Sunday, 25 February 2018

Tearsheet/Tanaya Macheel: Financial incumbents are starting to care about financial education


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Modern Banking Experience

Financial incumbents are starting to care about financial education

    Fintech companies have been trying to change the model by shifting the focus from their existing and target millennial customers to the next generation: their kids

    It’s not clear what financial education is exactly and existing initiatives haven’t been successful; with products are the driving force of behavior in the new economy, it should be built into product design

Tanaya Macheel | FEBRUARY 22, 2018

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Financial education is getting a long sought-after spotlight.

On Wednesday, Greenlight Financial Technology — the creator of a smart debit card for kids, teens, and college students — closed $16 million in a Series A funding round. Its investors went beyond your traditional venture capital firm, including a disparate coalition of  financial services bigwigs like SunTrust Bank and Ally Financial as well as the Amazon Alexa Fund, among other VCs. Greenlight, whose mission is to help strengthen financial literacy among kids and give parents a platform to raise “financially smart kids,” will use the new funds to develop its products.

That coalition of Greenlight partners signals a renewed understanding of the reality of most Americans’ financial lives — 57 percent of Americans are financially unhealthy according to the Center for Financial Services Innovation — by legacy financial services companies coming to terms with the fact that they need to be in the business of financial health in order to keep customer relationships in tact over the long term.

“Financial services providers are rethinking what the mass market is, what it looks like to be financially unhealthy and whats really going on in customers lives. I look at this [Greenlight] card and I think its responsive,” to the financial innovations put forth by fintech companies today, said Karen Andres, a relationship manager at the CFSI. “If you’re not taking care of your customers today and helping them build their financial health they won’t be your customers tomorrow.”

Financial education has a problem. Other than the fact that it’s important, it’s not clear what it is or how it’s consumed and in any case, existing initiatives — usually relegated to content marketing — haven’t worked. If they did, personal finance wouldn’t be such a daunting concept for those who need the initiatives most.

But over the last year fintech companies have been trying to change the model by shifting the focus from their existing and target millennial customers to the next generation: their kids. For example, last year Current launched with a platform that merges task assignments from parents with digital payments to children; earlier this month, microinvesting app Stash said it would use fresh funding to develop a product that lets customers invest on behalf of their kids.

To achieve financial health, the idea of financial education or financial literacy needs to change from one focused on gaining knowledge to one focused on changing behavior, which is more about financial capability than education.  The U.S. economy today is different from that of previous generations in that products are the driving force of behavior, said Current CEO Stuart Sopp, and that calls for an overhaul in the way products are designed.

“Teaching someone something is a very paternal thing we’ve seen in this capitalist economy and we’re into this really different economy now,” he said. “We’ve recognized a marked difference in the independence of this generation… There are probably more adults than in previous generations that get things like saving and investing and are driving the conversation home much more so than in previous generations. So you have to build tools in a way that is different to previous generations.”

Ally Ventures, the strategic investment arm of Ally Financial and one of Greenlight’s investors, for example, has strived to advance financial literacy and education through education courses, tips, tools and online resources designed to help customers manage their money more effectively, but it also wants to pursue opportunities to incorporate education and literacy into its offerings, said Dinesh Chopra, chief strategy officer at Ally Financial.

“We believe the combination of educational content and smart products and services can help empower consumers to achieve their financial goals,” he said.

Large institutions are often criticized for being slow innovators. Slow as they may be, they’ve been responding to innovative products focused on financial health at their own speed. BBVA Compass acquired Simple in 2016, JPMorgan Chase began offering Chase Liquid, a prepaid card designed for low-income customers with difficulty accessing good financial products, Wells Fargo is launching a sub-branded Greenhouse account with financial management capabilities built in. While they target the poor and financially unhealthy, they don’t always provide the educational tools to help them out of it. That’s starting to change. Traditional banks now build content around financial management and planning that’s short and easy to consume, but do so in collaboration with product design, Andres said.

“We’ve started to see shifts in the direction providers are taking to help customers learn by doing — in this case, with the Greenlight card — or to think about changing the way they conceptualize financial literacy by providing information to customers differently: in smaller chunks and at key moments of decision, rather than the old classroom-style half-hour module on a weighty financial topic,” she said.
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The Washington Post/Travis M. Andrews: The Flamin' Hot Cheetos movie: How a Frito-Lay janitor created one of America's most popular snacks

The Washington Post
Democracy Dies in Darkness

Morning Mix
The Flamin' Hot Cheetos movie: How a Frito-Lay janitor created one of America's most popular snacks
by Travis M. Andrews February 23 Email the author

Flamin’ Hot Cheetos — the spicy red version of the classic cheese-flavored snack — are something of a cultural phenomenon. A group of children rapping about them racked up more than 16 million views on YouTube. Pop star Katy Perry even dressed as a Flamin’ Hot for Halloween.

Although several schools banned them, saying they were unhealthy, the snacks enjoy the kind of high profile that research chefs and food scientists employed by big companies like Frito-Lay spend their careers chasing. But Flamin’ Hot Cheetos weren’t made by any experts.

They were invented by a janitor, the son of a Mexican immigrant who dropped out of school because he struggled with English.

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His name is Richard Montañez, and Fox Searchlight Pictures is making a movie about his life.

Lewis Colick, who wrote “Charlie St. Cloud” and “October Sky,” will pen the first draft of the screenplay, based on the initial pitch from Montañez and producer DeVon Franklin, Variety reported.

The biopic, titled “Flamin’ Hot,” will follow Montañez’s real-life rags-to-riches tale.

He grew up on a farm migrant labor camp in Guasti, Calif., a tiny town centered on winemaking. As a child, Montañez — one of 11 siblings — picked grapes at the vineyards and ate a communal table with several other families.

But he had an entrepreneurial streak even then.

In his memoir, “A Boy, a Burrito, and a Cookie,” he described arriving at his white elementary school during segregation. His bus was green, while the white children rode a yellow bus. Speaking only Spanish, he couldn’t understand anyone.

He felt like an outsider, especially at lunchtime when he pulled out a burrito. In the 1960s, Mexican food wasn’t the popular staple in white communities it is now. The other kids, with their bologna sandwiches and cupcakes, stared on in confusion until he grew embarrassed and put it back in his bag.

He begged his mom to make him the same food as everyone else, but she refused. Instead, the next day, she made him two burritos for lunch and told him to make a friend.

By the end of the week, he was selling burritos to his white classmates for 25 cents each.

“I learned at that moment that there was something special about being different, that there was a reason that we all just couldn’t fit into the same box,” he wrote.

His background would prove useful again later in life, but first it presented an obstacle. Montañez’s struggle to learn English was so severe that he dropped out of school at a young age. He worked various low-paying jobs, from slaughtering chickens to gardening around town, picking up English along the way.

When he was about 12 years old in 1976, Montañez landed a job working as a janitor at a California Frito-Lay plant.

One day, as he told Lowrider magazine, he saw a company-wide video of then-CEO Roger Enrico saying, “We want every worker in this company to act like an owner. Make a difference. You belong to this company, so make it better.”

Montañez took these words to heart.

“Here’s my invitation. Here’s the CEO telling me, the janitor, that I can act like an owner,” Montañez later recalled at the 2014 League of United Latin American Citizens’ National Convention. “I didn’t know what I was going to do. Didn’t need to. But I knew I was going to act like an owner.”

As he tells it, one day an assembly line at the plant where he worked broke down. A batch of Cheetos didn’t receive the orange, cheesy dust that make them so popular. So he took a few home to experiment.

He had formed an idea while watching a street vendor in his neighborhood make elote, or grilled Mexican street corn — corn on the cob covered in cheese, butter, lime and chili.

“What if I took the same concept and applied it to a Cheeto?” he thought, according to his memoir.

A bag of Flamin’ Hot Cheetos. (Frito-Lay)

So he did. His friends and family loved the result. Thinking back to the video and figuring he had nothing to lose, he decided to call Enrico to pitch the idea.

Enrico took his call and told Montañez to present his product in two weeks. So the janitor went out and bought his first-ever tie for $3, then stopped by a library to get a book on marketing and copied a strategy out of it to recite during the presentation.

“I’m a little bit of an artist so I even designed the bags and put the Cheetos in it,” he told Fox News Latino.

Against all odds, it worked. Enrico loved the idea, and a new line of spicy snack food was born — with Flamin’ Hot Cheetos as its flagship. Montañez has since served in various positions throughout the company, including as an executive vice president.

“Many times, greatness will come in ridiculous forms, a ridiculous idea might be a billion dollar idea,” he told Fox News Latino.

He now travels around the country, giving speeches on the importance of diversity in business. His message is always simple, as he told the audience at the Greater Kansas City Chamber of Commerce’s 2013 Power of Diversity event, according to the Kansas City Star.

“If you have confidence, you can walk into any room,” he said. “Your job is to prepare yourself to walk through the doors.”

It certainly worked for him. And while his wardrobe has grown considerably since he walked into that room with Enrico, he still holds onto that $3 tie.

More from Morning Mix:

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Widow says Republican candidate’s immigration ad politicizes her husband’s death

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Travis M. Andrews is a reporter for The Washington Post's Morning Mix. Previously, he was an editor for Southern Living and a pop culture and tech contributor for Mashable.
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Dr. Mercola: Neglect at Your Own Risk, Generates 90 Percent of Your Energy

What You Really Need to Know About Your Mitochondria

    February 25, 2018 • 25,527 views Edition: English


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Story at-a-glance

    In simple terms, mitochondria are the powerhouse of your cells, producing about 90 percent of the energy being generated in your body
    Everything that happens in your body, each and every muscle contraction and relaxation, biochemical cascade, cellular regeneration, detoxification and so on requires energy
    Free radicals formed at the level of the mitochondria are typically extremely harmful, which is why you need to minimize them. Two of the most effective ways to do this are exercise and calorie restriction (fasting)
    Mitochondria also act as the coordinator for apoptosis, or programmed cell death — an important process that ensures the death of malfunctioning cells that might otherwise turn into cancer
    If your genetic heritage stems from equatorial regions, you will tend to have less brown (heat-generating) fat, and hence less mitochondrial uncoupling, which raises your risk of chronic disease. To counteract this, you will need to exercise regularly and regularly engage in cold thermogenesis training

By Dr. Mercola

When it comes to health and disease prevention, your mitochondrial health and function simply cannot be overstated. If your mitochondria are not functioning well, nothing else will either. Optimization of mitochondria is also a central key for life extension. Dr. Lee Know, who is a naturopathic physician, has written a must-read book on this topic called “Mitochondria and the Future of Medicine: The Key to Understanding Disease, Chronic Illness, Aging, and Life Itself.”

Know has been a passionate student of mitochondria for quite some time. “I've always been interested in antiaging and longevity, but that was not the motivation behind the book,” he says. That motivation grew out of an interest in Coenzyme Q10. Animal research was showing that age-related female infertility was closely linked to mitochondrial dysfunction and aging mitochondria, and could be reversed through CoQ10 supplementation.

Fertility clinics in Canada started to use CoQ10, and through his work as a consultant for a supplement company working with a particularly bioavailable form of CoQ10, Know was invited as a spokesperson for the brand. He gave presentations to doctors and nurses, explaining how the supplement could benefit their patients.

    “As I started to do the research, I started to understand the connection of healthy mitochondria to not just age-related female infertility but to pretty much all degenerative diseases, including the aging process,” he says.

    “One of the things I came to realize is that there is a lot of good information out there, a lot of good primary research that’s been done, but I didn't really see any one resource that summarized everything. That's what I wanted to do — pull all these different resources together to give a starting point for anyone that is really interested in the mitochondria and understanding [their] importance.”

Mitochondria 101

So, what exactly are mitochondria, and why are they so crucial for good health? In the simplest terms, mitochondria are the powerhouse of your  cells, producing about 90 percent of the energy being generated in your body. What many fail to realize is that absolutely everything that happens in your body, each and every muscle contraction, biochemical cascade, cellular regeneration, detoxification and so on requires energy. Nothing can occur in an energy vacuum.

    “A lot of things happen in the cell that people don’t even think [about], like the transfer of ions across membranes, or the maintenance of the shape of the cytoskeleton. For the microtubules to maintain their shape, they require an input of energy. Literally everything that happens in the cell requires energy, and because the mitochondria is so critical to that energy supply … any time you have a decrease in that energy production, things can start to fall apart.”

Mitochondria also have other radically important functions. For example, they act as the coordinator for apoptosis, or programmed cell death — an important process that ensures the death of malfunctioning cells that might turn into tumors lest they be cleaned out. Know explains:

    “Apoptosis is basically cell suicide. Over the course of a cell's life … it’s going to [be] damaged. When that damage crosses a threshold, signals are sent to the cell that tell it, ‘You’re no longer functional, you better commit suicide for the greater good of the organism.’ What's interesting is that the newest research has shown that it’s the mitochondria that … initiate that cell suicide program …

    It’s the mitochondria that receive all those signals [and] determine whether or not that threshold has been reached … It’s also interesting to note that if your mitochondria are dysfunctional, first of all it might not be able to understand those signals properly and not give the signal for apoptosis when it's supposed to happen.

    The other thing is that all those different things that happen in the apoptosis cascade also require an input of energy. So, even though it might be able to read the signals properly and give the signal that it’s time to commit suicide, if there's not enough energy being produced … defective cells will survive and multiply … [So] dysfunctional mitochondria are the basis behind what we know as cancer.”

Energy Production Basics

As mentioned, about 90 percent of the energy produced within your cells occurs in your mitochondria, with a small portion of that occurring outside the mitochondria. The energy process starts in the cytosol (the fluid compartment of the cell), in a process called glycolysis. Once that process is done, the end products of glycolysis then enter the mitochondria and participate in the next phase of energy production, which is called the tricarboxylic acid (TCA) cycle, better known as the Krebs cycle.

Out of that Krebs cycle comes other energy molecules that then get fed into the last part of the energy production process — the electron transport chain. This is where things can start going wrong, leading to dysfunctional mitochondria. Consumed calories are converted into electrons that then enter complex I or complex II of the electron transport chain. Those two complexes then pass on electrons to CoQ10, and then down the chain until it reaches complex IV.

    “Now, complex IV is a very unique part in the cell because it’s the only place in the cell where we can take those electrons and enzymatically react them with oxygen to create water,” Know explains. “The problem is, if those electrons don’t reach complex IV and spill out of the electron transport chain prior to complex IV, it can prematurely react with oxygen, creating a free radical called superoxide.

    That is where the damage can start to occur because those superoxide radicals generated at the level of the electron transport chain are created in the immediate proximity of mitochondrial DNA [which] is particularly susceptible to damage. So, any time those free radicals are generated, you can have damage to the DNA in the mitochondria. If those DNA are damaged, you can't produce the proteins it codes for and everything starts to fall apart.”

Nuclear Versus Mitochondrial Repair Mechanisms

It is important to understand that free radicals are not universally toxic. You need some, and they serve useful and beneficial roles with important signaling functions. That said, most of the superoxide radicals formed at the level of the mitochondria are harmful, which is why you need to minimize them.

Cellular damage is essentially occurring around the clock, and your body has built-in repair mechanisms to continually address this damage. As mentioned, compared to the DNA in your cell’s nucleus, the DNA in your mitochondria are far more susceptible to damage.

Nuclear DNA are protected by elaborate proteins called histones, which form a shield around the DNA. Mitochondrial DNA does not have these protective proteins. Nuclear DNA also have massive reams of DNA that do not necessarily code for protein, commonly referred to as junk DNA (although we’re now starting to realize they too perform important functions; we just have not identified them yet). In the mitochondria, on the other hand, DNA is tightly packed and there’s no junk DNA.

Lastly, the DNA in your cell’s nucleus have elaborate and highly efficient repair mechanisms, whereas mitochondrial DNA do not have very good repair mechanisms. So, to protect your mitochondrial DNA, it’s important to minimize the generation of free radicals in the electron transport chain. As explained by Know, “Any time we have damage or free radicals being generated that exceed the capacity of the repair mechanisms, you're going to cause irreversible damage. That's what the whole point is — to stop [the damage].”
Efficient Fat Burning Minimizes Mitochondrial Damage

Indeed, that’s the premise of my book “Fat for Fuel,” which details strategies aimed at minimizing the production of excess free radicals while allowing biologically important free radicals to be maintained. What we’re now finding is that it’s the divergence from our ancestral diet — the massive prevalence of processed, unnatural foods and excessive amounts of added sugars, net carbs and industrial fats — that causes a majority of the damage.

High-carb, processed food diets prevent your body from efficiently burning fat as its primary fuel, and burning fats and ketones is far more efficient, inducing far less oxidative stress, than burning carbs. So, a foundational dietary strategy to optimize your mitochondrial health is to eat the right fuel. Once you become an efficient fat burner, you minimize the oxidative stress placed on your mitochondria, which is key.
The Importance of Meal Timing

Know’s book also addresses the issue of meal timing. He does an excellent job of explaining what happens when you eat too late in the evening, when your body doesn’t need the energy. In short, eating shortly before bed is one of the worst things you can do to your mitochondria. Know explains:

    “This goes back to what causes damage at the level of the mitochondria, and one of those is excess calories. [F]ood is converted at the cellular level into electrons… and the electron transport chain essentially pumps protons into mitochondrial space.

    We build up that concentration of protons [that] eventually flow back through ATP synthase and create ATP. In order for the ATP synthase to continue to run, it needs the building blocks of adenosine diphosphate (ADP). It takes a phosphate ion and combines [it with ADP] to create ATP. The thing is, we need to use up that ATP.

    When you use up ATP your body breaks off that third phosphate and creates ADP again. That cycle can happen over and over again, as long as you’re using up that ATP. The problem is, especially at night, when you … will be sedentary for the next eight hours … you’re building up ATP but you’re not using it. You’re not breaking it down to ADP, so … ATP synthase basically shuts down. It doesn’t have the building blocks of ADP anymore.

    [T]hen, the entire chain backs up. The electrons cannot flow through the electron transport chain, protons aren’t being pumped anymore, but because you ate late in the day, all those electrons are continuing to flow into the mitochondria and continue to enter the electron transport chain …

    … (Basically, you have a mismatch of supply versus demand), you generate an excess amount of free radicals that will spill out and damage the mitochondrial DNA… [T]he entry into the electron transport chain [at complex I] is the No. 1 site of endogenous free radical production in your body.”

An important side note to this is that excess carbohydrates, in particular, result in this backup of electrons, causing the production of superoxide. While not a pernicious free radical in and of itself, if you have high iron levels — which is far more common than low iron — combined with high superoxide, it produces hydroxyl free radicals, which is one of the most harmful.

The chemical reaction that creates these hydroxyl free radicals is known as the Fenton reaction. While you certainly need enough iron, having too high an iron level can cause severe damage, and this is one way in which it does that. To learn more about the hazards of high iron, and simple ways to screen for and lower it, please see “Why Managing Your Iron Level Is Crucial to Your Health.”
Why Some Populations Have Higher Exercise Requirements

Mitochondrial uncoupling is another interesting phenomenon that involves the flow of electrons in the electron transport chain. Certain populations, especially those from tropical and subtropical areas like Africa, are genetically predisposed to this problem and need to take steps to counteract it through proper diet and exercise. Mitochondrial uncoupling ties into brown fat or brown adipose tissue.

When hydrogen ions flow back through ATP synthase, energy is created. But in some cases, and in certain tissues, such as in brown adipose tissue, this process can become uncoupled. Instead of the hydrogen ions flowing back through ATP synthase, they flow through a different channel, creating heat rather than energy. A benefit of this is that it allows the electron transport chain to continue to operate even though you’re not using up energy. The hydrogen gradient is being dissipated through the generation of heat instead.

    “The great thing with this is that when you have sufficient brown fat … you have a far lower risk of cardiovascular disease, diabetes and all sorts of different degenerative diseases because you're allowing those hydrogen ions to flow back without backing up the electron transport chain,” Know explains.

    “Certain populations, like those that live in the far north, have quite a large amount of brown fat and that's because brown fat generates heat. That helps them stay warm in colder climates. On the other hand, populations that have originated from the equatorial regions typically have very tight mitochondria; they don’t have a lot of uncoupling. This is one of the reasons why certain populations have a much higher risk of cardiovascular disease and obesity.

    [In these populations] it becomes increasingly important to ensure that the energy being produced… is constantly used up through physical activity and exercise. Not to say that that's not important for populations that live in the far north, but they have other mechanisms built into their bodies that allow them to produce less free radicals, or allow those electrons to flow through without having to have as much exercise.”

If you’re not genetically predisposed to having higher amounts of brown adipose tissue, you have the capacity to make it. By exposing your body to cold temperatures on a regular basis (a process called cold thermogenesis), you will over time build more brown, heat-generating fat.

So, to summarize, if your genetic heritage stems from equatorial regions and/or you have very dark skin, you will tend to have less brown fat, and hence less mitochondrial uncoupling, which raises your risk of chronic disease. To counteract this biological reality, you will need to exercise regularly. Also, be mindful of your vitamin D level, and seriously consider regularly engaging in cold thermogenesis exercises to build brown and beige adipose tissue.
Practical Strategies to Optimize Your Mitochondrial Function

Thanks to living in a toxic environment, feeding your body inappropriate fuel, eating at the wrong time and not exercising enough, most people have less than optimized mitochondria. The good news is there are many ways to improve your mitochondrial function. As explained by Know, the two best and most researched ways to optimize mitochondrial function are exercise and calorie restriction.

    “Exercise has been shown to upregulate genes like PGC-1 alpha. It also helps upregulate other nuclear gene factors like Nrf2. These are genes that … help your mitochondria become more efficient, [and] help them grow and divide so that you actually have more mitochondria. I'm going to simplify it here, but the reason you end up with benefits to the mitochondria is that when you are physically active, you place an increased energy demand on your cells.

    In response ... free radicals signal that you need more mitochondria. So, your body adapts to physical activity by the mitochondria dividing and becoming more efficient. The next time you do some physical activity, it's less strenuous. You have a greater capacity to generate the energy needed to meet that demand. That also means that the workload of whatever the cell needs to do at rest is now shared amongst a greater number of mitochondria.

    Each mitochondrion is now under considerably less stress, and therefore generating far fewer free radicals. That's one of the reasons why physically fit individuals have a lower risk of pretty much all degenerative diseases, including cancer, as well as a longer life span.”

The Energy Demands of Relaxation

Paradoxically, not only does relaxation require energy, it actually requires far more energy than exertion. We typically associate energy input with strain. When you contract a muscle, you’re straining the muscle, and we think of that as requiring energy. At the biochemical level though, during exertion, ATP is needed only at one site. A single ATP energy molecule is needed to bind to a protein called myosin to cause a contraction. This is called cross-bridge cycling.

During relaxation, however, two sites require ATP. You need an ATP molecule to bind to a receptor on calcium-magnesium-ATPase, which pumps calcium out of the cell, thereby initiating relaxation. A second site on that enzyme also requires an ATP molecule, but it doesn’t have a high affinity for ATP.

The only way a second ATP can fit into that receptor is to have a large concentration of ATP, with the hope of one falling into place. In other words, while contraction takes just one ATP, relaxation actually requires hundreds of ATP molecules, and this has implications for your heart and cardiovascular health in particular. Know explains:

    “We actually need to generate a significant amount of energy for our muscles to relax. That's a difficult concept to understand, but the easiest scenario that I can use to describe it, and I mention this in my book, is rigor mortis. When we die we're not producing any energy anymore, and our muscles go into a permanently contracted phase. They can't relax because there's no energy.

    For a living person, this can cause a number of different health conditions associated with left ventricular hypertrophy or dysfunction as well as things like hypertension. When we're talking about the heart, what we call the ejection fraction is considered the measurement of heart function. So, when we have a small amount of ejection fraction, we're setting ourselves up for heart failure.

    The ejection fraction is the percent of blood that the left ventricle pumps with each heartbeat. When it relaxes, that's the reference point of 100 percent. When it contracts, the percent of blood pumped out is the ejection fraction. What's normal is 50 to 70 percent; anything under 35 percent is considered an emergency situation. Of course, we want the heart to be able to relax as much as possible so it can have a greater volume to pump.

    If the heart is not able to produce the energy it needs to fully relax, it partially relaxes, and then when it contracts, very little blood is pumped out … Essentially, what's going to happen is that the heart compensates by thinking it needs to grow more muscle. [T]he ventricle walls in early stages of heart failure start to thicken because the heart inappropriately interprets that signal as not [being] strong enough. That sets up further complications that eventually lead to congestive heart failure.”

Helpful Supplements

The same applies to your blood vessels, which are lined with tiny muscles that help regulate your blood pressure. When there’s insufficient ATP to allow the blood vessels to relax, you end up with hypertension. This is in part why supplements like CoQ10 (ubiquinol) and magnesium help lower blood pressure, as both of these are intimately involved in the energy production process.

As detailed by Know, “Having an excess amount of CoQ10 is, at this point, seen to be a fairly effective therapeutic strategy to ensure [well]-functioning mitochondria.” Aside from that, CoQ10 is a powerful fat-soluble molecule that prevents the oxidation of cholesterol. So, having sufficient amounts of CoQ10 prevents cholesterol from becoming troublesome. It also acts as a signaling molecule and helps protect cell membranes from damage.

Pyrroloquinoline quinone (PQQ) is a vitamin-like substance and a cousin to CoQ10. PQQ helps with mitochondrial biogenesis. As I mentioned earlier, the greater number of mitochondria you have, the more energy your cells are able to produce, and the better they function overall. So, having sufficient amounts of PQQ encourages the proliferation of mitochondria.

According to Know, “CoQ10 and PQQ are both very important nutrients for mitochondria health, but of the two, I would definitely say CoQ10 is still the more important one.” For adults, the reduced version of CoQ10, called ubiquinol, is a better choice as it’s more absorbable. Magnesium also plays a really important role. To learn more about how magnesium impacts your mitochondrial health, see “Magnesium — A Key Nutrient for Health and Disease Prevention.”
The Benefits of D-Ribose

D-ribose is another supplement that can be quite useful, as it’s required by ADP.

    “D-ribose is a five-carbon sugar, and it's completely safe to consume even for diabetics because it has no impact [on] blood glucose. [R]ibose … gets into the cells and converts into the adenosine base … which goes on to have the phosphate ions attached to it to create ADP and ATP.

    The importance of D-ribose as a supplement is that even though our bodies produce D-ribose on its own, it’s a very, very slow process. …it’s probably the rate limiting factor in recovery for cardiovascular patients, people with chronic fatigue … stroke and heart attack … D-ribose is incredibly important, probably one of the most important nutritional components for a subgroup of individuals that are suffering from heart attack, stroke and/or chronic fatigue.”

D-ribose is nontoxic and is virtually impossible to overdose on, and if you’ve suffered a stroke, heart attack or struggle with chronic fatigue, it’s a really important supplement to include in your regimen. Taking D-ribose prior to cardiac surgery can also help minimize damage associated with reperfusion injury. Since most people have some degree of mitochondrial dysfunction, it may also be helpful for general health, especially if you exercise regularly.

     “The minimum therapeutic dose is typically around 5 grams, and some studies have used 10 or even 15 grams. I would say 3 to 5 grams is the minimum, but if you get anything, it’s going to better than nothing,” Know says.

    “I also think it would be great for individuals going through any sort of low-carb program to supplement with D-ribose, because typically what happens is that our bodies use glucose as a starting point to create D-ribose, but that is a very slow process.

    In a situation where you're really cutting out glucose, your body is going to shift any spare glucose that it has into serving other purposes, so it might take a long time to rebuild any purine or energy pool in the absence of D-ribose supplementation. Especially for anyone going through [nutritional] ketosis, I think D-ribose is definitely something to consider.”

More Information

While we covered a lot in this interview, there’s plenty more in “Mitochondria and the Future of Medicine: The Key to Understanding Disease, Chronic Illness, Aging, and Life Itself.” Considering mitochondrial health underpins health and longevity in general, the information in this book is invaluable. So, to learn more, be sure to pick up a copy.
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Gulf Business: Revealed: Top 5 most powerful Arabs in Saudi Arabia

Gulf Business

Revealed: Top 5 most powerful Arabs in Saudi Arabia

The highest ranking entries originating from Saudi Arabia in Gulf Business’ annual Arab power list
Staff Writer
Saturday 24 February 2018

Saudi nationals are the second largest group in our 2018 Arab Power list with 19 entries.

This year’s ranking also includes several new entrants from the kingdom including HH Reema bint Bandar Al Saud, the head of women’s affairs at Saudi Arabia’s General Sports Authority, and the new chairman of the kingdom’s Capital Market Authority Mohammed bin Abdullah El-Kuwaiz.

November’s corruption purge that saw hundreds of businessmen, royals and government officials detained in the kingdom was a key factor in our ranking this year. Read on to find out how.

Read: Saudi says $107bn received in corruption settlements

Here are the top five most powerful Arabs from Saudi Arabia –

1. HE Khalid Al Falih (main image)

Chairman, Aramco / Ma’aden

Sector: Energy

Overall rank: 2

The last 12 months have seen Saudi Arabia’s minister of petroleum and mineral resources really step into his stride after prolonging an oil bargain with Russia and other OPEC members to maintain production cuts that have seen Bent crude prices rise from $55 a barrel to nearly $70. Beyond this he has spearheaded Saudi Arabia’s industrial strategy as chairman of national mining company Ma’aden, which is undergoing major expansion of its aluminium and phosphate production capabilities, overseen bidding for the first solar project under a $50bn renewable energy drive and driven the kingdom’s ambitions in nuclear energy with the first step in a multi-billion-dollar tender competition for two nuclear power plants. This is without even mentioning his role at state oil giant Saudi Aramco (where he was CEO from 2009 to 2015), which is planning the world’s largest initial public offering in the second half of this year.

2. Yousef Abdullah Al Benyan

Vice chairman and CEO, SABIC

Sector: Industry

Overall rank: 3

Al Benyan has worked hard to advance the fortunes of SABIC since first taking on the role of acting CEO in February 2015, despite tough market conditions and changes to regulation impacting the Gulf region’s current largest listed company. His efforts have beeng paying off, with signs of some relief in 2017 as the firm reported a 10.7 per cent increase in third quarter profit. Al Benyan has made no secret of his intentions for SABIC to climb up the global petrochemical ladder from its current position as the fourth largest firm, stating in May the company was evaluating up to $6bn of acquisitions. It continued to make moves in the second half of the year including the August acquisition of a 50 per cent stake in a Saudi petrochemical venture with Shell it did not already own and a memorandum of understanding with Saudi Aramco to build a $20bn complex for converting crude oil to chemicals. The company also said in December it would open an office in Iraq and boost investments in China. Meanwhile work continues on a $10bn petrochemical complex being built in partnership with Exxon Mobil in the US.

3. HH Prince Alwaleed bin Talal bin Abdulaziz Al Saud

Chairman, Kingdom Holding

Sector: Finance

Overall rank: 7

It would be fair to say that many of Alwaleed’s achievements over the last 12 months, including the acquisition of 7.11 per cent stake in Middle East ride company Careem for $67m and plans to invest $800m in Egyptian hotels and acquire a 16.2 per cent stake in Banque Saudi Fransi, were overshadowed by events at the end of 2017. The Saudi billionaire, who is the international face of the kingdom to many in the global business community after making shrewd investments in companies including Mövenpick Hotels, Walt Disney, News Corp and Twitter, was arrested under a corruption purge in November that snared hundreds of businessmen, royals and ministers. He was released from the kingdom’s luxury prison, the Ritz-Carlton Hotel in Riyadh, at the end of January and maintained his innocence despite reports that he had settled with authorities. Alwaleed has since returned to his philanthropic ways after announcing a $530,000 donation to Al Hilal football club earlier this month.

Read: Newly free Saudi Prince Alwaleed gives to football club

Read: Saudi billionaire Prince Alwaleed released

4. Amin Nasser

President and CEO, Saudi Aramco

Sector: Energy

Overall rank: 12

After serving for more than three decades at the company, Amin Nasser was announced as the replacement to Aramco CEO Khalid Al Falih in 2015 and is now overseeing the state oil giant during one of the most important periods in its history. The 5 per cent listing of the company, scheduled for later this year, could raise as much as $100bn and make the company the most valuable in the world at $2 trillion. On top of this process, the world’s media are watching every word coming out of Nasser’s mouth to gauge market movements as the CEO of by far the biggest energy company in the world. In particular he warned in 2017 of a lack of investment in long-term oil production during the current period of lower prices. Aramco appears set to answer these concerns with plans to raise spending to $414bn over the next decade and diversify into new businesses like renewables and petrochemicals.

5. Mohamed bin Issa Al Jaber

Chairman and CEO, MBI International

Sector: Diversified

Overall rank: 18

Al Jaber could be set to rise in the ranks of Saudi Arabia’s rich and powerful as one of the kingdom’s few billionaires not to be detained in the November corruption purge. The businessman, who Bloomberg estimates has a fortune of $8.3bn through his London-based hotel, food and real estate company, has developed a reputation for litigation in recent years. He continued this trend in 2017 after pursuing an appeal of a decision by a New York court to throw out a $10bn damages claim against Barclays over a property deal and a UK High court battle with two other Saudi businessmen over a $30m loan claimed to have helped launch 24-hour news channel Al Arabiya.
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Quartz Africa/Yomi Kazeem: Africa is losing billions annually to illegal capital flight

Quartz Africa                                                                                                                                  
Africa is losing billions annually to illegal capital flight
Yomi Kazeem
May 08, 2017 Quartz africa
A currency trader performs a transaction on the streets of Harare in this Friday, Oct. 28, 2016 photo.
Cash exchange...into the wrong hands. (AP Photo/Tsvangirayi Mukwazhi)

Illicit financial flows are generally bad news for any government. For developing countries, though, the impact of illicit financial flows is especially significant. Governments grappling with meeting pressing needs such as plugging infrastructural deficits and improving the quality of life for citizens are further hamstrung by the illegal movement of cash from the economy.

According to Global Financial Integrity (GFI), a Washington think thank, illicit financial flows from developing regions grew at an average rate of 8.5% to 10.1% a year between 2005 and 2014 (the latest year for which data is available). The funds are mainly moved through fraudulent invoicing of imports and exports, in a bid to avoid taxes and hide large sums.

While not all of the illegally moved money may have otherwise ended up in national coffers, illicit flows offer a scope of the tax revenues lost by developing countries. Globally, illegal capital flight nearly reached $1 trillion in 2014, at the high end of the GFI’s estimate, and just over $600 billion at the low end.

Sub-Saharan Africa remains the most affected and vulnerable region in the world. Invoice fraud is particularly aided by the pervasive lax regulation and corruption across the region. Between 2005 and 2014, on average, illicit outflows equaled between 7.5% and 11.6% of the region’s total trade—the highest for any region.

In 2014, illicit outflows were largest in Asia, pegged at between $272 billion and $388 billion. In sub-Saharan Africa, illicit capital flight that year was estimated at $36 billion to $69 billion. However, measured against scale of trade, the impact of the illicit outflows from sub-Saharan Africa was much greater.

Sign up for the Quartz Africa Weekly Brief — the most important and interesting news from across the continent, in your inbox.
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The New York Times/Robert Pear: Why Your Pharmacist Can’t Tell You That $20 Prescription Could Cost Only $8

The New York Times

Why Your Pharmacist Can’t Tell You That $20 Prescription Could Cost Only $8

By ROBERT PEAR FEB. 24, 2018
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States are moving to block “gag clauses” that prohibit pharmacists from telling customers that they could save money by paying cash for prescription drugs rather than using their health insurance. Credit Nicole Craine for The New York Times

WASHINGTON — As consumers face rapidly rising drug costs, states across the country are moving to block “gag clauses” that prohibit pharmacists from telling customers that they could save money by paying cash for prescription drugs rather than using their health insurance.

Many pharmacists have expressed frustration about such provisions in their contracts with the powerful companies that manage drug benefits for insurers and employers. The clauses force the pharmacists to remain silent as, for example, a consumer pays $125 under her insurance plan for an influenza drug that would have cost $100 if purchased with cash.

Much of the difference often goes to the drug benefit managers.

Federal and state officials say they share the pharmacists’ concerns, and they have started taking action. At least five states have adopted laws to make sure pharmacists can inform patients about less costly ways to obtain their medicines, and at least a dozen others are considering legislation to prohibit gag clauses, according to the National Conference of State Legislatures.

Senator Susan Collins, Republican of Maine, said that after meeting recently with a group of pharmacists in her state, she was “outraged” to learn about the gag orders.

“I can’t tell you how frustrated these pharmacists were that they were unable to give that information to their customers, who they knew were struggling to pay a high co-pay,” Ms. Collins said.
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Continue reading the main story

Alex M. Azar II, the new secretary of health and human services, who was a top executive at the drugmaker Eli Lilly for nearly 10 years, echoed that concern. “That shouldn’t be happening,” he said.

Pharmacy benefit managers say they hold down costs for consumers by negotiating prices with drug manufacturers and retail drugstores, but their practices have come under intense scrutiny.

The White House Council of Economic Advisers said in a report this month that large pharmacy benefit managers “exercise undue market power” and generate “outsized profits for themselves.”

Steven F. Moore, whose family owns Condo Pharmacy in Plattsburgh, N.Y., said the restrictions on pharmacists’ ability to discuss prices with patients were “incredibly frustrating.”

Mr. Moore offered this example of how the pricing works: A consumer filling a prescription for a drug to treat diabetes or high blood pressure may owe $20 if he uses insurance coverage. By contrast, a consumer paying cash might have to pay $8 to $15.

Mark Merritt, the president and chief executive of the Pharmaceutical Care Management Association, which represents benefit managers, said he agreed that consumers should pay the lower amount.

As for the use of gag clauses, he said: “It’s not condoned by the industry. We don’t defend it. It has occurred on rare occasions, but it’s an outlier practice that we oppose.”

Continue reading the main story

However, Thomas E. Menighan, the chief executive of the American Pharmacists Association, said that such clauses were “not an outlier,” but instead a relatively common practice. Under many contracts, he said, “the pharmacist cannot volunteer the fact that a medicine is less expensive if you pay the cash price and we don’t run it through your health plan.”
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A bipartisan measure that took effect in Connecticut this year prohibits the gag clauses. It was introduced by the top Democrat in the Connecticut Senate, Martin M. Looney, and the top Republican, Len Fasano.

“This is information that consumers should have,” Mr. Looney said in an interview, “but that they were denied under the somewhat arbitrary and capricious contracts that pharmacists were required to abide by.”

Mr. Fasano said that consumers were sometimes paying three or four times as much when they used their insurance as they would have paid without it. “That’s price gouging,” he said in an interview.

The legislation, Mr. Fasano said, encountered “a lot of resistance” from large pharmacy benefit managers and some insurance companies.

In North Carolina, a new law says that pharmacists “shall have the right” to provide insured customers with information about their insurance co-payments and less costly alternatives.

A new Georgia law says that a pharmacist may not be penalized for disclosing such information to a customer. Maine has adopted a similar law.

In North Dakota, a new law explicitly bans gag orders. It says that a pharmacy or pharmacist may provide information that “may include the cost and clinical efficacy of a more affordable alternative drug if one is available.”

The North Dakota law also says that a pharmacy benefit manager or insurer may not charge a co-payment that exceeds the actual cost of a medication.

Continue reading the main story

The lobby for drug benefit companies, the Pharmaceutical Care Management Association, has filed suit in federal court to block the North Dakota law, saying it imposes “onerous new restrictions on pharmacy benefit managers.”

Specifically, it says, the North Dakota law could require the disclosure of “proprietary trade secrets,” including information about how drug prices are set. “P.B.M.–pharmacy contracts typically preclude a pharmacy from disclosing to the patient the amount of a reimbursement,” the lawsuit says.

Gov. Asa Hutchinson of Arkansas, a Republican, said this past week that he would call a special session of the State Legislature to authorize the regulation of pharmacy benefit managers by the state’s Insurance Department.

He said he feared that some independent pharmacists receiving “inadequate reimbursement” from the benefit managers might go out of business, reducing patients’ access to care, especially in rural areas.

A version of this article appears in print on February 25, 2018, on Page A12 of the New York edition with the headline: Why Your Pharmacist Can’t Tell You That $20 Prescription Could Cost Only $8. Order Reprints| Today's Paper|Subscribe
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The Washington Post/Thomas Heath: Buffett says $29 billion tax cut windfall boosts Berkshire Hathaway

The Washington Post
Democracy Dies in Darkness

Get There
Buffett says $29 billion tax cut windfall boosts Berkshire Hathaway
By Thomas Heath February 24 at 3:06 PM Email the author

Berkshire Hathaway CEO Warren Buffett said the company’s $29 billion windfall from the new U.S. tax code overhaul “was far from standard.” (Reuters)

Investor Warren Buffett on Saturday disclosed that the tax legislation signed by President Trump netted a $29 billion windfall to the shareholders of Berkshire Hathaway, the Omaha-based conglomerate he leads.

The one-time benefit comes from savings on future taxes that the company would have to pay if it sold about $170 billion in equities, which run from American Express to Apple to the Coca-Cola Company. The taxes on the gains that in some cases have been piling up over decades, have dropped from 35 percent to 21 percent under the new tax law.

Berkshire’s 2017 gain “was far from standard: A large portion of our gain did not come from anything we accomplished at Berkshire,” Buffett wrote in his annual letter, released Saturday. The $29 billion “was delivered to us in December when Congress rewrote the U.S. Tax Code.”

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Berkshire doesn’t pay a dividend, but the $29 billion increased the value of the company. He called the gain “nonetheless real — rest assured of that.”

The 17-page missive issued Saturday morning is eagerly awaited by investors, shareholders and others who find the billionaire’s advice, insights and approach to life appealing.

[Warren Buffett’s $100 billion problem]

“My main takeaways are the underlying businesses continue to do extremely well, the cash continues to pile up, an additional $30 billion in the last year alone” to a total of $116 billion, said Whitney Tilson, a Berkshire shareholder for more than two decades and a close follower of Buffett, 87, and his longtime business partner and sidekick, Charlie Munger, 94.

The letter went on to caution investors to stick to “simple fundamentals” and lamented the Buffett braintrust’s inability to find acquisition targets at what he called “a sensible purchase price.”

The lack of a comfortable purchase price “proved a barrier to virtually all deals we reviewed in 2017, as prices for decent, but far from spectacular businesses hit an all-time high. Indeed, price seemed almost irrelevant to an army of optimistic purchasers.”

Buffett and Munger are known for their aversion to risk. That theme remains steadfast in the Berkshire culture even with $116 billion in cash and rock-bottom prices for debt.

“I’m glad to see Buffett and Munger are being disciplined and not putting [the cash hoard] to work in a richly valued market,” Tilson said.

[Meet the woman who gives bridge tips to Warren Buffett and Bill Gates]

“Our aversion to leverage has dampened our returns over the years,” Buffett said. “But Charlie and I sleep well. Both of us believe it is insane to risk what you have and need in order to obtain what you don’t need. We held this view 50 years ago when we each ran an investment partnership, funded by a few friends and relatives who trusted us. We also hold it today after a million or so ‘partners’ have joined us at Berkshire.”

Despite its equity investments, its $116 billion-plus in dry powder and ownership of dozens of other businesses, small and large, Berkshire Hathaway is primarily an insurance company. Buffett built a large portion of the company based on “float,” which is  the money he collects and holds from insurance premiums before he must pay it out in claims. Buffett uses the float — now in the billions of dollars — for Berkshire Hathaway investments.

Buffett loves to talk about insurance, and the 2018 letter was no exception. He said Berkshire Hathaway’s exposure to the three hurricanes that hit Texas, Florida and Puerto Rico last September will be $2 billion after taxes.

He said the damage to Berkshire and other insurers could have been “far worse: Had Hurricane Irma followed a path through Florida only a bit to the east, insured losses might have well been an additional $100 billion.”

That said, “no company comes close to Berkshire in being financially prepared for a $400 billion” mega-catastrophe — known as “mega-cat.”

“Our unparalleled financial strength explains why other (property and casualty) insurers come to Berkshire — and only Berkshire“ for reinsurance.

[Warren Buffett’s Berkshire Hathaway had an amazing 2017. 2018 isn’t looking bad, either.]

Buffett also used his letter to take a victory lap over winning his $1 million bet with a hedge fund that a passively managed index fund would achieve a superior return that a basket of hedge funds.

“The bet illuminated another important investment lesson: Though markets are generally rational, they occasionally do crazy things. Seizing the opportunities then offered does not require great intelligence, a degree in economics or a familiarity with Wall Street jargon,” he wrote. “What investors then need instead is an ability to both disregard mob fears or enthusiasms and to focus on a few simple fundamentals. A willingness to look unimaginative for a sustained period — or even to look foolish — is also essential.”

Tilson  said it was significant that Buffett pointed out in the letter that two longtime Berkshire executives — Ajit Jain and Gregory Abel — had been elevated to vice chairs on the board of directors of the $500 billion conglomerate.

“It’s old news, but the fact that he mentioned in the annual letter is an indication that one or both of them will likely be his successor,” Tilson said.

Read more:

Meet the Carlyle Group’s $174 billion man

A first lesson on the stock market: Don’t run from a good sale.

The man who sold his supermarket to Whole Foods talks about the future of grocery stores

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Thomas Heath is a local business reporter and columnist, writing about entrepreneurs and various companies big and small in the Washington metropolitan area. Previously, he wrote about the business of sports for The Washington Post’s sports section for most of a decade.
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Saturday, 24 February 2018

The Washington Post/Marc Fisher: Inside the Manafort money machine: A decade of influence-peddling, lavish spending and alleged fraud

The Washington Post
Democracy Dies in Darkness
Inside the Manafort money machine: A decade of influence-peddling, lavish spending and alleged fraud

Former Trump campaign official Rick Gates, left, and former Trump campaign chairman Paul Manafort are accused of defrauding the IRS and lying to U.S. banks to obtain loans. (Brendan Smialowski/AFP/Getty Images)
By Marc Fisher February 23 at 7:46 PM Email the author

As Donald Trump crisscrossed the nation promising to drain the swamp, two of his top advisers were busy illegally building a colossal fortress of riches deep inside that swamp, according to federal prosecutors.

For a decade prior and on through Trump’s populist crusade, Paul Manafort and Rick Gates used offshore accounts, hidden income, falsified documents and laundered cash to maintain Manafort’s lush life of multiple homes, fine art, exquisite clothes and exotic travel, the government says.

In a richly detailed expanded indictment filed Thursday, special counsel Robert S. Mueller III parted the curtain shielding how two longtime Washington influence merchants worked the system. The government contends that Manafort, who was Trump’s campaign chairman for five months before being fired, used people all around him, from his buddy Gates to banks, clients and the IRS, to build a life of conspicuous consumption.

Gates, who was Manafort’s deputy in their lobbying firm and on the Trump campaign, pleaded guilty Friday to conspiracy and lying to the FBI, cutting a deal with prosecutors to give them information that could help Mueller’s investigation into Russian interference in the 2016 presidential election.

Manafort, meanwhile, has maintained his innocence. His spokesman, Jason Maloni, said that Manafort is “confident that he will be acquitted and violations of his constitutional rights will be remedied.”
Special counsel Robert S. Mueller III filed new charges on Feb. 22 against former Trump campaign chairman Paul Manafort and his business partner, Rick Gates. Here is what you need to know. (Melissa Macaya,Peter Stevenson/The Washington Post)

An attorney for Gates declined to comment on Thursday’s indictment.

If convicted, Manafort faces punishment that could put him behind bars for the rest of his life.

But for the years when he was working for Ukrainian leader Viktor Yanukovych, the money poured in by the millions.

From 2006 on, much of it came from Manafort and Gates’s prized client, Yanukovych, and his Party of Regions, which paid their firm $17 million between 2012 and 2014, according to federal filings.

Even after the money stopped flowing, Manafort and Gates found ways — illegal ways, prosecutors say — to maintain and even improve their lifestyles.

After Ukrainians took to the streets in 2014 in an uprising against their government’s corruption, and Yanukovych fled to the protection of his close ally, Russian President Vladi­mir Putin, Manafort and Gates misled banks and borrowed millions, allowing Manafort to live in bigger and better houses, buy fabulous fashions and expand an already impressive collection of antique rugs, prosecutors allege.

With extensive help from Gates, Manafort opened a gusher of spending on personal pleasures, according to the indictment prosecutors filed this week. (Outwardly, Gates, who is 45, lived more modestly, but he, too, had amassed quite a fortune. Although he listed $2.2 million in assets in a court document in 2011, he wrote in a credit application in 2016 that he was worth $25 million and that his wife had assets of $30 million, the indictment says.)

Manafort, a longtime mainstay of Washington politics who tracked delegates for President Gerald Ford’s 1976 campaign and ran Ronald Reagan’s campaign in the South in 1980, and Gates had spent two decades at the pinnacle of Washington’s influence industry, collecting clients such as the Ukrainian leader and other strongmen from Congo, the Philippines and other countries who depended on the duo to advance their interests.

Manafort, 68, was not shy about displaying the fruits of that work.

The money went, the government says, to home contractors, with $5.4 million going to one on the East End of Long Island, where Manafort had a lavish 10-bedroom spread in tony Bridgehampton. (Manafort has since put that property — along with three others in Manhattan, Palm Beach and Alexandria — up as collateral in his $12 million bail deal with the government.)

Prosecutors say that Manafort made monthly payments to the home improvement company, many of them in six-figure amounts, drawn from accounts that he and Gates controlled in Cyprus and the Grenadines, companies with names such as Global Highway Limited and Lucicle Consultants.

Another $655,000 allegedly went to a Hamptons landscaper over a 2½ -year period. A second landscaper got $165,000 over the following two years.

The indictment describes how money poured into the coffers of the businesses that could turn a house into a state-of-the-art entertainment complex. It alleges that a lighting and home entertainment company in Florida got $1.3 million from five Manafort-controlled entities. Over two years, an antique-rug shop in Alexandria collected $934,000 from Manafort’s Cypriot accounts, prosecutors say.

Manafort spent $849,000 at one men’s clothing shop in New York City in 34 visits over six years — an average of $25,000 per shopping venture. Another clothing store, in Beverly Hills, collected $520,000 from Manafort on nine dates over five years, about $58,000 per visit.

Manafort allegedly bought Range Rovers (four of them in five years), a Mercedes, art, ­audio-video systems, a condo, a Manhattan brownstone and his Alexandria house.

He liked to live large and he didn’t mind if others saw how he spent his wealth. He once testified before Congress that although “the technical term for what we do . . . is ‘lobbying’ . . . I will admit that, in a narrow sense, some people might term it ‘influence peddling.’ ”

His friends loved that chesty bravado of his, and some of them called him “the Count of Monte Cristo,” named for the swashbuckling hero of the 19th-century French novel.

But prosecutors describe how much of Manafort’s fortune was not flaunted: Millions were tucked away in an extensive network of foreign companies and bank accounts in Cyprus, the Grenadines and the Seychelles islands. In the lean years that followed the flight of their Ukrainian patron, Manafort and Gates allegedly tapped into their foreign holdings, bringing large sums back home and presenting those transactions not as repatriated assets but as new income — thereby persuading banks to lend them more than $20 million that, prosecutors argue, they otherwise would not have qualified for.

The financial misdeeds that Manafort and Gates have now been accused of have nothing to do with their work for the Trump campaign. Mueller is apparently engaged in a classic prosecutor’s methodology, identifying other crimes committed by people in the orbit of the main subject of the investigation, and then using that evidence to find out if those people have incriminating information about the person prosecutors are really interested in.

On its face, the indictment filed Thursday is a fairly simple case of alleged tax fraud. A federal law called the Bank Secrecy Act says that if you have accounts in foreign banks — whether the accounts are in your name — you must report them to the U.S. Treasury.

The IRS’s 1040 tax form asks, “Did you have an interest in or a signature or other authority over a financial account in a foreign country?” Year after year — all the way up to last October — Manafort and Gates repeatedly answered, “No,” when, in fact, the government says, they had extensive foreign interests.

During the fat years when Yanukovych was on the rise and then in power, Manafort and Gates were able to stockpile millions in those foreign entities, prosecutors say. After 2014, when the cascade of money dried up, Manafort and Gates adapted.

Using the real estate Manafort had acquired with their Ukrainian fees as collateral, he — allegedly with Gates’s assistance — took out millions of dollars in mortgages. To get the mortgages, the government contends, Manafort and Gates concocted fake profit and loss statements that inflated their income.

In 2012, Manafort bought a four-story, 19th-century brownstone rowhouse in the Carroll Gardens section of Brooklyn. He paid $3 million in cash — from one of the men’s Cyprus accounts, prosecutors say — for the place on Union Street and set about renovating it from the guts out. The house already had marble mantelpieces and a Jacuzzi, but Manafort took it to a new level, adding a two-story extension out back, new windows, a roof deck and a slate walkway.

Neither Manafort nor his daughter ever moved in. The daughter, according to the New York Times, told neighbors that she loved the place and intended to live in it. As the renovations continued, Manafort took out a $5 million loan, supposedly to pay for the rehabilitation of the house. But Manafort, the government says, actually had no such intention. “The construction mortgage will allow me to pay back [another Manafort apartment] mortgage in full,” he wrote to his tax preparer in December 2015.

Similarly, Manafort in 2012 bought a $2.85 million condo in Manhattan’s pricey Soho neighborhood — also with cash, also from the accounts in Cyprus, the indictment says. For more than two years, he rented the place out on Airbnb, charging several thousand dollars a week, prosecutors say.

At the same time as he was renting out the apartment, Manafort sought a $3.4 million mortgage on it. To get a loan that large, the bank wanted to see that the condo was occupied by its owner. That’s exactly what Manafort claimed was the case, the government says.

“In order to have the maximum benefit, I am claiming Howard St. as a second home,” Manafort wrote in an email cited by prosecutors. “Not an investment property.”

The email was written in January 2016 — smack in the middle of the period when Manafort was renting out the place on Airbnb.

He told the lender that his daughter and son-in-law were using the condo and that it was not a rental property. And Manafort wrote to his son-in-law to remind him that when the bank’s appraiser showed up to assess the condo, he should “remember, he believes that you and [Manafort’s daughter] are living there.”

But the bank got suspicious, discovering that there was, indeed, a mortgage on Manafort’s Brooklyn brownstone, even though Manafort had written on his loan application that he owned the Brooklyn place free and clear.

Gates responded, prosecutors say, by having an insurance broker send the bank an old insurance report that listed no mortgage on the Union Street rowhouse. Gates emailed Manafort to let him know how he had handled the situation, the indictment says. Within hours, Manafort replied: “good job on the insurance issues.”

Still, it wasn’t clear that the lender was going to approve the loan on the Howard Street condo. There was another problem: A tax return that Manafort included in his application showed that he had received a $1.5 million loan from one of the entities in Cyprus that he and Gates controlled. With that large a debt on Manafort’s record, the bank was hesitant to approve a new loan.

In fact, the government alleges, there never was any loan; the money had just been transferred from Cyprus to the United States, but it had been called a loan so Manafort wouldn’t have to pay taxes on the income.

But now the “loan” was causing a problem, so, prosecutors say, Manafort and Gates had a tax accountant send the lender backdated documents falsely stating that the $1.5 million loan had been forgiven in 2015.

In March 2016, Manafort got a $3.4 million mortgage on the Howard Street condo.

About that same time, Manafort applied to borrow yet more money, this time a business loan. To boost the application’s prospects, prosecutors say, Gates asked a bookkeeper to add $2.4 million to the stated income of their company. “Can you make adjustments on your end and then just send me a new scanned version?” Gates asked in an email.

The bookkeeper refused, the government says, so Gates did it himself. “I am editing Paul’s 2015 P&L statement,” he wrote, sending the altered profit and loss statement to the lender. The loan application claimed that the company Manafort and Gates controlled had $4.45 million in net income; prosecutors say the real income was less than $400,000.

To win approval of the loans, the men needed help from inside the banks. They found what prosecutors call “a conspirator” who worked for one of the lenders. When Manafort and Gates’s loan application first arrived, the lender’s employee wrote back, “Looks Dr’d. Can’t someone just do a clean excel doc and pdf to me??”

The final, successful application included a later and different version of the paperwork.

But sometimes the duo’s methods didn’t work. In 2016, when Manafort applied for a mortgage on his Bridgehampton house, he told the bank that his firm would be getting $2.4 million in income later that year for work on a “democratic development consulting project.”

To back up that claim, the government says, Gates gave the bank a fake invoice for $2.4 million, attesting that the payment was for “services rendered per the consultancy agreement pertaining to the parliamentary elections.”

But the bank wanted more proof that Manafort had sufficient income to be able to pay back a loan. When it wasn’t forthcoming, the bank rejected the application, according to the indictment.

Undeterred, Manafort and Gates applied to a different bank, using what prosecutors say were false and doctored financial documents to overstate their firm’s income by millions.

In October 2016, Manafort emailed Gates a PDF version of their firm’s actual profit and loss report, showing that they’d lost more than $600,000. Gates then allegedly converted the PDF into a Word document so it could be edited. He sent that back to Manafort, who then added more than $3.5 million in income to the document and returned it to Gates, who converted it back to a PDF that was sent to the bank.

Still, the bank had another problem with the application: Manafort owed American Express $300,000, and the debt had damaged his credit rating. So Manafort replied that he had actually lent his credit card to Gates, who had spent the money and failed to reimburse his partner. Manafort sent the bank a letter from Gates, who said that he had incurred the Amex charges and would pay his partner back.

The result, the government says: two loans worth $16 million.


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Marc Fisher, a senior editor, writes about most anything. He has been The Washington Post’s enterprise editor, local columnist and Berlin bureau chief, and he has covered politics, education, pop culture and much else in three decades on the Metro, Style, National and Foreign desks.
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MIT Technology Review/Erin Winick: The Five Most Amazing Things That Were 3-D-Printed This Year

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Business Impact
The Five Most Amazing Things That Were 3-D-Printed This Year
Each of these items gives us clues to what the future of manufacturing might look like.

    by Erin Winick December 28, 2017

Additive manufacturing has been hyped for years. But in 2017 much of its promise materialized: 3-D printing took a series of big steps out of the realm of niche prototyping and into the world of mass manufacturing. Here’s a look at some of the most impressive things 3-D printers made this year, as well as what their creations portend for the future.

Running shoes

Through a partnership with additive-manufacturing company Carbon (one of our 50 Smartest Companies of 2017), Adidas has imbued its “speed factories” with the ability to print shoes 90 times faster than before. Carbon’s fast printing technology is being used to manufacture elastomer midsoles for the company’s custom athletic shoes. When the doors of the second speed factory open in Atlanta in 2018, Adidas will be poised to manufacture one million shoes a year using the technique.

Eyeglasses, a bevel gear, and a miniature replica of the MIT dome

Actually, these small plastic tchotchkes are not particularly impressive—but the speed at which they were created is. MIT researchers made them on a new machine that prints items so fast you’d swear a video of it in action has been sped up. Items that would once have taken hours to make are now down to minutes. The team published the details of its machine, which uses a heat-generating laser and a high–pressure screw mechanism, in the journal Additive Manufacturing in November.

Jet-engine combustion liner

In November GE unveiled its newest metal 3-D printer, as well as a part, called a jet engine combustion liner, printed on the beta version of the machine. Like most metal printers, it uses lasers to transform powder into a solid metal form, but this printer was made with the goal of overcoming size limitations that have dogged previous designs. The combustion liner showed off the size capabilities of the machine: it can print metal parts up to one meter in diameter. When it debuts in 2018, the printer figures to be a centerpiece of the company’s push for 3-D printing to fuel the future of its business. In December, GE also used 3-D-printed metal parts to help set an efficiency record for a natural-gas turbine.

Stronger steel
Lawrence Livermore National Laboratory

There’s long been a problem with 3-D-printed steel: you have to trade off strength for ductility. This year, though, a team from Lawrence Livermore National Laboratory has developed an approach that uses a regular laser-sintering printer to control the microscopic grain structure of the metal. This makes it possible to create components with similar ductility to regular stainless steel but twice the strength, and three times that of some previous 3-D-printed types.

Quickly made metal parts

In April, we reported on Desktop Metal’s revolutionary machines that figure to increase the rate at which metal parts can be printed by a factor of 100. The hydraulic manifold pictured above, which cannot be made through traditional methods, is being processed inside a microwave furnace, which uses temperatures up to 1,400 °C to finish off parts after printing. Printers meant for churning out parts in large-scale production runs are expected to ship in 2018.

Want to explore more about the future of 3-D printing? Check out our recent interactive conversation with entrepreneur Greg Mark.

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3-D printing, Additive Manufacturing, Greg Mark
Erin Winick

Erin Winick Associate Editor

I am the associate editor of the future of work at MIT Technology Review. I am particularly interested in automation and advanced manufacturing, spurring from my background in mechanical engineering. I produce our future of work e-mail… More
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