Category: Business Wires

  • U.S. lifts blockade of Iran and Iranian supreme leader endorses direct talks with American officials

    WASHINGTON — The U.S. on Thursday lifted its blockade of Iran, and oil tankers began freely moving through the Strait of Hormuz after months of being unable to use the critical channel, as the tentative agreement to end the war took effect.

    Meanwhile, Vice President JD Vance announced that he may postpone a trip to Switzerland that had been planned for Friday and included a ceremonial signing of the deal. The visit might have helped start talks on the next, potentially even more critical, round of negotiations between the two sides.

    Hours later, Iranian Supreme Leader Ayatollah Mojtaba Khamenei endorsed direct negotiations with the U.S. in a statement read by state media.

    “It is obvious that the face-to-face negotiations that will be held in the future will not mean accepting the enemy’s opinion,” he said.

    It was Khamenei’s first reaction to the agreement, and it indicated a shift in Iran’s approach. Hard-liners, especially Khamenei’s father, the previous supreme leader, have long opposed direct talks, especially after the U.S. pulled out of the 2015 nuclear deal between Iran and world powers.

    The supreme leader has not been seen in public since he was wounded in a strike at the start of the war.

    Trump envoy tells lawmakers Iran will invite U.N. inspectors to nuclear sites

    In other developments, Trump envoy Steve Witkoff told U.S. lawmakers Thursday in a private briefing that Iran will invite the U.N.’s nuclear watchdog agency to inspect its nuclear sites and begin work on identifying and uncovering the locations of Tehran’s enriched material.

    The briefing was described by two people familiar with the conversation who spoke to the Associated Press on condition of anonymity to share the closed-door details.

    Witkoff told congressional leadership and members of national security-related committees that the agreement that the U.S. struck with Iran did not include any side deals, but a side letter was drafted between Tehran and the International Atomic Energy Agency extending the invitation.

    Witkoff disclosed the existence of the letter and invitation in the briefing, according to the people.

    Witkoff said the letter to IAEA Director-General Rafael Mariano Grossi would enable him to bring U.S. nuclear inspectors to Tehran.

    Uncertain timeline could make it more difficult to promote deal

    Pakistani Prime Minister Shehbaz Sharif also postponed a planned visit to Switzerland, where Islamabad officials were to host the ceremony, because the agreement had already been signed, said two senior officials who spoke on condition of anonymity because of the sensitivity of the matter.

    The now uncertain timeline could raise new questions and make it even more difficult for the Trump administration to promote a deal that many in the U.S. — including some congressional Republicans — have criticized as too favorable to Tehran.

    “Our plan is to go to Switzerland. I don’t know exactly when,” Vance said during a briefing with reporters at the White House when asked about not flying, as planned, to the signing ceremony.

    “I suspect this weekend, but I’m not sure,” he added.

    That injected new doubt into an agreement that President Donald Trump said he signed to avoid “economic catastrophe” in the U.S.

    Vance’s announcement came a day after Trump signed the pact with Iran while dining with French President Emmanuel Macron at the Palace of Versailles. The deal is slated to take immediate effect and extends a ceasefire while giving each side 60 days to hammer out broader agreements on larger issues.

    Trump said the deal would avoid continued stress on the U.S. economy after the war caused oil prices to skyrocket, made financial markets skittish, and fueled inflation. He repeatedly said he did not want to be compared to Herbert Hoover, whose policies helped exacerbate the Great Depression of the 1930s.

    Vance defends U.S.-Iran deal

    The vice president, who was initially personally skeptical of the U.S. going to war with Iran, has increasingly become the administration’s face of the conflict and has been outspoken in defending the deal. Asked about concerns it concedes too much, the vice president said repeatedly that the accord would force Iran to “change their behavior.”

    Vance defended the agreement and shrugged off accusations that its rollout has been piecemeal and sometimes contradictory, saying, “I don’t think our public messaging has been chaotic.”

    He also offered a surprisingly blunt warning to Israel, which has pushed the U.S. to take a harder stance against Iran and launched attacks on the Iranian-backed Hezbollah militia in Lebanon throughout the war, including just before the deal extending the ceasefire was reached. Those attacks complicated the peace efforts with Iran.

    Trump “is the only head of state in the entire world who is sympathetic to the nation of Israel at this moment in time,” Vance said. “And he happens to be the head of state of the world’s superpower.”

    The vice president said more than 12.5 million barrels of oil went through the Strait of Hormuz on Wednesday night. That could further soothe oil prices that spiked during the war but have been falling since the U.S. and Iran announced a tentative deal to end the conflict.

    He said the U.S. easing its blockade of Iran means “honoring our end of the early part of the agreement on the military side.”

    U.S. Central Command said American warships “will remain in the general area to make sure that all aspects of the agreement are adhered to, obeyed, and in full force and effect.”

    Shipping starts to pick up

    At least two oil tankers left Iran and crossed the U.S. military blockade without being stopped. A merchant shipping tracking website said the ships were carrying a combined total of 3.8 million barrels of Iranian crude oil.

    Iranian state media said shipping had “normalized” at Iran’s southern ports but added that the strait remains supervised and under the control of the Iranian military, and transiting through the vital waterway still requires coordination.

    Major shipowners began moving vessels through the strait after the agreement was signed, according to maritime data company Lloyd’s List Intelligence, though Lloyd’s did not give data on how many ships have passed through the strait as of Thursday.

    In a media briefing, Richard Meade, editor-in-chief of Lloyd’s List, said for the first time in 110 days, ships owned by major companies are transiting the strait after effectively being marooned there since February.

    Tankers controlled by major ship owners Grimaldi Group, Cosco, Knutsen, and NYK have passed through the strait. And two Iranian-flagged, sanctioned crude oil tankers owned by the National Iranian Tanker Company have entered the strait, according to Lloyd’s List.

    Phillip Belcher, marine director of Intertanko, a trade group for global independent tanker owners, said the main central route of the strait is still closed and has an estimated 80 mines that need to be cleared.

    But ships have been passing through the smaller northern route, which goes through Iranian waters, and the southern route, which goes through Omani waters.

    Lloyd’s List estimated that 550 merchant ships will need to exit the Persian Gulf. It could take weeks or months to fully reopen the strait, and the two alternative routes do not have as much capacity as the strait’s central passage.

    Agreement calls for a lasting end to hostilities

    The U.S.-Iran deal calls for a permanent end to hostilities and starts a 60-day negotiating clock to reach a final deal on the future of Iran’s nuclear program, though Trump has left the door open to resume attacks. The agreement appears to offer Iran several benefits up front while extracting little in return.

    It states that Iran’s stockpile of highly enriched uranium, which is believed to be buried under rubble, must at minimum be diluted under international supervision. It also says that Iran shall not procure or develop nuclear weapons — a commitment it has made previously. But beyond stating that the U.S. and Iran will negotiate over Iran’s nuclear program, other commitments still need to be worked out.

    The deal also waives U.S.-backed sanctions on the country, immediately allowing Iran to sell its oil freely in a major concession from Washington.

    Still, Kaja Kallas, the European Union’s foreign policy chief, said Thursday that the 27-nation bloc would leave its sanctions on Iran in place for now. The bloc had slapped a series of separate sanctions on Iran over its nuclear program, human rights violations and the closing of the strait.

  • Federal regulators back Trump’s plan to speed power to energy-hungry AI data centers

    WASHINGTON — Federal regulators on Thursday agreed to let large energy users connect more quickly to the nation’s inefficient and aging electric transmission system to accommodate surging demand from power-hungry artificial intelligence data centers.

    Energy Secretary Chris Wright had urged the Federal Energy Regulatory Commission to act in an effort to help the United States better compete with China for superiority in the fast-growing AI sector.

    Tech companies and data center developers have welcomed the chances for faster connections to the country’s power supply.

    But utilities, states, and regional grid operators worried that the Trump administration’s plan would remove their authority to manage the process. Clean energy advocates want the agency to advance, rather than undermine, state-level efforts to require the use of renewable energies.

    The commission’s actions come as a backlash grows against data centers over fears about rising electricity prices and concerns about the massive amounts of energy and water they use, polluting communities across the country, and straining water resources and the electric grid.

    The five FERC members voted unanimously to direct six regional grid operators to ensure that AI data centers and other large power users are “able to connect to the transmission system in a timely and orderly manner.”

    Laura Swett, an appointee of President Donald Trump who chairs the commission, called the vote historic and said it would push the country’s electricity market into the future while also protecting ratepayers from shouldering the costs of connecting big power users to the grid.

    “I know that Americans across the country are concerned about affordability, and so are we,” Swett said.

    Data centers would pay the full cost of any grid upgrades needed for their connection, under the commission order. But that order can do little to address the tightening energy supplies that are driving up electricity bills in some areas and raising warnings of blackouts as the construction of data centers outpaces the speed of new power plants coming online to serve them.

    The six regional grid operators under the order serve 200 million Americans, or two-thirds of FERC’s jurisdiction. FERC also invited utilities that handle their regional transmission systems to also participate.

    More than 4,000 data centers now operate in the U.S., according to one estimate, with an additional 3,000 planned or under construction, including some that consume more energy than a small city. Such facilities have ballooned in size to accommodate the demands of AI.

    Trump has tried to deflect public concerns about AI, seeing the fast-evolving technology as crucial for the U.S. to attract foreign investment and maintain its economic and military prowess. Trump signed an executive order this month that establishes a framework for the federal government to vet the national security risks of the most advanced AI systems for up to a month before their public release.

    In December, FERC took an earlier step to help data center operators get electricity quickly, voting to allow tech companies to effectively plug a data center directly into a power plant.

    Companies such as xAI, Google, Microsoft, Meta, Oracle, OpenAI, and Amazon have signed Trump’s Ratepayer Protection Pledge, in which they agreed to build or buy new sources of power generation for their data centers and cover the expense of infrastructure upgrades.

    They also committed to making backup generation available to prevent blackouts in times of emergency and to hire locally for their data center build out.

    Rob Gramlich, a Washington-based energy consultant, said the order leaves states in control of retail electric rates, terms, and conditions. But, he said, they should quickly develop rules to accommodate large power users and prevent cost shifts to residential and business customers.

    FERC could assert broader jurisdiction over interconnection of large power users if states do not act quickly, Gramlich said.

    Data from the Electric Power Research Institute shows that data centers now account for about 5% of U.S. electricity demand, but could triple by 2035. In Virginia, data centers account more than 25% of overall demand and could rise to more than 40% by 2030.

  • Ukrainian drones set a Moscow refinery ablaze in a major attack on the Russian capital

    Ukraine struck a major Moscow oil refinery Thursday for a second time in a week, sending huge plumes of black smoke over the capital and disrupting hundreds of flights at its airports in one of its biggest drone attacks since Russia’s full-scale invasion over four years ago, officials said.

    Ukraine has repeatedly targeted Russian oil facilities, aiming to cut Moscow’s revenue for the war and make Russians feel the consequences of the invasion. Some areas have reported fuel shortages.

    The attack by dozens of drones came hours after Ukrainian President Volodymyr Zelensky said he had held “an important coordination call” with the presidents of the United States and France and had won key pledges of further support from this week’s G7 summit.

    “If Ukraine is going to burn, your Moscow will burn too,” Zelensky said, adding that the attack was part of Kyiv’s effort to bring Russian President Vladimir Putin to the negotiating table. ”It is time to end the aggression, time to end this war.”

    Ukrainian attack embarrasses Putin again

    The Moscow attack was the latest embarrassment for Putin. Ukrainian drones attacked his hometown of St. Petersburg earlier this month as he welcomed foreign VIPs to his showcase economic forum in the city.

    Putin on Thursday was in Kazan, some 430 miles east of Moscow, hosting leaders of the Association of Southeast Asian Nations as Russia seeks to bolster business and other ties with the regional bloc.

    Russia’s state-controlled TV channels only briefly mentioned the attack on Moscow. Pro-Kremlin newspapers reported it, with some praising the performance of air defenses while noting that the strike highlighted the need to further strengthen the defensive shield around the capital.

    Vyacheslav Volodin, speaker of the lower house of Russia’s parliament, warned that Moscow would respond by ramping up its strikes.

    “Their action will lead to our counteraction and launching harsher blows, with more powerful weapons,” Volodin said in televised remarks.

    Some Russian hawks urged the Kremlin to respond with nuclear weapons. Nationalist Konstantin Malofeyev criticized the military for “fighting at half-strength in a gentlemanlike way.”

    “War means victory at any cost,” Malofeyev wrote on his Telegram channel, suggesting the use of “the nuclear weapons that our ancestors created and stockpiled while mobilizing the entire country’s strength precisely for this purpose — to win.”

    Fires rage at Moscow refinery

    Thick black smoke and occasional flames spewed from the Moscow Oil Refinery amid its red-and-white smokestacks on the southeastern edge of the city, about 9 miles from the Kremlin. Sooty rain fell on cars, according to local video.

    “One of the most popular questions asked by Muscovites this morning is ‘What is going on?’” Ukrainian Foreign Minister Andrii Sybiha said in a post on X. ”I can answer. Your country started a war of aggression against ours. For years, it has been killing our people. Now that you know what’s going on, ask Putin when he is planning to end it.”

    The refinery is one of Russia’s biggest, according to its website, producing more than a third of the Moscow region’s fuel. It was last attacked by Ukraine on Tuesday, but officials said that fire was swiftly put out.

    Thursday’s fire at the refinery was “largely contained,” Moscow Mayor Sergei Sobyanin said hours afterward, adding that remaining hot spots were being extinguished.

    As Ukraine pressed its strikes on Russia’s energy infrastructure, fuel supplies appeared to be under strain. Gas station chains in multiple regions have introduced restrictions on what drivers could buy. Russian independent news outlet Agentstvo reported that one out of every four gas stations has introduced some kind of restrictions.

    Authorities in the capital said in a statement hours after the attack that “supplies of oil products to Moscow and the work of all gas stations in the city continue as normal.”

    The attack also temporarily halted flights from four Moscow airports, transport and aviation authorities said. The Russian business daily Kommersant counted more than 500 delayed or canceled flights at the airports, based on their online flight information.

    In the greater Moscow region, a drone hit a residential building in the town of Zhukovsky, according to Gov. Andrei Vorobyov. Buildings elsewhere were damaged by drone debris, injuring 17 people, including two children, he added.

    Ukraine seeks more help from NATO, EU

    “Russia is on the back foot: militarily, economically and politically,” ‪EU foreign policy chief Kaja Kallas‬ said on X after meeting Thursday with Ukrainian Defense Minister Mykhailo Fedorov. “Now is the time to provide Ukraine with even greater support and to exert even more pressure on Russia to end the war.”

    Zelensky held talks Thursday in Brussels with NATO and European Union leaders, and the German and Ukrainian defense ministers signed an agreement to jointly develop an air defense system to counter ballistic missiles. Zelensky described it as the start of an “anti-ballistic missile coalition” and invited others to join.

    Russia has relentlessly struck Ukraine with those types of missiles, which air defenses struggle to counter.

    Russia says it downed over 500 Ukrainian drones

    The Russian Defense Ministry said its air defenses overnight shot down 555 Ukrainian drones over multiple regions, with almost 200 intercepted as they approached Moscow. That was roughly double the number of drones that Russia launched at Ukraine overnight, according to the Ukrainian air force.

    “If Putin does not want to end this war and wants to continue it, we will not sit quietly — we will respond,” Zelensky said in a voice message to a group chat with journalists.

    He has accepted an unconditional ceasefire demanded by U.S. President Donald Trump, but Putin has refused, and U.S.-led peace efforts have fizzled.

    Ukraine disrupts Russian supply lines

    Along with pledges of more diplomatic and military help at the G7 summit, Ukraine recently has gained momentum on the battlefield against Russia’s bigger army, thanks to its high-tech drones, Western officials and analysts say. Longer-range drones are choking Russian supply lines in occupied regions of Ukraine, in addition to disrupting oil production.

    French President Emmanuel Macron said the G7 summit was “very important for Ukraine” because its supporters — crucially including the U.S. — vowed to help it, although he provided no details. The U.S. under Trump has cut back assistance to Ukraine, leaving the Europeans as the biggest suppliers of military and financial aid. Trump and Zelensky have had a sometimes strained relationship.

    “America is with us on Ukraine, that is very important,” Macron said as he and Trump left the Palace of Versailles near Paris.

    In other developments Thursday, Russia struck the city of Sumy in northeastern Ukraine with two glide bombs that killed a 64-year-old man who was fishing in a river, said Oleh Hryhorov, head of the regional military administration. A Russian strike on the central city of Dnipro killed one man and wounded nine, said Oleksandr Hanzha, head of the Dnipropetrovsk regional military administration.

  • Supreme Court sides with a Texas man who says it’s not a crime for marijuana users to have guns

    WASHINGTON — The Supreme Court ruled Thursday against a broad federal ban on gun ownership by marijuana users, the latest in a line of firearm cases from a court that has expanded gun rights.

    The justices decided unanimously in favor of Ali Danial Hemani, a Texas man who argued that a law barring guns from anyone who regularly uses illegal drugs violates the Second Amendment.

    Justice Neil Gorsuch wrote that his opinion narrowly limits the government’s power to take guns away from drug users who are not considered dangerous. Hemani, who was not charged with any other crimes or accused of using the weapon under the influence, is thankful he “finally has closure,” lawyer Zachary Newland said.

    The decision is a loss for President Donald Trump’s Republican administration, which had defended the 1968 law despite arguing against other gun restrictions. Its core argument “fails under every measure,” Gorsuch wrote.

    The law was originally meant to keep guns away from dangerous people, but millions of people now use marijuana, Gorsuch wrote. It is broadly legal in about half the states and has gained widespread use for health purposes.

    “Whatever one thinks of these developments, the federal government has not just tolerated them; it helped fuel them,” Gorsuch wrote. “All of which leaves it awkwardly positioned to suggest that the millions of Americans who now regularly use marijuana are categorically and unusually dangerous.”

    The law was also used in a case against Hunter Biden, who was convicted in Wilmington, Del., of buying a gun while addicted to cocaine in 2018. He was later pardoned by his father, Democratic President Joe Biden.

    Someone addicted to an illegal drug could potentially still be prosecuted after Thursday’s decision.

    “We do not address efforts to ban addicts, or those presently intoxicated, from possessing a firearm,” Gorsuch wrote. Prosecutors could charge a marijuana user if they had evidence the person was dangerous, he said.

    Recreational use remains illegal on a federal level even after the Trump administration reclassified medical marijuana as a less-dangerous drug in April.

    The case made for some unusual political alliances.

    The American Civil Liberties Union and the National Rifle Association supported Hemani’s case, as did cannabis legalization groups such as NORML. On the other side were gun safety groups including Everytown that usually oppose the administration on Second Amendment issues.

    The ACLU applauded the ruling, saying that nearly half of Americans have reported using marijuana at some point in their lives.

    “The court has sent a strong message that the government cannot criminalize the conduct of large numbers of people by making categorical and unfounded assumptions about whether they are dangerous,” said Cecillia Wang, legal director at the ACLU.

    The Second Amendment Foundation called it a “major victory for gun owners.”

    The group Smart Approaches to Marijuana, which opposes legalization of the drug, condemned the court’s decision.

    “While the justices in this case appear to be most concerned with historical battles over Second Amendment rights, public health and safety are the collateral damage in this decision,” said CEO Kevin Sabet.

    Gun control groups were more muted, with Everytown saying that the decision still recognizes that “drugs and guns can make for a dangerous mix.”

    It is rare to see standalone criminal charges filed against people accused solely of owning guns and using drugs. The charge is more often filed against people also accused of other crimes.

    The opinion is the latest in a series of firearm cases to reach the Supreme Court since its landmark ruling expanding gun rights in 2022 led to a wave of challenges around the country.

    Since then, the high court has upheld a law aimed at protecting victims of domestic violence and strict regulations on ghost gun kits but has struck down a ban on bump stocks, an accessory that enables rapid fire. The justices are also considering a second firearm case this term over strict regulations on carrying guns in Hawaii.

  • Federal Reserve keeps rate unchanged, but nearly half of policymakers would support hike this year

    WASHINGTON — The Federal Reserve kept its key rate unchanged Wednesday, yet almost half the central bank’s policymakers said they could support a rate hike later this year.

    The unexpectedly aggressive tilt toward higher rates would disappoint President Trump and suggests heightened concerns about persistent inflation among Fed officials.

    In an unusually short statement after their two-day meeting, the officials dropped language that had suggested their next move would be to cut the key rate. The brief statement reflects the influence of new chair Kevin Warsh, appointed by Trump, who has previously criticized the Fed for commenting too broadly on the economy.

    Still, Warsh’s 18 colleagues on the Fed’s rate-setting committee sent a clear message in a set of quarterly projections released Wednesday: Nine signaled they supported higher rates this year, with six of those supporting two quarter-point increases. It’s a sharp change from March, when no policymakers penciled in a hike and the committee as a whole forecast one cut in 2026. The change is an acknowledgment that inflation is at its highest level in three years, and many officials have said in recent speeches that if inflation doesn’t decline, higher rates may be necessary in the coming months.

    All told, another eight officials signaled they would support keeping the rate unchanged, and one penciled in a cut. Warsh did not submit a forecast for how the Fed might change its key rate. He said he encouraged his colleagues to do so, but he has previously criticized the projections for potentially locking the Fed into a specific policy outlook. The Fed also struck forward guidance from its policy statement.

    Warsh also told reporters at a news conference that he is forming five task forces to examine such areas as how the Fed communicates, the sources of data it uses in making policy decisions, and the frameworks it uses to evaluate inflation, all with the goal of making sure the Fed is “clear-eyed and focused on the future.”

    Wednesday’s policy meeting was the first for Warsh, who was appointed by Trump after the president sharply criticized Warsh’s predecessor, Jerome Powell, for not reducing rates deeply enough. The attacks largely backfired because they prompted Powell to stay on the Fed’s governing board, where he voted Wednesday in favor of keeping rates at about 3.6%.

    Warsh now faces a difficult choice: The Fed typically seeks to combat inflation by lifting interest rates to slow borrowing and spending and cool the economy. Yet taking such a step would likely attract the ire of the White House, and could lift the cost of mortgages, auto loans, and other borrowing, just before the midterm elections.

    If the Iran war is resolved, gas prices will likely continue to decline and inflation may cool in the coming months. But prices of many goods and services — such as clothes, dental care, and childcare — were rising before the Iran war, and inflation has been above the Fed’s 2% target for five years, suggesting that there may still be inflationary pressures in the economy.

    Warsh repeatedly stressed that Fed officials are committed to delivering price stability.

    “We’ve missed [on inflation] for five years and we’re gonna fix that,” he said.

    Warsh also faces a sharply different economic environment than when he appeared to campaign for the job of Fed chair last year. Back then, he was outspoken in favor of lower interest rates, as Trump has demanded. He pointed to the development of AI as a technology that could vastly expand the economy’s ability to produce goods and services cheaply, which would over time bring down inflation.

    Even then, many economists were skeptical of his claim. At least in the short run, analysts note that soaring investment in semiconductors and computing equipment is contributing to higher inflation.

    Indeed, since the Iran war began Feb. 28, inflation has accelerated to a three-year high of 4.2%, lifted mostly by costlier gas stemming from the Iran war. The Fed typically fights higher inflation by raising its key interest rate to cool spending and growth.

    Trump has announced an initial peace agreement that could bring the three-month conflict to an end, but it’s not clear if peace will hold. And even if oil flows freely out of the Middle East again, it could take months for prices of gas, groceries, and items such as airline fares, to cool.

    At the same time, hiring has picked up in recent months, removing a key rationale for cutting rates. In January, the Fed forecast that it would reduce rates twice this year, as part of its quarterly economic projections. A big reason for those potential cuts is that employers were shedding jobs and policymakers worried that the unemployment rate would rise. The central bank typically cuts its key rate to spur economic growth and hiring.

    But earlier this month a government report showed that hiring jumped in May, when employers added 172,000 jobs, the third straight month of solid job gains.

    On Wall Street, the S&P 500 fell 1.4% after the release of the Fed officials’ rate expectations. When asked whether changes, such as revising what’s included in the economic projections, could spook markets, Warsh said, “I think financial markets perform best when they react to incoming data. They work less effectively when they ask, ‘How will the Federal Reserve react to that information?’”

  • U.S. tells states to deal with unemployment fraud — or face penalties

    The U.S. Department of Labor told states Wednesday to take immediate action to combat fraud, waste, and abuse in their unemployment insurance programs — and that they could have administrative funds withheld if they don’t comply.

    The letters, which went to the governors of every state, are the latest in a series of actions from President Donald Trump’s administration focused on fraud, waste, and abuse in state-run programs that include federal funding. Like with most of the other similar announcements, the administration focused on issues in states where Democrats control the government.

    “We are officially putting governors on notice,” acting Labor Secretary Keith Sonderling said in a statement Wednesday. “The American people will no longer tolerate the blatant waste, fraud, and abuse of their hard-earned tax dollars — no state should allow it either. If states allow it, they will suffer the consequences.”

    Labor Department offers few details

    The Labor Department said Wednesday that poor oversight, outdated technology, weak identity verification, and lax controls have “allowed unprecedented fraud to flourish.”

    In its announcement, it cited problems in California, Illinois, and New York — three states where Democrats control the governments.

    California Gov. Gavin Newsom’s office blasted the move and criticized “lax regulations and rushed distribution” of unemployment benefits by the first Trump administration during the COVID-19 pandemic.

    “Meanwhile California outperforms other states in addressing fraud,” Newsom spokesperson Marissa Saldivar said in a statement.

    The federal Labor Department did not immediately respond to questions from the Associated Press about the details of the alleged fraud.

    The unemployment insurance program has come into question before

    The nonpartisan Government Accountability Office estimated that fraud accounted for between 11% and 15% of the amount paid out through unemployment insurance programs from April 2020 through May 2023, when the nation was under a public health emergency for the pandemic.

    During that time — which included the last months of Trump’s first term and over half of former President Joe Biden’s time in office — access to the funds was eased, and the government noticed the issues as the money was going out.

    In the new letter to the states, the department said that consequences from pandemic-era fraud “are still playing out.”

    The Labor Department said states would receive further directives in coming weeks.

    The administration has focused on fraud in state-federal programs

    Vice President JD Vance is overseeing an anti-fraud task force focused on potential misuse of social programs.

    The Department of Health and Human Services tried to withhold money for childcare subsidies and other social service programs from five states — all governed by Democrats — but has been rebuffed by a court. The department has also announced it’s using artificial intelligence to police how states and other recipients of federal dollars are auditing their program.

    The Department of Agriculture has threatened to withhold administrative funds from states that don’t provide data on participants in the Supplemental Nutrition Assistance Program, including their immigration status.

    Sophie Austin in Sacramento, Calif., contributed to this article.

  • Iran says the deal to end war with U.S. requires Israel to withdraw from Lebanon

    DUBAI, United Arab Emirates — Iran’s top diplomat said Tuesday that the tentative deal to end the war with the United States would require Israel to withdraw from Lebanon — a condition Israel has already rejected and that could sink the agreement, leading to the resumption of all-out war.

    The deal, which is between the U.S. and Iran, has not been made public, and officials have sometimes offered contradictory interpretations of what is in it. While Israel is not party to the agreement, it is part of the war: It joined the U.S. in launching strikes on Iran on Feb. 28, and has since fought the Iran-backed Hezbollah militant group in Lebanon and seized large swaths of that country.

    Iranian Foreign Minister Abbas Araghchi said Israel’s continued occupation of southern Lebanon would violate the deal.

    “Without the withdrawal of Israeli forces from the territories they occupied during this war, the war has not fully come to an end,” Araghchi said.

    A U.S. official, who spoke on condition of anonymity to discuss outlines of the agreement, has said the deal does not call for an Israeli withdrawal. And Israeli Prime Minister Benjamin Netanyahu said Monday that Israel would remain in Lebanon “as long as necessary.”

    The negotiations to end the war have been plagued by such disagreements before, leading to a prolonged but uneasy ceasefire that has failed to develop into a permanent end to hostilities and has left the Strait of Hormuz, a crucial waterway for the world’s energy supplies, effectively shut.

    In other developments, Switzerland’s foreign ministry said the signing ceremony for the deal will take place Friday at the Bürgenstock resort near the city of Luzern. Ministry officials said Tuesday that the location was proposed by Pakistani and Qatari mediators, along with the U.S. and Iran.

    Lebanon tests the durability of the deal

    Pakistan, a key mediator, has said the deal called for an end to military operations, including in Lebanon, as Iran long insisted. But Araghchi’s call for an Israeli withdrawal adds a new wrinkle.

    It puts Israel into a dilemma as it tries to degrade Hezbollah’s military capabilities without undermining an agreement championed by its most important ally, the United States. Israel invaded southern Lebanon after Hezbollah fired missiles across the border during the first week of the war. Since then, it has expanded its military footprint to levels unseen in decades and struck targets deep inside Beirut.

    Though Hezbollah has been weakened, it retains the ability to strike Israel, leaving open questions about the effectiveness of Israel’s campaign.

    As of Tuesday evening, Netanyahu had not seen the memorandum of understanding between the U.S. and Iran, said a person familiar with the situation, who spoke on condition of anonymity to discuss closed-door details. Another person, who also spoke on condition of anonymity to discuss private conversations between Israel and the U.S., said Israeli officials have not asked U.S. negotiators for the memorandum.

    Netanyahu’s office did not immediately respond to a request for comment from the Associated Press. The White House declined to comment on whether Netanyahu or Israeli officials have reviewed the agreement.

    The Israeli ambassador to the U.S., Yechiel Leiter, told NPR that while Israel does not know the details of the deal, the apparent inclusion of Lebanon is “unnecessary and unhelpful.”

    The extent of Israel’s strikes has at times opened a public fracture between its leaders and U.S. President Donald Trump, who told reporters Tuesday that he was “not happy with the way Israel has handled themselves with Lebanon and with Hezbollah.”

    “It just goes on forever,” he said of Israel’s strategy. Israeli strikes in Lebanon have killed nearly 4,000 people, including hundreds of civilians, and displaced more than 1 million. “Israel’s fighting Hezbollah too long, and too many people are being killed,” he said.

    Trump said he’s open to sending the emerging agreement to the U.S. Congress for review.

    Speaking on the sidelines of the Group of Seven summit in the French Alps, Trump said, “I like the idea, send it to Congress please.” He added, “I mean, who wouldn’t approve it.”

    Republicans on Capitol Hill say they want Trump to provide more information about the agreement, with some expressing skepticism that the deal can deter Iran from pursuing a nuclear weapon.

    Israel and the Lebanese government have entered into their own U.S.-mediated direct negotiations, of which Hezbollah was not a part. Those talks have yielded several announced ceasefires that were never implemented on the ground. Lebanese officials initially tried to keep Lebanon separate from the U.S.-Iran negotiations, not wanting to be seen as beholden to Iran, but they have since welcomed the announcement that the deal to end the U.S.-Iran war would include a ceasefire in Lebanon.

    Araghchi’s latest comments appear to match the understanding of two regional officials with direct knowledge of the interim deal. The officials, speaking to AP on condition of anonymity to discuss the closed-door negotiations, said it would require Israel to leave nearly all the territory it occupies in Lebanon, minus a few hilltop points along the border seized earlier.

    The officials say Iran insisted the accord include Lebanon in the last days of the negotiations.

    U.S. allies push to make deal work at G7 summit

    Lebanon is only one of several major questions hanging over the ceasefire ahead of the planned ceremonial signing.

    The agreement is meant to provide a meaningful truce in a monthslong war that has killed thousands across the Middle East, including the top leaders of Iran’s theocracy, and raised the prices of fuel, food, and other basic goods far beyond the region.

    The agreement provides for the “immediate” opening of the Strait of Hormuz and the lifting of the American naval blockade of Iranian ports, according to a senior U.S. official who spoke to reporters Monday on condition of anonymity to discuss outlines of the agreement.

    Pakistani officials who helped broker the agreement also described plans for the simultaneous lifting of Iran’s closure of the strait and the U.S. blockade.

    The United States and Iran will then begin 60 days of negotiations over Iran’s nuclear program and the potential lifting of sanctions, Pakistani officials who helped broker the interim deal said, speaking on condition of anonymity about the unpublished text.

    The pact also includes the possibility of releasing Iran’s frozen funds and a $300 billion fund to help rebuild Iran if Tehran meets certain benchmarks, senior U.S. officials told reporters Monday. Trump later said the United States would not “invest” funds in Iran.

    Regarding the timeline, regional officials who spoke to AP about the deal said the release of frozen Iranian assets would be tied to Tehran implementing the deal. Gulf Arab states also have pledged to inject billions of dollars in Iran’s economy, they added, speaking on the condition of anonymity to discuss the negotiations.

    Iran’s nuclear program, specifically the fate of its stockpile of highly enriched uranium, would be subject to the 60-day clock. Iran has agreed to discuss ways to possibly “dilute or remove” it, the officials said. However, it remains unclear whether Tehran would agree to that, particularly with hard-liners opposed to giving it up.

    U.S. officials have not yet explained how they see the agreement addressing Iran’s nuclear program, including who will be in charge of verifying that Iran is in compliance and who will destroy or remove highly enriched uranium believed to be buried under nuclear sites that were badly damaged by U.S. strikes last summer.

  • Pizza Hut, overtaken by the arrival of delivery culture, will be sold for $2.7 billion

    Pizza Hut, the 68-year-old chain that has long struggled with growing competition and outdated restaurants, will be sold for $2.7 billion by parent company Yum Brands.

    Yum said Tuesday that the private equity firm LongRange Capital will buy Pizza Hut, excluding the mainland China business, for about $1.5 billion.

    The mainland China Pizza Hut will be purchased by Yum China Holdings Inc. for approximately $1.2 billion, the company said. China is Pizza Hut’s second-largest market outside the U.S., accounting for 19% of sales.

    Yum Brands, which also owns KFC and Taco Bell, began to explore its options for Pizza Hut in November. Last year, Yum Brands’ global sales rose 5% but Pizza Hut’s sales fell 2%.

    In February, Yum Brands announced plans to close 250 U.S. Pizza Hut locations. Pizza Hut had 19,974 restaurants worldwide at the end of last year.

    “Pizza Hut has long been the weak link in Yum’s portfolio,” Neil Saunders, managing director of GlobalData, wrote Tuesday. “Despite efforts to revitalize the brand and shut underperforming locations, it has become increasingly clear that pushing the division back into growth will require a level of investment and patience that Yum is just not prepared to commit to.”

    Pizza Hut was founded in 1958 in Wichita, Kan., by two brothers who borrowed $600 from their mother to open the store. They chose the name because their sign only had room for eight letters.

    Pizza Hut’s familiar red roof debuted in 1969 and by 1971 it was the top pizza chain in the world by sales. PepsiCo acquired Pizza Hut in 1977 but spun off its restaurant division — which became Yum Brands — in 1997.

    By the 1980s, Domino’s was the fastest-growing U.S. pizza company, buoyed by its promise of 30-minute delivery. As carryout and delivery grew in popularity, Pizza Hut was saddled with large, dine-in restaurants.

    The chain has been further pinched in recent years by the growth of DoorDash, Uber Eats, and other restaurant delivery companies which marketed access to a slew of cuisines besides pizza.

    By selling Pizza Hut, Yum Brands can focus more on its brands with stronger sales, Yum CEO Chris Turner said.

    “Under LongRange and Yum China, Pizza Hut will be well positioned for future growth with ownership that brings deep expertise in the restaurant industry,” Turner said in a statement.

    Yum Brands, based in Louisville, Ky., expects the sale in U.S. and China to close in the third quarter. The company’s stock closed up 1.9% Tuesday.

  • Trump signals swift return of sanctions on Russian oil as G7 refocuses on Ukraine

    EVIAN-LES-BAINS, France — The United States could soon reimpose sanctions on Russian oil shipments after President Donald Trump and fellow leaders at the Group of Seven summit of major industrialized democracies moved Tuesday to put the war in Ukraine back on top of their agenda, more than four years after Russia launched its full-scale invasion.

    The Iran war has recently overshadowed Ukraine, but Trump said he wants to shift the focus following the announcement of an agreement to end the 3½-month-old conflict in the Gulf.

    Trump said Iran will soon be “back in the rearview mirror.”

    Trump said the sanctions on Russia that were eased during the Iran war to help lower oil prices can go back in place as more oil moves through the Strait of Hormuz.

    “Soon we’ll be able to do that because the oil is now flowing,” Trump told reporters in Evian, the French spa town close to the Swiss border that is hosting the summit. “We’re in a position to do that soon.”

    The U.S. in March temporarily eased some sanctions on some Russian oil shipments as crude prices sharply increased. The waiver has been extended.

    Zelensky joins G7 leaders for talks

    Ukrainian President Volodymyr Zelensky joined the G7 leaders for talks on the war in his country. They wrapped quickly, after just 75 minutes.

    Zelensky said Ukraine is serious about peace while Russia toys with world leaders. “The entire ‘Seven’ supports Ukraine unanimously today,” he said.

    Zelensky added that G7 leaders supported Ukraine’s need for more Patriot missiles and discussed how to increase production by licensing it. Patriot missiles are able to counter Russian ballistic missile attacks on Ukraine’s power grid and cities.

    As the U.S. under Trump has cut back aid to Ukraine, France and its European allies are now the biggest providers of military and financial support to Kyiv.

    Trump downplayed the impact of the Russia-Ukraine war on the U.S. but lamented the death toll.

    “The whole thing is ridiculous,” Trump said. “So, yeah, I’m going to do whatever I can.”

    Meanwhile, the U.K. announced new sanctions targeting the “shadow fleet” Russia uses to ship oil and gas, and the finance networks used by Moscow to evade Western sanctions. The ships targeted include several recently purchased by Russia to transport liquefied natural gas from its sanctioned Arctic LNG 2 project.

    Russia fires again at Ukraine’s biggest cities

    Hours before the summit began Monday, Russia fired hundreds of drones and dozens of missiles at Ukraine’s biggest cities in a barrage that killed 11 people and set fire to a religious landmark.

    The attacks came after Zelensky and Putin spoke separately by phone with Trump on Sunday, the U.S. leader’s 80th birthday.

    While campaigning in 2024 for a return to the White House, Trump claimed he could end the Russia-Ukraine war within 24 hours of taking office. However, negotiations have faltered and Trump has acknowledged it has proved much harder than he thought.

    Ukraine on Monday officially started European Union membership negotiations, launching a process that will require its government to commit to years of political reforms even as it fights the Russian invasion.

    Ukraine sees EU membership as a security guarantee for a stable future once the war ends. Its best guarantee would be membership in the NATO military alliance, but the Trump administration insists that cannot happen, and others are wary of Ukraine joining while the war continues.

    Trump says he may send Iran deal to Congress

    The U.S.-Iran ceasefire deal got plenty of attention at Tuesday’s sessions, with Trump voicing his openness to sending the deal to Congress for review. The text has not been made public.

    “I like the idea, send it to Congress please,” Trump said at the start of a meeting with United Arab Emirates President Sheikh Mohammed bin Zayed Al Nahyan on the summit’s sidelines. He added, “I mean, who wouldn’t approve it?”

    Republicans on Capitol Hill say they want Trump to provide more information about the agreement, with some expressing skepticism that the deal can deter Iran from pursuing a nuclear weapon.

    Trump also met with the Emir of Qatar, Sheikh Tamim bin Hamad al-Thani. The Gulf nations are not part of the G7, but French President Emmanuel Macron extended invitations to their leaders at a fraught moment for their region.

    Trump also expressed frustration over Israel’s continued hostilities with the Iranian-backed militia Hezbollah in Lebanon, telling reporters he’s “not happy with the way Israel has handled themselves with Lebanon and with Hezbollah.”

    Trump said Israeli operations to target Hezbollah “should have been able to deal with them faster,” adding: “It just goes on forever. And when that happens, it throws a negative light on the big deal. And that’s the deal with Iran.”

    Macron said France and other Western partners are “ready to take action very quickly” to help reopen the Strait of Hormuz peacefully to ease the economic impact of rising oil prices. France and the U.K. have championed a mission to restore maritime security there as soon as conditions allow.

    The G7 comprises France, the United States, Canada, Germany, Italy, Japan, and the United Kingdom. Other guest nations, including Brazil, India, Kenya, and South Korea, were invited to participate in some discussions.

  • Iran and U.S. reach an initial deal to end the war and open the Strait of Hormuz but challenges remain

    DUBAI, United Arab Emirates — The United States and Iran reached an initial agreement Monday that would extend their shaky ceasefire and lead to the reopening of the Strait of Hormuz, but significant challenges remain to ending the war, including whether Israel will continue its offensive in Lebanon.

    Details of the deal have not been made public. The U.S. said it was signed electronically on Sunday but that it will not be implemented until a formal signing. Pakistani Prime Minister Shehbaz Sharif, a key mediator, said that will happen Friday in Geneva. Even if the strait — a crucial waterway for the world’s oil and natural gas — fully opens then, it will likely take months for the global energy crisis sparked by its closure to ease.

    Israel joined the U.S. in launching the war on Feb. 28, but it is not party to the deal. The Israeli defense minister said Monday that the country would not withdraw from land seized in Lebanon, where Israel is fighting the Iranian-backed Hezbollah militant group.

    A spokesperson in Prime Minister Benjamin Netanyahu’s office said Israel will continue to defend itself against any threat to its security. That alone could scuttle the deal, since Iran has insisted any agreement to end the war include an end to the fighting in Lebanon.

    The agreement also faces other major challenges. It gives just 60 days to decide what to do about Iran’s stockpile of highly enriched uranium and its nuclear program — which the U.S. and Israel worry could be used to build an atomic weapon, despite Tehran’s insistence that the program is peaceful. It took years for Iran and world powers to negotiate a 2015 agreement to rein in Tehran’s nuclear program.

    President Donald Trump unilaterally withdrew the U.S. from that accord in his first term, setting the stage for the tensions that culminated in the current war, which has killed thousands across the Middle East, including the top leaders of Iran’s theocracy, and raised the prices of fuel, food, and other basic goods far beyond the region.

    The Strait of Hormuz won’t open until the deal is signed

    Early in the war, Iranian attacks on ships brought traffic in the Strait of Hormuz — through which a fifth of the world’s oil and natural gas passed before the conflict — to a near standstill. Trump implemented a blockade in response.

    Iran’s deputy foreign minister, Kazem Gharibabadi, said Iran would not start implementing the agreement until after the signing ceremony. The U.S. military said the blockade will remain in place “pending execution” of the deal.

    “Do not attempt to cross until explicit direction is given,” it said Monday in an advisory to merchant ships.

    Trump, who faced pressure to end the war ahead of congressional midterm elections in November, said that “a lot of great things are going to happen in the Middle East right now.”

    “Very importantly, the oil is plummeting down, and the stock market is shooting up like a rocket today,” he said Monday at the G7 summit in France.

    While the agreement provides for the “immediate” opening of the strait and lifting of the blockade, the process will take time because there are mines in the strait, and ships are unwilling to risk traversing it, according to a senior U.S. official who spoke to reporters on condition of anonymity to discuss outlines of the agreement.

    Details remain scant but expected soon

    A second senior U.S. official told reporters that details of the agreement would be released within the next two days.

    The memorandum of understanding includes the possibility of releasing Iran’s frozen funds, easing sanctions, and creating a $300 billion fund to rebuild Iran — all of which would be tied to Iran meeting benchmarks, the official said.

    The officials said technical talks would begin on Friday after the signing ceremony and that Vice President JD Vance would lead negotiations for the U.S.

    Israel says it won’t withdraw from Lebanon

    The success of the deal rests at least partially on what happens between Israel and Hezbollah in Lebanon. Israel’s bombing of Beirut’s southern suburbs on Sunday nearly derailed the negotiations, and a previous attack led Iran to fire on Israel and Israel to fire back.

    Defense Minister Israel Katz said Israel plans to stay “indefinitely” in land it holds in Lebanon, Syria, and the Gaza Strip. He also threatened that if Iran attacks Israel over its strikes in Lebanon, Israel will strike Iran with “great force.”

    Asked where Israel stands on the deal, David Mencer, a spokesperson in Netanyahu’s office, told the Associated Press that Israel and the U.S. remain fully aligned on preventing Iran from obtaining nuclear weapons. But he added that Israel will not tolerate attacks from Hezbollah on its territory.

    Israel and the U.S. began the war apparently in lockstep, but the war has created deep fractures in that close relationship, with Trump eager to end a conflict that is deeply unpopular with the American public and Netanyahu intent on destroying Hezbollah. Trump appears to have grown increasingly frustrated with the Israeli leader, even occasionally publicly insulting him, including telling the New York Times on Sunday that he was a “very difficult guy.”

    Many Lebanese travel to check on homes

    In a sign of the deal’s fragility, the Lebanese army called on residents not to rush to return to border villages, saying they should follow military instructions because of the danger of “Israeli violations and aggression.”

    Many Lebanese who had fled following Israeli evacuation orders and intense fighting were heading south, however, to check on their homes. Celine Fayad, driving south, said she will test how far she could go. Her village, Aitaroun, is along the border with Israel. It was among the first to be occupied and lies in ruins.

    “We were expecting to return,” she said. “Thanks to Iran.”

    Ali Haidar was among the first to return to Nabatiyeh, the southern city at the heart of the latest Israeli military operations, where many central buildings have been reduced to dust.

    “This used to be our home, our childhood home where we have all of our memories. This is where we grew up. Now it’s gone,” Haidar said. “We will return to rubble and sand. It’s better than being displaced.”

    Hezbollah, meanwhile, credited Iran with a “major achievement” in reaching the agreement, which it said could lead to “the full liberation of our land, the return of our prisoners to their homeland and families,” and reconstruction of war-devastated areas.

    Along with praising the deal, the militant group said it was committed to resisting Israel “until full withdrawal is achieved.”

    World leaders welcome the deal

    Despite the uncertainties, world leaders from Europe to China welcomed the agreement. French President Emmanuel Macron, who is hosting Trump and other world leaders at a Group of Seven summit this week, said France and other Western partners are “ready to take action very quickly” to help restore normal shipping traffic in the strait once the U.S. and Iran agree to such a mission.

    Others have expressed caution that the deal remains tentative. Luxembourg’s foreign minister, Xavier Bettel, noted: “It’s a long time till Friday.”