Defense Says American Charged in Ghosn Pay Case Not Involved

FILE - In this Aug. 18, 2021, file photo, former Nissan Motor Co. executive Greg Kelly speaks during an interview with The Associated Press in Tokyo. Eugene Hoshiko/AP
FILE - In this Aug. 18, 2021, file photo, former Nissan Motor Co. executive Greg Kelly speaks during an interview with The Associated Press in Tokyo. Eugene Hoshiko/AP
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Defense Says American Charged in Ghosn Pay Case Not Involved

FILE - In this Aug. 18, 2021, file photo, former Nissan Motor Co. executive Greg Kelly speaks during an interview with The Associated Press in Tokyo. Eugene Hoshiko/AP
FILE - In this Aug. 18, 2021, file photo, former Nissan Motor Co. executive Greg Kelly speaks during an interview with The Associated Press in Tokyo. Eugene Hoshiko/AP

The defense for former Nissan executive Greg Kelly said Wednesday there was no evidence or motives linking him to alleged under-reporting of his ex-boss Carlos Ghosn’s compensation.

Kelly’s chief defense lawyer, Yoichi Kitamura, said in wrapping up the defense’s arguments that Kelly is innocent and he had no knowledge of the complex calculations over Ghosn’s unpaid remuneration, tabulated and updated by Nissan Motor Co. secretariat official Toshiaki Ohnuma.

Kitamura told the Tokyo District Court prosecutors had presented no evidence of exchanges about Ghosn’s compensation between Kelly and Ohnuma.

“Kelly was not involved at all,” Kitamura said.

Kelly, who sat quietly with the defense lawyers wearing his usual red tie and dark suit, pleaded innocent at the opening of the trial a year ago.

Kitamura also stressed Kelly had been just trying to find legal ways to pay Ghosn after Ghosn's retirement.

“Greg Kelly is a lawyer. Even if he had wanted to prevent Carlos Ghosn from leaving, would he have committed a crime?” said Kitamura, who is famous in Japan for winning acquittals in a nation with a conviction rate higher than 99%.

“There is no motive at all for Kelly to carry out such an illegal act.”

Kelly, an American, was in semi-retirement in the US when Nissan lured him back to Japan, on the pretext of attending a meeting. He was arrested in November 2018, at the same time as Ghosn. But Ghosn jumped bail and fled to Lebanon in late 2019. Lebanon does not have an extradition treaty with Japan.

At the center of the case is a 1 billion yen ($9 million) a year pay cut Ghosn voluntarily took, starting in 2009, when disclosure of big executive salaries became legally required in Japan. Ghosn was worried about a public backlash as hefty executive pay packages are not common in Japan.

Prosecutors say that money, totaling about 9 billion yen ($80 million) should have been reported as compensation even though it was never paid or stipulated in a formal contract.

In wrapping up their arguments last month, prosecutors demanded two years in prison for Kelly. A verdict is not expected until March.

Critics of Japan's judicial system have blasted the cases against Ghosn and Kelly as “hostage justice."

Ghosn told The Associated Press in a recent interview he believes there was a conspiracy, concocted by officials at Nissan who feared greater control by French alliance partner Renault.

“Greg is paying the price of his honesty and his being straightforward,” Ghosn said of Kelly. “He is the only person who isn’t lying in the process.”

In a sign that Kelly is gaining support back home, Rahm Emanuel, former Chicago mayor, President Joe Biden's nominee for ambassador to Japan, told a Senate committee confirmation hearing last week that looking into Kelly’s case was “a top priority.”

“The No. 1 responsibility of an embassy and an ambassador is to make sure the safety, and ensure the safety, of a US citizen on foreign soil,” he said in response to a question from Republic Sen. Bill Hagerty of Tennessee, the state where Kelly lived before his arrest.

“You have my word,” Emanuel said.

Hagerty, ambassador to Japan until mid-2019, said Kelly’s human rights were violated, and his name should be cleared.

Nissan, the automaker behind the Leaf electric car and Infiniti luxury models, did not fight charges in the same trial as a corporate entity.

Separately, two Americans extradited from the US on charges of helping Ghosn escape Japan were convicted in July. Michael Taylor was sentenced to two years in prison. His son Peter Taylor was sentenced to a year and eight months.



Despite Sharp Decline, Inflation Remains a Sore Point for Harris

Democratic presidential nominee and US Vice President Kamala Harris delivers a speech at The Alan Horwitz "Sixth Man" Center, a youth basketball facility, as she campaigns in Philadelphia, Pennsylvania, US October 27, 2024. REUTERS/Evelyn Hockstein
Democratic presidential nominee and US Vice President Kamala Harris delivers a speech at The Alan Horwitz "Sixth Man" Center, a youth basketball facility, as she campaigns in Philadelphia, Pennsylvania, US October 27, 2024. REUTERS/Evelyn Hockstein
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Despite Sharp Decline, Inflation Remains a Sore Point for Harris

Democratic presidential nominee and US Vice President Kamala Harris delivers a speech at The Alan Horwitz "Sixth Man" Center, a youth basketball facility, as she campaigns in Philadelphia, Pennsylvania, US October 27, 2024. REUTERS/Evelyn Hockstein
Democratic presidential nominee and US Vice President Kamala Harris delivers a speech at The Alan Horwitz "Sixth Man" Center, a youth basketball facility, as she campaigns in Philadelphia, Pennsylvania, US October 27, 2024. REUTERS/Evelyn Hockstein

For six months or so in 2021, as vaccines paved an economic reopening from the COVID-19 pandemic and fresh waves of federal benefits flowed to household bank accounts, President Joe Biden's administration reaped the benefit with an approval rating pinned above 50%.
It has been mired around 40% ever since, with the scarring impact of subsequently high inflation still cited by voters as a major issue even though the pace of price increases has declined, wages and the economy continue to grow, and the jobless rate remains low, Reuters said.
As good as the economy might seem across most major indicators, inflation that peaked at 9% more than two years ago has been hard for Vice President and Democratic nominee Kamala Harris to outrun, and given former President and Republican candidate Donald Trump a cudgel that remains effective on the eve of the election even as inflation has dwindled to 2.4%.
"Inflation has not faded as an issue," said Justin McCarthy, a spokesperson for Gallup, the polling giant that fields monthly surveys that include an open-ended question, without lists or prompts, of what respondents feel is the "most important" issue facing them. Those citing inflation as the most serious issue has fallen from highs of around 20% during the peak inflation surge in 2022 to around 15% in recent polls, but that remains double the historic norm and is part of broader concern about the economy cited by more than 40% of respondents.
It's an area where Trump continues to hold a polling edge despite Harris' pledges to address issues like high housing costs or the "price gouging" she cites as a cause of high prices in the grocery aisle.
In a recent Reuters/Ipsos poll, 68% of respondents in seven swing states said the cost of living was "on the wrong track," and 61% said the same about the economy. Half said Trump had "a better plan, policy or approach" to managing the economy compared with 37% for Harris, while on inflation Trump was favored 47% to 34%.
In-person voting concludes on Tuesday, with polls showing an overall tight race between Harris and Trump nationally and in the battleground states seen as determining the outcome.
The Biden administration and later the Harris campaign recognized early on the problem inflation posed.
Biden named one of his signature pieces of legislation the "Inflation Reduction Act," though much of it focused on subsidies for electric vehicles and clean energy. As rising rent and housing prices emerged as a particularly acute issue, they launched proposals that included capping rent increases, tax incentives for affordable housing construction, and downpayment help for first-time home buyers.
What they didn't publicize so much is how sticky a problem it would be for the households living through it.
Attitudes improved somewhat as inflation began to ease last year, but the change only went so far.
'UNAMBIGUOUSLY NEGATIVE'
Solutions have been offered by both campaigns, but inflation, the responsibility first and foremost of the Federal Reserve through its management of interest rates and credit conditions, is difficult for elected officials to address.
Republican President Richard Nixon tried the direct route by freezing wage and price increases for 90 days in 1971 and establishing a government panel to approve them after that. Inflation was 4.3% at the time and did fall below 4% in the summer of 1972 as Nixon campaigned for reelection.
But it soared that fall as the controls were eased, and following an embargo by Arab oil exporters in 1973 exceeded 12% by the end of 1974.
When inflation started rising during his term in office, Democratic President Jimmy Carter used a major address in 1978 to announce plans to limit government spending and call for voluntary wage and price limits from business. By the middle of his losing reelection bid against Republican Ronald Reagan prices were rising more than 14% annually.
After two recessions, a period of punishing interest rates imposed by the Fed and its firmer commitment to inflation control, price increases gradually settled close to the 2% level the central bank eventually adopted as its official target - and stayed there until the COVID-19 pandemic.
Economists have sparred over the exact reasons inflation took off beginning in 2021, and if that could have been prevented. But they generally agree on the broad mix. As the pandemic limited spending on in-person services, it also created deep backlogs in the manufacture and delivery of the goods, from bikes to appliances to automobiles, that were suddenly in high demand as a result of roughly $5 trillion in stimulus from the federal government.
The pandemic support began under Trump; Biden added more in a move some economists feel may have supercharged demand beyond what was needed.
It is a debate being litigated in hindsight and in the shadow of a health crisis that lingered long enough - new COVID variants were still suppressing in-person gatherings through 2021 - to even implicate the Fed. Inflation took off in 2021; the central bank did not raise rates until March 2022.
What doesn't seem in doubt is the impact on the public mood, something that shouldn't be a surprise.
Surveys about inflation have been consistent in finding that price shocks register deeply and are not quickly forgotten.
"Inflation significantly complicates household decision-making, which is seen as its most critical consequence," researchers Alberto Binetti of Bocconi University and Francesco Nuzzi and Stefanie Stantcheva of Harvard University concluded from the results of an online survey of 2,264 people conducted between March and May. "This complexity affects daily economic choices" and adds to economic uncertainty.
Nor do people seem to care much if, as has happened recently and Democrats have tried to emphasize, wages rise faster than prices.
"Inflation is perceived as an unambiguously negative phenomenon without any potential positive economic correlates," they found, with people expecting it to be fixed "without significant trade-offs."