..
THE NEW YORK TIMES INTERNATIONAL EDITION
Business
When we move past email
Farhad Manjoo
STATE OF THE ART
Though its political implications are
yet unclear, the publication of an email
chain in which Donald Trump Jr. ar-
ranged a June 2016 meeting with a
lawyer peddling the Russian govern-
ments help for his fathers presidential
campaign ought to inspire some pretty
obvious tech advice: Step away from
the inbox, stupid!
Thats not a partisan slight. I said
pretty much the same thing last year
about the emails of John D. Podesta,
Hillary Clintons campaign chairman,
whose inbox emptied across the inter-
net after he clicked on a link he should-
nt have.
What was most notable about the
Podesta stash not to mention earlier
releases from the Democratic National
Committee and Mrs. Clintons own
server was the Clinton campaigns
apparent slavishness to email. No
thought appeared too big or too small
to escape documentation and discus-
sion over a fundamentally insecure
communication channel invented more
than 50 years ago and meant for sub-
jects far less weighty than a campaign
for the presidency. The Democrats
email troubles suggested how thor-
oughly email had seduced us and how
deeply wed all overcommitted to it
and how desperately we all needed to
move to something more secure.
The younger Mr. Trumps emails
only underline that point. But they also
suggest what well lose when, inevita-
bly, the world does move on to some-
thing better than email an un-
matched historical record of some of
the most important stories.
Precisely because its inescapable,
insecure and irresistibly convenient,
email provides an almost uncomfort-
ably intimate view into the historical
record. It preserves time, location and
state of mind, the what-when-where-
and-who of every story. The last two
decades, emails high-water era, have
thus been a bounty for anyone wishing
to understand exactly what was hap-
pening in the inner circles of powerful
organizations for journalists,
historians and prosecutors of white-
collar crime, among others.
If common sense prevails, Mr.
Alarm grows over Chinese investment in Canada
VANCOUVER, BRITISH COLUMBIA
BY KEVIN A. WONG
No nursing home wants to be known for
uncertainty and intrigue.
So a Canadian retirement home chain
found itself in an uncomfortable position
last year when it agreed to be bought by
a politically connected Chinese com-
pany with a shadowy group of owners.
Regulators approved the deal even
though the buyer was under regulatory
scrutiny in the United States and critics
in Canada questioned the identities of its
local representatives.
Today, the chairman of the Chinese
buyer, the Anbang Insurance Group, is
being held by the Chinese police for un-
disclosed reasons.
Critics say the deal represents the lat-
est example of Canadas troublingly lax
attitude toward Chinese money flooding
into the country.
When the Anbang house of cards fi-
nally collapses, who will gain control of
these senior care facilities in B.C.?
Mark R. Strahl, a lawmaker with
Canadas opposition Conservative
Party, asked at a parliamentary session
last month, referring to the province of
British Columbia. Are seniors about to
find out that their landlord is actually
the Peoples Republic of China?
Canada, like the United States and
other countries, is grappling with how to
handle billions of dollars of Chinese pur-
chases on its home turf. Recent pur-
chases have included big oil companies,
swank office buildings and cutting-edge
tech firms. That last set, in particular,
has raised objections in the United
States as well as Canada from those
worried that they could give China ac-
cess to sensitive technologies.
Theres an emerging pattern here of
being nave with regard to China, and
lax with regard to national security,
said Michael Byers, a Canada Research
Chair at University of British Columbia.
That leaves Canadian officials in a fix.
China has helped lift Canadas economy
with tens of billions of dollars a year in
exports. Its investments are often in
businesses like nursing homes that
could use the money. Many of those
transactions have little to do with na-
tional security or other sensitive issues.
The anxieties, said Yuen Pau Woo,
Working on laptops in New York. When the world does move on to something better than email, we will lose an unmatched historical record.
Trumps email thread may serve as the
final nail in the coffin of email as the
universal office communicator. People
in business and politics are already
moving on to other methods, from
cloud-based business tools like Slack to
apps like Signal, which promise the
discretion of a spymaster. These tools
allow for auto-deletion and encryption;
theyre not perfectly secret (nothing
is), but theyre a fortress compared
with email.
Yet we should mourn emails death
as much as we celebrate it; every
organizations gain in privacy is bound
to result in a loss of public transparen-
cy. The Trump emails show exactly
why. Both Mr. Trump and Rob Gold-
stone, an entertainment publicist who
who represents British Columbia in
Canadas Senate, reflect a longstanding
tradition to simply be suspicious of and
prejudiced against foreign ownership.
Economically, China and Canada
have grown close. The value of Chinese
direct investment in Canada increased
nearly fivefold between 2007 and 2015.
Chinese buyers have struck nearly $43
billion in Canadian deals over the last
seven years, according to Dealogic, a
data provider.
But that closeness has caused ten-
sions. Many Canadians blame Chinese
money for soaring home prices in places
like Vancouver, and perceive a softening
of Canadian positions on topics like hu-
man rights. Last year at a news confer-
ence, Chinas foreign minister rebuked a
Canadian journalist for asking a ques-
tion about human rights while Stphane
Dion, then Canadas foreign minister,
stood silently by.
Now some critics are focusing on the
deals themselves.
In January, the government of Prime
Minister Justin Trudeau reversed a de-
cision to stop a company partly owned
by a Chinese state-owned company
from purchasing a Montreal-based laser
company called ITF Technologies. In
June, an American security official ex-
pressed wariness over Ottawas approv-
ing a Chinese companys acquisition of
Norsat, a company that provides satel-
lite technology to the United States De-
fense Department, among others.
The United States will review the Nor-
sat deal, said Michael R. Wessel, a mem-
ber of the U.S.-China Economic and Se-
curity Review Commission, which moni-
tors security issues for Congress.
The U.S. and Canada have a unique
security, defense and intelligence rela-
tionship, Mr. Wessel said in an email.
As such, any transaction that impacts
upon these critical areas need to be
strictly scrutinized.
The Trudeau administration de-
fended the recent deals, saying they
were thoroughly vetted under Canadian
takeover law. Our government has a
balanced approach of openness to ideas,
people and trade, said Hans Parmar, a
spokesman for Canadas economic de-
velopment ministry.
That law, called the Investment Cana-
da Act, is similar to the takeover review
laws of the United States. Government
officials make recommendations to the
had a relationship with the Trump
Organization, understood the sensitiv-
ity of their conversation. Mr. Goldstone
actually noted the sensitivity a couple
of times in the email thread.
One of emails best tricks is asyn-
chronicity you can send an email
even if your recipient is away. But in
this instance both parties appeared
available to talk; several of the mis-
sives were sent within minutes of each
other. And not only that, they often
both used iPhones. (Brace yourself:
Mr. Goldstones mobile email signa-
ture, This iPhone speaks many lan-
guages, is destined to become an
unbearable meme.)
In other words, they could both have
clicked one app over and hashed all
economic development minister, who
can block the deal.
But while United States officials have
rejected a growing number of Chinese
deals, rejections in Canada are rare. Its
takeover panel has rejected only two
deals since 1985, while more than 1,700
transactions have been approved. The
government does not release data on
deals canceled before a decision.
The Canadian government does not
review deals below a certain level and
that level keeps rising. The threshold
rose in April from 600 million Canadian
dollars to 800 million dollars, and it rose
again in June to 1 billion dollars, about
$770 million.
In that regard, most investment in
Canada is not subject to any review at
this out in a phone call, which would
have been faster and left almost no
trace. (They did suggest holding a
phone call, but it isnt clear if that took
place; in an interview with Sean Han-
nity, Donald Trump Jr. said he recalled
coordinating only through email.)
But, no. Despite the sensitivity, email
offered something irresistible to the
participants. It was easy and it was
there, and it felt secret at the time.
Looking at the chain now, you might
marvel at the brazenness of their
conversation what sort of numbskull
would you have to be to write down, in
an email, that youre offering a foreign
governments help with a presidential
campaign?
But that is often the case with email.
MINH UONG/THE NEW YORK TIMES
all, said Josh Krane, a partner at the
law firm Blake, Cassels & Graydon.
The government points to moves to
tighten regulations, including a 2015 re-
quirement that investors declare
whether a foreign state had financial in-
terests or other influence over them.
Anbangs deal for the retirement
home chain, Retirement Concepts, went
through Canadas deal review process.
Anbang burst onto the global deal
scene three years ago when it unveiled a
deal to buy the Waldorf Astoria hotel in
New York for about $2 billion.
But questions about ownership have
dogged the company. The New York
Times reported last year that many of
the companys owners had links to its
chairman, Wu Xiaohui, who according to
ELIAS WILLIAMS FOR THE NEW YORK TIMES
More technically sophisticated men
than Mr. Goldstone and Mr. Trump
have fallen for emails allure: Emails
from Bill Gates made up the key evi-
dence in the Justice Departments case
against Microsoft, and Steve Jobss
audacious emails came back to haunt
Apple in several legal proceedings.
Email undid Enron and played a small
part in the recent fall of Travis Kalan-
ick, Ubers former chief executive.
And those are just the famous cases.
Email evidence has become a routine
linchpin of white-collar criminal pros-
ecution, because everything anyone
has ever thought is likely to be con-
tained in email.
Not for long. Savor Don Jr.s thread;
this is emails last hurrah.
Anbangs public records does not own
shares himself. Such ownership issues
can be sensitive in China, where the
wealthy and powerful often hold shares
in companies in the names of others.
New York State insurance regulators
questioned details of Anbangs owner-
ship in June 2016, evaluating its pro-
posed $1.6 billion deal to buy an Iowa in-
surer. Anbang abandoned the deal this
year. Anbang also came under the public
spotlight when it tried and failed to
reach a deal on a skyscraper project in
Manhattan with President Trumps son-
in-law, Jared Kushner.
In November, Anbang said it would
purchase Retirement Concepts, which
owns more than 20 retirement homes
across Canada. Medical groups, unions
and doctors quickly criticized the deal,
asking whether a foreign buyer could be
held accountable.
Some also questioned the paperwork.
Anbang conducted the transaction
through a new holding company called
Cedar Tree Investment that initially
listed Hong Zhao and Ye Zhang as direc-
tors. Cedar Tree then listed different di-
rectors. The shifting paperwork drew
scrutiny from the local news media. An-
bang declined to comment on the
changes. The deal was approved in Feb-
ruary. Four months later, Anbang was
back in the news after Mr. Wu, Anbangs
chairman, was detained by the Chinese
police for undisclosed reasons.
Tim Ragones, a spokesman for An-
bang, said its North American opera-
tions were unaffected. We continue to
operate our properties and move for-
ward with our development projects,
he said in an email. Retirement Con-
cepts did not respond to requests for
comment.
Scott Sinclair, a fellow at the Canadian
Centre for Policy Alternatives, a think
tank, says he worries that Anbang in-
tended only to use Retirement Concepts
as a foreign supply of cash one it could
squeeze if it came under more official
pressure in China.
The Canadian government didnt get
any assurances from Anbang to protect
vulnerable seniors, aside from the
promise to maintain existing staffing
levels, he said. Beyond that, this was
pretty much a blank check for Anbang.
Edward Wong in Princeton, N.J., contrib-
uted reporting.
FRIDAY, JULY 14, 2017 | 7
Mexicos bet
on opening
energy sector
is paying off
With government control
left behind, companies
make 2 big oil discoveries
BY STANLEY REED
When Mexico gambled on ending
decades of state control of its energy in-
dustry, officials said they hoped the
move would promote investment and
give the country access to technical ex-
pertise. That wager now appears to be
paying off.
The government began auctioning off
rights two years ago to drill in parts of
the Gulf of Mexico. On Tuesday, an inter-
national consortium of energy compa-
nies said they had discovered a large oil
field, and another firm said it had dis-
covered more oil than expected in a sep-
arate area.
The overhaul of the Mexican oil and
gas sector in recent years eventually
ended the state energy companys sev-
en-decade domestic monopoly on explo-
ration and production. The aim was to
arrest years of declining oil output,
blamed on a slow-moving public sector
that lacked the technology to exploit op-
portunities in deep-sea drilling, or shale
oil and gas.
The two announcements on Tuesday
appeared to suggest that Mexicos strat-
egy, which was initially met with criti-
cism, was succeeding.
The consortium, made up of Premier
Oil of Britain, as well as Talos Energy of
Texas and the Mexican company Sierra
Oil and Gas, said that it had discovered a
field containing more than one billion
barrels of oil in shallow water 40 miles
off the Mexican coast. Riverstone Hold-
ings, an American private equity firm
that specializes in energy investments,
owns 45 percent of Talos Energy and 43
percent of Sierra Oil and Gas.
This is the most important achieve-
ment so far in Mexicos overhaul, said
The United States side
of the gulf is pockmarked
with oil wells, while the
Mexican side is not.
Pablo Medina, a Houston-based analyst
at the consulting firm Wood Mackenzie.
The companies won the rights to drill
in the zone in 2015, during Mexicos first
auction of exploration rights.
In an interview, Alfredo A. Marti, a
former BP executive who is now a
Riverstone managing director, said that
high-tech data processing indicated that
the Mexican governments estimates
for the amount of oil in the field might
have been too low.
But after drilling, he said, we found
that even our bullish expectations were
conservative, and we have something
much more interesting.
Because of Mexicos rich resources
and proximity to the United States, Mr.
Marti continued, we think that over the
next few decades, Mexico is going to be
a very important source of growth in the
oil and gas sector.
Also on Tuesday, Eni, an Italian oil
company, said a well recently drilled to
test a previously announced discovery
had shown that the trove also held more
than one billion barrels of oil much
more than previously thought.
Enis chief executive, Claudio
Descalzi, said in an interview that the oil
would be cheap and easy to produce be-
cause it was in shallow water only a few
miles from shore.
Oil companies have long eyed Mexico
for exploration and production of ener-
gy, banking on the rich geology that has
produced so much oil and gas in United
States waters in the Gulf of Mexico.
Geologically it is part of the same big
basin, Tony Durrant, Premiers chief
executive, said in an interview.
Mr. Durrant said that while the United
States side was completely pock-
marked with oil wells, the Mexican side
was not as heavily drilled because the
state-owned Petrleos Mexicanos, or
Pemex, had long been the only game in
town.
Last year, Mexicos oil production av-
eraged 2.5 million barrels per day,
making it a midsize producer. But out-
put has been declining, and last years
figure was more than a million barrels
per day fewer than a decade earlier.
Those poor levels of production com-
pelled the government to take on nation-
alist pressures and to bring in competi-
tors to try to turn around one of the
countrys most important industries.
But the timing of the overhaul
coincided with a sharp fall in oil prices,
which had been at more than $100 a bar-
rel but are at about $48 a barrel now.
With companies chopping explora-
tion budgets, interest in Mexicos early
auctions was muted, allowing compa-
nies like Eni and the consortium includ-
ing Premier to pick up what are turning
out to be gems.
Now, most major oil companies have
acquired positions in Mexico. After this
discovery, it is going to be quite hot, Mr.
Durrant said.