Latest news with #US1000
Sydney Morning Herald
6 hours ago
- Business
- Sydney Morning Herald
‘Wolf in cashmere': Billionaire luxury king tries to avoid a crisis
LVMH's market value has fallen by more than a quarter over the past year, to less than €250 billion. Hermes, a luxury brand Arnault tried and failed to buy, and has eyed with envy ever since, has taken LVMH's crown as the most valuable company in the industry, despite generating only €15 billion in sales last year. Adding insult to injury, the Arnault family, which has topped France's rich list since 2017, has also been dethroned by the Hermes clan. Can Arnault turn the ship around? Loading LVMH can't blame the economic environment for all its woes. It raised prices enormously in the post-COVID 'revenge shopping' boom, irking some customers. The price of Louis Vuitton's Speedy 30 canvas tote bag has more than doubled since 2019, for example, while the average price of personal luxury goods in Europe has increased by just over 50 per cent, according to HSBC, a bank. Only a handful of designers, including Chanel and Gucci, have raised prices more. A series of scandals have also damaged the image of some of its brands. Moet Hennessy, LVMH's drinks division, has recently faced accusations of sexual harassment, bullying and unfair dismissal by former employees (which it denies). On July 14, an Italian court placed Loro Piana, an LVMH label that sells cashmere sweaters for more than $US1000 ($1500) a piece, under judicial administration for using suppliers that allegedly violate labour rights. Dior faced similar investigations last year. LVMH's response has been half-hearted: 'Transparency, control and management of this whole ecosystem can sometimes prove a bit difficult,' it said recently. Arnault is attempting to steer towards calmer waters. New bosses have been put in charge of the booze, watches and retailing units. The appointment of Jonathan Anderson as the new creative director of Dior has been cheered by fashionistas. Some investors, however, worry that the companies' problems are deeply rooted. One concern is that decades of pushing fancy clothing and accessories not just to the super-rich but also the merely well-off has made LVMH's brands more vulnerable to economic cycles and dented their image of exclusivity. Even Louis Vuitton, the company's crown jewel, has not been immune. Analysts at HSBC term the brand 'schizophrenic' for its attempt to peddle entry-level products like chocolate and make-up alongside ultra-pricey handbags and luggage. Loading The outlook for Moet Hennessy is more worrying still. As profits have shrunk, the division has announced thousands of job cuts. Analysts point out that young consumers aren't drinking as much as older generations, and when they do, they tend to shy away from spirits such as cognac, which make up a big chunk of LVMH's booze business. The wine and spirits division now contributes less than 10 per cent of LVMH's operating profits, down by roughly half over the past decade. By contrast, Hermes, which has remained focused on selling fashion to the exceedingly wealthy, has continued growing handsomely. Its market value as a multiple of its net profit is now more than twice as high as for LVMH. Brunello Cucinelli, another purveyor of ultra-luxe fashion, is valued at a similar multiple to Hermes. If Louis Vuitton were to be valued at such a multiple, it alone would be worth significantly more than the entirety of its parent company. That has led some to call for LVMH to break itself up. On July 25, reports emerged that it was exploring a sale of Marc Jacobs, a fashion label founded by a former creative director of Louis Vuitton. A bolder move would be jettisoning the troubled drinks business. Diageo, owner of tipples from Guinness to Johnny Walker, already controls a third of Moet Hennessy and has in the past expressed interest in taking the rest of it off LVMH's hands. The British company is currently grappling with its own slump in profits and recently parted ways with its chief executive, but analysts speculate that it could make a deal work by selling off its beer business at the same time. Arnault, aged 76, is navigating all this while making plans for a transition at the helm. He clearly intends to keep the enterprise under family management. All five of his children work in different corners of his empire under the tutelage of experienced executives. His daughter, Delphine, who has been tasked with turning around Dior, is his eldest and the only of his offspring on the executive committee of LVMH, making her the most likely candidate to succeed her father. Yet, there are other possibilities. In February, Alexandre was parachuted in as the deputy head of Moet Hennessy. In March Frederic was put in charge of Loro Piana.
The Age
6 hours ago
- Business
- The Age
‘Wolf in cashmere': Billionaire luxury king tries to avoid a crisis
LVMH's market value has fallen by more than a quarter over the past year, to less than €250 billion. Hermes, a luxury brand Arnault tried and failed to buy, and has eyed with envy ever since, has taken LVMH's crown as the most valuable company in the industry, despite generating only €15 billion in sales last year. Adding insult to injury, the Arnault family, which has topped France's rich list since 2017, has also been dethroned by the Hermes clan. Can Arnault turn the ship around? Loading LVMH can't blame the economic environment for all its woes. It raised prices enormously in the post-COVID 'revenge shopping' boom, irking some customers. The price of Louis Vuitton's Speedy 30 canvas tote bag has more than doubled since 2019, for example, while the average price of personal luxury goods in Europe has increased by just over 50 per cent, according to HSBC, a bank. Only a handful of designers, including Chanel and Gucci, have raised prices more. A series of scandals have also damaged the image of some of its brands. Moet Hennessy, LVMH's drinks division, has recently faced accusations of sexual harassment, bullying and unfair dismissal by former employees (which it denies). On July 14, an Italian court placed Loro Piana, an LVMH label that sells cashmere sweaters for more than $US1000 ($1500) a piece, under judicial administration for using suppliers that allegedly violate labour rights. Dior faced similar investigations last year. LVMH's response has been half-hearted: 'Transparency, control and management of this whole ecosystem can sometimes prove a bit difficult,' it said recently. Arnault is attempting to steer towards calmer waters. New bosses have been put in charge of the booze, watches and retailing units. The appointment of Jonathan Anderson as the new creative director of Dior has been cheered by fashionistas. Some investors, however, worry that the companies' problems are deeply rooted. One concern is that decades of pushing fancy clothing and accessories not just to the super-rich but also the merely well-off has made LVMH's brands more vulnerable to economic cycles and dented their image of exclusivity. Even Louis Vuitton, the company's crown jewel, has not been immune. Analysts at HSBC term the brand 'schizophrenic' for its attempt to peddle entry-level products like chocolate and make-up alongside ultra-pricey handbags and luggage. Loading The outlook for Moet Hennessy is more worrying still. As profits have shrunk, the division has announced thousands of job cuts. Analysts point out that young consumers aren't drinking as much as older generations, and when they do, they tend to shy away from spirits such as cognac, which make up a big chunk of LVMH's booze business. The wine and spirits division now contributes less than 10 per cent of LVMH's operating profits, down by roughly half over the past decade. By contrast, Hermes, which has remained focused on selling fashion to the exceedingly wealthy, has continued growing handsomely. Its market value as a multiple of its net profit is now more than twice as high as for LVMH. Brunello Cucinelli, another purveyor of ultra-luxe fashion, is valued at a similar multiple to Hermes. If Louis Vuitton were to be valued at such a multiple, it alone would be worth significantly more than the entirety of its parent company. That has led some to call for LVMH to break itself up. On July 25, reports emerged that it was exploring a sale of Marc Jacobs, a fashion label founded by a former creative director of Louis Vuitton. A bolder move would be jettisoning the troubled drinks business. Diageo, owner of tipples from Guinness to Johnny Walker, already controls a third of Moet Hennessy and has in the past expressed interest in taking the rest of it off LVMH's hands. The British company is currently grappling with its own slump in profits and recently parted ways with its chief executive, but analysts speculate that it could make a deal work by selling off its beer business at the same time. Arnault, aged 76, is navigating all this while making plans for a transition at the helm. He clearly intends to keep the enterprise under family management. All five of his children work in different corners of his empire under the tutelage of experienced executives. His daughter, Delphine, who has been tasked with turning around Dior, is his eldest and the only of his offspring on the executive committee of LVMH, making her the most likely candidate to succeed her father. Yet, there are other possibilities. In February, Alexandre was parachuted in as the deputy head of Moet Hennessy. In March Frederic was put in charge of Loro Piana. Loading Arnault refuses to answer questions on the topic of succession. Having raised the age limit for his job from 75 to 80 three years ago, he raised it again to 85 earlier this year. That may mean he will wait until he has steadied the ship before relinquishing control. Even then, some investors question whether it is possible to replace the man who created the modern luxury industry. Arnault still has plenty to do before he hangs up his hat.
Sydney Morning Herald
30-06-2025
- Business
- Sydney Morning Herald
The Zuckerbergs stopped funding social causes – 400 children lost their school
Nearly 90 per cent of the Primary School's roughly 400 students in preschool to year 8 identify as Latino, Asian, Pacific Islander, black or multiracial. At its separate preschool across San Francisco Bay, 98 per cent of families have incomes that would qualify for state-subsidised tuition at a conventional school that charged fees. Many families will likely turn to the local public school district, Ravenswood, which closed two schools around the time the Primary School was launched. At a board meeting late last month, the district's assistant superintendent of finance, William Eger, said it would face 'long-term financial pressure' because of the closure, despite CZI's commitment to cover the cost of educating any students from the Primary School until 2031. To address the shortfall after that, the district is considering turning one of its campuses into housing. CZI declined to make Chan available for an interview. 'We're hopeful that the most successful elements of the school's model will become accessible to more students and families through integration with the Ravenswood City School District, building on its strong foundation in health programming and parent engagement,' communications director Jane Packer said in an emailed statement. CZI has promised a parting gift totalling $US50 million ($76.5 million) to the community. Parents were told students wouldreceive $US1000 to $US10,000 for their future education based on age, and the school district received $US26.5 million in grant funds last month. The district declined to comment for this article. 'We're very proud of the work we've done at the Primary School over the past decade, and of what our children and families have achieved,' Carson Cook, a spokesperson for the Primary School, said in an email. Shannon Todd, a parent who has been with the school since it opened, said its closure would be difficult for her family, whose three children attend the school. It provided disability testing, coaching and helped navigating healthcare, said Todd, who has unsuccessfully pushed for Chan to meet with families. 'For her to come into our community and give us the hopes of a better future for our kids, and now just pull the plug like that is not fair for these kids,' she said. Dream school East Palo Alto is a neighbour to wealthy Silicon Valley towns like Palo Alto, where the children of employees at Google and Meta, as Zuckerberg's company is now called, can receive top-rated public education for free. Because of historical redlining, residents of East Palo Alto are mostly lower-income families of colour. Many struggle with the region's cost of living. The Primary School opened in 2016 with 40 students and a 'whole child' philosophy that offered free healthcare for students and families, plus coaching and mental health support for parents. 'It takes three to five years of consistent leadership for a school to really take off. The Primary School never had that.' Former Primary School administrator Chan, the daughter of refugees who fled Vietnam and settled in a low-income Boston neighbourhood, hoped to prove that access to good healthcare and schooling could help economically disadvantaged students achieve more. 'We are working toward a world where every child gets an education that gives them a fair shot,' she said in a 2019 speech. The East Palo Alto project was the billionaire couple's second major intervention in a city's education system, after a controversial 2011 gift of $US100 million to the Newark public schools. Some experts and community members have claimed that money was largely squandered. In 2017, a Harvard study funded by CZI found that by 2015, the growth rate of student achievement in English had significantly improved, but there had been no significant change in mathematics. Chan's partner on her new mission was education leader Meredith Liu, whom she hired from Boston's Codman Academy, a model for her project. 'People thought they were going to get the school of their dreams,' one former school administrator said, speaking on the condition of anonymity to protect her career. Current staffers at the Primary School were asked to sign non-disclosure agreements. In reality, the school met stumbling blocks. Two principals left in its early years, which three former school leaders said made it difficult to establish stability. The school tested innovative ideas but lacked some standard features found in many schools. It didn't have the special education system or disciplinary rules that are required of charter schools, the former administrator said. But students wore recording devices dubbed 'speech pedometers' so that software could analyse the speech patterns of children and the adults around them. The technology was designed by a non-profit to encourage staff to talk more with students in ways that studies suggest encourage brain and language development. 'It was beyond naivete,' the former administrator said. 'It was hubris.' In annual reports, the school credited the devices with helping staffers track and improve students' language development. In the Primary School's fourth year, the coronavirus pandemic brought disruption, especially to the school's literacy rates. Katherine Carter, a former public school administrator brought on in 2019 to assess the school's academic struggles, was surprised to find that staff did not use science-based methods to teach reading, according to a 2023 blog post on the school's website. 'It takes three to five years of consistent leadership for a school to really take off,' the former administrator said. 'And the Primary School never had that.' In 2023, Liu, Chan's co-founder and the school's president, died unexpectedly. The two were close, people familiar with the school and their relationship said. According to the former administrator, Liu 'was the visionary'. The tragedy cost the school its closest tie to Chan, who by then had stepped down as the board's chair. In recent years, she has been seen at the school infrequently, according to three people familiar with its operations. Another former administrator recalled that leaders of a similar school advised it might take 20 years for the Primary School to deliver the outcomes it sought. 'I remember hearing that and thinking, 'We don't need to be rushing … we just need to keep at it,'' the former staffer said, also speaking on the condition of anonymity for fear of damaging her career prospects. The Primary School had been operating for only nine years when its board voted unanimously in April to close it because of the lack of funding. 'Any model that leans on one primary funder is not something I've felt was sustainable,' board chair Jean-Claude Brizard said in an interview with the Post, although he praised the school's work. Cook, the school's spokesperson, said in an emailed statement the focus on literacy made the percentage of students meeting or exceeding grade-level reading standards steadily increase. 'I don't think it was enough time,' the former administrator said. Wound down CZI's withdrawal from the Primary School came after a flurry of changes at the philanthropy in the early months of US President Donald Trump's second term. They included announcing lay-offs, abandoning diversity policies and pulling out of work on community, education and social issues. CZI had been founded alongside the start of the school project in 2015 as part of Chan and Zuckerberg's pledge to emulate Bill and Melinda Gates in giving away the majority of their wealth. The founding couple has led CZI even as Zuckerberg continues to serve as chief executive of Meta, possibly meaning their philanthropic ventures could complicate the company's relationship with politicians and regulators. In 2020, during Trump's first term, Zuckerberg touted CZI's work on racial equity after the death of George Floyd. Some employees saw the comments as tone-deaf and his philanthropic work as insufficiently ambitious, according to previous Post reporting as well as a person familiar with the matter. The same year, the couple gave $US400 million to help state and local governments run the pandemic election, but some Republicans called the donation 'Zuckerbucks' and claimed it was part of an alleged scheme to favour Democrats. Under the new Trump administration, some of CZI's established programs may appear out of step with moves by the White House to eradicate diversity, equity and inclusion programs. Shortly after the 2020 election, Zuckerberg and Chan began to pull CZI back from social issues. Its criminal justice reform work was spun off into a separate organisation. To insiders, it seemed part of a strategy to separate the CZI name from a sensitive political topic. 'People can promise stuff all day long. If nothing is legally binding, they're going to pull out, and we're going to be left with the fallout.' Kyle Brown, East Palo Alto resident and activist CZI stopped launching new racial and criminal justice equity programs, and its immigration work moved to an advocacy group that supports expanding immigration. After Trump's re-election last year, Zuckerberg reversed some of his previously stated positions on diversity and content moderation, ending Meta's fact-checking programs and many of its diversity initiatives. In parallel, more changes came to CZI, which laid off members of its community team that worked on affordable housing, supported local civil society groups and helped underrepresented entrepreneurs. Days after it publicly confirmed that the Primary School would close, it emerged that the philanthropy was also ending its statewide housing program, which studied housing policy and tried to spur production of affordable homes. 'As we've focused on science, we've wound down our social advocacy funding,' chief operating officer Marc Malandro wrote in a February email to CZI staff, in favour of 'pushing the frontiers of biology and AI'. In an emailed statement, Packer, CZI's director of communications, said the initiative was focused on 'building technology to help scientists unlock a deeper understanding of how the human body works,' which she said 'has been a core mission since our earliest days.' 'Tremendous impact' Gisselle Munoz, a 24-year-old mother who attended public school in Ravenswood, was excited to offer her three- and four-year-old children something better at the Primary School. In April, when parents were asked to attend an important meeting, she joined via Zoom and heard staff announce that the school would be closing. Some parents were so shocked and angry that they hung up, she said. The school's closure 'stresses me out', Munoz said. 'We have to find another school and start all over again.' At the meeting, a presentation stated that each family would be allocated a 'transition specialist' to help them choose a new school and detailed the education savings money students would receive: $US10,000 for elementary and middle school students, $US2500 for preschoolers and $1000 for younger children. 'We understand that this news has a tremendous impact on your family,' read a copy viewed by the Post. Some parents said in interviews that the money promised to their children felt insignificant compared with the costs ahead. Kyra Brown is a fourth-generation East Palo Alto resident and activist who has written about displacement and gentrification caused by the tech industry. She has long been sceptical of allowing the community to become dependent on billionaires like Zuckerberg. 'People can promise stuff all day long', Brown said, but 'if nothing is legally binding, they're going to pull out, and we're going to be left with the fallout'. When the political climate changed under Trump, Brown surmised, so did the Chan-Zuckerberg commitment to East Palo Alto.
The Age
30-06-2025
- Business
- The Age
The Zuckerbergs stopped funding social causes – 400 children lost their school
Nearly 90 per cent of the Primary School's roughly 400 students in preschool to year 8 identify as Latino, Asian, Pacific Islander, black or multiracial. At its separate preschool across San Francisco Bay, 98 per cent of families have incomes that would qualify for state-subsidised tuition at a conventional school that charged fees. Many families will likely turn to the local public school district, Ravenswood, which closed two schools around the time the Primary School was launched. At a board meeting late last month, the district's assistant superintendent of finance, William Eger, said it would face 'long-term financial pressure' because of the closure, despite CZI's commitment to cover the cost of educating any students from the Primary School until 2031. To address the shortfall after that, the district is considering turning one of its campuses into housing. CZI declined to make Chan available for an interview. 'We're hopeful that the most successful elements of the school's model will become accessible to more students and families through integration with the Ravenswood City School District, building on its strong foundation in health programming and parent engagement,' communications director Jane Packer said in an emailed statement. CZI has promised a parting gift totalling $US50 million ($76.5 million) to the community. Parents were told students wouldreceive $US1000 to $US10,000 for their future education based on age, and the school district received $US26.5 million in grant funds last month. The district declined to comment for this article. 'We're very proud of the work we've done at the Primary School over the past decade, and of what our children and families have achieved,' Carson Cook, a spokesperson for the Primary School, said in an email. Shannon Todd, a parent who has been with the school since it opened, said its closure would be difficult for her family, whose three children attend the school. It provided disability testing, coaching and helped navigating healthcare, said Todd, who has unsuccessfully pushed for Chan to meet with families. 'For her to come into our community and give us the hopes of a better future for our kids, and now just pull the plug like that is not fair for these kids,' she said. Dream school East Palo Alto is a neighbour to wealthy Silicon Valley towns like Palo Alto, where the children of employees at Google and Meta, as Zuckerberg's company is now called, can receive top-rated public education for free. Because of historical redlining, residents of East Palo Alto are mostly lower-income families of colour. Many struggle with the region's cost of living. The Primary School opened in 2016 with 40 students and a 'whole child' philosophy that offered free healthcare for students and families, plus coaching and mental health support for parents. 'It takes three to five years of consistent leadership for a school to really take off. The Primary School never had that.' Former Primary School administrator Chan, the daughter of refugees who fled Vietnam and settled in a low-income Boston neighbourhood, hoped to prove that access to good healthcare and schooling could help economically disadvantaged students achieve more. 'We are working toward a world where every child gets an education that gives them a fair shot,' she said in a 2019 speech. The East Palo Alto project was the billionaire couple's second major intervention in a city's education system, after a controversial 2011 gift of $US100 million to the Newark public schools. Some experts and community members have claimed that money was largely squandered. In 2017, a Harvard study funded by CZI found that by 2015, the growth rate of student achievement in English had significantly improved, but there had been no significant change in mathematics. Chan's partner on her new mission was education leader Meredith Liu, whom she hired from Boston's Codman Academy, a model for her project. 'People thought they were going to get the school of their dreams,' one former school administrator said, speaking on the condition of anonymity to protect her career. Current staffers at the Primary School were asked to sign non-disclosure agreements. In reality, the school met stumbling blocks. Two principals left in its early years, which three former school leaders said made it difficult to establish stability. The school tested innovative ideas but lacked some standard features found in many schools. It didn't have the special education system or disciplinary rules that are required of charter schools, the former administrator said. But students wore recording devices dubbed 'speech pedometers' so that software could analyse the speech patterns of children and the adults around them. The technology was designed by a non-profit to encourage staff to talk more with students in ways that studies suggest encourage brain and language development. 'It was beyond naivete,' the former administrator said. 'It was hubris.' In annual reports, the school credited the devices with helping staffers track and improve students' language development. In the Primary School's fourth year, the coronavirus pandemic brought disruption, especially to the school's literacy rates. Katherine Carter, a former public school administrator brought on in 2019 to assess the school's academic struggles, was surprised to find that staff did not use science-based methods to teach reading, according to a 2023 blog post on the school's website. 'It takes three to five years of consistent leadership for a school to really take off,' the former administrator said. 'And the Primary School never had that.' In 2023, Liu, Chan's co-founder and the school's president, died unexpectedly. The two were close, people familiar with the school and their relationship said. According to the former administrator, Liu 'was the visionary'. The tragedy cost the school its closest tie to Chan, who by then had stepped down as the board's chair. In recent years, she has been seen at the school infrequently, according to three people familiar with its operations. Another former administrator recalled that leaders of a similar school advised it might take 20 years for the Primary School to deliver the outcomes it sought. 'I remember hearing that and thinking, 'We don't need to be rushing … we just need to keep at it,'' the former staffer said, also speaking on the condition of anonymity for fear of damaging her career prospects. The Primary School had been operating for only nine years when its board voted unanimously in April to close it because of the lack of funding. 'Any model that leans on one primary funder is not something I've felt was sustainable,' board chair Jean-Claude Brizard said in an interview with the Post, although he praised the school's work. Cook, the school's spokesperson, said in an emailed statement the focus on literacy made the percentage of students meeting or exceeding grade-level reading standards steadily increase. 'I don't think it was enough time,' the former administrator said. Wound down CZI's withdrawal from the Primary School came after a flurry of changes at the philanthropy in the early months of US President Donald Trump's second term. They included announcing lay-offs, abandoning diversity policies and pulling out of work on community, education and social issues. CZI had been founded alongside the start of the school project in 2015 as part of Chan and Zuckerberg's pledge to emulate Bill and Melinda Gates in giving away the majority of their wealth. The founding couple has led CZI even as Zuckerberg continues to serve as chief executive of Meta, possibly meaning their philanthropic ventures could complicate the company's relationship with politicians and regulators. In 2020, during Trump's first term, Zuckerberg touted CZI's work on racial equity after the death of George Floyd. Some employees saw the comments as tone-deaf and his philanthropic work as insufficiently ambitious, according to previous Post reporting as well as a person familiar with the matter. The same year, the couple gave $US400 million to help state and local governments run the pandemic election, but some Republicans called the donation 'Zuckerbucks' and claimed it was part of an alleged scheme to favour Democrats. Under the new Trump administration, some of CZI's established programs may appear out of step with moves by the White House to eradicate diversity, equity and inclusion programs. Shortly after the 2020 election, Zuckerberg and Chan began to pull CZI back from social issues. Its criminal justice reform work was spun off into a separate organisation. To insiders, it seemed part of a strategy to separate the CZI name from a sensitive political topic. 'People can promise stuff all day long. If nothing is legally binding, they're going to pull out, and we're going to be left with the fallout.' Kyle Brown, East Palo Alto resident and activist CZI stopped launching new racial and criminal justice equity programs, and its immigration work moved to an advocacy group that supports expanding immigration. After Trump's re-election last year, Zuckerberg reversed some of his previously stated positions on diversity and content moderation, ending Meta's fact-checking programs and many of its diversity initiatives. In parallel, more changes came to CZI, which laid off members of its community team that worked on affordable housing, supported local civil society groups and helped underrepresented entrepreneurs. Days after it publicly confirmed that the Primary School would close, it emerged that the philanthropy was also ending its statewide housing program, which studied housing policy and tried to spur production of affordable homes. 'As we've focused on science, we've wound down our social advocacy funding,' chief operating officer Marc Malandro wrote in a February email to CZI staff, in favour of 'pushing the frontiers of biology and AI'. In an emailed statement, Packer, CZI's director of communications, said the initiative was focused on 'building technology to help scientists unlock a deeper understanding of how the human body works,' which she said 'has been a core mission since our earliest days.' 'Tremendous impact' Gisselle Munoz, a 24-year-old mother who attended public school in Ravenswood, was excited to offer her three- and four-year-old children something better at the Primary School. In April, when parents were asked to attend an important meeting, she joined via Zoom and heard staff announce that the school would be closing. Some parents were so shocked and angry that they hung up, she said. The school's closure 'stresses me out', Munoz said. 'We have to find another school and start all over again.' At the meeting, a presentation stated that each family would be allocated a 'transition specialist' to help them choose a new school and detailed the education savings money students would receive: $US10,000 for elementary and middle school students, $US2500 for preschoolers and $1000 for younger children. 'We understand that this news has a tremendous impact on your family,' read a copy viewed by the Post. Some parents said in interviews that the money promised to their children felt insignificant compared with the costs ahead. Kyra Brown is a fourth-generation East Palo Alto resident and activist who has written about displacement and gentrification caused by the tech industry. She has long been sceptical of allowing the community to become dependent on billionaires like Zuckerberg. 'People can promise stuff all day long', Brown said, but 'if nothing is legally binding, they're going to pull out, and we're going to be left with the fallout'. When the political climate changed under Trump, Brown surmised, so did the Chan-Zuckerberg commitment to East Palo Alto.
Sydney Morning Herald
04-06-2025
- Health
- Sydney Morning Herald
‘A place of killing': The US aid agency sowing chaos in Gaza
The aerial photographs show five narrow lanes made of high metal fences wedged between two artificial mounds of earth and topped with barbed wire. Inside, hundreds of people are crammed under the baking sun. The sight of ordinary Gazans corralled into cages is not the image Israel's reputation managers were after. But, just over a week into its controversial new aid delivery scheme to bypass Hamas using a US contractor, that is what they are faced with. That, and viral videos of civilians running for their lives to the sound of gunfire, amid accusations – bitterly denied by Israel – that more than 20 were shot dead by the Israel Defence Forces (IDF) on Sunday as order disintegrated at a distribution centre in the south of the Strip. One man who spoke to The London Telegraph said he found the centre 'terrifying' and 'like a prison', but that he was forced there – kilometres from his temporary home – out of fear that his children would starve. Another called it 'a place of killing'. Fuelling the international criticism is the nature of the Gaza Humanitarian Foundation (GHF), the American company created to deliver the new system, with persistent suggestions of CIA involvement, opaque funding and concealed Israeli control. This has been enhanced by condemnation from the UN and other large aid NGOs, which want nothing to do with the GHF and accuse it of politicising aid. After Sunday's alleged shooting, and new claims of gunfire killing more than 20 people overnight, the project's credibility is on a knife-edge. Loading From Israel's point of view, the new system makes perfect sense. The government argues that under the previous model, which it cut off entirely at the beginning of March, Hamas robbed the aid trucks blind – the UN denies this – then sold the food, fuel and medical supplies back to civilians, thus cementing their control over the population and financing their terror infrastructure. By contrast, the new arrangement requires people to travel to four purpose-built distribution centres in the south of the Strip where – it was promised – they would be screened to make sure they are deserving civilians and not terrorists. The idea, in principle, is that while the IDF provides a wider blanket of security, Gazans themselves do not interact with Israeli soldiers, but deal directly with the foundation staff and associated security contractors. Some reports suggest these contractors are paid more than $US1000 a day. 'Places of killing' The UN and legacy NGOs, which used to deliver aid into communities through more than a hundred drop-off points, say this offends basic humanitarian principles, trapping people between starvation and a long and dangerous journey. Omar Baraka, 40, from Khan Younis, said: 'We go to dangerous red zones, the army asks us to walk for several kilometres. 'There is no order in the place, it's very chaotic. 'Tens of thousands of citizens go there. The organisation delivered aid in the first two days, then the centres became places of killing.' Salem Al-Ahmad, an 18-year-old high school student, has ventured to the GHF site on several occasions to try to pick up flour for his family. 'The situation required getting food and saving yourself from death,' he said. 'Anyone who gets aid has to run back quickly, about three kilometres, because the army starts shooting to empty the area of civilians. 'I found a lot of food lying on the ground because it is difficult to carry and run with it. I only had 1kg bags of flour so I could run from the gunfire.' Israeli government officials and their supporters in the press argue that, despite the chaotic scenes, the early days of the new scheme represents a triumph. This is because it shows Gaza's civilian population has passed through the 'fear barrier' – in other words, it shows they are now prepared to defy the terror group's commands not to engage with the GHF. There is certainly evidence that Hamas has tried to put obstacles – some physical, others in the form of propaganda – between the Gazan civilians and the new aid system. It is far less certain to what extent the group has been behind the scenes of chaos at the new distribution centres themselves. Critics say that the scenes of disorder are simply a function of a desperate, starving population and inexperienced aid distributors. Aside from gunfire, flashbangs and smoke grenades have been thrown. Meanwhile, multiple people say that no serious attempt at screening is made. On Monday night, UN human rights chief Volker Turk told the BBC the way humanitarian aid is now being delivered is 'unacceptable' and 'dehumanising'. 'I think what it shows is utter disregard for civilians. Can you imagine people that have been absolutely desperate for food, for medicine, for almost three months and then they have to run for it or try to get it in the most desperate circumstances? Mr Turk told the BBC World Service's Newshour program. Aside from the practical difficulties the new system imposes, it has been accused of serving Benjamin Netanyahu's agenda by forcing the population into the largely levelled south of the Strip, leaving the IDF clear to execute Operation Gideon's Chariot, which, sources have said, will see a similarly widespread demolition of property. Loading Some have even questioned whether the GHF model is a crucial component of an attempt to realise Donald Trump's 'riviera' vision for Gaza, which would see the population displaced ahead of a comprehensive redevelopment. While the president himself now appears lukewarm about the scheme, there are some in Israel's government – notably Defence Minister Israel Katz – who allude to it often. Aside from its performance on the ground, the origins and make-up of the GHF and its partner organisation, Safe Reach Solutions (SRS), continue to provoke comment. The latter is headed by Philip Reilly, a CIA veteran, who is said to have played a role in training the Contra rebels in Nicaragua in the 1980s, and was then the first agency officer into Afghanistan after the September 11 attacks, where he went on to be station chief. SRS previously had the contract to police traffic and people along a main north-south road in Gaza during the January-March ceasefire. A recent investigation by The New York Times suggests that an informal network of powerful individuals in both the IDF and the prime minister's office, known as the Mikveh Yisrael Foru, had been aiming towards a parallel aid system that cut out the NGOs since December 2023. It claimed that the group had identified Reilly as its candidate to lead such a mission as early as January last year, and that the January contract was a key step in convincing Netanyahu to hire him for the aid distribution job. The GHF is a separately registered company, although it was registered by the same lawyer and previously had the same spokesman. A $US100 million donation to the GHF got tongues wagging in Israel that this was really the work of Mossad, the Israeli intelligence agency – indeed, the former defence minister, Avigdor Lieberman, said as much. The GHF denies this, saying the donation was from a Western European country, but declined to name which one. 'Tired from malnutrition' Jake Wood, a former US Marine, quit as chief executive of the foundation the day before aid distribution operations began, claiming it violated 'humanitarian principles'. He had previously said: 'I would participate in no plan in any capacity if it was an extension of an IDF plan or an Israeli government plan to forcibly dislocate people anywhere within Gaza.' Back in Rafah, Ahmed Musa, a 34-year-old from Khan Younis, spoke of despair at Sunday's events. 'I left at dawn to go to the American aid centre in the Mawasi area of Rafah,' he said. 'I went there under duress, as I have four hungry children who are tired from malnutrition. 'The scene was terrifying,' he added. 'I sat and cried bitterly over my helplessness that I did not receive anything. But I will try again.'
