Wednesday, December 05, 2018

Nine Reasons for the Sell-Off in U.S. Stocks
By Brad Olesen
Bloomberg
December 4, 2018, 2:27 PM EST

There was no single headline, no one trigger that sent U.S. stocks into a free-fall Tuesday afternoon. Instead, the rout that lopped more than 800 points off the Dow Jones Industrial Average had no shortage of explanations among Wall Street traders.

Among the culprits cited:

The supposed trade truce between China and the U.S. began to look more like a vague agreement to do nothing concrete. A Sunday night rally in S&P 500 futures that topped 2 percent got wiped out by midday Tuesday.

The first inversion of any portion of the Treasury yield curve in more than a decade awoke the specter of a recession, while the relentless flattening of the slope elsewhere sent financial shares careening to the worst day since February. On Monday, JPMorgan Asset Management said cash will likely outperform equities.

Technical levels buckled, then broke. The 50-day average in the S&P 500 was first to go, then the 200-day got obliterated. “There was some forced selling as we got to important technical levels,” Tom Essaye, a former Merrill Lynch trader, said. “It wasn’t a specific event that caused it, it’s just been building all morning.”

Angst that the housing market is ill resurfaced. Toll Brothers, one of the high-end builders, posted results that pointed to softening fundamentals.

Momentum names from Square to Advanced Micro plunged the most. Apple didn’t help. Another iPhone supplier cut forecasts after the close Monday, the latest in a string of cautious pre-announcements that suggest the tech giant faces slowing sales.

Geopolitics lingered in the background, with NATO and the U.S. Secretary of State issuing concerns about Russia’s compliance with the treaty on nuclear forces.

The never-ending Brexit negotiations joined the list of worries after the U.K prime minister’s government was found in contempt of Parliament after refusing to release the attorney general’s legal advice on the divorce, raising prospects for a potential “hard” exit

Forced selling added to the woes. According to Charlie McElligott, cross-asset strategist at Nomura Securities, trend-following quant funds are in the process of shedding over $50 billion in notional exposure to U.S. equities on Tuesday.

JPMorgan Chief Executive Jamie Dimon said at an investor conference that he saw the fourth-quarter trading environment as flat, adding to woes in the financials.
Stock Market Misery Runs Deeper Than Trump and the Fed
Sarah Ponczek, Luke Kawa and Vildana Hajric
Bloomberg
December 4, 2018

(Bloomberg) -- At first glance, investors got what they wanted: a less aggressive Federal Reserve and calming words on trade. That they still aren’t pleased suggests a bigger issue is underscoring their anxiety.

That issue is the possibility economic and earnings growth will slow down or stop next year, a scenario that unlike the trade war and interest-rate policy defies any obvious quick fix. The S&P 500 plunged 3.2 percent, the Dow Jones Industrial Average sank almost 800 points and bond yields tumbled.

Reading too much into day-to-day moves is usually a mistake and a half dozen explanations exist for Tuesday’s walloping, including selling pressure ahead of Wednesday’s market closure honoring former President George H.W. Bush. At the bottom of virtually all the other narratives, however, lurks concern that the market sees something to suggest the decade-long expansion that has fueled the bull market is in greater jeopardy than economists realize.

“The fundamental data is just not pricing in a robust, exciting, and upwardly sloping market,” Alicia Levine, BNY Mellon Investment Management chief strategist, said on Bloomberg TV. “The bond market is clearly giving a different signal than the equity market has in the last week. And the bond market is concerned about slowing global growth.”

Of course, a strong jobs report Friday could go a long way to alleviating concern that a significant slowdown is imminent. Recent readings on U.S. manufacturing and personal spending also showed that any impact from the trade tensions has not fed through to the world’s largest economy, at least not yet. And while one part of the Treasury yield curve inverted for the first time since 2007, the relationship most closely watched by the Fed is emitting a more muted warning.

For now, though, equity bears have wrested the upper hand in markets and focus is squarely on the risks they’re flagging:

Yield Curve Signal

Noise abounds in stock gyrations but coincidences bother traders. One fact that stands out right now is that the market abandoned its single-session celebration of Donald Trump’s trade truce on the same day the yield on three-year Treasuries fell below the 5-year rate for the first time in a decade. A more closely watched relationship, the spread between 2- and 10-year yields, remains positive, though the gap keeps getting slimmer.

“As parts of the yield curve invert, investors are getting spooked about potentially receiving a recession signal,” said Michael O’Rourke, JonesTrading’s chief market strategist.

Decelerating Earnings

Could the focus on trade and central-bank policy have been a red herring? Those who say so got a boost Tuesday. Progress on both fronts failed to sound the all clear in markets, putting the focus back on a fundamental backdrop that while robust now, is virtually certain to slow in 2019.

Decelerating global growth and concerns about margin pressure from higher labor costs as well as tariffs on imported goods have seen analysts trim their estimates for earnings growth in 2019. And there might be further downside yet. Despite the plunge in crude oil prices, expectations for profit growth among energy companies next year are in excess of 20 percent.

Defensive Posture

Since the S&P 500 peaked in late September, defensive areas of the market have continued to gain traction -- another fact that is cited by doomsayers as portending a slowdown. Utilities, real estate and consumer staples are the only sectors that have provided a positive return, while groups more closely associated with the economic cycle have yet to emerge from a correction. That has some weighing recession odds, wondering if the market has sussed out a slowdown.

“The only stocks up today are those that go up when people think the economy is slowing down,” Donald Selkin of Newbridge Securities said by phone. “That’s another sign -- those defensive stocks are the ones people run into when we have perceptions of economic slowdowns."

Trade, Fed Walk Backs

Even the news that pushed the S&P 500 to a 6 percent rally in the prior six sessions may not be great news. While the meeting between Presidents Donald Trump and Xi Jinping in Argentina produced positive headlines and a trade truce for now, its positive extent is already being questioned as few details emerge.
Dow Falls 800 Points As Stock Rally Fizzles Amid Growth Worries, Skepticism Over Trade Truce
Fred Imbert
CNBC
6:52 p.m. ET Dec. 4, 2018

Bear Market is a term that sends fear into Wall Street and investors. What does it mean? And how does it affect both Wall Street and Main Street? Adam Shell explains.

The Dow fell nearly 800 points Tuesday as investors worried about a bond-market phenomenon signaling a possible economic slowdown. Lingering worries around U.S.-China trade also sent jitters down Wall Street.

The Dow Jones Industrial Average declined closed down 799.36 points, or 3.1 percent, to 25,027, led by losses in Apple. Shares of Apple dropped 4.4 percent after HSBC downgraded the company's stock to hold from buy as it faces "the reality of market saturation." The S&P 500 declined 3.2 percent as the financials sector lagged. The Nasdaq Composite dropped 3.8 percent.

The yield on both the two-year and the three-year Treasury notes surpassed its five-year counterpart on Monday. When a so-called yield curve inversion happens — short-term yields trading above longer-term rates — a recession could follow, though it is often years away after the signal triggers.

Jeffrey Gundlach, CEO of Doubleline Capital, told Reuters this inversion signals that the economy "is poised to weaken."

Lower long-term rates put pressure on bank stocks. The SPDR S&P Bank ETF (KBE) dropped 5.3 percent. Shares of J.P. Morgan Chase, Citigroup and Bank of America all declined more than 4.5 percent.

"No good deed goes unpunished," said Art Hogan, chief market strategist at B. Riley FBR. "As we get headwinds from trade worries fading, you get an inverted yield curve and another brick added to the market's wall of worry."

Further fears of an economic slowdown were stoked by weaker-than-expected quarterly guidance from homebuilder Toll Brothers. The company issued its forecast for the first quarter. Toll Brothers also pointed to negative reports about the housing market as the cause for the slowdown. New home sales have fallen for 11 straight months.

Doubt about a permanent deal between the U.S. and China crept into investors' minds following a stellar rally in the previous session.

The U.S. and China agreed over the weekend to hold off on any additional tariffs on each other's goods on January 1, in order to allow trade talks to continue. Leaders from the two countries met over dinner at the G-20 summit in Argentina. The news sent stocks surging on Monday, with the Dow rallying more than 300 points.

But discrepancies over when that truce would begin has led to confusion. While President Donald Trump's economic advisor, Larry Kudlow, told reporters Monday that the cease-fire would start from January 1, the White House later issued a corrected statement saying that the 90-day truce period would start on December 1.

"Bottom line, yesterday's price action further confirmed that while clearly there has been some important macro clarity provided, we need to see more before we can expect the S&P 500 to make a serious challenge to the old highs," said Tom Essaye, founder of The Sevens Report.

China and the U.S. have been engaged in a tense sparring match over trade, with both countries hitting each other's economies with levies on imported goods. Trump's administration has so far slapped tariffs on $250 billion worth of Chinese imports, while Chinese President Xi Jinping's government has imposed tariffs on $110 billion in U.S. goods.

Trump said in a series of tweets Tuesday that a deal between the two countries would get done if possible. "But if [it's] not possible remember ... I am a Tariff man."

© CNBC is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.
Today's Stock Market: Dow Jones Slammed On Economic Slowdown Worries
KEN SHREVE
Investor's Business Daily
12/04/2018

Sellers were in back in the stock market in spades Tuesday as Wall Street grew concerned about falling bond yields and and an economic slowdown. In today's stock market, JPMorgan (JPM) took a hit in the Dow Jones, down nearly 5%. Big decliners in the Nasdaq 100 included semiconductor stocks like Applied Materials (AMAT), Lam Research (LRCX) and Micron Technology (MU). (For updates on this story and other market coverage, visit the Stock Market Today.)

In late-afternoon trading, the Nasdaq composite was down 3%, the S&P 500 lost 2.5% and the Dow Jones industrial average swooned 2.5%. Small caps took the hardest hit as the Russell 2000 slumped 3.3%. Volume on the NYSE and Nasdaq was tracking slightly lower than Monday's levels but seemed to be picking up the pace.

In today's stock market, Apple (AAPL) was another big decliner in the Dow Jones, down nearly 4%, after HSBC downgraded shares to hold with a 200 price target.

After gapping above its 50-day moving average Monday, the Philadelphia Semiconductor index plunged below the line Tuesday, falling nearly 4%.

Innovator IBD 50 ETF (FFTY) fell mostly in line with the Nasdaq. After eight straight gains, IBD 50 stock BioTelemetry (BEAT) plunged around 7%. HealthEquity (HQY) was another big decliner in the IBD 50, down more than 5%, ahead of its earnings report after the close.

Today's Stock Market: Bonds Rally

In economic news, the IBD/TIPP Economic Index dipped to 52.6 in early December, matching its April low. Meanwhile, the spread between the 10-year yield and 2-year yield continued to narrow. The 10-year Treasury yield was recently trading around 2.91%, with the the 2-year at 2.80%. Money flowing into bonds hurt the cause of financial stocks. IBD's Banks-Super Regional group, which includes stocks like Fifth Third Bancorp (FITB), Regions Financial (RF) and SVB Financial (SIVB), was down 5% in afternoon trading.

Heavy-volume gainers in today's stock market included AutoZone (AZO). The auto parts retailer gapped up to a new high after earnings and same-store sales topped expectations.

Also in the stock market today, RH (RH) soared 10% thanks to strong earnings and bullish Q4 guidance.
An Inverted Yield Curve, a Predictor of Recessions, Has the Stock Market Spooked
Here’s What’s Driving the Stock Market Drop but don’t panic just yet

By KEVIN KELLEHER 7:45 PM EST
Fortune

For the first time in a while, stock market investors are being spooked this week by what’s happening in the bond market. And the reason has something to do with an occurrence that is not exactly in the everyday investor’s lexicon: an inverted yield curve.

Put simply, an inverted yield curve happens when bond yields at the short end of the bond spectrum rise above those at the long end. Usually, the bond market focuses on the difference between the yields on U.S. Treasury two-year notes and those for 10-year notes. When the yield curve inverts, it means the two-year notes pay bondholders more in interest than 10-year notes do, something that’s both rare and counterintuitive.

For economists and investors, it’s a loud warning about the economy’s outlook. One portfolio manager called the inverted yield curve a “harbinger of doom.” It has a scarily accurate track record of predicting economic recessions, which in past decades have arrived six months to two years after an inversion.

“Every U.S. recession in the past 60 years was preceded by a negative term spread, that is, an inverted yield curve. Furthermore, a negative term spread was always followed by an economic slowdown and, except for one time, by a recession,” Michael Bauer and Thomas Mertens, two Federal Reserve research advisors in San Francisco, wrote in a March paper.

And while interest rates have been unusually low for most of the past decade, Bauer and Mertens believe the prophetic power of the inverted curve still applies. “While the current environment is somewhat special—with low interest rates and risk premiums—the power of the term spread to predict economic slowdowns appears intact,” their paper said.

Typically, the yield curve slopes upwards over time, especially in times of strong economic growth. That’s because the longer it takes a bond to mature, the higher the yields investors demand as a protection against inflation. But long-term bond yields have been lower this year, amid concerns about the U.S. economic outlook in coming years. Meanwhile, the Fed has pushed short-term interest rates up, bringing them closer to—and now, in some cases, above—longer-term yields.

The difference between the two-year and the 10-year Treasury yields hasn’t yet inverted, although it has flattened to 11 basis points—that is, 11 hundredths of a percent—from 25 basis points last Wednesday. But on Monday, the yields on five-year Treasury notes fell below those on three-year notes, an inversion that hasn’t happened since 2007.

That hardly ensures that a recession is coming, let alone one as severe as the Great Recession a decade ago. But it has the bond and stock markets both worried that the classic two-year/10-year inversion is also coming. On Tuesday, the Dow Jones Industrial Average fell nearly 800 points, or 3.1%, largely in response to recession fears stoked by recent changes in the yield curve.

That the lower portion of the yield curve has inverted amid signs that the global economy is slowing is especially worrisome. Many market participants are now watching to see how the Fed reacts to that inversion, along with whether the two-year and 10-year yields will also invert.

“My bigger-term thought is the curve has to invert, and it’s going to happen sooner than people think. If twos and tens invert between now and Dec. 18, the Federal Reserve is going to have to take out some of the hikes next year—or they should do it,” Joseph Lavorgna, chief U.S. economist at Natixis, told Reuters. “I’m worried that they won’t.”
This Chart May Be a Key Reason the Stock Market is Plunging
Dec 5, 2018 8:50 a.m. ET

Gundlach on Tuesday says yield-curve inversion signals that ‘economy is poised to weaken’

By MARK DECAMBRE

U.S. stocks on Tuesday are in free fall, just a day after equity benchmarks mounted a rally that took the Dow Jones Industrial Average to its best close in a month, following a trade-tension moratorium between the U.S. and China.

The Dow DJIA, -3.10% closed Tuesday down almost 800 points, or 3.1%, with the financial sector for the S&P 500 index SPX, -3.24% registering its worst daily slump since Feb. 8.

So, why has investor sentiment done a complete 180-degree turn from Monday’s euphoria?

At least part of the downturn come amid an ominous narrowing in the spread between U.S. 10-year Treasury note TMUBMUSD10Y, +0.00% and two-year Treasury note yield TMUBMUSD02Y, +0.00% to the tightest gap, about 10 basis points, in about 11 years.

The rate spread between the 2-year and 10-year government — at around 10 basis points, or 0.10 percentage point, at its tightest — is closely followed because a narrowing gap indicates a dim outlook for the economy. A so-called yield-curve inversion, where the yield on shorter-dated debt rises above that of longer-dated bonds, has been a feature that has preceded every recession since 1975.

Although the two-year and the 10-year haven’t inverted yet, the skinnier differential between the pair as well as an inversion of the two-year-to-5-year TMUBMUSD05Y, +0.00%  section of the yield curve has market participants on edge.

Inversions are perceived as a negative for Wall Street because it undercuts the business models of banks, the engine of most financial markets, which lend on a short-term basis and lend over a longer term.

Expected rate increases by the Federal Reserve, one as soon as later this month, and waning enthusiasm about a murky detente in tariff disputes between Beijing and Washington also have combined to stoke investor anxieties, driving more robust appetite for longer-dated bonds compared against their shorter-dated counterparts.

On Tuesday, Jeff Gundlach, the chief executive of DoubleLine Capital, told Reuters that he believes the inversion of short-dated debt suggests that the “economy is poised to weaken.”

He also said the Fed must be “especially careful in its choices of words” when it meets later this month to deliver on a promised rate hike. The rate-setting Federal Open Market Committee is slated to meet Dec. 18-19 for its final policy gathering of 2018.

“While US growth is still holding up OK, worries are increasing about the overseas economic outlook. All this macro-economic uncertainty is clouding the 2019 earnings outlook, leading to increasingly violent equity swings as investors try to handicap what 2019 will look like, wrote Alec Young, managing director of global markets research at FTSE Russell, in a Tuesday note email message.

Tuesday, December 04, 2018

Stock Market Plunges as Wall Street Gives Trump’s China Deal Another Look
The president calling himself “Tariff Man” didn’t help.

By Emily Stewart
Vox.com
Dec 4, 2018, 4:07pm EST

President Donald Trump on a television monitor at the New York Stock Exchange in March 2018 discussing steel and aluminum tariffs imposed by his administration. Drew Angerer/Getty Images
Stock market investors appear to be signaling they believe President Donald Trump’s trade compromise with China is a bit of a dud.

Wall Street was initially encouraged by Trump’s Saturday deal with Chinese President Xi Jinping in which both sides agreed to a 90-day timeout of the US-China trade war. Major United States stock indexes climbed on Monday amid optimism the US and China might strike a deal, with the Dow Jones Industrial Average, which Trump often touts, gaining nearly 300 points.

But after investors had a second day to think about US-China trade relations, they appear to have changed their minds on how optimistic they feel. The Dow plunged on Tuesday, falling nearly 800 points by market close, and the S&P 500 and Nasdaq saw deep declines as well. All three major indexes ended the day down by 3 percent or more.

Trump isn’t the only factor making markets edgy — there are concerns about a potential economic slowdown and the Federal Reserve’s interest rate path as well.

But Wall Street is sending a clear signal that, upon closer inspection, Trump’s trade war détente with China isn’t looking so hot — especially after a string of tweets from the president this morning indicated he has no problem going back to a trade war if a broader agreement isn’t reached in the next three months.

In one tweet, Trump referred to himself as a “Tariff Man.” The Wall Street Journal reports that after those tweets, the Dow fell by 200 points.

“The trade war between the United States and China has been put on hold for the holidays, but the respite will be brief given the 90-day deadline and inherent difficulty in addressing the fundamental factors driving trade tensions between the two countries,” Isaac Boltansky, an analyst at research firm Compass Point LLC, wrote in a note to clients ahead of the Trump tweets on Tuesday.

This China-US trade war pause doesn’t look so great in the light of day

On the sidelines of the G20 summit in Buenos Aires, Argentina, on Saturday, Trump agreed to hold off on increasing tariffs on $200 billion in Chinese-made goods in exchange for China purchasing a still-to-be-defined amount of American-made products. Trump said he would give China and Xi 90 days to fix the structural issues in US-China trade relations.

The president immediately took a victory lap, boasting on Twitter that China had agreed to reduce its current 40 percent tariffs on US auto imports to zero, and claiming that China would “start purchasing agricultural product immediately.”

The White House hasn’t been able to back up Trump’s claims, though, indicating the president is overselling what happened in Buenos Aires. National Economic Council Director Larry Kudlow acknowledged in a call with reporters on Monday that there was no “specific agreement” on auto tariffs. Kudlow also said he couldn’t “specifically” answer questions about China’s agricultural product purchases, saying his “expectation” is that China would roll back tariffs on goods “quickly.”

There also appeared to be some confusion on the timeline from the US: Kudlow initially told reporters the 90-day clock started on January 1, but the White House later put out a correction, saying it was actually December 1.

There’s also a different story coming out of China about what happened. As the Washington Post notes, state media outlets on Monday made no mention of Trump’s 90-day time frame or reducing tariffs on US cars. They didn’t offer specifics on buying American-made products, either.

Michael Antonelli, a managing director at Robert W Baird & Co., told Bloomberg the market was acting like a “scorned lover” in relation to Trump’s trade deal. “It had believed, for whatever reason, that progress was being made at the G20 and that turns out to be murky — it feels lied to,” he said.

Trump isn’t the only thing making Wall Street anxious lately. Sam Stovall, chief investment strategist at investment research firm CFRA Research, said in an email that investors are also worried because of movements in the bond market that could signal an economic slowdown is coming.

The November jobs report is also coming out on Friday. A solid report would provide more cause for the Fed to continue raising interest rates, and when that happens, it can spook markets.

But skepticism over Trump’s China trade talks is playing a part as well — especially as it becomes increasingly obvious that no one seems to know exactly what’s going on, and this temporary timeout is no guarantee of anything substantive happening in the future.
Houthi Ansarullah Delegation Departs Yemen for Peace Talks in Sweden
Tue Dec 4, 2018 10:44PM
presstv.ir

Delegates from the Houthi Ansarullah movement, escorted by United Nations Envoy to Yemen Martin Griffiths, prepare to board a Kuwaiti plane and head for UN-sponsored peace talks in Sweden, in Sana’a, Yemen, on December 4, 2018. (Photo by AFP)

Delegates from the Houthi Ansarullah movement, escorted by United Nations Envoy to Yemen Martin Griffiths, have flown from the Yemeni capital city of Sana’a to Sweden to attend UN-sponsored peace negotiations with representatives from the administration of former Yemeni president Abd Rabbuh Mansur Hadi.

The Houthis left aboard a Kuwaiti airliner on Tuesday, one day after 50 wounded fellow fighters were allowed to fly to neighboring Oman for treatment in a major boost to peace efforts.

An unnamed senior United Nations official said Griffiths offered to accompany the Ansarullah delegates after they voiced fears that the Saudi-led military coalition, which has imposed an aerial blockade on Yemen and is conducting a devastating aerial bombardment campaign against the impoverished Arab country, might intercept the flight.

Mohammed Abdul-Salam, the spokesman and chief negotiator for the Ansarullah movement, wrote on his official Twitter page that the Houthis “will spare no effort to make a success of the talks to restore peace and end the aggression.”

Ansarullah officials said that preliminary consultations with Saudi-backed Hadi loyalists could begin as early as Wednesday.

Although no date has been announced for the start of the talks, there are reports they could begin on Thursday.

Britain has presented a draft UN Security Council resolution on Yemen, and called on parties involved in Yemen’s crisis to restart peace negotiations.

“The conflict in Yemen can only be resolved though an inclusive political process,” the draft resolution said.

The draft sets a two-week deadline for warring Yemeni parties to remove all barriers to humanitarian aid, halt attacks on civilian areas and allow unhindered access to the strategic port city of Hudaydah.

Also on Tuesday, tens of Saudi-backed militiamen after Yemeni army troopers, supported by allied fighters from Popular Committees, thwarted their offensive on al-Qatab area in the Nihm district of Yemen’s province of Sana’a.

Moreover, a young girl lost her life after Saudi military forces and their mercenaries targeted residential buildings in the al-Durayhimi district of the western Yemeni province of Hudaydah with a barrage of artillery rounds and mortar shells.

Saudi Arabia and a number of its regional allies launched a devastating military campaign against Yemen in March 2015, with the aim of bringing the government of Hadi back to power and crushing Ansarullah movement.

According to a new report by the Armed Conflict Location and Event Data Project (ACLED), a nonprofit conflict-research organization, the Saudi-led war has so far claimed the lives of around 56,000 Yemenis.

The Saudi-led war has also taken a heavy toll on the country’s infrastructure, destroying hospitals, schools, and factories. The UN has already said that a record 22.2 million Yemenis are in dire need of food, including 8.4 million threatened by severe hunger. According to the world body, Yemen is suffering from the most severe famine in more than 100 years.

A number of Western countries, the US and Britain in particular, are also accused of being complicit in the ongoing aggression as they supply the Riyadh regime with advanced weapons and military equipment as well as logistical and intelligence assistance.
Philadelphia-born U.S. Citizen Claims He Was Illegally Detained by ICE
By KASSIDY VAVRA
NEW YORK DAILY NEWS
DEC 04, 2018 | 1:45 PM
 
Philadelphia-born U.S. citizen claims he was illegally detained by ICE

Peter Sean Brown, a Philadelphia-born U.S. citizen, says he was illegally detained by ICE and was threatened with deportation to Jamaica. (YouTube/ACLU)

A Philadelphia-born U.S. citizen says he was illegally detained by ICE and was threatened with deportation to Jamaica.

According to a lawsuit filed Monday, Brown repeatedly told authorities that he was a U.S. citizen — but he was still held in custody in Monroe County, Florida, and threatened that he would be sent to a Jamaican prison.

Brown — who lives in the Florida Keys and works in the restaurant industry — is suing Monroe County Sheriff Rick Ramsay nearly eight months after the incident occurred in April.

Brown turned himself into the Sheriff’s Office for a probation violation when he tested positive for marijuana. Rather than being in jail until the probation violation was resolved, however, he was threatened with being deported.

His information was sent to ICE, who responded with a detainer form — which asks law enforcement to hold detainees for up to 48 hours past their release time so they may be picked up by ICE agents.

“I did not even realize what ICE was at the time, and reading through it I realized it had something to do with immigration,” Brown said in a video released by the American Civil Liberties Union — who is helping represent Brown.

“And at that point, I made a comment of, ‘There must’ve been a mistake.’”

According to the video, ICE confused Brown with someone else who had the same name.

“Mr. Brown was shocked and frightened to learn that he had been flagged for deportation. He immediately began telling nearly every jail employee he encountered that he was a U.S. citizen, born in Philadelphia, and that they should not be holding him for ICE,” the lawsuit says.

Brown had a valid Florida driver’s license, and documentation showed he was a U.S. citizen born in Philadelphia according to the sheriff’s files, the lawsuit claims.

“The guard mocked me, singing the theme song from ‘The Fresh Prince of Bel-Air,’ with the reference of ‘West Philadelphia born and raised,’ because I had told him I was from Philadelphia,” Brown said in the video. “So he decides that rather than do anything to help me, he thought it was funny and decided to mock me with that.”

Brown offered to give authorities his birth certificate, and his co-worker and friend called the jail to explain he was a citizen.

“Despite his repeated protests to multiple jail officers, his offer to produce proof, and the jail’s own records, the Sheriff’s Office held Mr. Brown so that ICE could deport him to Jamaica — a country where he has never lived and knows no one,” the lawsuit said.

The lawsuit claims he was held illegally and later transferred to Miami to the Krome immigrant detention center — where people are held before they are deported.

Brown was only released from Krome after his roommate emailed his birth certificate to an ICE officer at the detention center, the lawsuit says.

According to a statement from the ACLU, 17 Florida sheriffs participate in an ICE detention program that pays counties $50 for each person they hold for ICE.

The agreement — called Basic Ordering Agreements or BOA’s — shield counties from liability even when they violate constitutional rights, ACLU said.

The lawsuit argues Ramsay violated Brown’s fourth amendment rights when they held him illegally.

The lawsuit says that another officer told Brown while he was detained that Ramsay previously detained another U.S. citizen for ICE for almost a year before it was determined he was a citizen.
Florida Man Claims Sheriff Held Him for ICE for More Than Two Weeks Despite Proof of U.S. Citizenship
By MOLLY OLMSTEAD
Slate
DEC 04, 201812:24 PM

 A screengrab from an ACLU video about the case. Brown looks into the camera earnestly.

A Florida man born in Philadelphia has filed a lawsuit alleging Immigration and Customs Enforcement detained him for weeks and prepared for his deportation to Jamaica, despite numerous documented complaints that he was a U.S. citizen and had only been to the island nation once on a one-day stop on a cruise years ago.

Peter Sean Brown, who filed the lawsuit Monday, had turned himself in to the Monroe County Sheriff’s Office in April for a probation violation after testing positive for marijuana. But rather than being released a few days later or given a court date, according to the lawsuit, he was handed over to ICE and mocked by agents who refused to listen to his protestations. When he was finally released 22 days later, he had lost his job at his job at a Key West, Florida, restaurant.

According to the Washington Post, Monroe County is one of a dozen Florida counties that entered an agreement with ICE in which ICE promised to compensate sheriffs financially for holding “criminal aliens” already in their custody for ICE to pick them up. The ACLU, which with the Southern Poverty Law Center and the Los Angeles-based law firm Gibson, Dunn & Crutcher has filed the suit for Brown, has contended that the agreement violates basic policing principles that will sweep up citizens like Brown and expose them to unjust and lengthy detentions.

The lawsuit, filed in the U.S. District Court for the Southern District of Florida, accuses Richard Ramsey, the sheriff of Monroe County, of unlawfully arresting and detaining a U.S. citizen.

According to Brown’s lawsuit, when he was booked in the county jail, his fingerprints were sent off to the FBI to verify his criminal records. Those fingerprints reached ICE, which sent the sheriff a detainer request asking his office to hold Brown. Officers told a confused Brown that he was going to be deported to Jamaica—a country where he knew no one—and he protested that he was a U.S. citizen and offered to provide a birth certificate as proof. He had his friend call the jail to tell them they were holding the wrong person, but the jail told the friend to relay the information to ICE, and the officers told Brown they would hold him on retainer regardless of whether he produced a birth certificate. According to the lawsuit, the inmate file maintained by the sheriff would have confirmed that Brown was born in the U.S.

Brown continued to plead with officers to look into his citizenship, but the officers mocked him, according to the lawsuit. He filed a series of written complaints, but a lieutenant told him, “it is not up to us to determine the validity of the ICE hold,” the complaint alleges. When he eventually went to court, the judge ordered the end of his detention for the probation violation, but the sheriff’s office arrested him again and returned him to the jail for the ICE request, according to the complaint.

More than three weeks after he was booked, Brown was transferred to ICE custody and taken to the Krome immigrant detention center in Miami. There, he told the agents he was a citizen, and they agreed to look at his birth certificate. His roommate emailed the document, and ICE finally released him, only after confiscating all the documents they had given him to do with his impending deportation, according to the lawsuit.

Earlier this year, the Los Angeles Times reported the case of a U.S. citizen who was held for more than a year in an ICE facility. The paper’s investigation found that ICE had released more than 1,400 people from custody since 2012 after investigating their citizenship claims.
Michigan Supreme Court Won't Have Black Justice for First Time in 33 Years
Oralandar Brand-Williams
The Detroit News
5:41 a.m. ET Dec. 4, 2018

For the first time in 33 years, the Michigan Supreme Court will not have an African-American justice or a person of color come Jan. 1 after Justice Kurtis Wilder's election loss.

Since Democratic Party-nominated Megan Cavanagh narrowly defeated Republican-nominated Wilder, the state's highest court will become an all-white body. African-Americans comprise 14 percent of Michigan's population and make up 83 percent of the state's largest city.

The lack of diversity on the Michigan Supreme Court has the local African-American legal community worried. The issue is of "great concern" to the Rev. Wendell Anthony, head of the Detroit branch of the NAACP.

"We're always concerned about diversity," Anthony said. "Diversity presents an opportunity for there to be a greater sensitivity toward different people, different backgrounds, different values, different situations. When you have a diverse court, diverse company, or diverse anything ... it just makes a broader view and gives one a broader understanding of the issues impacting and effecting that particular ... situation."

The court has had at least one black justice since Democratic Gov. James Blanchard appointed Dennis Archer in November 1985. Archer has been followed by Conrad Mallett, who resigned in 1998; Robert Young Jr., a Republican-nominated justice who retired in April 2017; and Wilder.

"We can count the number of African-Americans that have been on the Michigan Supreme Court on ... on one hand," Anthony said. "It is supposed to be the highest (court), but you cannot be all of that unless you really reflect the highest values and traditions of all people."

But he added that white jurists can make fair rulings in many cases.

Democratic Gov.-elect Gretchen Whitmer may well appoint an African-American to the high court if a vacancy occurs, according to Archer and Bill Ballenger, a former Republican lawmaker who has written about state government politics for more than three decades.

Chief Justice Stephen Markman, 69, is nearing the state's required retirement age of 70 for judges that is enforced when judges or justices reach the end of their term. The term for Markman, a GOP-nominated justice, expires at the end of 2020.

There is speculation in Lansing that Markman might decide to retire before year's end to give Republican Gov. Rick Snyder a chance to appoint a replacement, Ballenger said.

Minorities on the court

Five African-Americans have served on the seven-member court in its 214-year history.

The first was Otis Smith, who was appointed by Democratic Michigan Gov. John Swainson in 1961 and served on the bench until 1966. After Smith was defeated for re-election, he was hired in 1967 as general counsel for General Motors Corp.

Archer followed nearly two decades later but returned to private practice in 1990 as he considered his eventual, successful run for Detroit mayor.

"It makes a difference" when citizens see personnel and judges in the courthouse who look like them, said Archer, who is chairman emeritus for the Dickinson Wright law firm in Detroit.

Michigan won't be alone among populous states in not having an African-American justice.

Florida won't have a black justice on its Supreme Court next year after a list of 11 replacements recommended by a nominating commission to the state's incoming governor didn't have any African-American nominees. The court's lone black justice , Peggy Quince, is leaving after reaching mandatory retirement age.

Michigan has two black judges, Karen M. Fort Hood and Cynthia Diane Stephens, on the Michigan Court of Appeals, which is one rung below the state Supreme Court.

Racial and ethnic diversity should be a key priority for the Michigan Supreme Court, Archer said. Otherwise, there is a sense of distrust about the high court.

"People become suspicious or they lose respect for the law," he said about the lack of African-American judges. "Then you have a problem or a disconnect."

Archer said he told Blanchard when he left the bench that he worried it would be another 20 years before another African-American would be appointed or elected to the bench.

"I did let Gov. Blanchard know that I would appreciate it if we would not have that kind of issue occur again," Archer told The News.

Blanchard appointed Mallett to replace Archer. Mallett, now chief administrative officer for the Detroit Medical Center, became the first black chief justice of the Supreme Court in 1997 before resigning at the end of 1998.

As Mallett's replacement, Republican Gov. John Engler chose Young, who helped cement a conservative judicial philosophy on the court and was selected for an unprecedented three consecutive two-year terms as chief justice by his colleagues.

Democratic candidates

No African-American women have been appointed or elected to the Michigan Supreme Court. Three black women have run for the high court in the past decade: Southfield District Judge Sheila Johnson, Oakland County Circuit Court Judge Denise Langford-Morris and Wayne County Circuit Court Judge Deborah Thomas.

But the Democratic Party this year didn't nominate any minorities for the high court as it chose two white candidates, appellate attorney Cavanagh and University of Michigan law professor Sam Bagenstos. The party was criticized for its all-white slate of candidates for governor, attorney general and secretary of state before Whitmer selected Garlin Gilchrist II of Detroit for lieutenant governor.

Cavanagh had high name recognition and great odds for winning, Ballenger said.

"I think the Democrats wanted to win and you've got someone like Megan Cavanagh ...and in the Year of the Woman, you go for it," he said.

Archer agreed, saying Cavanagh is a "very bright, outstanding lawyer" who comes from a family of "great lawyers" since her father, Michael, was a state Supreme Court justice for 32 years.

The last time Democrats decided not to run a minority candidate, in 2008, nominee Diane Hathaway defeated then-Justice Cliff Taylor. Hathaway resigned in 2013 and subsequently was sentenced to a year in prison for bank fraud involving a Grosse Pointe Park home.

Diversity matters

The high court's diversity matters for people like Metro Detroit attorney Arnold Reed, who served as a clerk on the Michigan Supreme Court during Mallett's tenure.

"The courts should be representative of the people they serve," just as juries are expected to reflect a defendant's peers, said Reed, an African-American.

"It gives people who come before the court a sense of fairness," he said. "We also need to do better with a representative of Hispanics, Arab-Americans, Chaldeans. ... We need to move more in that direction (of diversity)."

But voters should elect and the governor should appoint people of color as judges because they provide "a diversity of value," Anthony said.

But he makes exceptions for some judicial conservatives such as U.S. Supreme Court Justice Clarence Thomas, who has not sided with minority groups on rulings such as affirmative action in university admissions and other issues affecting women or minorities.

"The black skin does not make you a kin to the real issues impacting minorities and women in this nation," Anthony said. "We need people who are professional but who are also sensitive and who are learned and who look at the totality of the impacts of issues on our community.

"I'm not so certain that we have experienced that recently on the Michigan Supreme Court, so hopefully this will change."

bwilliams@detroitnews.com

(313) 222-2027
Bush Made Willie Horton an Issue, and for African-Americans, the Scars Are Still Fresh
By Peter Baker
New York Times
Dec. 3, 2018

WASHINGTON — The tributes to former President George Bush in recent days have focused on his essential decency and civility, and his embrace of others, including even his onetime opponents. But the “last gentleman,” as he has been called, was not always so gentle.

Mr. Bush’s successful campaign for the presidency in 1988 was marked in part by the racially charged politics of crime that continues to reverberate to this day. The Willie Horton episode and the political advertising that came to epitomize it remain among the most controversial chapters in modern politics, a precursor to campaigns to come and a decisive force that influenced criminal justice policy for decades.

Mr. Horton was an African-American prisoner in Massachusetts who, while released on a furlough program, raped a white Maryland woman and bound and stabbed her boyfriend. Mr. Bush’s campaign and supporters cited the case as evidence that his Democratic opponent, Gov. Michael S. Dukakis of Massachusetts, was insufficiently tough on crime.

To many African-American people, the scars from that campaign attack remain fresh. Whatever Mr. Bush’s intentions, they said, the campaign encouraged more race-based politics and put Democrats on the defensive, forcing them to prove themselves on crime at the expense of a generation of African-American men and women who were locked up under tougher sentencing laws championed by President Bill Clinton, among others.

“The reason why the Willie Horton ad is so important in the political landscape — it wasn’t just about a racist ad that misrepresented the furlough process,” said Marcia Chatelain, a Georgetown University professor of African-American history who teaches a class on race and racism in the White House. “But it also taught the Democrats that in order to win elections, they have to mirror some of the racially inflected language of tough on crime.”

Michael Nelson, an editor of a book of essays on the Bush presidency called “41,” said the Horton episode led to far more overt plays to race in American politics, all the way up to President Trump. “In some ways, the Willie Horton ad is the 1.0 version of Trump’s relentless tweets and comments about African-Americans,” he said.

The wisdom of the Massachusetts furlough program was open to debate aside from race. Releasing nonviolent offenders on weekends to help ease re-entry into society was the goal, but freeing violent convicts raised questions about security, and such release programs have receded in the decades since 1988.

“What crossed the line was not that he was raising the issue of crime itself because crime was a big issue, and that’s fair game,” said David Greenberg, a Rutgers University professor and the author of “Republic of Spin,” about political messaging. “But to use the image of this threatening black man — people call it a dog whistle; it was a pretty clear whistle.”

The fear of Willie Horton continues to haunt politicians today. When President Barack Obama was trying to forge a bipartisan coalition to overhaul the criminal justice system to ease sentencing laws that many in both parties believe went too far, some lawmakers worried that any change that resulted in the release of someone who would then go on to commit another violent crime could be political suicide.

Mr. Bush expressed no regret for the Horton ad, and some of his longtime allies have long argued that he got a bad rap for something that was not really of his making. Al Gore, then a senator from Tennessee, was the first to try to wrap the Horton case around Mr. Dukakis’s neck during the Democratic primaries that year.

By summer, Mr. Bush picked up the theme, citing the case during speeches, and by fall, his campaign began airing an ad attacking the Massachusetts furlough program, showing a series of prisoners walking through a revolving door. But that Bush campaign ad did not mention Mr. Horton.

The one that would be remembered for years to come was produced not by the Bush campaign but by an operative named Larry McCarthy working for an ostensibly independent group called the National Security Political Action Committee. The ad, called “Weekend Passes,” singled out Horton, showing a picture of his scowling face as the narrator described his torture and rape of the Maryland couple. In the end, it was shown only briefly on cable television, but its impact was magnified by repeated coverage on television newscasts.

When critics called the ad a brazen appeal to racial fears, the Bush campaign distanced itself from the ad and wrote to the committee that aired it asking that it be withdrawn. But Mr. Dukakis did not buy the explanation that the committee was independent. “Anybody who believes that believes in the tooth fairy,” he said at one point.

Indeed, Mr. Bush’s advisers had been focused on Mr. Horton for months. “If I can make Willie Horton a household name, we’ll win the election,” said Lee Atwater, the campaign strategist. He later referred to making Horton “Dukakis’s running mate.” Roger Ailes, another Bush strategist, said, “The only question is whether we depict Willie Horton with a knife in his hand or without it.”

A little more than two years later, when stricken with a cancer that would take his life, Mr. Atwater repented the hardball tactics used in 1988. He said he particularly regretted saying he would make Mr. Horton into Mr. Dukakis’s running mate “because it makes me sound racist, which I am not.”

What was never clear was how involved Mr. Bush was in crafting the strategy. But as Josh King, the author of “Off Script,” a book about political stagecraft, and a student of the 1988 race, put it, “He was willing to employ campaign aides who would use the barest of knuckles in pursuit of the goal of humiliating and destroying the opposing candidate.”

Mr. Bush’s history with race was complicated. Running for the Senate in 1964 in Texas, he opposed the Civil Rights Act, but later regretted it and sought to make up for it by supporting the Fair Housing Act in defiance of conservative supporters.

As president, he vetoed civil rights legislation on the grounds that it would provide for quotas, but ultimately he signed an updated version of the bill into law. He appointed only the second African-American person ever to serve on the Supreme Court, Clarence Thomas, to replace the first, Thurgood Marshall, but the choice angered African-American leaders on the left who considered Justice Thomas too conservative.

Mr. Bush was unfailingly gracious and friendly with everyone, black or white, and gave no indication that it mattered to him. When Mr. Obama visited Houston as president in 2014, Mr. Bush was there waiting for him on the tarmac to welcome him to town. As it happens, Mr. Obama then became one of the last outsiders to see Mr. Bush alive last week when he visited him at his Houston home three days before his death.

Mr. Nelson said Mr. Bush looked at campaigning and governing differently.

“He regarded politics and campaigning as just the dirty business,” Mr. Nelson said. “Running for office is the price you have to pay for holding office.”
What Trump Has Not Done for African Americans and Hispanics
President Trump claims to have improved the median income, poverty and homeownership rates of African Americans and Hispanics. But the numbers don't line up.

By Meg Kelly
Washington Post
November 26

“African American poverty has reached its lowest rate ever, lowest rate ever.”

— President Trump, at a rally in Lebanon, Ohio, Oct. 12

“Hispanic American poverty has reached an all-time low.”

— President Trump, at a rally in Houston, Oct. 22

"Hispanic American homeownership recently hit its highest rate in much more than a decade.”

— President Trump, at a rally in Houston, Oct. 22

"Homeownership is up for African Americans — way up, every category. They’re doing better than they did with the past administration or the Democrats.”

— President Trump, in an interview with the Daily Caller, Sept. 3

"You look at median income for African Americans. It’s at the best it’s ever been in the history of our country.”

— President Trump, in an interview with Shannon Bream on Fox News, Oct. 10

“Hispanic American median household income — Hispanic Americans — think of it — median income reached an all-time high.”

— President Trump, at a rally in Houston, Oct. 22

“What do you have to lose?” was the question then-candidate Trump regularly posed to minority voters. Speaking directly to Hispanic and African American voters who tend to lean Democratic, his argument was simple: Democrats had not succeeded in advancing your economic prospects — so why not give Republicans a shot?

Fast-forward two years. Now president, Trump claims he has been successful. As evidence, he points to the “lowest [poverty] rate ever,” an “all-time high” median income and booming homeownership rates for Hispanics and African Americans.

Regular readers of The Fact Checker know we tend to award Two Pinocchios to anyone who gives sole credit to a president for the state of the economy. That’s because the U.S. economy is complex, and the decisions of companies and consumers often loom larger than the acts of government officials. The economy is doing well, and, as we’ve previously reported, many of the positive trends started before Trump took office.

But Trump’s claim here is more specific. Have his policies had an outsize impact for African American and Hispanic communities compared with the country overall? Let’s dig in.

The Facts: Poverty Rate

President Trump claimed the poverty rate for African Americans has “reached its lowest rate ever,” and for Hispanics, it “has reached an all-time low.” At first look, Trump’s statements are correct, according to data from the U.S. Census Bureau. The official poverty rate for African Americans fell to 21.2 percent in 2017. For Hispanics, it dropped to 18.3 percent.

But, as we’ve noted before, scholars increasingly believe that the official poverty estimate is somewhat misleading and not especially informative. This is in large part because transfer payments — such as the earned-income tax credit or food stamps — are not recorded as income, so their impact isn’t incorporated into the official figure. To assuage these concerns, the Census Bureau introduced a second poverty measure in 2011 — the Supplemental Poverty Measure (SPM). (This also has critics.)

The overall SPM is declining at a slower rate than the official poverty rate, dropping only 2.2 points since its peak. For African Americans, its lowest point was in 2016 with a slight uptick in 2017. Hispanic Americans, however, did see the lowest rate ever in 2017.

Despite the data, experts are hesitant to credit the president with success. Gregory Acs, vice president for income and benefits policy at the Urban Institute, said the economy is still largely a “reflection of the policy environment that was in place for the last several years” before Trump took office. Plus, he noted that the effects of the Trump tax cut, the president’s signature economic achievement, were not reflected in 2017 data.

Homeownership Rate

Trump touted his impact on minority homeownership rates, telling audiences that Hispanics now own homes at the “highest rate in much more than a decade.” He boasted that homeownership among African Americans is “way up,” and they are “doing better than they did with the past administration or the Democrats.”

Homeownership rates have declined across the board since the recession. But the housing crisis hit the African American community particularly hard. In 2004, almost half of African Americans owned homes. In 2017, African American homeownership dropped 6.6 percentage points. Jonathan Spader, a senior research associate at Harvard University’s Joint Center for Housing Studies, said part of the steep decline was due to the type of loans African American households had used to finance their homes.

Hispanic households also saw a decline. A decade ago, in 2007, 49.7 percent of Hispanics owned homes. In 2017, 46.2 percent of Hispanics owned homes.

Homeownership rates for both demographics have started to recover in recent years — 2015 for Hispanics and 2016 for African Americans. The market started to stabilize, Spader explained, and once the foreclosure backlog cleared, the overall economy improved, and real wages started to increase again. And so, the recent uptick in homeownership, he says, has more to do with overall trends than any new federal housing policy.

Median Income

Median income represents the midpoint of household income — half of American households earn more, and half earn less. Trump claimed median income for African Americans is “the best it’s ever been in the history of our country.” For Hispanics, he said it had reached “an all-time high.”

Although growth has been sluggish over the past several decades, generally speaking, incomes have been rising. Median income for Hispanics has reached an all-time high. But African American median income, which was $40,258 in 2017, still lags more than $2,100 behind its level in 2000. Plus, after gains over $1,000 in 2015 and 2016, median income for African Americans fell in 2017.

Acs explained: “The income growth we’ve seen is essentially a continuation of the trends once the recovery picked up steam.” That’s not a surprise, he noted. “We expect income to grow if the economy is growing.”

(We asked the White House for comment on our analysis but did not receive a response.)

Pinocchio Test

The president cited six statistics: median income, homeownership rates and poverty rate for both African Americans and Hispanics. In each case, he claimed there had been marked improvement since he took office. Only three of those statistics were numerically accurate. And in each of those cases — Hispanic American median income and the poverty rate for both African Americans and Hispanic Americans — the underlying economic trends started well before Trump took office. Plus, experts say his tax cut had yet to filter into available data.

The president is often eager to prove his economic might. But he should be more careful when promoting success. He earns Three Pinocchios.
Menial Tasks, Slurs and Swastikas: Many Black Workers at Tesla Say They Faced Racism
African-American workers have reported threats, humiliation and barriers to promotion at the plant. The automaker says there is no pattern of bias.

By Lauren Hepler
New York Times
Nov. 30, 2018

FREMONT, Calif. — Owen Diaz had seen swastikas in the bathrooms at Tesla’s electric-car plant, and he had tried to ignore racist taunts around the factory.

“You hear, ‘Hey, boy, come here,’ ‘N-i-g-g-e-r,’ you know, all this,” said Mr. Diaz, who is African-American. Then, a few hours into his shift running the elevators, he noticed a drawing on a bale of cardboard. It had an oversize mouth, big eyes and a bone stuck in the patch of hair scribbled over a long face, with “Booo” written underneath.

On that winter night in the factory, when, he said, a supervisor admitted drawing the figure as a joke, Mr. Diaz had had enough. He typed a complaint to a Tesla manager on his phone. “Racist effigy & drawing” was the subject.

“When you really just look at it, you ask yourself at some point, ‘Where is my line?’” said Mr. Diaz, 50, who worked at the factory as a contractor for 11 months before he quit in May 2016.

It is a line that others say they reached, too.

Interviews, internal communications and sworn legal statements filed by more than two dozen current or former Tesla employees and contractors describe a wide range of concerns among some African-American workers at the factory in Fremont, including threats by co-workers, demeaning assignments and barriers to advancement. Three lawsuits by former workers accusing Tesla of failing to curb racial discrimination and harassment have been filed since early last year, including one by Mr. Diaz awaiting trial.

Tesla rejects the workplace portrait painted in the complaints as inaccurate, saying there is no evidence to support “a pattern of discrimination and harassment.” It is not the only automaker to face allegations of racism in recent years, and it acknowledges that “in a company the size of a small city, there will at times be claims of bad behavior,” real or false. But it said there was no indication that the factory had an unusual rate of complaints.

“We strive to provide a respectful work environment for all employees and do our best to prevent bad conduct,” the company said. African-American employees at various levels of authority, made available by Tesla, said their own experiences had been positive.

Crystal Spates, a production manager overseeing 500 people building the Model 3, said racial slurs were not tolerated at the factory. “I have never heard, myself, anyone use that terminology,” said Ms. Spates, 30, who is African-American and joined Tesla two years ago.

Mr. Diaz, like Tesla itself, likened the plant to a small city — one in which experiences can vary, he said. “You know, you can have something that happens in one part of the city that doesn’t happen in another part,” he said. But when his son encountered racial slurs and caricatures in a different part of the factory, Mr. Diaz concluded that the issue was not an isolated one.

One suit accusing Tesla of racial discrimination and harassment, filed last November in California Superior Court, seeks class-action status. The lawyers involved — Lawrence A. Organ and Bryan Schwartz, whose practices focus on workplace rights — say they have identified dozens of potential plaintiffs. Each lawyer has won multimillion-dollar judgments in other harassment or discrimination cases against major employers. Tesla is seeking to move the case into arbitration, which would require workers to bring individual lawsuits rather than a joint claim.

The state’s Department of Fair Employment and Housing says it has issued 10 “right to sue” letters — a precondition for a discrimination lawsuit — to employees complaining of racial bias at the Fremont plant. Dozens of other complaints against Tesla are pending, but the agency would not say how many involved race.

In an email to employees last year, which the company later released in response to one of the lawsuits, Elon Musk, Tesla’s chief executive, warned against “being a huge jerk” to members of “a historically less represented group.” At the same time, he wrote, “if someone is a jerk to you, but sincerely apologizes, it is important to be thick-skinned and accept that apology.”

But by many accounts, the issues at the Tesla factory go beyond the need for a thick skin.

High Hopes

When employees and contractors are counted together, there are more than 15,000 workers at the Fremont factory, but it is not clear how many are African-Americans. The company says more than two-thirds of the production leads — those directing work in different areas of the factory — are nonwhite. But it would not specify the share of jobs held by African-Americans, who have long been underrepresented in other Silicon Valley workplaces.

In any case, some African-American workers who expected to help build a future for the company and themselves, like Teshawna Stewart, say the reality proved to be a slap in the face.

Before starting at Tesla last year, Ms. Stewart, 25, sorted and packed orders at a nearby Amazon warehouse.

The job she landed installing taillights at the Tesla factory paid several dollars an hour more. But she discovered a downside when she was assigned to “the brick,” the production area for Model 3 sedans.

During several weeks when the Model 3 production line was not yet operating, Ms. Stewart said, she was frequently assigned to menial tasks, while workers of other races did work like sorting components.

In a sworn statement for a lawsuit, she said that when she had complained about “African-American employees being required to get down on our hands and knees and scrub the floor,” a human resources representative told her that she was “making up stories.”

Tesla said Ms. Stewart “did not raise these types of claims during her employment.” Ms. Spates, the production manager, said assembly workers were expected to handle other tasks if production was interrupted, but “nothing in terms of ‘get on your hands and knees.’” She does not recall working with Ms. Stewart.

My dad worked in the Ford Rouge machine shop for over 40 years. He often said that black employees were treated poorly because of racial bigotry.

In May, Ms. Stewart was fired for “job abandonment,” she said, after her team was assigned to a job in San Francisco for the day to help prepare cars for shipment to China. Tesla said she had been fired because she failed to return to the factory and had been given written warnings about her attendance. She said she had returned with the other workers, who were not African-American, and was the only one fired.

Like Ms. Stewart, Nigel Jones arrived at Tesla with high hopes. He was fresh out of the Army when he started as a temporary battery technician at Tesla in September 2015. Mr. Jones, now 26, quickly found the kind of rapid professional mobility often out of reach without a college degree. In about 22 months, he went from being an $18-an-hour contractor to making $85,000 a year as a mobile-equipment supervisor.

Then, on a busy afternoon in January during the ramp-up of Model 3 production, Mr. Jones said, he stopped to help two other African-American workers set up a water cart. A new manager questioned the group, and after Mr. Jones assured him that he had everything “under control,” the manager turned and muttered a vulgar racial epithet within 10 feet of the group, Mr. Jones recalled. His recollection was affirmed by a current employee who said he had witnessed it; he asked not to be identified.

Though he tried to “let that go,” Mr. Jones soon put a post on Facebook about growing tired of “subtle racial discrimination” at work. His mother said Mr. Jones had also told her about the incident two to three weeks later, shortly before he was fired.

Tesla said Mr. Jones had been “reprimanded numerous times for attendance and safety violations” and given a “final written warning” before being fired for attendance problems.

Mr. Jones denied having had attendance problems, attributing that account to the manager with whom he tangled. He looks back with regret that the prospect of a bright future didn’t pan out.

“Tesla, it is a cool company,” Mr. Jones said. “You sit there and you’re like, ‘This can’t be happening here.’”

A Settlement Offer

DeWitt Lambert, an African-American electrician, was not quite 40 when he left home in Mobile, Ala., in 2012 and drove to California in search of a job. Tesla hired him in June 2015 as a production associate, mostly installing seatbelts.

Soon, he said, he encountered co-workers mocking his Southern drawl. He started to wear headphones to drown them out, but when the occasional taunts turned to frequent racial slurs, he said, they were hard to ignore.

The company granted his request to change stations, but his tormentors started lingering near his new spot, he told officials, and he worried that they “are going to do something to me.”

Between June 2016 and February 2017, Mr. Lambert sent at least a dozen text messages, emails, photos and videos to human resources, copies show.

The evidence sent by Mr. Lambert included a 58-second cellphone video, punctuated by repeated racial slurs, in which an unidentified narrator walking the factory floor says it’s “DeWitt’s” phone and threatens to “cut you up … so everybody can have a piece of you, nigger.” He said it had been recorded by co-workers who took his phone and meant it as a threat.

Feeling that he had a potential civil rights claim, he consulted a lawyer about legal options, and filed a complaint with the state fair-employment agency.

Tesla’s general counsel, Todd Maron, wrote in March 2017 with an offer to settle.

“We are willing to pay Mr. Lambert $100,000, but only if we are to resolve this matter before there is media attention,” Mr. Maron wrote in an email provided by Mr. Lambert’s lawyer.

Attached was a four-page document outlining information the company had collected to undermine Mr. Lambert’s claims. “Our C.E.O., Elon Musk, has reviewed this case personally and notwithstanding everything that’s in the attached document, he is sorry that this case did not get escalated much sooner and he agrees that change is needed,” the email stated.

Mr. Lambert, who declined the settlement offer in favor of a chance to take the claim to trial and argue for higher damages, was put on paid administrative leave.

In June, after Tesla succeeded in moving the case to arbitration, Mr. Lambert received a letter terminating his employment, saying the company had discovered acts “inconsistent with Tesla’s values.” Tesla said Mr. Lambert himself had been involved in “instigating use of the ‘N-word.’” He conceded that he had used the epithet at times, but only with other African-Americans.

After Tesla moved to bring the case to a close, an arbitrator issued a preliminary ruling saying it merited fuller consideration.

“I feel like everything was taken away from me,” said Mr. Lambert, who is living at his mother’s house back in Alabama. “I got everything snatched from up under me since I complained about it.”

‘Not Tesla Material’

DeWayne Jones, 52, was a commercial truck driver in 2012 when he learned that Tesla was hiring. He was familiar with the factory, having worked there from 1992 to 1995, when  it was the production site of a joint venture by General Motors and Toyota called Nummi.

Within about 90 days after starting at Tesla as a contract production associate, he became a full-time employee and saw his pay steadily climb from $17 to $21 an hour.

Mr. Jones (no relation to Nigel Jones) said he had then started to notice that black workers weren’t being promoted. In one case, he said, a manufacturing official told him that “people like you” didn’t move up to lead positions. He also reported that he had heard a supervisor say of black employees that “there’s too many of them in there, they are not Tesla material,” and that he had been at a meeting where a supervisor, gesturing toward African-American workers, remarked that “monkeys work outside.”

Tesla said there was no record of a formal complaint from Mr. Jones about racial insults.

The company also denied that there was any inequity in its career development practices. “You do a great job, you make your way here,” said the company’s head of diversity and inclusion, Felicia Mayo, who is African-American. After a year at the company, she was recently made a vice president.

Clarence Johnson, who came to Tesla four and a half years ago as a forklift driver and now tests equipment on a safety team — his second promotion — said his experience reflected opportunity.

While he said he could not speak for others, he added, “I’m an African-American male, and I didn’t have any of those roadblocks.”

Like Ms. Spates, he said supervisors would not tolerate racial slurs — though he said the use of a racial epithet “where it’s two people referring to one another as friends” was common.

For Mr. Jones, the route was not up but out. He said his children and a psychologist he had started seeing persuaded him to go back to truck driving.

“Everybody has a breaking point,” he said. “I’m able to breathe now.”

A Son’s Parallel Path

If Nummi represented the auto industry’s past, Owen Diaz was sure that Tesla was the future.

But that was before the racist effigy on the cardboard bale, and the slurs and offensive graffiti that came earlier. He said he had ultimately found the environment so degrading that he struggled to get out of bed for work.

As for the graffiti, Tesla said that Mr. Diaz brought “a single drawing to the attention of his supervisor” and that it “was promptly and thoroughly investigated.” It said a contractor involved had been given a warning and suspended without pay.

Demetric Diaz, who was a contractor at Tesla, said he had seen bathroom graffiti that included a racial slur. After he complained to his staffing firm, he said, he was let go.

Despite what he said he had experienced, Mr. Diaz was eager to give his youngest son, Demetric, a chance at the company’s pay and stock options. So he recruited him as a fellow contractor in 2015, working in a different production area.

The first weeks were fine for Demetric, now 23. But he started to notice incidents that disturbed him.

“I started telling him like, ‘Hey, well, I seen this, Dad,” Demetric said. “When I was in the bathroom,” he said, he saw vulgar graffiti that included a racial slur.

The younger Mr. Diaz complained to his staffing firm and then to a Tesla supervisor about racial abuse, protesting that the supervisor was “calling me an N-word every day,” according to a lawsuit. The suit says that within days, he was given a written warning of misconduct and was shortly out of a job. Tesla said he had been let go after repeated warnings about failing to wear protective clothing.

His father hung on for a few more months. Then he quit.
Florida NAACP Calls for Reopening of State Supreme Court Nominations, After Zero Nominees Were African-American
By Lloyd Dunkelberger
News Service of Florida
Mon, Dec 3, 2018 at 11:41 am

The state NAACP demanded Friday that the nomination process for three appointments to the Florida Supreme Court be reopened after a list of 11 nominees did not include any African-Americans.

The call came a day after The News Service of Florida reported that the Supreme Court will not have a black justice for the first time in 36 years when Justice Peggy Quince leaves the bench on Jan. 8. Adora Obi Nweze, president of the NAACP Florida State Conference, said in a statement that Gov. Rick Scott and the Supreme Court Judicial Nominating Commission have “failed the people of Florida.”

“No recent governor has allowed appointees to return a slate that doesn’t reflect the diversity of Florida,” Nweze said. “It’s a shame and disgrace we are still fighting for equality at all levels of government for black people and particularly representation on the state Supreme Court.”

She said every governor, dating back to Gov. Reubin Askew, who appointed the first black justice, Joseph Hatchett, to the Supreme Court in 1975, has assured there was at least one African-American justice on the seven-member court.

Nweze said the nominating commission, which released its 11 nominees on Tuesday, should reconvene and reconsider six African-American applicants who were among a pool of 59 lawyers and judges seeking appointment to the Supreme Court.

She also called on Gov.-elect Ron DeSantis, who takes office next month and who will make the appointments, to “stand up to” Scott and the nominating panel “and demand what all other prior governors did with a slate that reflects the diversity of our state.”

Jason Unger, a Tallahassee lawyer who is chairman of the Supreme Court Judicial Nominating Commission, declined to comment on the NAACP’s request to reopen the process.

The DeSantis transition team said Friday that the incoming governor “is grateful for the work of the Judicial Nominating Commission in their assessment and selection of the nominees” to fill the upcoming court vacancies.

“The governor-elect looks forward to evaluating each potential justice and is committed to appointing the three best individuals to serve on our state’s highest court,” the statement said.

In a statement Thursday, Scott’s office said the governor is required by the state Constitution to make court appointments from the list provided by the nominating commission.

“Our office does not control who applies to become a judge or what applicants are sent to the governor for consideration,” said McKinley Lewis, a Scott spokesman.

But Democrats and other critics say Scott has “stacked” the judicial nominating commissions for the court system with his appointees under a provision that allows him to reject potential commission members recommended by The Florida Bar.

Under a 2001 law, the nine-member commissions include five members directly appointed by the governor, with four members recommended by The Florida Bar and appointed by the governor.

But unlike the two prior Republican governors, Jeb Bush and Charlie Crist, who accepted the Bar recommendations and made the appointments, Scott has routinely rejected Bar candidates for the nominating commissions until he has received recommended members acceptable to him.

A 2014 Florida Bar report that looked at the issue of diversity among the nominating commissions reported that at that time, which was about midway between Scott’s two terms as governor, he had rejected the Bar recommendations for commission members 18 times.

Reacting to that, Florida Senate Democrats announced on Friday that they will push measures in the 2019 legislative session to overhaul the judicial nominating process.

Senate Minority Leader Audrey Gibson, D-Jacksonville, said the list of nominees for the Supreme Court without a black applicant underscores “how politicized the process has become.”

“How can a population of more than 3 million African-Americans in this state have confidence in our highest court when their voices are being silenced?” Gibson asked.

She also noted the Supreme Court Judicial Nominating Commission could have advanced up to 18 nominees under a provision that allows six nominees for each court vacancy. The vacancies are occurring because Quince and justices Barbara Pariente and R. Fred Lewis will be forced to leave the court in January because of a mandatory retirement age.

Gibson also said the issue of diversity extends beyond the Supreme Court, with Scott failing to appoint a black judge to any of the five state district courts of appeal during his two terms. Scott has made 32 appointments to those courts.

Sen. Perry Thurston, D-Fort Lauderdale, said he is working on legislation that would restore the nominating commissions to a system that would be similar to what was in place before the law was changed in 2001.

Under the prior system, each commission included three members appointed by the governor and three appointed by the Bar. The six members then appointed the remaining three members, who were not lawyers.

Under the current structure, Thurston said “not only does the governor have absolute control over the process, he has unfettered power to select judges that are mirror reflections of his own politics and personal beliefs.”

“In a state as diverse as Florida, that cannot stand,” said Thurston, an attorney.

But with a large Republican majority in the Legislature and an incoming Republican governor, efforts to change the judicial nominating process are likely to face resistance.

Sen. Randolph Bracy, D-Orlando, filed a similar bill aimed at changing the judicial nominating process in the 2018 session. But the legislation never received a hearing. A similar proposal was rejected by the state Constitution Revision Commission last spring. 

Monday, December 03, 2018

Minneapolis Police Decorate Christmas Tree With Racial Stereotypes in Majority-black Neighborhood
Two Minneapolis police officers were placed on leave Nov. 30 after decorating a Christmas tree with racial stereotypes in a majority-black neighborhood. (Elyse Samuels /KSTP)

By Meagan Flynn
Washington Post
December 3 at 6:42 AM

It looked as though a couple police officers went dumpster diving for ornaments.

Hanging from the Christmas tree inside a Minneapolis Police Department precinct were half-crushed cans of Steel Reserve malt liquor and crumpled bags of Takis chips and Funyuns. There was a cup from the fried-chicken joint Popeyes and two packs of Newport cigarettes — pieces of actual garbage accented by a single strip of yellow crime-scene tape that didn’t quite cut it as tinsel.

If the police thought the scene was a joke, nobody was laughing.

The Christmas tree inside a Minneapolis Police Department precinct was described by one longtime activist as a "racist dog whistle," a sentiment echoed by the mayor. (Video still/CBS 4 Minnesota)
“These pieces of trash were deliberately chosen to represent how certain officers feel about the community they serve: that black people are a stereotype to be mocked and the lives of those they serve may as well be reduced to trash in the gutter,” said City Councilman Phillipe Cunningham, who represents constituents in the majority-black Near North neighborhood where the MPD’s 4th Precinct is located.

The two Minneapolis police officers who created the display were placed on leave Friday in response to fierce backlash from both the African American community and public officials, including Mayor Jacob Frey, who described the tree as “racist, despicable, and well beneath the standards of any person who serves the city of Minneapolis.” The tree, beyond being seen as a “racist dog-whistle,” as longtime civil rights activist Ron Edwards described it, also rekindled simmering distrust between police and the black community in Minneapolis.

Three years ago, community organizers led an 18-day occupation outside the 4th Precinct station to protest the fatal shooting of Jamar Clark, a 24-year-old black man. Since then, activists said at a news conference Friday, they had hoped police would be doing everything possible to improve their relationship with the Near North Minneapolis community, rather than seeming to go out of their way to strain it.

“I just could not believe that after everything we’ve been through to try to change the narrative about the African American community, that our police officers still held that same mind-set,” Black Lives Matter Twin Cities activist Chauntyll Allen said at the news conference. “They have no respect for the lives that have been lost.”

Cunningham and Minneapolis Board of Education member KerryJo Felder were among the first public officials to sound off about the tree after hearing complaints and seeing photos flood social media. Cunningham said Friday on Facebook that he learned from speaking with an MPD inspector that every year an officer is assigned tree-decorating duties. This year, Cunningham said, two officers decided to hang the inappropriate ornaments as a “prank.”

“They hurt EVERY gain made in improving community-police relations,” Cunningham wrote on Facebook. “On a personal level, despite being a [Council Member], I am still a Black man myself and these outrageous reminders only further my own feeling [of being] generally unsafe around police officers.”

At first, Frey was so incensed that he vowed the officers responsible would be fired by the end of the day.

Termination, he wrote, “is necessary — both to discipline the officer and to send a clear message: [Minneapolis Police Chief Medaria Arradondo] and I will not tolerate conduct that departs from our values.” But within hours, Frey walked back the statement after realizing “there is a legally required process that must be followed" before an officer can be discharged, his spokesman, Mychal Vlatkovich, told the Minneapolis Star Tribune.

Arradondo, describing the Christmas tree as a “racially insensitive display,” said in a statement that he was “ashamed and appalled" by the behavior of the two officers involved. He said a full investigation had been launched.

Edwards, the civil rights activist who has lived in Minneapolis since the 1940s, told The Washington Post that what the community needs to see is a black officer in charge of the 4th Precinct. Racial insensitivity training, he said, will only do so much. And for those who questioned what was so racially insensitive about the bag of Takis and the fried-chicken fast-food cup, Edwards said those who lived in the neighborhood didn’t need to ask.

“These policemen are well familiar with what racism is,” he said. “They knew exactly what they were doing when they ‘decorated’ the tree.”