The New York Times said Facebook conducted an aggressive campaign to combat critics. AP
The New York Times said Facebook conducted an aggressive campaign to combat critics. AP
The New York Times said Facebook conducted an aggressive campaign to combat critics. AP
The New York Times said Facebook conducted an aggressive campaign to combat critics. AP

Senator to query Facebook about report on treatment of critics


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A Democratic US senator said on Thursday she will ask Facebook Inc and the Justice Department about a media report that the company hired an outside firm to attack critics, warning that such action could raise campaign finance issues.

Senator Amy Klobuchar told the Senate Judiciary Committee she would send a letter seeking details about a New York Times article that named the Minnesota Democrat as a target of an aggressive Facebook lobbying campaign that relied partly on a Republican opposition research firm.

Facebook did not immediately respond to a request for comment on Klobuchar. But Facebook Chief Executive Mark Zuckerberg told reporters that he ended the company’s relationship with the outside firm, Definers Public Affairs, after he became aware of it while reading the New York Times story. Definers did not respond to a request to comment.

The New York Times said Facebook conducted an aggressive campaign to combat critics, shift public anger toward rival companies and fend off new regulations contained in proposed legislation that Ms Klobuchar supports.

“This is a pretty serious matter for those of us on the receiving line,” Klobuchar told the committee.

“I would like to know what was going on with elected officials,” she said. “If they in fact were taking actions against critics, this could be a campaign finance issue... It could also have other legal ramifications.”

If Facebook spent money trying to influence the outcome of an election, it would have been required to disclose that spending to the Federal Election Commission and failure to do so would be a violation of the law. However, recent Supreme Court rulings have given companies leeway, requiring that they directly call for someone to be elected, or lose their office, to trigger the campaign finance laws.

The Times report said Facebook hired the Republican firm to discredit activist protesters and lobbied a Jewish civil rights group to cast some critics of the company as anti-Semitic.

Its issue with Ms Klobuchar involved legislation known as the Honest Ads Act, which she has supported along with Democratic Senator Mark Warner and the late Arizona Republican Senator John McCain. The bill would compel Facebook and other internet firms to disclose the sponsors of political ads on their websites.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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