The Wall Street Journal - 06.03.2020

© 2020 Dow Jones & Company. All Rights Reserved. **** THE WALL STREET JOURNAL. Friday, March 6, 2020 |B

Amazon.comInc. is strug-

gling to stamp out third-party

sellers charging exorbitant

prices for virus-killing cleaning

supplies, hand sanitizer and

other products in high demand

amid coronavirus fears.

The company said it has re-

moved tens of thousands of

items because of unreasonably

high prices and it is taking ac-

tion against sellers making un-

substantiated claims.

“There is no place for false

claims and price gouging on

Amazon,” Dharmesh Mehta,

Amazon’s vice president of

world-wide customer trust and

partner support, said Wednes-

day at a consumer-protection

hearing in Washington, D.C.

The price issue persisted

Thursday on Amazon and else-

where online. Among the items

listed for sale on Amazon was

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BUSINESS & FINANCE

JUSTIN SULLIVAN/GETTY IMAGES

Insurance mogul Greg Lind-

berg was found guilty Thurs-

day on bribery charges after

jurors determined he had at-

tempted to bribe North Caro-

lina’s insurance commissioner

by promising $2 million in

campaign donations to obtain

favorable regulatory treat-

ment.

A self-proclaimed billion-

aire, Mr. Lindberg amassed a

business empire in recent

years, fueled in part by an un-

usual stream of loans from his

insurance companies. He also

had become the leading politi-

cal donor in North Carolina

and a major campaign donor

nationally.

The judge declined prosecu-

tors’ request that Mr. Lindberg

be taken into custody immedi-

ately, while awaiting sentenc-

ing. Mr. Lindberg will choose a

judicial district as his base and

travel outside it at the discre-

tion of a probation officer

while continuing to wear an

electronic monitoring device.

The government alleged Mr.

Lindberg sought the replace-

ment of a senior regulator

who was overseeing his insur-

ers with someone of his own

choosing. The move was aimed

at getting a clean bill of health

for Mr. Lindberg’s life insur-

ers, prosecutors argued, so he

could make more acquisitions

to further expand his con-

glomerate.

Jurors in federal court in

Charlotte, N.C., listened to hours

of secret recordings made by

North Carolina Insurance Com-

missioner Mike Causey, who

was cooperating with the Fed-

eral Bureau of Investigation and

Please turn to page B

BYLESLIESCISM

ANDMARKMAREMONT

Insurance

Tycoon Is

Guilty in

Bribe Case

A federal corruption investi-

gation targeting United Auto

Workers leaders has led to

charges against its highest-

ranking official yet: an ex-union

president accused of stealing

union funds to pay for private

villas, expensive cigars, golf

outings and other luxuries.

Federal prosecutors accused

Gary Jones, the former head

of the 400,000-member union,

of conspiring with other se-

nior UAW officials to embezzle

more than $1 million and cov-

ering up the alleged miscon-

duct with fake receipts and

fraudulent expense reports,

according to charging docu-

ments filed with a federal

court in Michigan and made

public on Thursday.

The 63-year-old Mr. Jones,

who was named president in

2018, most recently led the

UAW through contract talks

with the Detroit car makers

last fall and a 40-day strike at

General MotorsCo.

The charges are the latest

escalation in the government’s

probe and come as the 84-

year-old union is struggling to

reverse membership declines

and win back the trust of rank-

and-file workers, whose confi-

dence in senior leadership has

been dented by the expanding

federal investigation.

An attorney for Mr. Jones

declined to comment. The UAW

in a statement Thursday con-

demned the alleged actions by

Mr. Jones and other former

union officials who have been

convicted in the probe.

Prosecutors said the alleged

misconduct, spanning from

Please turn to page B

BYNORANAUGHTON

ANDBENFOLDY

Ex-UAW

Leader

Accused of

Embezzling

a 33-count container of Clorox

disinfecting wipes for $20.99,

roughly eight times the typical

cost. An 12-ounce, two-pack of

Purell hand sanitizer was

listed at $99.95, around 10

times what major retailers

charge.

Health officials have said

cleaning hands and surfaces

with household disinfectant is

critical to stopping the virus’

spread.

U.S. sales of hand sanitizer

were up 54% for the week

ended Feb. 22 compared with

the same period a year earlier,

according to Nielsen. Sales of

thermometers were up 34%

and aerosol disinfectant sales

rose 19%, the firm said.

Online marketplaces such as

eBayInc. andFacebookInc.

featured similarly high prices.

WalmartInc. had instances of

higher-than-usual prices online

from third-party sellers. On

Thursday, eBay started remov-

ing items, such as hand sani-

tizer and face masks, and up-

dated its listing policy to

address the situation. The site

had prohibited sellers from us-

ing the term coronavirus in

product listings. The moves

come after California declared

a state of emergency, which

makes price gouging illegal on

essential items.

In a statement, the com-

pany said “eBay is taking sig-

nificant measures to block or

quickly remove items on our

marketplace that make false

health claims.”

Facebook said it is working

to ensure listings on its mar-

ketplace comply with local

laws. A Walmart spokesman on

Wednesday said the company

is closely monitoring the situa-

tion and removing any items

with abnormally high prices.

Shoppers can alert the com-

pany to any price gouging, he

said.

Major bricks-and-mortar re-

tailers have held prices steady

as shoppers quickly clear

shelves. The websites ofTar-

getCorp.,CVS HealthCorp.,

Walgreens Boots AllianceInc.

andHome DepotInc. showed

in-demand products at typical

prices, but the items were

largely sold out. Those compa-

nies buy products directly

from manufacturers.

“Supply of products contin-

Please turn to page B

BYSHARONTERLEP

Amazon Strains to Stem Price Gouging

The coronavirus epidemic is

upending the carefully cali-

brated logistics of global ship-

ping, as plunging exports from

China disrupt the trade of

American goods, especially

farm products such as fruit and

meat destined for Asia.

Congestion at Chinese ports

and interrupted sailings have

squeezed space on China-

bound vessels and created an

imbalance of the 40-foot long

refrigerated containers used to

ship fruit, meats and other per-

ishables on three-week voyages

across the Pacific, with many

stuck on the China side.

The traffic jam is pushing up

transportation prices for U.S.

exporters and sowing turmoil

on the heels of a painful trade

war.

Shipping volumes out of

China plummeted in February

as factory shutdowns in the

wake of the epidemic crimped

industrial production. Contain-

ership operators have canceled

ByJesse Newmanin

Chicago andJennifer

Smithin New York

given “everything happening

in the world, particularly with

coronavirus, I have to recon-

sider what’s going on and

what that means for me and

for our company.”

The CEO first disclosed his

Africa plans last year via Twit-

ter, surprising some company

insiders.

He said on Thursday he

didn’t make his plans to work

there remotely sufficiently

clear at the time.

“I do believe fully in this

concept of figuring out how to

work in a distributed model.

So my intention is not to go

over and just hang out or take

a sabbatical, but actually ev-

erything I’m doing in San

Francisco, doing on another

continent.” he said.

Mr. Dorsey defended his

plans to spend time in Africa.

“The tech innovation is incredi-

ble,” he said, and represented a

growth opportunity for Twitter.

Elliott has taken a roughly

$1 billion stake in Twitter and

nominated four directors to

the social-media company’s

board.

It is also seeking a full-time

CEO. Mr. Dorsey runs pay-

ments firmSquareInc. as well

as Twitter.

Mr. Dorsey co-founded

Twitter and was its first chief

executive, before he was

pushed out in 2008 with the

company struggling from tech-

nical glitches.

He returned to the company

in 2011, first as executive

chairman before being reap-

pointed as CEO in 2015 when

he relinquished the chairman-

ship. He retained the Square

CEO job.

“I have enough flexibility in

my schedule to focus on the

most important things and I

have a good sense of what is

critical on both companies,”

Mr. Dorsey said at the investor

event.

Mr. Dorsey has received

public backing for retaining his

CEO role at Twitter from some

within and outside the com-

pany. Tesla Inc. Chief Execu-

tive Elon Musk, who also runs

rocket firm Space Exploration

Technologies Corp., or SpaceX,

and is a heavy user of Twitter,

tweeted “Just want to say that

Please turn to page B

TwitterInc. Chief Executive

Jack Dorsey appeared to back

off plans to spend part of this

year in Africa and defended his

time leading the social-media

company as he tries to fend off

a push by activist hedge fund

Elliott ManagementCorp. to

possibly replace him.

Mr. Dorsey on Thursday

said the spreading coronavirus

was, in part, causing him to

rethink his plans.

Speaking at a Morgan Stan-

ley event, Mr. Dorsey said

BYBETSYMORRIS

Twitter CEO Rethinks Africa Trip

Shipping containers at the Port of Oakland in California last week. Fewer ships are arriving from China, disrupting the availability of vessels to make the return journey.

nearly 60 trans-Pacific sailings

to the ports of Los Angeles and

Long Beach, Calif., in the first

quarter and more than 110 to

all of North America. Normally

there are about 200 sailings of

container ships across the Pa-

cific a month.

That means fewer ships are

available to make the return

journey east, and the normal

turnover of containers has

stalled.

“Right now empty [refriger-

ated] containers are in short

supply,” said Peter Friedmann,

executive director of the Agri-

culture Transportation Coali-

tion, a trade group for export-

ers. “It’s harder to get on a

vessel, and there’s not enough

outbound capacity to handle all

the cargo seeking bookings,

particularly to China.”

It’s the height of California’s

orange-growing season, but

truckers for Fast Way Xpress

Inc., who haul oranges and

other produce from California’s

Central Valley to the Port of

Please turn to page B

Virus Turmoil Snarls Shipping, Exports

INSIDE

1Q ’

33

Volumes have fallen at the ports of Los Angeles and Long Beach, and more

sailings have been canceled in the first quarter. Citrus exports, which were hit

by the trade war, are now being further disrupted by the coronavirus epidemic.

Sources: Ports of Los Angeles and Long Beach (calls); U.S. Department of Agriculture (citrus); Shanghai Containerized Freight Index (price)

Quarterlyaveragerateto

shipcontainersfromChinato

U.S.Westcoastports

Containershipcallsatthe

portsofLongBeachand

LosAngeles

0 100200300400500

1Q 2017

1Q ’

1Q ’

1Q ’20 estimate

0

10,

20,

30,

40,

50,000 tons

(^2015) ’
$3,
1,
1,
2,
2,
a container
2011 ’15 ’
1Q ’
58
cancellations
CitrusexportstoChina
Cancellationsattheportsof
LongBeachandLosAngeles
Shipping prices have risen in recent months amid the
reduced capacity. Multiple factors had pushed them lower
over the past decade, including price undercutting and
volatile fuel costs.
0
U.S. sales of hand
sanitizer were up
54% for the week
ended Feb. 22.
 Crisis exposes steelmakers’
reliance on China materials. B
RETAIL
Costco sales surge
12 % as customers
stock up to prepare
for the worst.B
HEARD ON
THE STREET
It is looking like the
toughest year for car
makers in a decade.B
DUANE TANOUYE/REUTERS