effective weapons. That observation goes back to John's Milton epic "Paradise Lost." Satan heaped humor on righteous values. Ouch.

The trial is about Parnas' alleged filtering of $100,000 from Russian businessperson Andrey Muraviev to political candidates as a kind of bribe nudge. It's contended those funds were intended to grease the wheels for Muraviev to establish a cannabis enterprise in the U.S. Parnas is connected to Rudy Giuliani.

Parnas' lawyer is Joseph Bondy who argues that his client did not know the alleged stealth agenda. Of course, ignorance of the law is no excuse.

With "The Many Saints of Newark" in movie theatres, the fascination with the Sopranos hubris is back. That could hover as presence in the courtroom.

Few of us have outgrown our adolescent love of expressing scorn for the rules. And outwitting the system. Even supposedly fully grown up, we admire the bad guys.

It would be wise for Parnas not to smirk during the trial.

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Corporations Woke to the Profits in Social Justice, Hammers Vivek Ramaswamy: But That Is Money Hard-Earned

Vivek Ramaswamy's manifesto against business' supposed embrace of social justice, published in August, is a best-seller. The book is "Woke, Inc.: Inside Corporate America's Social Justice Scam." On Amazon, it ranks 705. 

Right from the get-go Ramaswamy, a successful entrrepreneur and first-generation American, is persuasive. He provides an example that resonates. It's Coca-Cola.

Lawyers will vividly recall how the chief legal officer there created a radical initiative for increasing diversity. That imposed quotas on outside law firms for having minorities on the account and docked those which didn't conform. Coca-Cola also took a stand against voter suppression in Georgia. In addition, it implemented anti-racisim training for employees.

Ramaswamy assesses all that as a kind of protective coloring that allows it to actually do "bad things" and make big profits. In the chapter "The Goldman Rule," he writes:

"Coca-Cola fuels an epidemic of diabetes and obesity among black Americans through the products it sells. The hard business decision for the company to debate is whether to change the ingredients in a bottle of Coke."

This approach to doing business is called "Stakeholder Capitalism." Another term for that is ESG (Environmental Social Governance). But the real game, he contends is: "pretend like you care about something other than profit and power, precisely to get more of each."

Those buying his book give it an almost "5" rating out of a possible "5." And the author is receiving glowing reviews from thought leaders such as Glenn Greenwald, journalist and constitutional lawyer, Ambassador Nikki Haley, Bill Ackman who founded hedge fund Pershing Square, and N. Gregory Mankiw of the Harvard Economics Department. 

So, "Woke, Inc." has touched a nerve. But what Ramaswamy doesn't get is that already there have been severe questionings of the tenets of Stakeholder Capitalism or ESG and various forms of push-back. Trying to make a buck off it doesn't go all that smoothly.  

The now-classic example has been the unraveling of Allbirds. Incidentally, it's yet to make a profit and is racking up large losses.

Among Allbirds' Woke efforts had been in governance. It gave permission to its board of directors to factor in other stakeholders, not just shareholders. Its marketing platform was sustainability-centric. For its IPO it established a sustainability framework which could be a model for others to leverage in their IPOs.

Then came the lawsuit seeking class action certification "Patrica Dwyer, et al.  v Allbirds" challening the claims. Here is a copy of the complaint. Allbirds has modified much of the sustainability material for its IPO filing. Media outlets have turned on it.

The raw reality is that many corporations are struggling to navigate the legal, public relations, stock price, employee activism, political, and community challenges associated with stakeholder capitalism. If they are making money from ESG, it's well-earned.

In response to the pickles corporations can get into during this era of stakeholder capitalism, most large law firms have established special ESG practices to guide them. The first of the law firms to anticipate the chaos had been Paul Weiss. Way back in April 2020 it had custom-made an ESG practice. 

Last August, a sign of these confusing times, Reuters Legal presented a case study of a corporation mired in ESG troubles and had law firms size up the situation and respond.

And Coca-Cola actually lost money on how it positioned and packaged its social activism outreach. Forbes reports that both those supporting and those opposing its middle-of-the-road stance on Georgia's voting law, threatened to boycott the corporation. The latter actually went through with that. Also, there was plenty of bad media.

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FTC Warns on Social Media Fake Reviews, Stealth Influencer Marketing

"Companies including Amazon.com Inc. and Facebook Inc. could face fines over fake reviews or other misleading endorsements online, according to a warning from the Federal Trade Commission. The warning comes as social media has blurred the line between authentic content and advertising ... Practices such as influencer marketing leave some consumers confused about when posters are paid to endorse a product, if their connection to the brand isn’t clearly disclosed." - Andrea Vittorio, Bloomberg Law, October 13, 2021.

Over 700 of those warnings went out. The penalty is stiff: $43,792 for each violation. 

The strategy FTC Chairperson Lina Khan is using is to rely on the agency's existing powers. Recently a SCOTUS ruling limited the FTC's authority to obtain monetary awards in court. 

The FTC already has the power to impose civil penalties on those that have done wrongdoing if they know their actions have been forbidden by an earlier FTC administrative order. 

If this FTC campaign is successful, then the world of social media promotions could be in turmoil. So much of what is in that space constitutes some form of false advertising. And, the business of being an influencer is often not conducted in a transparent way. The sources of income are usually not disclosed.

Marketing communications. It’s about results. Not quantity. Not clickbait. Not even influence. Together we will get those results. Clients range from American Express to industrial accounts. Fees customized for your unique budget. Complimentary consultation - janegenova374@gmail.com.

The Tragedy of Parent Plus Loans - Under the Radar, Until Now

Parent Plus loans. There has been the play out of this American debt tragedy, mostly inflicted on aging parents, throughout America.

Until recently, this story hadn't been featured in influential media. Now, that is changing. 

Parent Plus educational loans are available to parents and graduate students. Unlike undergraduate loans there is no limit on the amount that can be borrowed. There is also no determination of the ability to pay back the amount borrowed, in addition to the interest which will inevitably pile up. And the interest rate is higher than on a number of other educational loans.

Insider had recently featured the pickle Robert Pemberton, 64, is in. He will probably work into his 80s and still not be able to pay off the $265,000 in educational loan debt. He took out the Parent Plus loans to help fund college for his two children. Meanwhile, the meter keeps running on the interest. Down on his luck, the last we heard of him he was employed in a very low-paying situation.

Now The Wall Street Journal goes there again into Parent Plus territory. It features Trina Saverin, age 53, with $231,000 in Parent Plus debt. She took out those loans for her two children's college education and her own Master degree. The WSJ notes:

"Some of the wealthiest U.S. colleges [such as Baylor] are steering parents into no-limit federal loans to cover rising tuition, leaving many poor and middle-class families with debt they can’t repay."

That's allegedly how Baylor could become a brandname institution of higher education. 

Given the hype about the importance of a college degree and the love parents have for their children, it's a piece of cake to have parents loop into this educational loan program.

The dangers associated with taking on such debt keep increasing in this era of such volatility in the work world - and in life. When Pemberton signed up for the loans he had a six-figure job. Then there was a merger and that high earning power went kaput. In addition, medical bills for his wife increased his financial woes. 

The recent media coverage of this growing debt problem may provide warning to parents who are well-intentioned about "helping out" their offspring with college costs. Or they might consider it a good idea to finance an advanced degree later in life for their own professional upward mobility or a career change with Parent Plus loan funds.

Obviously, these articles are also a nudge to Congress to investigate the practices associated with Parent Plus lending.

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