Apple recently said it had $252 billion in cash or cash equivalents abroad
Apple Inc. AAPL 1.65% said it would pay a one-time tax of $38 billion on its overseas cash holdings and ramp up spending in the U.S., as it seeks to emphasize its contributions to the American economy after years of taking criticism for outsourcing manufacturing to China.
The world’s most valuable publicly traded company laid out its plans Wednesday in a statement that was full of big-dollar figures, though it said that much of the money reflected Apple’s current pace of spending.
Taxing Foreign Profits
Companies have long sheltered foreign profits offshore. Now the tax bill is coming due. How much will they pay?
Apple said it would invest $30 billion in capital spending in the U.S. over five years that would create more than 20,000 jobs. The total includes a new campus, which initially will house technical support for customers, and $10 billion toward data centers across the country. It also will expand from $1 billion to $5 billion a fund it established last year for investing in advanced manufacturing in the U.S.
All told, Apple said it would directly contribute $350 billion to the U.S. economy over the next five years, with the bulk—about $55 billion this year, for example—coming from ongoing spending on parts and services from U.S. suppliers. That number also includes the federal tax payment and capital spending.
Chief Executive Tim Cook touted the plans as building on Apple’s support for the nation’s economy. “We have a deep sense of responsibility to give back to our country and the people who help make our success possible,” he said in a statement.
The announcement comes after President Donald Trump late last year signed into law a major overhaul of the U.S. tax code, under which companies must pay a one-time tax of 15.5% on overseas profits held in cash and other liquid assets. Apple cited those changes as the reason for its giant tax payment, which it said would likely be the largest of its kind, but didn’t say how much of its $252.3 billion in overseas cash holdings it plans to bring home.
The company said in November that it had earmarked $36 billion to cover deferred taxes on that money, assuming that it would eventually pay U.S. taxes on a portion of it by bringing it home.
Mr. Trump praised Apple’s announcement on Twitter, saying his policies allowed the tech giant “to bring massive amounts of money back to the United States.” He added, “Huge win for American workers and the USA!”
Apple didn’t provide historical comparisons for some of the figures it gave Wednesday. The company previously said it planned $16 billion in capital expenditures world-wide in the fiscal year that ends this September, up from $14.9 billion the previous year. However, Apple doesn’t break out its spending in the U.S., making it difficult to gauge how much of the $30 billion over five years it announced Wednesday is new.
Toni Sacconaghi, an analyst with Sanford C. Bernstein & Co., said Apple’s plans are in line with Trump administration goals, but it isn’t clear how many of the commitments are new. And he said the company could deliver on those commitments with existing cash flow—without needing to tap cash holdings.
“It’s a nice number and puts a foot forward in line with where the administration wants to go with adding jobs and building in the U.S.,” he said. But “it’s not clear these investments were impacted in any way by tax reform.”
Apple has faced criticism over the past decade for overseas manufacturing of its iPhones, of which it has sold more than one billion, rather than making them domestically. Mr. Trump during the presidential campaign blasted the company for outsourcing. He later called on Apple to build a factory in the U.S. and last year said Mr. Cook promised to build three plants in the U.S.
Apple has responded over the past year by pointing to its spending on procurement in the U.S. and to the size of the so-called app economy spawned by the iPhone, which the company says has created more than 1.6 million U.S. jobs.
The tax overhaul’s one-time levy on overseas cash is often referred to as a repatriation tax, although it applies whether companies leave their foreign profits overseas or bring them to the U.S. It is intended as a transition from the previous tax system, under which the U.S. taxed all world-wide profits of an American company except those kept overseas, to the new system, in which the U.S. won’t tax most foreign profits at all. Companies may choose to pay the one-time tax over eight years.
The $38 billion in taxes Apple owes reflects its growth in the decade since Congress last reduced taxes on overseas holdings. In 2006, Apple recorded a tax charge of $51 million as it repatriated $1.6 billion in cash held overseas for the fiscal year.
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Apple’s accumulated foreign profits of $252.3 billion amount to just over a quarter of the U.S. tech industry’s total, a Wall Street Journal analysis of 311 large public companies found, and about 9.5% of the $2.65 trillion in foreign profits reported by all companies in the analysis.
A tax obligation of $38 billion would work out to about 15% of the S&P 500’s total obligation under the repatriation tax, based on figures from the Journal analysis and a separate analysis by Zion Research Group. Altogether, the Joint Tax Committee estimated last month, the tax should raise about $339 billion over 10 years from all companies—meaning Apple could account for 11% of the total.
The changes in U.S. tax law triggering Apple’s $38 billion tax obligation don’t affect the company’s responsibility to repay Ireland €13 billion ($15.9 billion) in unpaid taxes in Europe, according to a spokesman for Ireland’s Department of Finance. Apple has challenged the ruling.
Apple also told employees Wednesday it is issuing each of them a bonus of $2,500 in restricted stock, according to a person familiar with the matter. The planned bonus, reported earlier by Bloomberg, adds Apple to the growing list of companies that are rewarding employees due to the new tax law, including AT&T Inc. and ComcastCorp.
If Apple brings home a large share of its overseas cash it could decide to apply some of it to more buybacks and dividends. Apple has returned $233.9 billion to investors since fiscal 2012.
Mr. Sacconaghi expects Apple to provide an update on potential increases to those programs when it reports quarterly results in April or May, when it typically announces such plans. That would give it a chance to see how much cash other companies plan to return to shareholders from overseas holdings—moves that could please investors but aren’t as helpful to public perception as investments in jobs. “No company with that much cash wants to be the first to do a significant buyback,” he said.
Apple’s announcement said it currently employs 84,000 people in the U.S., 4,000 more than it said a year ago.
The company said it would offer more information later this year on its planned new campus. The facility is expected to be located outside of California and Texas, where the company already operates campuses: in Austin, Texas, and its new $5 billion headquarters, Apple Park, in Cupertino, Calif.
—Theo Francis, Richard Rubin and Natalia Drozdiak contributed to this article.
Corrections & Amplifications
Apple had $252.3 billion in cash and marketable securities held overseas as of the end of November. An earlier version of this article incorrectly stated it had $246 billion overseas.
Fired White House chief strategist and ex-Trump campaign manager Steve Bannon has been subpoenaed by special counsel Robert Mueller, Fox News has confirmed.
First reported by The New York Times, the Bannon subpoena was issued by Mueller’s team last week. Sources told Fox News that Bannon’s subpoena, which could require him to appear before a grand jury investigating Russian meddling in the 2016 presidential election, was issued after the FBI was initially unable to contact him.
Sources familiar with the matter told Fox News that despite the subpoena to testify before a grand jury, there is a possibility that Bannon will, instead, be interviewed by Mueller’s office.
“Even if you thought that was not treasonous, or unpatriotic, or bad s**t, and I happen to think it’s all of that, you should have called the FBI immediately.”
– Quote attributed to Steve Bannon in “Fire and Fury”
A spokesperson for Mueller did not immediately respond to Fox News’ request for comment.
Revelation of the Bannon’s subpoena came as the onetime Breitbart News executive chairman testified behind closed doors on Capitol Hill Tuesday. Bannon appeared before investigators at the House Intelligence Committee as part of its Russia probe.
Bannon’s subpoena, and interview with congressional investigators, comes after the publication of Michael Wolff’s book “Fire and Fury: Inside the Trump White House,” where Bannon made comments blasting President Trump’s eldest son Donald Trump Jr., son-in-law Jared Kushner, and ex-campaign chairman Paul Manafort.
Bannon described their infamous June 2016 meeting in Trump Tower with Russian attorney Natalia Veselnitskaya during the campaign “treasonous” and “unpatriotic.”
“Even if you thought that was not treasonous, or unpatriotic, or bad s**t, and I happen to think it’s all of that, you should have called the FBI immediately,” Bannon said in the book.
Bannon also said that Trump Jr. would be cracked “like an egg on live TV” in any possible public testimony about the situation.
The president issued a multi-paragraph blistering takedown of Bannon, who left his White House post in August, suggesting that “sloppy Steve” Bannon had “lost his mind,” seeking to distance himself from the former chief strategist.
“Steve Bannon has nothing to do with me or my presidency,” Trump said in the statement. “When he was fired, he not only lost his job, he lost his mind.”
Bannon is just the latest Trump campaign associate to be summoned to interview with Mueller.
In October 2017, Manafort and his associate Rick Gates were indicted by a federal grand jury on 12 counts, as part of Mueller’s investigation. Both pleaded not guilty.
The special counsel’s office told Fox News that the counts included conspiracy against the United States, conspiracy to launder money, unregistered agent of a foreign principal, false and misleading Foreign Agent Registration (FARA) statements, false statements and seven counts of failure to file reports of foreign banks and financial accounts.
Fox News learned Tuesday that Manafort’s next court appearance would be Feb. 14 for a status hearing. The government had proposed the trial begin May 14, but the date may be pushed to October. At this point, there is no official start date.
Mueller’s team also charged former Trump campaign foreign policy adviser George Papadopoulos with making false statements to FBI agents about his contacts with people close to the Russian government. Papadopoulos pleaded guilty to the charges in the Mueller investigation.
She is a bug-eyed fraud just like most liberals are.
The Yale University psychology professor who called President Trump “mentally impaired” appears to lack a valid license to practice psychiatry in her home state of Connecticut.
The prominent professor Bandy Lee made the headlines over the past few days when she made a diagnosis of the president as suffering from a “mental impairment” that would disqualify him from the highest office in the land.
Following Lee’s comments, the American Psychiatric Association released a statement on Tuesday warning members of its profession to refrain from making public diagnoses of public figures like Trump without a proper medical exam.
“We at the APA call for an end to psychiatrists providing professional opinions in the media about public figures whom they have not examined, whether it be on cable news appearances, books, or in social media,” wrote the APA, without mentioning Lee specifically. “Arm-chair psychiatry or the use of psychiatry as a political tool is the misuse of psychiatry and is unacceptable and unethical.”
Lee and her colleague responded to the issue in a piece to Politico on Wednesday, in which they claimed it is “perfectly OK to question the president’s mental state” because of their profession as “psychiatrists.”
The professor, who has met with lawmakers in Capitol Hill to talk about the issue, is now facing scrutiny amid allegations that she is not licensed to practice psychology in Connecticut.
Campus Reform reports that state records indicate that Lee’s “physician/surgeon” license expired some three years ago — on May 31, 2015 — and that her application for reinstatement has been pending ever since. The publication was able to produce Lee’s license details to back up the claim.
In addition to her pending physician’s license, the professor’s “controlled substance registration for practitioner” license is also lapsed, having expired last February. In other words, Lee is not legally able to prescribe medication as a medical practitioner.
Lee responded to Campus Reform’s inquiries, stating simply: “I only need one license.” She did not clarify precisely what license she has, or in which state she is registered.
As TheDC’s Joe Simonson writes, the U.S. president’s public meeting with congress shattered the narrative that he is mentally unfit to run the country.
Why don’t Trey Gowdy talk to someone about getting these SOB’s locked up?
This damn government is so damn corrupt that it is not possible to have a proper investigation. How is it possible that no one is being indicted and locked up. This video proves the FBI and the DOJ is corrupt all the way up to Barack Obama.
Will anyone ever get locked up for all of this corrupt behavior.
Huma Abedin forwarded sensitive State Department emails, including passwords to government systems, to her personal Yahoo email account before every single Yahoo account was hacked, a Daily Caller News Foundation analysis of emails released as part of a lawsuit brought by Judicial Watch shows.
Abedin, the top aide to former Secretary of State Hillary Clinton, used her insecure personal email provider to conduct sensitive work. This guarantees that an account with high-level correspondence in Clinton’s State Department was impacted by one or more of a series of breaches — at least one of which was perpetrated by a “state-sponsored actor.”
The U.S. later charged Russian intelligence agent Igor Sushchin with hacking 500 million Yahoo email accounts. The initial hack occurred in 2014 and allowed his associates to access accounts into 2015 and 2016 by using forged cookies. Sushchin also worked for the Russian investment bank Renaissance Capital, which paid former President Bill Clinton $500,000 for a June 2010 speech in Moscow.
A separate hack in 2013 compromised three billion accounts across multiple Yahoo properties, and the culprit is still unclear. “All Yahoo user accounts were affected by the August 2013 theft,” the company said in a statement.
Abedin, Clinton’s deputy chief of staff, regularly forwarded work emails to her personal humamabedin@yahoo.com address. “She would use these accounts if her (State) account was down or if she needed to print an email or document. Abedin further explained that it was difficult to print from the DoS system so she routinely forwarded emails to her non-DoS accounts so she could more easily print,” an FBI report says.
Abedin sent passwords for her government laptop to her Yahoo account on Aug. 24, 2009, an email released by the State Department in September 2017 shows.
Huma sends laptop password to Yahoo / Source: State Department
Long-time Clinton confidante Sid Blumenthal sent Clinton an email in July 2009 with the subject line: “Important. Not for circulation. You only. Sid.” The message began “CONFIDENTIAL… Re: Moscow Summit.” Abedin forwarded the email to her Yahoo address, potentially making it visible to hackers.
The email was deemed too sensitive to release to the public and was redacted before being published pursuant to the Judicial Watch lawsuit. The released copy says “Classified by DAS/ A/GIS, DoS on 10/30/2015 Class: Confidential.” The unredacted portion reads: “I have heard authoritatively from Bill Drozdiak, who is in Berlin…. We should expect that the Germans and Russians will now cut their own separate deals on energy, regional security, etc.”
The three email accounts Abedin used were abedinh@state.gov, huma@clintonemail.com, and humamabedin@yahoo.com. Though the emails released by the State Department partially redact personal email addresses, the Yahoo emails are displayed as humamabedin[redacted].
Clinton forwarded Abedin an email titled “Ambassadors” in March 2009 from Denis McDonough, who served as foreign policy adviser to former President Barack Obama’s campaign and later as White House chief of staff. The email was heavily redacted before being released to the public.
Stuart Delery, chief of staff to the deputy attorney general, sent a draft memo titled “PA/PLO Memo” in May 2009, seemingly referring to two Palestinian groups. The content was withheld from the public with large letters spelling “Page Denied.” Abedin forwarded it to her Yahoo account.
Abedin routed sensitive information through Yahoo multiple times, such as notes on a call with the U.N. secretary-general, according to messages released under the lawsuit.
Contemporaneous news reports documented the security weaknesses of Yahoo while Abedin continued to use it. Credentials to 450,000 Yahoo accounts had been posted online, a July 2012 CNN article reported. Five days later, Abedin forwarded sensitive information to her personal Yahoo email.
Abedin received an email “with the subject ‘Re: your yahoo acct.’ Abedin did not recall the email and provided that despite the content of the email she was not sure that her email account had ever been compromised,” on Aug. 16, 2010, an FBI report says.
The FBI also asked her about sending other sensitive information to Yahoo. “Abedin was shown an email dated October 4, 2009 with the subject ‘Fwd: US interest in Pak Paper 10-04’ which Abedin received from [redacted] and then forwarded to her Yahoo email account…. At the time of the email, [redacted] worked for Richard Holbrooke who was the Special Representative for Afghanistan and Pakistan (SRAP). Abedin was unaware of the classification of the document and stated that she did not make judgments on the classification of materials that she received,” the report said.
The U.S. charged Sushchin with hacking half a billion Yahoo accounts in March 2017, in one of the largest cyber-breaches in history, the Associated Press reported. Sushchin was an intelligence agent with Russia’s Federal Security Service — the successor to the KGB — and was also working as security director for Renaissance Capital, Russian media said.
“It is unknown to the grand jury whether [Renaissance] knew of his FSB affiliation,” the indictment says.
Renaissance Capital paid Bill Clinton $500,000 for a speech in 2010 that was attended by Russian officials and corporate leaders. The speech received a thank-you note from Russian President Vladimir Putin. Renaissance Capital is owned by Russian oligarch Mikhail Prokhorov, who also owned the Brooklyn Nets basketball team. He unsuccessfully ran for Russian president against Putin in 2012.
Sushchin’s indictment says “the conspirators sought access to the Yahoo, Inc. email accounts of Russian journalists; Russian and U.S. government officials,” and others. Information about the accounts such as usernames and password challenge questions and answers were stolen for 500 million accounts, the indictment says. The indictment does not mention Abedin’s account.
A hacker called “Peace” claimed to be selling data from 200 million Yahoo users.
The user data also included people’s alternate email addresses, that were often work accounts tying a Yahoo user to an organization of interest. The hackers were able to generate “nonces” that allowed them to read emails “via external cookie minting” for some accounts.
The New York Times reported that in the 2013 hack, which affected all Yahoo accounts, “Digital thieves made off with names, birth dates, phone numbers and passwords of users that were encrypted with security that was easy to crack. The intruders also obtained the security questions and backup email addressed used to reset lost passwords — valuable information for someone trying to break into other accounts owned by the same user, and particularly useful to a hacker seeking to break into government computers around the world.”
Yahoo published a notification on Sept. 22, 2016, saying: “Yahoo has confirmed that a copy of certain user account information was stolen from the company’s network in late 2014 by what it believes is a state-sponsored actor.”
Clinton downplayed the risks of her email use days later, saying it was simply a matter of convenience.
“After a year-long investigation, there is no evidence that anyone hacked the server I was using and there is no evidence that anyone can point to at all, anyone who says otherwise has no basis, that any classified materials ended up in the wrong hands. I take classified materials very seriously and always have,” Clinton said on Oct. 9, 2016, at the second presidential debate,
Abedin’s use of Yahoo email is consistent with the determination by the FBI that Clinton associates’ emails were, in fact, compromised. “We do assess that hostile actors gained access to the private email accounts of individuals with whom Secretary Clinton was in regular contact from her private account,” then-FBI director Jim Comey said in 2016.
President Donald Trump on Thursday spoke about his plan to slash government regulations, calling it “the most far reaching regulatory reform in history.”
“By ending excessive regulation, we are defending democracy and draining the swamp,” Trump said at a White House event promoting the Unified Agenda of Regulatory and Deregulatory Actions.
In January, Trump signed an executive order that said for every new regulation introduced, two must be eliminated.
Trump said that goal has been exceeded, and for every new regulation introduced, government agencies have eliminated 22.
“The never-ending growth of red tape in America has come to a sudden, screeching and beautiful halt,” Trump said.
He said that because of regulatory reform, the stock market is soaring, unemployment is at a 17-year low and wages are rising.
He said this deregulation effort is just getting started, as there are still decades of excess regulation to remove.
“Let’s cut the red tape, let’s set free our dreams and, yes, let’s make America great again. And one of the ways we’re going to do that is by getting rid of a lot of unnecessary regulation,” Trump said before symbolically cutting a ribbon on stacks of paper representing the exponential growth of the regulatory code.
