Deloitte Is the Latest Target of a Cyber Attack With Confidential Client Data at Risk

Global accountancy firm Deloitte has been hit by a sophisticated hack that resulted in a breach of confidential information and plans from some of its biggest clients, Britain’s Guardian newspaper said on Monday.

Deloitte—one of the big four professional services providers—confirmed to the newspaper it had been hit by a hack, but it said only a small number of its clients had been impacted.

The firm discovered the hack in March, according to the Guardian, but the cyber attackers could have had breached its systems as long ago as October or November 2016.

The attack was believed to have been focused on the U.S. operations of the company, which provides auditing, tax advice, and consultancy to multinationals and governments worldwide.

“In response to a cyber incident, Deloitte implemented its comprehensive security protocol and began an intensive and thorough review including mobilizing a team of cybersecurity and confidentiality experts inside and outside of Deloitte,” a spokesman told the newspaper. “As part of the review, Deloitte has been in contact with the very few clients impacted and notified governmental authorities and regulators.”

A Deloitte spokeswoman declined immediate comment, saying that the firm would issue a statement shortly.

Tech

A 13% Yield, Industry Turnaround, And Upside Potential For This Pure-Play LP

Have you ever had to grit your teeth and “hang in there” while one of your holdings works through an industry trough? That’s where we’ve been at with USA Compression Partners LP (USAC) for the past few quarters. As US drilling declined and picked back up, USAC, the leading US pure play compression company, has seen its DCF and distribution coverage falter due to a lagging effect – new compression demand tends to lag increased drilling by a few quarters. Its price/unit also suffered.

Fortunately, USAC has a very supportive general partner, USAC Compression Holdings LLC, which has continued to reinvest 50% of its quarterly distributions in USAC. This has allowed to maintain a “cash distribution coverage ratio” above 1x. (Left column is Q2 ’17; right column is Q1 ’17):

(Source: USAC site)

Here’s how this has played out over the past four quarters – the DCF/Distribution coverage has below 1x, but due to the $ 6M-plus that has been reinvested each quarter, they’ve been able to maintain their $ .525 quarterly payout with a cash coverage ratio averaging 1.055x:

Management reaffirmed it’s 2017 guidance on the Q2 earnings release. We’ve updated this table with the actual distribution figures from Q1-Q2, to compare them to the guidance figures.

If USAC maintains the current level of total distributions, their traditional DCF/Distribution coverage will be in a range of .84x to .95x, according to the DCF guidance range.

However, if their GP continues to reinvest its distributions in Q3 and Q4 ’17, USAC’s cash distribution coverage ratio will be in a 1.06x to 1.20x range.

In this table, we compare the actual Q1-2 ’17 EBITDA and DCF figures vs. the pro-rated 2017 guidance figures. So far in 2017, management has achieved the low end of its guidance in both DCF and EBITDA.

However, there are reasons to believe that this will improve in the second half of 2017 and in 2018, which we’ll detail in the Earnings and Back To The Future sections further on in the article.

Distributions:

USAC’s next distribution should have an ex-dividend date sometime in late July. It pays in the usual Feb/May/Aug/Nov LP cycle. Management has maintained a $ .525 quarterly payout since August 2015, which is 23.53% above its targeted minimum quarterly distribution.

You can track USAC’s price and current yield in the Basic Materials section of our High Dividend Stocks By Sector Tables.

Unit holders get a K-1 at tax time.

Note: Investing in LPs and MLPs may present tax complications when done in an IRA. Additionally, since LPs usually make tax-deferred distributions, you’d reap more tax benefits by holding them in a non-IRA account. At any rate, please consult your accountant about this issue.

Options:

We feature option-selling trades for USAC in our premium subscription service, which we can’t reveal here, but you can see details for over 25 trades in our free Covered Calls and Cash Secured Puts Tables.

Earnings:

In Q2 ’17, EBITDA was down slightly vs. Q2 ’16, while DCF fell -11% due to “some acceleration in maintenance activities during the quarter, as demand for certain idle units in our fleet increased more than expected.”

OK, so DCF was down due to increased demand – not a totally negative scenario – they needed to spend to prepare more machinery for future service.

Sequentially, this was USAC’s best EBITDA figure since Q2 ’16. Fleet utilization was also up, as they noted on the Q2 earnings call: “Our average horsepower utilization for the second quarter was 91.2%, up nicely from 88.2% in Q1, continuing the upward movement of recent quarters.”

“We increased our core compression service revenues by about 5% over the first quarter and achieved a gross margin of over 67%, which was also up from the first quarter.”

Here’s what investors have had to deal with over the past 4 quarters, in return for receiving the steady $ .525/unit quarterly payout – flat revenue, EBITDA down -6%; DCF down -10%; DCF Distribution Coverage down -20%; and unit growth of 12.43%.

Like many of the companies we cover in our articles, USAC has long-term fee-based contracts. Management has also done a good job of keeping bad debt at a minimum, (less than 0.07% over the past 12 years), through partnering with larger, solid counter-parties, and maintaining long-term relationships:

We wouldn’t be braving these headwinds over the past year if it wasn’t for management’s long-term track record of growth – EBITDA CAGR of 15%, Revenue CAGR of 16%, with margins above 50%, (and, of course, the steady distribution).

In addition, USAC has a long history of weathering natural gas cycles. Due to the critical need for its compression services – producers need compression to move natural gas through the pipeline system. This company isn’t going away anytime soon:

Another factor which makes compression services “sticky” over the long term is the profile of natural gas wells in shale plays, which not only need more compression but also tend to have a long 20-year-plus life, after stabilizing.

Management has grown USAC’s asset base considerably, but also made a savvy move in 2016 and 2017 – they cut capex substantially, in response to the downturn:

(Source: USAC site)

Back To The Future:

So, can USAC return to growth, or, at least get to better distribution coverage in the second half of 2017 and in 2018? Management thinks so. On the Q2 earnings call, they said the following:

Looking back on the quarter, we experienced increased activity on the part of our midstream and large E&P customers. This increase in demand has led to tightening in availability of certain types and classes of equipment, leading to increased fleet utilization, both for USA Compression as well as select sector peers. USA’s larger horsepower fleet utilization is now back to levels virtually the same as before the industry decline, in the mid-90% area.”

We also improved visibility regarding demand for our services and corresponding contracting activities, well into 2018. Given this tightness, we have increased the monthly service fees we charge on many types of equipment we use to provide our services.” (Emphasis ours)

During the second quarter, we also saw strong contracting activity, signing new contracts for upwards of a 160,000 horsepower.”

As of the end of the second quarter, we expect to take delivery of approximately 70,000 new-build horsepower in the second half of 2017, part of approximately a 125,000 total horsepower that is already contracted and expected to start in the back half of the year, further increasing utilization as well as revenues and cash flow.”

For 2018, we’ve already contracted to build and take delivery of approximately a 150,000 horsepower throughout the year with the majority already spoken for by our core customers.”

able to see increasing cash flows and increasing activity over the next — the rest of this year and well into 2018. We think we kind of grow back into a coverage level that’s a little more attractive than where we are now.”

Another positive note was that management doesn’t see any more unit dilution in the near future: “We are not looking at any need for equity and we think that the business kind of naturally delevers over the course of the next two, four-plus quarters.” (Source-Q2 earnings call)

Industry Tailwinds:

Management also addressed the changes which have been evolving in the industry on the Q2 earnings call:

“There is a fundamental shift occurring in the oil and gas industry as certain shale plays move from the exploration/exploitation mode into the development mode, driven in many cases by our larger upstream customers. This moment toward massive mining type, manufacturing oriented project results and initial production volumes in many cases approaching those of large offshore production platforms.”

“Our business is driven by natural gas demand and production. As the industry has evolved into these larger projects, our large horsepower fleet sits right in the middle of it all. We continue to see significant activity by our customers, especially in the Permian and Delaware basins, and it is all focused on the very largest compression units in our fleet.”

(Source: USAC site)

What’s causing the increased demand for compression? US producers are adding rigs in key areas – excepting the Marcellus, which was up 73% from the trough, all of the areas listed below had rig counts up by triple digits as of 8/11/17.

(Source: USAC site)

As management noted in the earnings call, “The factors driving natural gas demand and the associated need for increased domestic natural gas infrastructure remain firmly in place – exports to Mexico, LNG exports, industrial demand, and gas-fired electric generation.”

(Source: USAC site)

Risks:

As we noted earlier, USAC isn’t currently covering its distributions in a traditional DCF/distribution model – its general partner, USAC Compression Holdings LLC, has been supporting the distribution by electing to reinvest 50% of its distributions into the company’s DRIP plan, which affords USAC more cash to continue paying out that $ .525 distribution every quarter. If the general partner decides to stop reinvesting in the near term and USAC’s anticipated earnings growth doesn’t emerge, management may be forced to cut the distribution.

Hurricane damage – Hurricane Harvey caused some wells to be shut in within the Eagle Ford area – the net downside is unknown as of yet. “The shut-in wells also have disrupted natural gas pipeline flows into Mexico, one of the biggest purchasers of Eagle Ford gas, and caused prices to spike there.” (Source: mysanantonio.com)

However, a 9/11/17 update from Forbes said that “A variety of midstream companies have provided updates on operations and the punchline is there has been very minimal damage and operations have either restarted or in process of restarting at various facilities. This is consistent for producers, with crude oil and natural gas production coming back on-line as well.” (Source:forbes.com)

Analysts’ Targets:

USAC is now 12.6% below analysts’ current $ 17.60 price target, and 28% below the $ 20.00 high price target.

Valuation:

USAC’s 13.44% yield dwarfs the Oil & Gas Equipment & Services industry’s average 1.67% yield, while its Price/Book is considerably lower.

Financials:

The industry isn’t known for high ROA and ROE figures – the amount of heavy equipment needed implies a large depreciation and amortization charge vs. net income, which makes USAC’s tiny ROA and ROE figures look good by comparison. Its Operating Margin is also much higher than broad industry averages, while its Debt/Equity level is much lower.

Debt and Liquidity:

Management commented on current leverage on the Q2 earnings call – “Outstanding borrowings under our revolving credit facility as of quarter-end were $ 725 million, resulting in a leverage ratio of 4.94 times, consistent with the first quarter and well within our covenant level of 5.5 times.”

The $ 1.1B credit facility matures in 2020. They had ~ $ 375M available as of 6/30/17.

(Note: we used trailing EBITDA to derive a 5.04x ratio, whereas management uses Q2’s EBITDA annualized vs. debt, to come up with their 4.94x figure.)

Summary:

We continue to rate USAC a long-term buy. This is a company which has weathered numerous Energy cycles, and we feel that they will do so once again. Meanwhile, income investors receive a very attractive quarterly payout.

All tables furnished by DoubleDividendStocks.com, unless otherwise noted.

Disclaimer: This article was written for informational purposes only, and isn’t intended as personal investment advice. Please practice due diligence before investing in any investment vehicle mentioned in this article.

Disclosure: I am/we are long USAC.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Tech

Half a million sign petition supporting Uber in London

SAN FRANCISCO/LONDON (Reuters) – Half a million people have signed an online petition in under 24 hours backing Uber’s bid to stay on roads of London, showing the company is turning to its tried-and-tested tactic of asking customers for help when it locks horns with regulators.

London’s transport authorities stunned the powerful start-up on Friday when they deemed Uber unfit to run a taxi service for safety reasons and stripped it of its license from next week, although it can continue to operate while it appeals.

The regulator cited Uber’s failure to report serious criminal offices, conduct sufficient background checks on drivers and other safety issues, threatening the U.S. firm’s presence in one of the world’s wealthiest cities.

Uber immediately emailed users in London and urged them to sign a petition that said the city authorities had “caved in to a small number of people who want to restrict consumer choice”.

By 1200 GMT on Saturday, more than 515,000 people had signed in support of Uber.

It counted 3.5 million active users in London in the past three months. Even if many tourists are probably included in the total, the figure represents a potential political force of commuters who face long journeys between their home and offices and who use Uber as a cheaper alternative to other taxi firms.

Turning to users for help is one of the first steps in Uber’s playbook. In Jakarta, Budapest, Toronto and Portland it asked riders to sign petitions and built online tools to contact lawmakers to show their support.

Regulators have at least partly relented in Portland, Toronto and Jakarta, but Budapest remains a work in progress.

Uber now faces a showdown with London’s Mayor Sadiq Khan, who this month said he wouldn’t let his teenage daughters use cabs like Uber on their own over fears for their safety.

Khan, a leading figure in the opposition Labour Party, said on Friday: “All private-hire operators in London need to play by the rules. The safety and security of Londoners must come first.”

As mayor, Khan is chairman of Transport for London, the regulator which stripped Uber of its license.

London’s decision is the first major challenge for new Uber Chief Executive Dara Khosrowshahi, who took over from co-founder and ex-CEO Travis Kalanick. He was forced out after internal and external investigations into sexual harassment complaints, the thwarting of government inquiries and potential bribery.

NEW REGIME?

So far, Khosrowshahi has adopted a softer tone to the company’s crisis in London than his ousted predecessor did when faced with similar problems.

“Dear London: we (are) far from perfect” Khosrowshahi tweeted on Friday. But he noted that 40,000 drivers and millions of riders were dependent on the service. “Please work with us to make things right.”

The early signs of Khosrowshahi’s strategy suggest he is likely to follow earlier game plans, said Bradley Tusk, an Uber investor who advised on policy in New York City for the company.

“A lot of people rely on it, so there’s going to be a lot of fertile ground to mobilise,” Tusk said. “If real people are angry, it’s a lot harder for regulators.”

However, while Uber has been ready to turn to make campaigns personal in the past, Khosrowshahi may take a more moderate tone, by temperament and necessity.

In New York City, Austin, Texas and Washington, D.C., Uber hired political ad agencies and consultants and blasted political leaders for supporting measures that could eliminate jobs and worsen traffic.

During a stand-off in New York City in 2015, Uber named a mock feature on its app after the city’s mayor, Bill de Blasio, and used it to warn users that a regulatory proposal he backed could increase waits for rides.

Kalanick issued tweets criticizing opponents, including an all-capitalized message saying “WATCH THIS!” which linked to a video that suggested the mayor was obstructing social progress.

“They have a lot more scrutiny on them now,” said Reed Galen, a political consultant who worked with Uber on a campaign in Austin, Texas. “Going with the old idea of punching the local leader in the nose, that strategy doesn’t work when you’ve had the issues Uber has had.”

Khosrowshahi’s statements Friday were an “absolutely different take,” Galen said.

In an internal email seen by Reuters, Khosrowshahi said there was a “high cost” to having a bad reputation. He described it as “critical” that employees “act with integrity in everything we do, and learn how to be a better partner to every city we operate in.”

WAITING GAME

For a company known for the speed of its growth, Uber has shown patience when needed. It has long treated tussles with government as inevitable challenges, but ones it sees as temporary setbacks.

Uber has suspended its services for months in some markets, including Alaska and Texas. But it’s been able to return within a year or two in most cases by working out new rules or turning to higher authorities such as courts and state governments.

The efforts have a cost. Uber and rival Lyft Inc together spent more than $ 10 million on a failed ballot-box campaign in Austin and millions more on lobbying elsewhere in Texas.

Uber continues to engage in a cat-and-mouse game with city officials in many of the 600 plus cities in which it operates.

It suspended services in July in Finland but plans to re-enter Helsinki next year after the country passed a law de-regulating taxi services.

Whether Uber continues such tactics – for instance, seeking action from Britain’s parliament to supersede London authorities – is unclear. But Tusk said he would be surprised if Uber was not already in touch with members of parliament.

In a sign of early political opposition to London’s move, Greg Hands, the minister for London in Britain’s Conservative government, hit out at what he called a “blanket ban” on Uber.

“At the flick of a pen Sadiq Khan is threatening to put 40,000 people out of work and leave 3.5 million users of Uber stranded,” Hands tweeted late on Friday.

“Once again the actions of Labour leave ordinary working people (to) pay the price for it.”

Additional reporting by Eric Auchard in Frankfurt; Editing by Peter Henderson and Andrew Bolton

Our Standards:The Thomson Reuters Trust Principles.

Tech

'Unfit' Uber stripped of London license, CEO tweets 'pls work w/us'

LONDON (Reuters) – London deemed Uber unfit to run a taxi service on Friday and stripped it of its license to operate from the end of next week in a major blow to the U.S. firm and 3.5 million users in one of the world’s wealthiest cities.

Graphic: Uber stripped of London license – tmsnrt.rs/2jQOqKD

In a break with the startup’s usual combative tone, Uber’s new Chief Executive Dara Khosrowshahi asked London to please work with the ride service. He told employees the company needed to act with integrity but that he did not believe Uber had done everything it was accused of in London.

Uber [UBER.UL], which has 40,000 drivers working in the capital, also said it would contest the decision.

The British capital’s transport regulator said the Silicon Valley technology giant’s approach and conduct was not fit and proper to hold a private vehicle hire license and it would not be renewed when it expires on Sept. 30.

Regulator Transport for London (TfL) said it would let Uber operate until the appeals process is exhausted, which could take months.

“Uber’s approach and conduct demonstrate a lack of corporate responsibility in relation to a number of issues which have potential public safety and security implications,” TfL said.

Specifically, TfL cited Uber’s approach to reporting serious criminal offences, background checks on drivers and software called Greyball that could be used to block regulators from gaining full access to the app.

Uber London General Manager Tom Elvidge responded that the mayor, who supported the decision, and regulators had “caved in” to people who want to restrict consumer choice. He added that Uber would “immediately challenge” the decision in court.

Khosrowshahi, brought in to steer the company after a string of scandals involving allegations of sexism and bullying, later appealed to the city on Twitter with a self-deprecating style.

“Dear London: we r far from perfect but we have 40k licensed drivers and 3.5mm Londoners depending on us. Pls work w/us to make things right,” Khosrowshahi wrote in a tweet.

He also acknowledged the company’s turmoil in a message to employees seen by Reuters. “It’s worth examining how we got here. The truth is that there is a high cost to a bad reputation,” he said. “It really matters what people think of us,” he added, and “actions in one part of the world can have serious consequences in another.”

Many riders rallied to the company’s aid. Uber has turned to customers to help defend itself in other battles around the world, and an online petition in support of Uber had gathered more than 400,000 signatures by late evening in London.

A taxi drives past the London Eye in central London, Britain September 22, 2017. REUTERS/Toby Melville

‘SAFETY THREAT’

The loss of the San Francisco-based start-up’s license comes after a tumultuous few months that led to former CEO and co-founder Travis Kalanick being forced out.

Uber, which is valued at about $ 70 billion and whose investors include Goldman Sachs, has faced protests around the world for shaking up long-established taxi markets.

The taxi app has also been forced to quit several countries, including Denmark and Hungary, and faced regulatory battles in multiple U.S. states and around the world.

Slideshow (9 Images)

The company’s UberX offers rides in London by individuals with licenses issued by TfL, often in drivers’ personal cars.

London’s traditional black cab drivers have attacked Uber, saying it has undercut safety rules and threatened their livelihoods. Uber has been criticized by unions and lawmakers too and been embroiled in legal battles over workers’ rights.

London police also complained in a letter in April that Uber was either not disclosing, or taking too long to report, serious crimes including sexual assaults and this put the public at risk.

Of the 154 allegations of rape or sexual assault made to police in London between February 2015 and February 2016 in which the suspect was a taxi driver, 32 concerned Uber, according to the capital’s police force.

Uber said on Friday its drivers passed the same rigorous checks as black cab drivers, it has always followed TfL’s rules on reporting serious incidents and it had a dedicated team that worked closely with London’s police.

London Mayor Sadiq Khan, a Labour politician who has criticized Uber in the past, said he backed the decision to reject its application for a new license.

“It would be wrong if TfL continued to license Uber if there is any way that this could pose a threat to Londoners’ safety and security,” he said.

Drivers of London’s black cabs, who have snarled up the city’s streets in protest at the app over the last few years, welcomed Friday’s decision.

“Their standards are not up to scratch,” said 71-year-old Walt Burrows, who has driven a black cab for 39 years. “The black cab is an iconic part of London. What you get with a black cab is a metered fare and you know you’re safe.”

Additional reporting by Eric Auchard, Michael Holden, Kylie MacLellan, James Davey, Elizabeth O’Leary. Elaine Hardcastle, Paresh Dave, and Heather Somerville; Editing by Peter Henderson, David Clarke and Diane Craft

Our Standards:The Thomson Reuters Trust Principles.

Tech

At smartphone pioneer HTC: a new, or virtual, reality

TAIPEI/SINGAPORE (Reuters) – When HTC Corp (2497.TW) brought back founder Cher Wang two years ago to turn around the struggling Taiwanese mobile phone maker, investors hoped she could stem a sharp loss in market share to Apple (AAPL.O) and Samsung Electronics (005930.KS).

But the gamble to rebuild the early smartphone pioneer’s reputation failed, as its market share has continued to dwindle – to below 1 percent from closer to 10 percent in 2011.

On Thursday, Wang announced HTC was shifting around 2,000 staff, mainly handset engineers, to Alphabet’s Google (GOOGL.O) in a $ 1.1 billion deal that casts doubts over the company’s longer-term future.

“Our main consideration is that our brand will continue,” Chialin Chang, who heads HTC’s mobile business, told reporters. “So our major releases will be as usual. In future, HTC will concentrate not on our portfolio size, but what’s in the portfolio.”

Wang, a pioneer in Taiwan’s male-dominated technology industry, founded HTC 20 years ago as a contract manufacturer and established it as a leader, designing and making Microsoft-powered (MSFT.O) smartphones.

It later turned out its own branded phones, but often struggled to translate positive early reviews into strong sales, despite spending heavily on marketing, including a collaboration with “Iron Man” star Robert Downey Jr for its flagship HTC One phone.

It also struggled to carve out a strong consumer brand in a market where Apple and Samsung grew quickly and have since been joined by Chinese rivals such as Huawei, Oppo and Vivo.

HTC shares have slumped around 90 percent since the company’s 2011 peak.

This week’s deal marks a retreat from HTC’s smartphone legacy.

“It may take a hard look at its smartphone business … and think it’s probably better to wind it down as soon as possible rather than for it to drain more cash,” said David Dai, an analyst at Sanford C. Bernstein.

“If it focuses on virtual reality (VR) and augmented reality (AR), there’s a much more concrete chance the company turns things around.”

That prospect pushed up HTC shares by their daily maximum of 10 percent on Friday, valuing the company at around $ 1.7 billion, as some investors hope the Google cash helps HTC focus on its Vive VR headsets and reduce its development costs.

HTC Chief Financial Officer Peter Shen said the deal will cut operating costs by 30-40 percent.

GLIMMER OF HOPE

While the Google cash throws HTC a lifeline for now, it may find it hard to retain staff, analysts said.

Google has cherry-picked the best people, said a former HTC executive who has spoken to current employees, adding: “It’s hard to see how anyone remaining would be enthusiastic.”

“Google’s investment will probably slow, but not stop, HTC’s decline,” said Neil Mawston, an analyst at Strategy Analytics.

Even Vive faces tough competition against the likes of Samsung and Sony Corp (6758.T), which control half the $ 2 billion global AR and VR headset market.

HTC saw flat second-quarter growth, and had 4.4 percent market share after a price reduction.

“Vive remains in the red; free cash flow is negative; book value is eroding; and sales growth is decelerating,” JP Morgan analyst Narci Chang said in a note following the Google deal.

“Nevertheless… we think HTC might narrow the loss considerably… enough to keep the business afloat and beat the (market) consensus for the next few quarters.”

For now, no major VR overhaul has trickled down to staff.

“It (Google’s investment) could be (a good thing), but it’s business as usual,” one Vive employee told Reuters.

Writing by Miyoung Kim; Editing by Ian Geoghegan

Our Standards:The Thomson Reuters Trust Principles.

Tech

Facebook to overhaul political ads after threat of U.S. regulation

SAN FRANCISCO (Reuters) – Facebook Inc (FB.O) on Thursday launched an overhaul of how it handles paid political advertisements, giving a concession to U.S. lawmakers who have threatened to regulate the world’s largest social network over secretive ads that run during election campaigns.

The company also said it would turn over to congressional investigators the 3,000 political ads that it says were likely purchased by Russian entities during and after the 2016 U.S. presidential election.

Chief Executive Mark Zuckerberg said the company, for the first time, would now make it possible for anyone to see any political ads that run on Facebook, no matter whom they target.

Facebook will also demand that political advertisers disclose who is paying for the advertisements, a requirement that under U.S. law applies to political ads on television but not on social media.

“We will work with others to create a new standard for transparency in online political ads,” Zuckerberg said.

Zuckerberg, broadcasting live on Facebook from company headquarters in Menlo Park, California, said the changes would help address concerns that governments including Russia are using Facebook ads to meddle in other countries’ elections.

Earlier this month, Facebook said an internal review had shown that an operation likely based in Russia spent $ 100,000 on 3,000 Facebook ads promoting divisive messages in the months before and after last year’s U.S. presidential election. The company initially declined to turn over details on the ads to Congress.

U.S. congressional investigators and special counsel Robert Mueller are examining alleged Russian election interference, which Moscow has denied.

Investigators are interested in other companies as well. Representatives for Twitter Inc (TWTR.N) are set to meet next week with staff from the Senate Intelligence Committee in relation to inquiries into the 2016 election.

Representative Adam Schiff, the top Democrat on the House Intelligence Committee, said on Thursday that he wants to hear from Facebook, Alphabet Inc’s (GOOGL.O) Google, Twitter and others in public hearings.

“It will be important for the committee to scrutinize how rigorous Facebook’s internal investigation has been, to test its conclusions and to understand why it took as long as it did,” Schiff said in a statement.

‘WILD, WILD WEST’

The political advertising changes represent a retreat for Facebook, which for years has resisted calls from transparency advocates and academics for the regulation of political ads. The company has instead treated them like all commercial ads.

In the days after the November 2016 U.S. election, Zuckerberg said it was a “crazy idea” to think that misinformation on Facebook swayed the vote toward President Donald Trump.

Senator Mark Warner, the vice chairman of the Senate Intelligence Committee, this month compared political ads on social media to the “wild, wild West” and said legislation might be needed to address them.

The U.S. Federal Election Commission last week sought public comment on possible regulatory changes to digital ads and considered whether to call Facebook and other tech firms before the commission for a public hearing.

Facebook has grown to be the leading online platform for political ads because of its low costs and tools for targeting messages to narrow audiences.

U.S. political campaigns likely spent $ 300 million on Facebook ads during the 2016 election cycle, according to Nomura analysts, though the exact amount is unknown.

It remained unclear whether Facebook’s voluntary changes would satisfy demands for government action.

Warner and another senator, Democrat Amy Klobuchar, on Thursday sent a letter to colleagues inviting them to be co-sponsors of legislation they are writing that would formalize and expand the commitments Zuckerberg made.

The legislation, they wrote, would require digital platforms with 1 million or more users to maintain a publicly available file of all election-related ads bought by people who spend more than $ 10,000, according to a copy of the letter seen by Reuters.

Trevor Potter, president of the pro-transparency Campaign Legal Center, said in a statement that his group would “carefully monitor Facebook’s implementation of this new policy.” He said Facebook “helped create the secrecy that gave rise to foreign interference in the 2016 elections.”

In the past, Facebook has argued that ad details had to remain confidential unless released by the advertisers.

GERMAN ELECTION MONITORING

Zuckerberg, who returned to work on Thursday after a month of paternity leave, laid out other steps the company would take to prevent governments from using Facebook to manipulate each other’s elections.

He said Facebook would hire 250 additional people; expand partnerships with election commissions around the world; and adapt systems to help deter political bullying.

Facebook has not found an attempt at election-meddling in Germany, Zuckerberg said, but he added that the company would continue to examine fake accounts that it has removed in advance of Sunday’s German national election.

“I don’t want anyone to use our tools to undermine democracy. That’s not what we stand for,” Zuckerberg said.

Facebook General Counsel Colin Stretch said in a blog post on Thursday that it was unusual for Facebook to voluntarily turn over information to government authorities, as it was doing by giving U.S. lawmakers copies of ads.

The company has long had a rigid policy of refusing to turn over any user information without a court order or other legal process.

But ultimately, Stretch wrote, “We believe the public deserves a full accounting of what happened in the 2016 election.”

Reporting by David Ingram in San Francisco; Additional reporting by Dustin Volz and Patricia Zengerle in Washington and Abinaya Vijayaraghavan in Bangaluru; Editing by Jonathan Weber and Diane Craft

Our Standards:The Thomson Reuters Trust Principles.

Tech

Lomography Lomo'Instant Automat Glass Magellan Review: It Urges Your to Get Experimental

Fujifilm’s instant film is incredibly fun to shoot. It’s just too bad that many of the cameras Fuji makes are aimed squarely at tweens instead of photo buffs. Even the best of Fuji’s lineup, the Instax Mini 90 Neo Classic, has limited features and an underwhelming plastic lens. That’s where Lomography’s latest instant camera flips the script.

What Lomography has done is hitch its easy-to-shoot automatic exposure system (previously used in the Lomo’Instant Automat) to a wide-angle multicoated glass lens. Translation for non-shutterbugs: clearer, better landscapes and selfies.