WSJ What’s News - New York City Mayor Eric Adams Charged With Bribery and Corruption

Episode Date: September 26, 2024

P.M. Edition for Sept. 26. Federal prosecutors say Adams sought and accepted illegal foreign political contributions. Journal reporter Corinne Ramey discusses the charges. And WSJ lead writer Gunjan Banerji on why American investors are sticking with money market funds. Plus, what counts as a supermarket? WSJ’s Jinjoo Lee explains why this is a big question rocking the grocery industry. Tracie Hunte hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Easy. Go to kraken.com and see what crypto can be. Not investment advice. Crypto trading involves risk of loss. See kraken.com slash legal slash ca dash pru dash disclaimer for info on Kraken's undertaking to register in Canada. Federal prosecutors revealed the charges against New York City Mayor Eric Adams.

The conduct alleged in the indictment, the foreign money, the corporate money, the bribery, the years of concealment is a grave breach of the public's trust. Public office is a privilege. We allege that Mayor Adams abused that privilege and broke the law. And the New York appeals court questions the nearly half a billion dollar civil fraud judgment against Donald Trump.

Plus, investors are keeping their cash in money market funds instead of the stock market. Does it matter? It's Thursday, September 26th. I'm Tracy Hunt for the Wall Street Journal. This is a PM edition of What's News, the top headlines and business stories that move the world today. Eric Adams is the first sitting New York City mayor to be indicted in modern history. Adams is facing five criminal counts, including for bribery, fraud, and soliciting a contribution by a foreign national. Corinne Ramey has been covering this story for the Wall Street Journal, and she joins us now. Corinne, what are prosecutors saying?

Prosecutors said that for nearly a decade, Adams was part of a conspiracy to solicit and accept illegal contributions for his campaign. They said this dated back to his borough president years and continued to when he was mayor. And much of this related to relationships with Turkish officials and business people. Foreign officials aren't allowed to donate to elections here. One of the really striking things in the indictment is the allegations of a cover-up that he deleted messages, that had communications with staffs about deleting messages,

other conduct that showed he knew this conduct was illegal both when he was doing it and after he was aware of the investigation. So what has Adams said about all the charges against him? Adams has portrayed the charges as unfair. Before the U.S. Attorney's Office held their late morning press conference, Adams held his own press conference in front of his official residence in Gracie Mansion. Federal agents had executed a search warrant at the residence this morning. His lawyer said his phone was taken and Adams was defiant and portrayed himself as sort of improperly targeted. He encouraged New Yorkers to have patience,

not just believe their narrative. And he has indicated he won't resign and has said his lawyers will fight the charges while he runs the city. Karin Ramey is a reporter covering federal law enforcement and white collar crime for the Wall Street Journal. Thank you, Karin. Thanks. A New York appeals court today questioned whether the state's civil fraud case against Donald Trump properly applied the law and whether the nearly half a billion dollar penalty

against the former president was too high. The court heard arguments in Trump's bid to overturn a judge's order that he and other defendants pay $489 million for lying about the value of parts of his real estate empire for financial gain. The civil hearing comes as three prosecutions of Trump have been derailed or delayed, and his sentencing for his New York hush money conviction has been postponed until after the election. What Questions Do Americans Have?

Americans are having fewer babies, and it's become an issue for politicians and policymakers. What questions do you have about America's falling birth rate and what it means for politics and the economy? Send a voice memo to wnpod at wsj.com or leave a voicemail with your name and location at 212-416-4328. We might use it on the show. Coming up, why money market funds remain as popular as ever.

That's after the break. Introducing TD Insurance for Business with customized coverage options for your business. Because at TD Insurance, we understand that your business is unique, so your business insurance should be too. Whether you're a shop owner, a pet groomer, a contractor, or a consultant, you can get customized coverage for your business. Contact a licensed TD Insurance advisor to learn more. American's dash for cash isn't over yet. Investors have poured $126 billion into money market funds since the Federal Reserve's big interest rate cut. That sent assets in those funds to a record $6.76 trillion as

of Tuesday. That's based on crane data going back to 1998. Wall Street investors are trying to figure out what those trillions in cash will mean for the path of stocks, which have historically provided the highest returns in the long run. Joining us now is Gunjan Banerjee, the lead writer for the Wall Street Journal's live markets coverage. Gunjan, let's start with the basics. What are money market funds? Money market funds are ultra safe funds

that typically hold things like short term treasuries. They're thought of as cash like investments. And as interest rates go down, why isn't that cash going into the stock market? What we're learning is that there isn't this direct correlation between what stocks do and where money goes in terms of money market funds. And I think one of the most surprising things

to many investors I've been chatting with is that the S&P 500 has notched dozens of records this year, but you still have this pile of cash sitting out there that's approaching $7 trillion. And many investors thought that when the Federal Reserve started trimming interest rates, that investors would start yanking money from money market funds. And so far, what we've seen is that since the Fed's rate cut, investors have actually poured money into money market funds and assets have touched a record just this week. What we're hearing is that unless yields fall much lower, say to 3% or 2%, which is really,

really far from where they are now, money market funds are going to keep some of their appeal. We've seen fund flows into money market funds. We've seen fund flows into bonds and we've seen fund flows into money market funds. We've seen fund flows into bonds, and we've seen fund flows into stocks. So contrary to what many investors thought at the start of the year, all three asset classes have seen monster fund flows.

Gunjan Banerjee is a lead writer for the Wall Street Journal's live markets coverage. After taking a quick breather, U.S. markets are looking up again. The Dow climbed 0.6% or 260 points, the tech-heavy Nasdaq also rose 0.6%, and the S&P 500 edged 0.4% higher. Supermarket chains Kroger and Albertsons have put their $20 billion merger on hold after antitrust enforcers sued to block the deal. The outcome of the case involving the Federal Trade Commission could open up some interesting

deal possibilities for the grocery industry. One of the central points of the case is what actually constitutes a supermarket. The two companies argue that they need to combine to fend off giants like Amazon and Costco. But the FTC complaint argued for a narrower definition that would not include those companies. Joining us now to talk about the implications of this is heard on the street columnist, Jinju Lee. Now, Jinju, millions of Americans probably get their groceries from Amazon and Costco. Why is the FTC not counting them as supermarkets?

So the FTC says that Kroger and Albertsons falls into a bucket of places for one stop shopping where people can get everything they need and have tens of thousands of unique items so that they don't have to visit multiple stores. And their argument for not including Costco and Amazon, for Costco they're saying that it's not quite the same because Costco tends to carry a limited selection of goods. It requires a membership fee and also the package sizes are a lot larger. Amazon, they're saying that it doesn't provide an in-person shopping experience. So they also think that's a different market. How could not completing the acquisition affect Kroger and Albertson's

ability to compete? It's interesting because the whole reason behind this deal was Kroger and Albertsons was saying that they simply need more scale in order to compete against giants like Costco and Walmart. And if they're not able to complete the acquisition, maybe they'll become a target of another company's acquisition. Like maybe this opens up a path for someone like Amazon to buy Albertsons. That would be one possibility because supermarkets like Kroger and Albertsons have been losing market share over the years.

Jinju Lee is a Heard on the Street columnist for The Wall Street Journal. And we've got two exclusives to report. First up, the Justice Department has begun a probe of the server maker super microcomputer. That's according to people familiar with the matter, who said the probe is at an early stage and stems from a critical report from an activist short-selling firm. A prosecutor at the U.S. Attorney's Office in San Francisco has asked for information that appeared to be connected to a former employee who accused the company of accounting violations. Short-seller Hindenburg Research published its report last month about Supermicro and

said it had placed bets against the company's stock. A Supermicro spokesman declined to comment, as did a spokesman for the US Attorney's Office. And US officials said that China's newest nuclear-powered attack submarine sank back in the spring. The incident hasn't been previously disclosed. Chinese authorities scrambled to cover it up when it happened in late May or early June

in a shipyard near Wuhan. It comes as China has been pushing to expand its navy, including its fleet of nuclear-powered submarines. The U.S. doesn't know if the sub was carrying nuclear fuel at the time it sank, but experts outside the U.S. government said that was likely. The Chinese embassy didn't immediately respond to requests for comment. And the Chinese military and local authorities have not acknowledged the episode. And one last thing before we go. Heads up. We made a correction to this morning's episode.

We'd incorrectly said Israeli Prime Minister Benjamin Netanyahu was due to speak at the UN General Assembly today. He's actually scheduled to speak there tomorrow. And that's what's news for this Thursday afternoon. Today's show was produced by Pierre Bienneme and Anthony Bansi with supervising producer Michael Kosmitis. I'm Tracy Hunt for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.