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* * * * * * MONDAY, JANUARY 11, 2016 ~ VOL. CCLXVII NO. 8 WSJ.com HHHH $3.00
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Security Concerns Reverberate Throughout Europe

Fed Eyes
Old Rule
Business & Finance
To Bolster
T he Fed is moving for-
ward with plans to alter
margin rules for securities- BY RYAN TRACY
financing transactions under
a recent global accord. A1 WASHINGTON—The Federal
Reserve is dusting off a legal
 U.S. public pension plans
power it has largely ignored for
and mutual funds are hold-
four decades, a move that could
ing more cash than they
significantly expand the Fed’s
have in years amid concern
influence over financial markets.
about volatile markets. C1
Margin requirements—rules

 Drugmakers have raised limiting what portion of stocks

U.S. prices for dozens of or bonds can be purchased
branded drugs since late De- through borrowing—are moving
cember, with many increases up the Fed’s to-do list as offi-
between 9% and 10%. B1 cials fret about whether they
have adequate tools to suppress
 Proxy access is being em-
dangerous asset bubbles that
braced by more U.S. compa-
could lead to another financial
nies, giving shareholders
crisis. They also allow the Fed to
more power to oust directors
exert influence on all financial
and influence strategy. B1
firms, not just banks.
 China shares fell early A little-noticed global agree-
Monday, and losses in other re- ment recently paved the way for
gional markets deepened with ON WATCH: French gendarmes inspected a refugee camp in the northern coastal town of Grande-Synthe near Dunkirk on Sunday. the central bank to move for-
the resumption of trading. C3 ward with plans to alter margin
requirements. Under the accord
 Apple mistakenly has been

announced Nov. 12, regulators
underestimating the number
representing 25 economies
of readers using its News app
agreed to adopt rules similar to
and passing the inaccurate in-
ones the Fed is developing, a
formation on to publishers. B1
united front intended to prevent
 Kohl’s is debating whether financial firms from moving
to pursue steps such as tak- German chancellor’s lor Angela Merkel since she Meanwhile, a growing suspected attackers were mi- transactions offshore in re-
ing itself private or break- threw open Germany’s borders number of people, largely grants. sponse to tighter Fed rules.
ing up the company. B3 open-door migrant to refugees last summer. women, have reported being The assaults and fresh evi- Margin works as protection
 Citigroup is pushing to policy is questioned at On Sunday, German officials robbed and sexually assaulted dence of other security risks for lenders financing securities
disclosed that the man French on New Year’s Eve by mobs of linked to migrants bring new purchases. If an investor wants
ramp up stock trading amid home and abroad authorities say tried to attack a what many described as difficulties to Ms. Merkel’s ef- to borrow $100 for a day, a
a slump in its traditional en-
Paris police station in an Islamic largely North African or Arab- forts to preserve her open- lender might ask the borrower
gines of trading revenue. C1
BY ANTON TROIANOVSKI State-inspired assault last week looking men. In Cologne, door refugee policy and get to post a bond worth $105, leav-
 Alcoa plans to announce had been living at a German ref- where most of the assaults other European Union coun- ing a $5 margin in case the
a $1.5 billion long-term sup- COLOGNE, Germany—The ugee shelter—adding more fuel have been reported, police tries to agree on a common re- value of the bond drops.
ply contract with General aftershocks spreading from al- to a debate that has exploded said 516 complaints had been sponse to the migration crisis. Unlike earlier Fed margin
Electric’s aviation unit B3 legations of New Year’s Eve over the security threats tied to filed by Sunday—40% of them Please see MERKEL page A8 rules, which focused largely on
assaults by migrants in Ger- the arrival of more than 1 mil- for sexual offenses, including Please see FED page A2
World-Wide man cities have provoked the lion asylum seekers in Germany at least two rape allega-  Professor’s views on Islam
biggest challenge to Chancel- over the past year. tions—and that many of the divide a U.S. college............... A2  Latest fund fashion: cash.... C1

 Merkel’s refugee policy


is facing its biggest chal-
lenge amid aftershocks from
allegations of assaults by mi-
grants in German cities. A1
 The suspect in an attack
on a Paris police station had
been living at a German refu-
gee shelter, officials said. A8
 Clinton and Sanders Companies look for ways to get inside vehicles, but customers are wary
are deadlocked in Iowa

and New Hampshire, while

BY LESLIE SCISM devices installed in custom- “I know some people say,
the GOP race remains tight

ers’ cars, Progressive and ‘What do you have to hide,’

in Iowa, a poll found. A1
MAYFIELD VILLAGE, other auto insurers are track- but I don’t want big business
 Trump is stepping up his
Ohio—In a lab at Progressive ing things like how far their or Big Brother being involved
attacks on Cruz, question-
Corp.’s suburban headquar- customers drive and how of- in my personal life,” says
ing the Texas senator’s eli-
ters, managers and techni- ten they slam on the brakes. Shauna Aiken, a San Diego
gibility to be president. A4
cians at the auto-insurance For decades, insurers have driver of a Mazda Miata. “It
 U.S. military officials ex- giant watch a colleague drive relied heavily on lumping ap- just creeps me out.”
pressed qualified optimism from his home outside Cleve- plicants into broad actuarial At a time when industries
about the recent successes land to the city zoo. A dot on categories by characteristics such as advertising, media
by Iraqi forces against Is- a computer screen moves such as age, gender and car and technology are being re- MEDIA | B7
lamic State in Ramadi. A8 along a map overlaid with type to supplement informa- shaped by an explosion of
speed limits, turning red tion gathered from driving re- personal data, the effort by
At the Golden Globes
 The U.S. flew a B-52
when the driver is speeding. cords. Now, they are collect- auto insurers is turning into a
bomber near North Korea in
The demonstration is part ing reams of personal data in test of the extent to which Films including ‘The Revenant’ and ‘The Martian,’ which earned Leonardo
a bid to pressure Pyongyang
of an effort to figure out how hopes of drawing much more Americans are willing to DiCaprio and Matt Damon awards, were honored Sunday night.
after its nuclear test. A16
location data could someday tailored conclusions. share private details for po-
 Congressional Democrats be used to assess drivers, as The catch is the industry tential economic benefit.
are pressuring the White the roughly $185 billion auto- needs its customers’ consent Progressive, Allstate Corp. JOURNAL REPORT | R1
House to hold Iran account- insurance industry undergoes to gather the information, and State Farm Mutual Auto-
able for missile tests. A3 a wholesale change in how and many customers are mobile Insurance Co. are pro-
Investing in Funds & ETFs
companies size up risk. Using wary. Please see CARS page A12
 Officials are investigating
After a bad 2015 for emerging markets, investors might be tempted
a claim that a man accused of
to jump in. There are things they need to consider.
These Experts Plot to Keep the Sci in Sci-Fi
ambushing a Philadelphia po-
liceman had radical links. A2
 Guzmán’s interview with
actor Sean Penn helped lead
Mexican authorities to the
i i i

Scientists help writers make films ‘plausible-ish’; 844-NEED-SCI

Clinton Faces a Test
drug lord’s hideout. A10
 Egypt’s first parliament in
nearly four years was sworn
BY ERICH SCHWARTZEL making that is the aim of the
As Iowa Race Tightens
loft party’s host, a behind-the- BY PATRICK O’CONNOR Sanders edges the former sec-
in. Its makeup reflects Sisi’s
LOS ANGELES—Will Mat- scenes organization that links retary of state among likely
tightening grip on power. A9
thews and Jeffrey Addiss needed scientists with writers who want Democrats Hillary Clinton primary voters in New Hamp-
to end the world. a dose of scientific accuracy in and Bernie Sanders are dead- shire, 50% to 46%. Both leads
CONTENTS Money & Inv.....C1-C6 They found an accomplice at their movies, television shows locked in both Iowa and New are within the polling margins
Business News...B1-7 Opinion................A13-15
Crossword...................B7 Sports............................B8 a loft party here last fall. The and books. Hampshire three weeks before of error.
Election 2016......A4,6 Technology.................B6 two screenwriters approached a Mr. Addiss says Dr. Johnson’s voting begins in the 2016 pres- The survey underscores the
Global Finance.........C3 U.S. News.......A2,3,4,6 theoretical physicist, Clifford black hole is now the script’s idential race, a new Wall challenge Mrs. Clinton faces in
Heard on Street......C6 Weather.......................B7
Journal Report... R1-12 World News... A8-10,16
Johnson, explaining that for a likely scenario. Regarding Earth, Street Journal/NBC News/Mar- the first two nominating
screenplay they wanted ideas “he showed us how we can re- ist poll finds. Please see RACE page A4
for offing Earth in Hollywood ally mess it up.” The Republican primary
> fashion—“in a popcorn way,” A black hole Parties like this spotlight a contest also remains tight in
Mr. Matthews told him. plot twist in Hollywood: As mu- Iowa.
A black hole, the physicist re- plained scientifically, offered Dr. tants, superheroes and interga- Mrs. Clinton holds a slim,
plied, would do nicely. Johnson, a University of South- lactic warfare fill multiplexes in 48%-to-45% lead over the Ver- More coverage of
s Copyright 2016 Dow Jones &
That phenomenon was “much ern California specialist in quan- an age of intense audience scru- mont senator among likely the presidential campaign
Company. All Rights Reserved more interesting” than anything tum fields and gravity. tiny, filmmakers need good sci- Democratic caucusgoers in A4, A6
in most movies and could be ex- It was just the kind of match- Please see SCI-FI page A12 Iowa, the survey found. Mr.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A2 | Monday, January 11, 2016 * *** THE WALL STREET JOURNAL.

Beijing’s Intervention Is Worsening Market Turbulence
he convulsions in ter a series of ad hoc mea- resurrected a pledge to man- stimulate demand more
China’s stock and cur- sures taken to halt the stock The Gravitational Pull of Market Forces age the currency against a broadly and ease the transi-
rency markets this past bubble’s collapse last sum- Investors have responded to slowing growth in China by driving basket of currencies rather tion for laid-off workers into
week fanned investors’ worst mer, China’s securities regu- down both its shares and its currency, prompting periodic than just the dollar, which new jobs. People’s Daily On-
fears: The world’s second big- lator proposed circuit break- intervention by the government. appeared to be the justifica- line, a party mouthpiece,
gest economy is in trouble ers that would halt trading tion for engineering another quoted an “insider” as saying
and the authorities are pow- for 15 minutes if the main Chinese devaluation in the past week. that “turbulence cannot be
erless to fix it. stock index rose or fell more yuan vs. the entirely avoided, but it is
U.S. dollar 6.3 yuan

The truth is less frighten- than 5%, and for the day if it 6.5934 eteriorating funda- worthwhile turbulence.”
ing, but still moved more than 7%. mentals, not just spec- Such rhetoric isn’t new. A
THE fraught. China is “It was a sincere attempt ulation, are weighing year after becoming Commu-
OUTLOOK trying to shift on the part of regulators to on stocks and the currency. nist Party chief in 2012, Xi
GREG IP economic growth have a mechanism to prevent Scale is inverted to show The slowdown has been led Jinping pledged to give mar-
AND BOB to a slower, safer panic,” said David Dollar, a a weakening yuan by heavy industry and real kets a “decisive” role. But re-
DAVIS path, one less China expert at the Brookings 2015 estate, which are plagued by ality has been different. An
dependent on Institution. excess capacity and unsold overhaul of state-owned en-
capital spending But the collar was far too Shanghai property, in part the conse- terprises unveiled in Septem-
and debt. Chinese techno- narrow, perhaps reflecting an Composite quence of stimulus ordered ber suggested bureaucrats
Index 4,500
crats know that means open- aversion to the market’s in- Friday up by the government that would seek to merge compa-
ing to ever more market herent volatility. Shortly after 3186.41 helped repel the recession. nies suffering from excess ca-
forces, but its ruling elite is the circuit breakers took ef- 3,500 Economists at UBS esti- pacity, rather than let such
still not willing to accept that fect last week, they were mate that if China’s growth companies fail.
loss of control. triggered as downbeat news slumped to 4% this year (ver- This may be less disrup-
China’s economy is now and a falling yuan spurred 2,500 sus their forecast 6.2%), it tive economically and politi-
open enough that the Com- selling. Investors rushed to 2015 would slice half a point off cally in the short run because
munist Party can’t simply sell more. That made it a Source: WSJ Market Data Group THE WALL STREET JOURNAL. U.S. growth, 0.8 point off Eu- it would avoid loan defaults
state its preferred outcome foregone conclusion the cir- rope’s and 2.6 points off and minimize job cuts. But
and expect it to happen. In- cuit breakers would be trig- When the economy began accelerated and the yuan’s Japan’s. This is why global Haibin Zhu of J.P. Morgan
vestors inside and outside gered again. The halts to slow last year and the Peo- value in offshore markets fell stock and commodity prices notes that means debt will
the country have a say, too. sparked anxiety that spilled ple’s Bank of China cut inter- sharply below its more con- have been so sensitive to Chi- keeping mounting, productiv-
The result: As growth slows, over to other countries. est rates, investors naturally trolled onshore value. nese developments. ity and growth will slide fur-
its leaders repeatedly try to A similar tension afflicts sought to take capital out of The PBOC resisted those At their Central Economic ther, and rolling over loans to
tame the accompanying mar- currency policy. China has the country. The PBOC re- pressures, intervening heavily Work Conference in Decem- “zombie companies will
ket turbulence, often making long strictly controlled flows sponded by devaluing the to buy up yuan. It also inter- ber, party leaders recognized crowd out the financing for
matters worse. Whether that of capital across its borders, yuan last August. vened in the offshore yuan some slowdown was inevita- other companies (especially
interventionist instinct ulti- which helped it keep the China’s political leaders, market to beat back selling ble when they prioritized re- from new sectors).”
mately derails the economy’s yuan closely pegged to the to whom the PBOC reports, pressure, while other officials ducing excess capacity. That In the long run, then, it
transformation is very much dollar. But to make the yuan had a more expedient motive: ordered banks to crack down conference also suggested might be better for China,
an open question. a more widely held global re- bolster exports and growth. on currency speculators. that monetary and fiscal pol- and the world, that it suffer
This past week’s plunge serve currency, it has gradu- As investors expected more Then, as the dollar icy would be used not to prop the turbulence of market
exemplifies the challenge. Af- ally relaxed those controls. of the same, capital outflows marched higher, the PBOC up obsolete industries, but to forces now.

Police Told Suspect Had Links to Radicals Professor

BY SCOTT CALVERT Donald King, a neighbor of
Mr. Archer’s mother, said in an
A citizen told a Philadel-
phia police officer Saturday
that Edward Archer, accused
interview on Sunday that Mr.
Archer was “always peaceful”
when the two talked on the
For Views
of shooting a police officer
three times in a late-night am-
bush Thursday, “had an affili-
street. Mr. Archer never
brought up Islam, said Mr.
King, who lives across from
On Islam
ation to a group with radical Mr. Archer’s mother in Lansd- BY DOUGLAS BELKIN
beliefs,” a spokesman for the owne, Pa., where he said Mr.
Philadelphia police said. Archer often stayed. CHICAGO—A professor’s ef-
Police and the Federal Bu- Mr. King said Mr. Archer, fort to express solidarity with
reau of Investigation are in- who wore Muslim dress and Muslims by wearing a head
vestigating the claim, the was usually alone, once scarf and saying that Chris-
spokesman said in the state- worked for a group that helps tians and Muslims worship the
ment released Sunday. troubled youth. “I would never same God is dividing a small
Philadelphia police officials expect this type of behavior private Christian school as her

on Friday said Mr. Archer told from him,” said Mr. King, 32 tenured position hangs in the
detectives he was inspired by years old. balance.
the extremist group Islamic Defense attorney Doug Dolf- Professor Larycia Haw-
State when he opened fire on man, who briefly represented kins, placed on administrative
33-year-old Officer Jesse Hart- Mr. Archer in a 2012 assault leave and awaiting a hearing
nett’s marked cruiser at a case in Philadelphia, said he before nine faculty members at
West Philadelphia intersec- doubted Mr. Archer’s alleged Wheaton College in suburban
tion. Commissioner Richard claim that Islamic State in- Chicago, told reporters last
Ross said police didn’t know if Law enforcement officials outside the home of Edward Archer in Yeadon, Pa., on Friday. Mr. Archer spired last week’s attack. week she “is flummoxed and
Mr. Archer has any connection is accused of opening fire on a Philadelphia police officer on Thursday. “He’s just somebody who flabbergasted” by the school’s
to the group or acted on his was a lone wolf who just response but won’t cower “in
own. what motive he might have tempted murder, aggravated at a Philadelphia jail, Mon- wanted to make a name for fear of the enemy of the
The FBI is continuing to in- had,” FBI Special Agent Eric assault on a police officer, day’s planned sentencing of himself because he knew he month” as defined by “funda-
vestigate whether trips Mr. Ruona said in an interview. gun-related offenses and re- Mr. Archer in an unrelated had a case coming up,” Mr. mentalists of every stripe.”
Archer made to Saudi Arabia “I don’t want to be prema- lated charges. A preliminary case in neighboring Delaware Dolfman said, referring to his Ms. Hawkins, a 43-year-old
and Egypt in recent years ture and say there aren’t any hearing is set for Jan. 25. County, Pa., will be postponed, sentencing date in Delaware associate professor of political
have any connection to Thurs- connections, because it just Court records show Mr. Ar- officials there said. County. science, announced on Face-
day’s attack on Mr. Hartnett, takes time to figure that out,” cher is represented by the De- In November, Mr. Archer Mr. Dolfman recalled Mr. book she was donning the hi-
who is recovering from his in- said Mr. Ruona. He said Mr. fenders Association of Phila- was convicted of forgery and Archer as a “very flamboyant, jab during the pre-Christmas
juries. Archer, 30 years old, spent a delphia, which provides legal other charges stemming from loud, boisterous character, a season of Advent. She said her
“At this stage it’s still too couple of weeks in Saudi Ara- services to indigent criminal a minor hit-and-run incident little bit paranoid.” aim was to show support for
early for us to make any de- bia in October and November defendants. No one from the in 2014. In the 2012 case, Mr. Archer Muslims amid a rise in anti-
termination on whether or not 2011, and several months in association could be reached A conflicting picture of Mr. pleaded guilty to simple as- Islamic sentiment after the
[Mr. Archer] was involved Egypt during 2012. on Sunday. Archer emerged in recent sault and carrying an unli- terrorist attacks in Paris and
with any terrorist groups, or Mr. Archer is accused of at- With Mr. Archer being held days. censed gun. San Bernardino, Calif.
School officials said they
had no problem with the hijab
Readers can alert The Wall Street
FED ing it publicly with greater fre-
quency. Shortly after the mid-
November global agreement,
Daniel Tarullo, the Fed’s regula-
can cause volatile price swings
during stressful periods. Margin
requirements could exacerbate
that problem if they make it
man Alan Greenspan spear-
headed a deregulatory push at
the central bank and other fi-
nancial authorities.
or her support for Muslims,
but took offense at comments
in her Facebook post in which
she said Muslims and Chris-
Journal to any errors in news Continued from Page One tory czar, gave a speech stating even harder for banks to partici- Now, Fed officials and others tians worship the same God.
articles by emailing stock purchases, the new rules the Fed will be developing the pate in the market. say modernized margin require- That conflicts with the school’s
wsjcontact@wsj.com or by calling
888-410-2667. being crafted by the central rules and touting them as “a “These rules may improve ments are one of the few tools statement of faith, which holds
bank would apply to securities- mechanism for limiting the the markets’ security, but they available to curb some of the de- that God consists of the father,
financing transactions, a mul- buildup of leverage in the finan- may well undermine their li- stabilizing excesses exposed the son and the Holy Spirit.
THE WALL STREET JOURNAL titrillion dollar market involving cial system” as memories of the quidity because you have fewer during the 2008 financial col- Muslims don’t believe in the
(USPS 664-880) repurchase agreements, or re- rough times fade. players” in a time of stress, she lapse. Trinity.
(Eastern Edition ISSN 0099-9660) pos, for stocks and bonds, as Unlike most of the central said. Democratic presidential “As they participate in vari-
(Central Edition ISSN 1092-0935) well as lending of securities. bank’s regulatory authority, this The Fed’s return to margin front-runner Hillary Clinton has ous causes, it is essential that
(Western Edition ISSN 0193-2241)
Editorial and publication
Wall Street firms of all rule would reach beyond banks requirements is symbolically said she would seek to impose faculty and staff engage in and
headquarters: stripes use the transactions as a and across the entire financial significant, a kind of throwback margin requirements globally to speak about public issues in
1211 Avenue of the Americas, source of short–term leverage, system, affecting investment to an earlier era of empowering limit borrowing outside the ways that faithfully repre-
New York, N.Y. 10036 borrowing that allows them to funds and other nonbank play- regulators to try to steer mar- banking system. sent the college’s evangelical
Published daily except Sundays and make more bets and boost re- ers, reflecting the Fed’s growing kets. Until 1974, the Fed regu- Fed officials have suggested Statement of Faith,” the school
general legal holidays. Periodicals turns on winning trades. But concern about what has been larly tinkered with the amount the task of crafting new margin said in a statement.
postage paid at New York, N.Y., and such leverage also amplifies called shadow banking. rules has taken on more urgency The debate is roiling the
other mailing offices.
losses on losing bets, and these And unlike most of the Fed’s as other new regulations ad- college as students return
POSTMASTER: Send address changes to
transactions were at the heart of recently expanded powers, this
The new margin opted to force large banks to Monday to the campus in
The Wall Street Journal, 200 Burnett Rd.,
Chicopee, MA 01020. the collapse of Lehman Brothers one doesn’t come from the 2010 requirements let the rely less on short-term funding Wheaton, Ill., 20 miles west of
All Advertising published in The Wall Holdings Inc., igniting the finan- Dodd-Frank financial-overhaul bite with more severity. This in- Chicago, after a holiday break.
Street Journal is subject to the cial crisis. act responding to the financial
Fed exert influence creases the potential for regula- “It’s extremely divisive
applicable rate card, copies of which The U.S. Office of Financial crisis but goes back to the 1934 on all financial firms. tory arbitrage, in which risky fi- right now,” said Kirkland An,
are available from the Advertising Research recently estimated the Securities Exchange Act enacted nancial activity moves outside editor of the student paper.
Services Department, Dow Jones & Co.
Inc., 1155 Avenue of the Americas,
securities-financing transaction after the Great Depression, banks and outside the Fed’s Alicia Artis, a senior,
New York, N.Y. 10036. The Journal market is worth about $4.4 tril- when policy makers blamed a of margin, or collateral, required reach. said she is organizing a stu-
reserves the right not to accept an lion, less than the crisis peak but debt-fueled stock frenzy for ex- by an investor to purchase “Understanding that eventu- dent sit-in at the college presi-
advertiser’s order. Only publication of still substantial. acerbating the 1929 Great Crash. stocks, raising or lowering the ally this is going to drive that dent’s office on Monday to ex-
an advertisement shall constitute final The new rules would exempt Fed officials will also have to figure when officials considered business outside of the regu- press displeasure with what
acceptance of the advertiser’s order. Treasurys and U.S. agency secu- consider how new margin re- American stocks overly, or insuf- lated realm, you want to have a she sees as an excessive reac-
Letters to the Editor:
rities, which concern the Fed quirements interact with other ficiently, pumped up with credit. tool that is less easily arbi- tion to Ms. Hawkins’s per-
Fax: 212-416-2891; email:
wsj.ltrs@wsj.com less because they are less risky rules, such as liquidity require- By the 1980s, policy makers traged,” said Jeremy Stein, a ceived transgression. “Main-
than other forms of collateral. ments that limit banks’ activities considered such powers obso- Harvard professor who worked stream Christianity doesn’t
NEED ASSISTANCE WITH Transactions using U.S. govern- in securities-financing markets lete, as increasingly sophisti- on financial regulation issues as like to say we have anything in
YOUR SUBSCRIPTION? ment securities likely make up by penalizing them for taking on cated investors found ways a Fed governor from 2012 to common with Islam,” she said.
CONTACT CUSTOMER SUPPORT. more than two-thirds of the se- too much short-term credit. around the requirements, and 2014. Luke Nelessen, a sopho-
By web: customercenter.wsj.com curities-financing market, ac- Karen Petrou, managing part- Washington had come to em- “The more stringent regula- more, said he wished Ms.
By email: wsjsupport@wsj.com cording to the OFR. ner of the policy-analysis firm brace a greater deference to tion of the banking sector may Hawkins had expressed sup-
By phone: 1-800-JOURNAL The Fed declined to discuss Federal Financial Analytics Inc., Wall Street. They didn’t alter push short-term financing activ- port for Muslims without say-
(1-800-568-7625) the rule’s timing, but officials said those rules already mean margin requirements in the late ities to less regulated entities,” ing they worshiped the same
Or by live chat at wsj.com/
livechat have signaled it is moving to- fewer buyers and sellers in the 1990s, even as the tech-stock Fed Vice Chairman Stanley Fis- God. “She crossed a line that’s
ward the front burner, discuss- market on a given day, which bubble grew, as then Fed Chair- cher said in a Dec. 3 speech. important,” Mr. Nelessen said.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Monday, January 11, 2016 | A3


Powerball Mandatory Union Fees Face Test

Soars to High court weighs players that support Democrats
historically. Not just with

A Record whether public-sector

workers must pay
money but with boots on the
If the unions lose, Ms.

$1.3 Billion dues if they don’t joinBY JESS BRAVIN

Hodges expects their strength
to decline more in some cate-
gories than others. Unions rep-
shared culture, a shared pro-
The multistate Powerball WASHINGTON—The Su- fession”—such as teachers, po-
lottery jackpot jumped to preme Court on Monday will lice officers and firefighters—
$1.3 billion, the largest U.S. consider eliminating a pillar of are better poised to survive,
lottery jackpot ever, after no public-sector union strength in she said.
one picked a winning number more than 20 Democratic-lean- Union leaders are already
in Saturday’s drawing. ing states: the ability to require looking to their counterparts in
If there were a single jack- workers, including those who states that don’t allow manda-
pot winner in the next Pow- don’t join the union, to pay for tory fee collection for advice
erball drawing on Wednesday representation. on how to navigate possible
and it was taken as a lump The high court ruled in 1977 changes.
sum instead of annuity pay- that such provisions—known Virginia prohibits collective
ments, the pretax payout as union security, agency fee or bargaining for public employ-
would be worth $806 million, fair-share clauses—were con- ees. In Norfolk, the school
according to Powerball’s stitutional for public employ- board negotiated a de facto
website. ees, as they have been for pri- contract with the Norfolk Fed-
Saturday’s lump-sum pay- vate-sector workers. eration of Teachers, an affiliate
ment would have been The current case, brought of the American Federation of
$558 million, according to by the Christian Educators As- Teachers, in the early 1980s.
Powerball. Saturday’s jackpot sociation International and Although the memorandum of
had been the largest of any nine California teachers, asks understanding isn’t enforceable
lottery in U.S. history. the justices to overrule the in court, it has remained the
At a gas station in At- precedent and effectively end basis of employee relations in
lanta’s Little Five Points the practice. the school system ever since.
neighborhood, Powerball The challengers in the case, “We would call it a best
sales were slow on Sunday Friedrichs v. California Teach- practice,” said the school-board
because “people figure they ers Association, argue they chairman, Rodney Jordan.


have a little time before the shouldn’t have to pay for any “Now, they challenge us, they
next one,” said clerk Moham- union services, on the theory advocate for their members,
mad Mafuzur Rahman. With that even basic functions such but we also work together,” he
more modest lotteries, the as collective bargaining are po- said, citing joint lobbying of
store might sell 700 to 800 litical speech because they in- the city council to increase ed-
tickets a day, but the store volve requesting action from a ucation funding.
sold more than 4,600 tickets government agency. Mr. Jordan said Norfolk’s
on Saturday alone, he said. The ability to collect fees “respectful relationships” with
With an even larger jackpot from dues-paying members the federation and the Educa-
now up for grabs, he ex- and workers who don’t join has tion Association of Norfolk, af-
pected ticket sales could bolstered the strength of pub- filiated with National Educa-
reach 5,000 to 6,000 on the lic-sector unions, which typi- tion Association, helps in other
day of the drawing. cally represent all workers in a ways.
The chances of winning bargaining unit regardless of “As an urban district sur-
the Powerball jackpot prize membership status. Union offi- rounded by suburban districts
remains one in 292,201,338, cials say removing that ability that may have more resources
according to the Powerball would make their work harder, than we do, I think it’s also a
website. Despite the long if not insurmountable. competitive advantage for us”
odds, people lined up at Nearly half of public em- Rebecca Friedrichs, a veteran teacher in Orange County, Calif., is the lead plaintiff in the case. in attracting or retaining
stores across the country un- ployees in states with such teachers, he said.
til the Saturday evening provisions were represented by workers, banning collective The Norfolk federation pres-
deadline to buy tickets for unions, compared with 17% in Mandatory Dues bargaining and prohibiting ident, Thomas Calhoun, said
the lottery game. states that prohibit the fees, Half of U.S. states allow unions to collect fees from public-sector payroll deduction of voluntary that just under half the teach-
The Powerball is operated according to an October report workers even if they don’t join the union. The Supreme Court is dues. Since then, the American ers, and about a third of other
by the Multi-State Lottery from the left-leaning Economic considering whether to end the practice. Federation of State, County district employees, choose to
Association, a group of 34 Policy Institute. Of the latter and Municipal Employees lost join the union, paying about
state lotteries as well as lot- group, between 2000 and 2014 States permitting fees for all government workers two-thirds of its membership, $700 in annual dues.
teries in the District of Co- about 20% were workers who N.H. while the statewide teachers Because nonmembers auto-
lumbia, Puerto Rico and the declined to pay dues, the insti- Wash. Vt. union shrank 50%, said Paul matically get whatever benefits
Mont. Maine
U.S. Virgin Islands. tute said. Minn. Secunda, a labor law professor the union negotiates, “there’s
Though no one won the The plaintiffs, all Republi- Ore. at Marquette University in Mil- nothing you can offer them to
N.Y. Mass.
jackpot prize, ticket holders cans or independents, say they waukee. entice them to come over” un-
in various states won smaller oppose union bargaining goals Pa. What those unions do today less they believe in the cause,
prizes, some as high as that may benefit them, such as Ill. Ohio is “collective begging. It’s not Mr. Calhoun said. That drives
Colo. R.I.
$2 million. Non-jackpot higher pay or seniority protec- W.Va. collective bargaining,” he said. the federation to work con-
Calif. Mo. Conn.
prizes totaled about tions. Not all states that prohibit stantly to prove its worth, he
$159 million in Saturday’s “In my district, we have 70% N.M. the fees are so restrictive. But said.
drawing, according to Power- of our students on free and re- without provisions compelling “We go out there every day,”
ball. duced lunch. It’s a very low-in- membership, union officials he said. “I try to be involved in
The Powerball isn’t the come area and our community Alaska must continuously attend to the community, and with the
largest lottery in the world. cannot support higher salaries,” Fla. organizing and membership re- League of Women Voters and
For example, El Gordo, “the said plaintiff Harlan Elrich, a tention, reducing resources the NAACP” and other civic or-
fat one,” in Spain, paid out math teacher at Sanger High they can devote to bargaining ganizations, he said.
cash prizes in euros of about School in Fresno County, Calif. Source: Economic Policy Institute THE WALL STREET JOURNAL. and contract enforcement, said Despite Norfolk’s experi-
$2.4 billion in December, Mr. Elrich, who said he has Ann Hodges, a labor law pro- ence, Mr. Calhoun said no
though the grand prizes were been teaching nearly 30 years Among states that forbid represents one extreme. fessor at the University of other Virginia district has fol-
capped at about $4.36 mil- and makes about $75,000 an- the fees, the landscape for Wisconsin Republicans led Richmond in Virginia. lowed its example and volun-
lion per winning ticket. That nually, added that while “se- unions varies considerably. by Gov. Scott Walker left police A blow to unions would re- tarily instituted collective bar-
lottery, started in 1812, is niority is great,” teacher per- Wisconsin, which all but elimi- and fire unions intact. But they verberate into the political gaining.
held every year around formance should also affect job nated organizing rights for placed restrictions on unions arena, she notes: “Unions are “It’s clear that it hasn’t
Christmastime. security. most public employees in 2011, representing other government one of few large institutional caught on,” he said.

Democrats Press Obama Over Iran

BY KRISTINA PETERSON Nations panel ruled in Decem-
ber that the October launch vi-
nal Democrats are intensifying
olated a U.N. Security Council
pressure on the Obama admin- Last week, seven House
istration to hold Iran account- Democrats, including Demo- Long-range aircraft with long-term value.
able for its testing of ballistic cratic National Committee
Leverage the strength of Gulfstream

missiles. Chairwoman Debbie Wasser-

Both supporters and oppo- man Schultz of Florida, urged first flight, every flight.
nents of the multinational nu- President Barack Obama in a
clear accord with Iran say that letter to sanction Iran for the www.gulfstream.com
to maintain U.S. credibility in missile testing.
enforcing the deal, the White “Inaction from the United
House must move forward States would send the mis-
with sanctions on Iran after guided message that, in the
two missile tests in the fall. wake of the [nuclear deal], the
The administration in late international community has
December told lawmakers it lost the willingness to hold the
planned to impose new finan- Rep. Jerrold Nadler (D., N.Y.), shown in October in New York City, Iranian regime accountable,”
cial penalties on nearly a favors sanctions after Iran’s testing of ballistic missiles in the fall. the Democrats wrote.
dozen companies and individu- Iranian leaders have warned
als for their alleged role in de- who backed the nuclear deal, The debate over the nuclear they would view any new sanc-
veloping Iran’s ballistic missile said in a recent interview. deal reached with Iran in July tions as a violation of the nu-
program. It then reversed “Iran is very destabilizing, is likely to intensify as it is clear deal.
course, saying it needed more very aggressive and very badly formally implemented and Rep. John Delaney (D., Md.),
time for diplomatic work with behaved and we have to do sanctions against Tehran are who supported the deal, has
the Iranian government, but it what we can to stop that.” lifted. “I’m hopeful that Demo- introduced legislation, backed
hasn’t given a timeline for “We will issue those sanc- crats, even those who voted to by Minority Whip Steny Hoyer
when they would be imposed. tions and those designations support the president’s deal, (D., Md.), aimed at making it
The delay has put some at the appropriate time. will recognize we’re in a bad easier for the president to is-
Democrats, particularly those There’s no question about it,” place” under the agreement, sue sanctions on entities that
who represent large Jewish Denis McDonough, the presi- Rep. Mike Pompeo (R., Kan.) buy or sell ballistic missiles
constituencies and donors, in dent’s chief of staff, said on said. from Iran.
an uncomfortable position. Fox News Sunday. Under terms of the nuclear Some Democrats said they
Many such lawmakers ago- The House is expected to deal, the U.S. committed to would oppose legislation they
nized this summer over vote Wednesday on GOP legis- freeing as much as $100 billion viewed as designed to under-
whether to support the nuclear lation ensuring that as the ad- in Iranian oil money frozen in mine the nuclear deal. “Let’s
deal, which was opposed by Is- ministration eases sanctions overseas accounts as Iran be careful that what we’re do-
rael, saying their backing was on Iran under the nuclear deal, takes steps to roll back key ing is actually useful and help- SCOTT NEAL +1 912 965 6023
contingent on strict oversight it doesn’t lift sanctions against parts of its nuclear program. ful,” said Rep. Jim McGovern scott.neal@gulfstream.com
of Iran’s behavior. individuals involved in the But Iran has test-fired two bal- (D., Mass.). A spokesman for
“They ought to impose country’s ballistic missiles pro- listic missiles since the July Mr. McGovern said he would
sanctions because we have to gram or terrorism. Many Dem- agreement, one in October and vote against the GOP bill.
show we take this seriously,” ocrats said they were review- a second in November, accord- —Nick Timiraos
Rep. Jerrold Nadler (D., N.Y.), ing the legislation. ing to U.S. officials. A United contributed to this article.
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A4 | Monday, January 11, 2016 P W L C 10 11 12 H T G K B F A M 1 2 3 4 5 6 7 8 9 O I X X THE WALL STREET JOURNAL.

Trump Steps Up Cruz Citizenship Attacks

Tactic change comes day’s GOP candidate debate in and received legal status there vals who have been targeted by Cruz spokesman Rick Tyler Over the summer, Mr.
South Carolina. as a migrant seeking asylum Mr. Trump, Mr. Cruz is in a po- said that when the campaign Trump and his advisers had
as polls show senator The billionaire businessman after his student visa expired. sition of strength in early states began, polls showed that only discussed the possibility of us-
holds small lead over has raised questions about Mr. He became a Canadian citizen and rising in national polls. 4% of Trump backers saw his ing Mr. Cruz’s citizenship as
Cruz’s eligibility to be presi- in 1974, after Mr. Cruz was John Reed, a retired build- boss as their second choice. an issue but were divided
businessman in Iowa dent, cast doubt on his evan- born in 1970, a campaign ing-materials salesman in The latest Wall Street Jour- about the possible benefits
gelical faith and even called spokesman said. Rafael Cruz Winterset, Iowa, predicted Mr. nal/NBC News poll found that and costs, according to people
BY HEATHER HADDON him a “maniac,” all after Mr. later renounced his Canadian Cruz would emerge from the 66% of Trump voters said they familiar with the matter.
AND JANET HOOK Cruz took the lead in Iowa citizenship and became a nat- battering unscathed. “Ted would consider supporting Mr. Some close to Mr. Trump
GOP polls and gained ground uralized U.S. citizen. Cruz is handling all this inter- Cruz—far more than other ma- have been encouraging him to
Donald Trump is taking aim on Mr. Trump nationally. Many legal scholars agree party bickering better than all jor candidates. go negative, feeding him oppo-
at Republican presidential ri- On NBC Sunday, Mr. Trump with Mr. Cruz that he meets those candidates collected,” Steve Deace, an influential sition research from Mr.
val Sen. Ted Cruz, a tactical questioned again whether Mr. the constitutional standard of Mr. Reed said. “He doesn’t get Iowa talk radio host who is Cruz’s career as a private law-
shift that could be risky on Cruz is constitutionally eligi- being a “natural-born citizen” into the fight. He smiles and supporting Mr. Cruz, said Mr. yer and attacks that surfaced
two fronts: It may have come ble to serve as president. because children of U.S. citi- goes on.” Trump’s attacks were “reality during his Senate primary
too late, and the Texas senator “From Ted’s standpoint and zens are U.S. citizens, regard- For Mr. Cruz, being under TV star antics” that reflect his campaign. But others argued
might actually be benefiting from the party’s standpoint, less of where they are born. attack by other Republicans is anxiety about losing Iowa. the plan risked alienating anti-
from the attacks. he has to solve this problem, The lines of an attack on a badge of honor, another “After leading these media- establishment voters both men
Other candidates have with- because the Democrats will citizenship have been batted backer said. “It’s a quasi-en- driven national polls for six are courting, said people fa-
ered under Mr. Trump’s fire or sue him if he’s the nominee,” around inside the Trump camp dorsement of Cruz to the months, Trump is poised to miliar with the discussions.
felt obliged to respond, but Mr. Trump said. “This matter for months, though advisers grass-roots,” said Saul Anuzis, lose the very first real contest The turning point in the
Mr. Cruz has shrugged it off. has not been determined.” have been torn about how and former Michigan GOP chair- here in Iowa. He knows it, too, Trump camp came about the
His posture could change this Mr. Cruz was born in Can- when they should be em- man. and he’s acting out as a re- time Mr. Cruz started pulling
week if questions Mr. Trump ada to a mother who was a ployed. Thus far, they are hav- Polls show a growing num- sult,” Mr. Deace said. “Cruz ahead in Iowa polls and when he
has raised about his Canadian U.S. citizen. His father, Rafael, ing little impact and that may ber of Trump backers see Mr. should remain the adult in the questioned Mr. Trump’s judg-
birthplace resurface in Thurs- left Cuba to study in the U.S. be because, unlike other GOP ri- Cruz as their second choice. room as he always has.” ment at a private fundraiser.

RACE Close Calls

Hillary Clinton and Bernie Sanders are down to the wire in both New Hampshire and Iowa, while Ted Cruz and
before. Past participation is
typically the best indicator of
who will turn out on caucus
Continued from Page One Donald Trump are vying for the lead in the Hawkeye State. “Trump and Cruz are bat-
states. Losses in Iowa and New tling for the insurgent lane in
Hampshire would level a blow In Iowa In New Hampshire Iowa,” said Mr. Miringoff. “In
to Mrs. Clinton’s presidential New Hampshire, the big ques-
prospects, give Mr. Sanders a Republicans Democrats Republicans Democrats tion is whether anyone will
burst of momentum and imme- among likely caucusgoers among likely caucusgoers among likely primary voters among likely primary voters emerge to unite the GOP estab-
diately inject his campaign Sanders 50% lishment and overtake Trump.”
Cruz 28% Clinton 48% Trump 30%
with more credibility. Yet The New Hampshire contest
Trump 24 Sanders 45 Rubio 14 Clinton 46
back-to-back defeats might not remains fluid, with just 55% of
be debilitating to Mrs. Clinton. Rubio 13 O'Malley 5 Christie 12 O'Malley 1 likely GOP voters saying they
The Democratic front-runner Carson 11 Cruz 10 strongly support their pre-
has maintained a double-digit Paul 5 Bush 9
ferred pick for the nomination.
lead over Mr. Sanders in almost However, Trump backers are
Kasich 9
every national poll of Demo- the most committed, with
Most important issues
cratic primary voters, thanks in roughly two-thirds saying they
All respondents Likely Republican Likely Democratic Most important issues
part to her dominance with mi- caucusgoers caucusgoers
strongly support their candi-
All respondents Likely Republican voters Likely Democratic voters
nority voters. She led Mr. Sand- date, compared with the 42%
ers by a substantial 64% to 29% National security/terrorism National security/terrorism of Rubio supporters who say
among nonwhite voters nation- Job creation / economic growth Job creation /economic growth the same about the Florida
wide who expect to participate Health care Health care senator.
Deficit/government spending Deficit/government spending
in the primaries, a December Religious and moral values Immigration
Five Republicans garner be-
Wall Street Journal/NBC News Immigration Climate change tween 9% and 14% support
poll found. Climate change Religious and moral values among likely GOP primary vot-
Mrs. Clinton’s strength 0% 5 10 15 20 25 30 35 0% 5 10 15 20 25 30 35 ers in New Hampshire. The
among minority voters could Head-to-head among registered voters crowd includes Messrs. Cruz
prove a big boost in the con- Head-to-head among registered voters and Rubio, as well as former
tests that follow Iowa and New Sanders vs. Trump Sanders vs. Cruz Sanders vs. Trump Sanders vs. Cruz Florida Gov. Jeb Bush, Mr.
Hampshire. African-Americans 51% 38% 47 42 56% 37% 55 36 Christie and Ohio Gov. John
comprised 55% of Democratic Kasich.
Clinton vs. Trump Clinton vs. Cruz Clinton vs. Trump Clinton vs. Cruz
primary voters in South Caro- The poll also offers evidence
48 40 43 47 45 44 44 48
lina, according to exit polls of that the candidates competing
the state’s 2008 contest. And Sanders vs. Rubio Clinton vs. Rubio Sanders vs. Rubio Clinton vs. Rubio for the establishment vote are
while detailed demographic 44 44 42 47 50 41 40 52 cannibalizing each other’s sup-
data doesn’t exist for every port. Among potential primary
state, nonwhite voters ac- Sources: WSJ/NBC News/Marist telephone polls from Jan. 2–7. In Iowa, 456 likely Republican and 422 likely Democratic caucusgoers were polled with a margin of error of +/- 4.6 pct. pts. and voters, Christie supporters
+/-4.8 pct. pts., respectively. In New Hampshire, 569 likely Republican and 425 likely Democratic voters polled with a margin of error of +/- 4.1 pct. pts. and +/-4.8 pct. pts., respectively.
counted for more than half of were most likely to name Mr.
the electorate in 2008 in a THE WALL STREET JOURNAL. Rubio as their second choice,
number of states that will vote and vice versa. A strong corre-
on Super Tuesday, March 1, in- still go either way,” said Lee Mrs. Clinton leads Mr. the top pick of 30% of likely party supporters, very conser- lation also exists between
cluding Texas. Miringoff, director of the Mar- Trump 48% to 40% in Iowa, GOP primary voters. Mr. Rubio vative voters and GOP Messrs. Bush and Kasich.
Mr. Sanders has opened up ist College Institute for Public but the two are essentially tied is a distant second in New caucusgoers who actively prac- That dynamic helps explain
big leads in Iowa and New Opinion, which conducted the in New Hampshire. And the Hampshire, with 14% support. tice a religion. Mr. Trump has the increased sniping among
Hampshire among indepen- poll. Democratic front-runner trails The New Hampshire survey big leads among self-described all four Republicans, as each
dents who say they will partici- The poll suggests that, in Messrs. Cruz and Rubio in illustrates the gulf between Mr. moderates and likely caucusgo- tries to assert himself as the
pate in the Democratic con- those two states, Mr. Sanders both Iowa and New Hampshire Trump and rivals with more ers who aren’t that religious. clear alternative to Messrs.
tests, while Mrs. Clinton would be a stronger general- among all registered voters. conventional resumes. For With the Feb. 1 Iowa cau- Trump and Cruz.
notches big edges among Dem- election candidate than Mrs. Meantime, the GOP race is now, Mr. Rubio seems to have cuses approaching, Mr. Cruz The bickering has grown
ocrats. In both states, Mrs. Clinton. Among all registered close in Iowa, where Mr. Cruz a slight edge, but Gov. Chris holds a double-digit lead over particularly fierce between
Clinton has a wide advantage voters, Mr. Sanders shows big leads Mr. Trump, 28% to 24%, Christie of New Jersey and Mr. Trump among another Messrs. Christie and Rubio,
among likely participants age leads over Sen. Ted Cruz, Sen. among likely caucusgoers, a others are right on his heels. critical constituency: likely with the Florida senator ques-
45 and older, while Mr. Sanders Marco Rubio and Donald gap within the poll’s margin of In Iowa, the Republican race caucusgoers who have partici- tioning Mr. Christie’s conser-
enjoys even bigger leads among Trump in New Hampshire and error. Mr. Rubio is third, at looks like a two-way contest pated in previous caucuses. Mr. vatism and the New Jersey
younger voters. leads Messrs. Cruz and Trump 13%. between Messrs. Cruz and Trump, meanwhile, claims a governor criticizing Mr. Ru-
“The Democratic contests in in Iowa. He and Mr. Rubio are Mr. Trump has a much big- Trump. The Texas senator out- similar advantage among Io- bio’s lack of executive experi-
Iowa and New Hampshire could tied in Iowa. ger lead in New Hampshire, as paces Mr. Trump among tea- wans who haven’t caucused ence.

GOP: Private Sector Best to Help Poor Heard on the Stump

Rubio Doesn’t Think Clinton Says Trump
BY BETH REINHARD President Lyndon B. John- Much of Sean Penn Attacks Won’t Work
How Much Hardship son, a Democrat, declared an Marco Rubio said on ABC he Hillary Clinton said Republi-
COLUMBIA, S. C.—Republi- The share of people in each of the states voting on March 1 or “unconditional war on pov- didn’t know that actor Sean cans' focus on her husband’s sex
can presidential candidates, earlier who had incomes below the poverty line in 2014 erty” in 1964. Today, Republi- Penn, whose Rolling Stone inter- scandals is a “dead end” that
blaming a federal government ($23,834 for a family of four). cans say the hundreds of bil- view with Mexican drug lord El hasn’t derailed her in the past
they call bloated and inept for lions of dollars spent on Chapo was the talk of the day, and “won’t work again.”
losing the “war on poverty” Alabama 4th (ranking among 50 states) 19.3% antipoverty programs haven’t is still around. “If one of these Her comments to CBS follow
begun a half-century ago, are Arkansas 6th 18.9% made a significant dent in pov- American actors who have bene- a Donald Trump video suggest-
calling for helping the needy Tennessee 8th 18.3% erty rates. The national pov- fited from the greatness of this ing former President Bill Clin-
through family and faith. Georgia 8th 18.3% erty rate was 15.5% in 2014, ac- country, who have made money ton’s record undermines her sup-
Appearances by six contend- South Carolina 11th 18.0% cording to census data, down from this free-enterprise system, port for women’s rights. On
ers at a forum on poverty Sat- Texas 12th 17.2% from 19% in 1964. want to go fawn all over a crimi- NBC, he said he felt compelled
urday reflected the importance Oklahoma 15th 16.6% President Barack Obama has nal and a drug trafficker in their to bring up Bill Clinton’s past be-
of early-voting South Carolina Nevada 23rd 15.2% said that because his adminis- interviews, they have a constitu- cause Mrs. Clinton had called
as well as the clout of new Vermont 36th 12.2% tration expanded programs like tional right to do it. I find it gro- him sexist.
House Speaker Paul Ryan (R., Iowa 36th 12.2% the Earned Income Tax Credit, tesque,” the GOP senator said. “I’m going to talk about the
Wis.), the party’s 2012 vice- Colorado 38th 12.0% the poverty rate has fallen and —Nick Timiraos differences between us, because I
presidential nominee and a Virginia 39th 11.8% millions were saved from desti- think that’s what Americans care
leading voice for revamping Massachusetts 41st 11.6% tution during the recent reces-
O’Malley Takes On about,” Mrs. Clinton said.
the government safety net. The Minnesota 43rd 11.5% U.S. sion. Guns at Gun Show —Harriet Torry
event was sponsored by the Alaska 46th 11.2% average Speaking at Saturday’s A man driving up to a gun
Jack Kemp Foundation, named New Hampshire 50th 9.2% 15.5% event, former Florida Gov. Jeb show Saturday in Cedar Rapids,
for Mr. Ryan’s mentor, the 1988 Source: U.S. Census Bureau, Bush said people get “stuck” in Iowa, spotted Martin O’Malley’s
presidential candidate known Republican National Committee THE WALL STREET JOURNAL. poverty and if Republicans sug- entourage setting up for a cam-
for his efforts to revitalize poor gest otherwise, “we’ll never paign speech and couldn’t resist
communities and bring minori- Mr. Ryan called an “optimistic, worth its salt if it can’t help win elections.” New Jersey Gov. needling the Democratic presi-
ties into the GOP fold. inspiring, inclusive majority people.” Chris Christie said Republicans dential candidate: “Yay, guns!”
The 2016 candidates called party”—a departure in a cam- His remarks reflect concerns need to spend more time cam- Mr. O’Malley stood shivering
for empowering churches and paign dominated by incendiary among some Republicans that paigning in black churches and in the 18-degree weather and
families to take a more promi- rhetoric about illegal immigra- Mr. Trump’s success signals Hispanic neighborhoods. made clear he had no interest in
nent role, expanding vocational tion and national security. No- the party is headed for another The presence of Mr. Scott winning the driver’s vote. “You
training, increasing tax credits tably absent from the event defeat like in 2012, when Mitt and Nikki Haley, the first are standing at the easiest place
to the working poor, reducing was the Republican front-run- Romney was rejected by mi- woman and Indian-American to in America for a psychopath, a
sentences for nonviolent drug ner, billionaire Donald Trump, norities, women and young serve as the state’s governor, murderer or a terrorist to pur-
offenders and shifting more who has called Mexican immi- people. were signs of the GOP’s efforts chase a combat assault
money for social services to grants rapists and drug dealers “In order to win in Novem- to grow beyond its white, male weapon—and that is a gun
‘Well, I don’t
the states. and proposed barring Muslims ber, I believe we have to have a conservative base. The field show,” the former Maryland gov- want to say it’s a
“I believe the real answer to from entering the U.S. to pre- candidate who can inspire peo- seeking the White House is ernor said.
poverty is not government; it’s vent terrorist attacks. ple…having a conversation also more diverse than ever, in- Inside the show there was lit-
threat. But it is a
the private sector,” said Ben “Where did the party of with everyday voters on every- cluding Mr. Carson, an African- tle doubt where people stood in threat.’
Carson, who overcame inner- Jack Kemp go? Is it still out day issues, like poverty,” said American, and two Cuban- the partisan divide. Waiting to
city poverty to become a neu- there?” asked South Carolina South Carolina Sen. Tim Scott, Americans, Texas Sen. Ted pay the $7 admission, one man
rosurgeon. Sen. Lindsey Graham, who the state’s first black senator, Cruz and Florida Sen. Marco said to a friend: “Obama’s really DONALD TRUMP, on
The discussion also turned dropped out of the presidential who was raised by a poor, sin- Rubio. Mr. Cruz didn’t attend selling some guns, isn’t he?” bringing Bill Clinton’s past
to Mr. Kemp’s vision of what race last month. “A party is not gle mother. Saturday’s event. —Peter Nicholas into the 2016 race.
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A6 | Monday, January 11, 2016 * * THE WALL STREET JOURNAL.

For TV Stations,
2016 Ads Are Adds
Typically flush season The growing number of ad-
New Channels vertising platforms saves the
is now even more so As TV stations move regular stations’ salespeople some
as regular customers advertisers to digital channels, headaches, too. Rachel Schmit,
more campaigns are following an account executive at KCRG,
buy spots online the same route. has at times baked her cus-
tomers what she calls “pre-
BY REBECCA BALLHAUS Total spending on political emption cookies” when their
advertising spots have been bumped by
CEDAR RAPIDS, Iowa—For Broadcast TV Cable Digital political ads. Now, “we have a
decades, presidential cam- lot more things to offer digi-
$6 billion $5.83 billion

paigns have been windfalls for tally,” she said.

local TV stations in swing TV stations are required to
states. But they also came with give candidates the “lowest
a big headache: keeping local unit rate” in the 45 days before
advertisers happy when their 4 a primary election. The sta-
ads get shunted to the wee tions face no such rules when
hours of the morning, if they it comes to super PACs, which
run at all. are political-action committees
In this election, though, sta- that can raise money without
tions are figuring out how to $1.14 contribution limits. Republican
win on both ends, bolstering Sen. Marco Rubio, for example,
already big revenue years by $1.08 paid $250 for a spot to air on a
channeling the messages of recent Saturday morning in
their regular customers to dig- 2008 ’12 ’16 Cedar Rapids, according to fil-
ital offerings, including on sta- Source: Borrell Associates ings with the Federal Commu-
tion websites and embedded in THE WALL STREET JOURNAL. nications Commission. His su-
online videos. per PAC paid double for that
Political revenue is expected said he has shifted his adver- time slot a week later.
to jump 150% this year from tising from “100% TV to 100% Kantar Media, which tracks

last at KCRG in Cedar Rapids, web.” He said he is paying TV advertising, predicts over-
the top-ranked station in the nearly the same amount to the all spending for the 2016 elec-
second-largest media market station, KCCI, as he usually tions will be about $4.4 billion,
in Iowa, according to national does, and he is happy with the up roughly 16% from what can-
sales manager Steve Lake. results. didates and outside groups
Larger Des Moines stations are Nick Pagliai, manager of Pa- spent on cable and broadcast
expecting an overall revenue gliai’s Pizza in Johnston, Iowa, ads in the 2012 cycle.
increase of as much as 25% said he has worked with his lo- Not all TV stations have
from last year after political cal station to divert some of been able to bypass the crowd-
spending is combined with his ad spending to digital. He ing-out effect of political ads.
their local advertisers, many of recalls the station’s ad sales- Ken French, the advertising
whose messages are now run- man telling him of political ad and events manager at a car
ning online. season: “This is coming. This is dealership in Charleston, S.C.,
Beyond the creative use of how I see you surviving.” said he has grown frustrated
the web, prices are going up. By maintaining their regular with his inability to get his ads
KCRG has already booked ads customers, on top of the influx on TV, with rates up 25% in the
for more than 25 campaigns of cash from super PACs back- lead-up to February’s primary.
and political groups. The in- ing more than a dozen candi- “I know [TV stations] want
creased need for the station’s dates in the race, TV stations to take the money from the su-
airtime means advertisers—in- are in for an even bigger wind- per PACs and sell that time,”
cluding those not involved in fall than usual this cycle. In he said. “But come the second
politics—have to pay more for November, the Tribune Televi- week in February, that money
the guarantee that their ad will sion Group, which has 42 sta- is gone for another four years,
run. The election has so far tions in 33 markets, projected and I’m still going to be here.”
driven rates up 25% for nonpo- net revenue for 2015 of about He said he would explore
litical advertisers targeting $2 billion. Its digital ad reve- other advertising options.
high-demand programs, Mr. nue for the first three quarters Some advertisers avoid the
Lake said. of the year was up 26% over political season. Toby Joseph,
Attorney Jeff Wright said he the comparable period in 2014. whose family runs the Josephs
got “hammered” in the 2014 For stations, digital ads Jewelers chain in central Iowa,
election. His Des Moines firm, aren’t a replacement for isn’t planning to air ads until

Carr & Wright, typically runs broadcast ones, as they bring after the Feb. 1 Iowa caucus.
as much as $4,000 in TV ads a in less money and reach a While Mr. Joseph says he is
month, but nearly none of its smaller audience. Still, most tired of fielding four calls a
spots wound up on air in the stations recommend mixing night from various campaigns,
lead-up to the midterm elec- both TV and digital ads even in there is a silver lining: “I love
tion. “All of a sudden, the the nonpolitical season, be- wealthy people in my city,” he
From top, still images taken from campaign ads by presidential candidates Hillary Clinton, Donald phone stops ringing,” he said. cause online ads allow a more said. “I hope everyone at the
Trump and Sen. Ted Cruz. Such ads typically crowd out other advertisers during the election season. This season, Mr. Wright targeted approach. TV station makes a fortune.”

Bush Alumni Pound the Pavement

counts of Donald Trump and
HHHHH Sen. Ted Cruz, while the social

network didn’t come up in the
Democratic group.
BY BETH REINHARD Bush was governor.
In a sign that Mr. Bush may
a long time ago, but for Jeb I’d
do just about anything,” said
the alumni group walked away
with a Bush convert. WIRE Both groups said they use
Google to search for candidates
NORTH CHARLESTON, S.C.— be running low on money, his 64-year-old Ed Moore, president Retiree Rachel Carter was HHHHH and issues, and were wary of in-
Since Jeb Bush signaled a likely campaign recently said it was of the Independent Colleges and walking her longhair chihuahua formation their friends posted
presidential bid one year ago, canceling $3 million of televi- Universities of Florida. near her North Charleston home online on networks such as
his family’s decades-old net- sion time in Iowa and South “Once you are connected to when she ran into Stephanie Ko- IMMIGRATION Facebook because it may not be
work of former ambassadors, Carolina. The campaign also has the Bush family, you are forever pelousos, who worked as Mr. truthful. (Google was one of the
cabinet secretaries and Wall pulled several hundred thou- dedicated, and they maintain Bush’s federal liaison in Wash-
Cruz Slams Trump’s sponsors of the focus group, but
Street financiers has been doing sand dollars in ads in New the relationships,” said Frances ington, D.C., and later as secre- Deportation Stance the participants in the focus
what it does best: raising Hampshire, according to people Fisher, who worked in the first tary of the Florida Department Texas Sen. Ted Cruz said he group weren’t made aware of
money. familiar with the transactions. Bush White House and recently of Transportation. doesn’t support sending forces that.)
But now, with Mr. Bush lag- That means his candidacy’s hosted a fundraiser for Jeb “My reservation is that Bush to round up and deport illegal Mr. Luntz showed the focus
ging behind in the final stretch success increasingly hinges on Bush in her Palm Beach home has got too soft of a personal- immigrants, likening such a pol- groups printed images of the
before Republican votes are the mechanics of targeting po- that was attended by former ity,” said Ms. Carter, who said icy to “a police state.” candidates’ websites. Over-
cast, hundreds of supporters tential supporters and mobiliz- first lady Laura Bush, wife of ex- she was thinking of voting for “I don’t intend to send jack- whelmingly, the 24 people in the
from his Florida governorship ing them to vote. President George W. Bush. Mr. Trump. Of Mr. Bush, she boots to knock on your door and Democratic group picked Sen.
and two family White Houses The campaign calls the Bush Still, canvassing neighbor- added, “I think he needs to be a every door in America; that’s not Bernie Sanders’s website as
are trading their checkbooks for alumni “validators” because, hoods is tiring. More people are little sharper.” how we enforce the law for any their favorite.
comfortable shoes to canvass having known or worked with out and about than indoors. Ms. Kopelousos talked about crime,” Mr. Cruz said on CNN. —Natalie Andrews
neighborhoods in the early-bal- the ex-governor, they can vouch Dogs bark. Homeowners slam Mr. Bush’s handling of eight Donald Trump has called for a
loting states of Iowa, New for him in a way that a volun- the door. hurricanes that hit his state “deportation force” to remove STATE OF THE UNION
Hampshire and South Carolina. teering College Republican One resident in Hanahan, over less than two years. She the roughly 11 million immi-
Their hope is that a strong can’t. Supporters say they see in S.C., seemed taken aback when wrote her cellphone number on grants in the country illegally.
Aide: Speech to Rebut
voter-turnout operation—en- Mr. Bush not the slightly three Cuban-Americans from a campaign flier. And she never The Texas senator spoke up ‘Doom and Gloom’
hanced by front-stoop contact stooped presidential candidate Miami knocked on his door. stopped stroking the Chihuahua. for the employment-verification President Barack Obama
with people who personally ridiculed by Donald Trump as “I’m very sympathetic to eth- Finally, Ms. Carter was con- program E-Verify and the crimi- plans to offer an upbeat look at
know Mr. Bush—will boost him “low-energy” but a two-term nic people because I’m ethnic vinced. “Can you give me some- nal law-enforcement system to America’s potential in his final
to a better-than-expected show- governor who pushed a conser- myself. I’m French Canadian,” thing to put in my yard?” A combat illegal immigration. State of the Union address
ing in the February contests. vative agenda of tax cuts, gun said the man, who declined to campaign placard was retrieved, “Federal immigration law says Tuesday night, Chief of Staff
This past weekend, more rights and charter schools. give his name. while Ms. Kopelousos went to if we apprehend an individual Denis McDonough said Sunday,
than 50 Bush alumni, mostly “I gave up knocking on doors Every so often, a member of go knock on another door. who is here illegally, they are to moving to draw a contrast with
from Florida and Washington, be deported. I will enforce the what he called the “doom and
D.C., paid their own way to law,” Mr. Cruz told CNN. gloom” of Republican presiden-
knock on doors in South Caro- —Harriet Torry tial contenders.
lina, where Mr. Bush is polling Mr. McDonough said Mr.
in fifth place with 8.5%, accord- IOWA CAUCUSES Obama will break from tradition
ing to Real Clear Politics. by eschewing the recitation of
The group included longtime
Voters Say They Go specific, year-ahead policy wish-
Republican operatives who Online for Information lists and instead offering a
worked for Mr. Bush’s father, With just weeks to go before broad and optimistic look at the
former President George H.W. deciding on a candidate, Iowa country’s potential over the com-
Bush, as well as the network of voters are still sorting through ing decades.
Hispanic professionals culti- candidates—and critiquing their ”The president is going to lay
vated by Mr. Bush’s two sons, Web and social-media efforts. out…a picture of the country
George P. and Jeb Bush Jr. Many In two weekend focus groups moving forward, focused on the

are more accustomed to hosting in Des Moines, one for Demo- future—not afraid of it,” Mr. Mc-
receptions and consulting on crats and one for Republicans, Donough said on Fox.
policy than the grind of cam- GOP pollster Frank Luntz found Mr. Obama told his staff late
paign volunteer work. that the Web wins, hands down, last year that he didn’t “want
“For someone who has never when voters look for information this to be your traditional policy
done it before, it’s a little intim- on the races. speech that outlines a series of
idating and uncomfortable to But this being Iowa, a major- proposals,” Mr. McDonough said
knock on the door of a perfect ity of Democrats and Republi- on ABC.
stranger,” said Simone cans raised their hand when The speech will hit on three
Marstiller, an assistant general asked if they had met a candi- broad themes, he said: the econ-
counsel and secretary of the De- date in person. omy, national security and civic
partment of Business and Pro- Stephanie Kopelousos, center, and former U.S. congressman Tom Feeney tried to persuade retiree Iowa Republicans said they participation.
fessional Regulation when Mr. Rachel Carter, left, to vote for Jeb Bush over the weekend in South Carolina. have an eye on the Twitter ac- —Nick Timiraos
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A8 | Monday, January 11, 2016 * * THE WALL STREET JOURNAL.

Kurds Hold Out in Battle With Turkey
In urban stronghold, Kurdish-inhabited areas GEORGIA
barricades and booby Sites of Turkey's main military
operations against Kurdish insurgents
traps help rebels stall ARMENIA

large military force Ankara


AND AYLA ALBAYRAK 100 miles Silopi
Cizre IRAN
DIYARBAKIR, Turkey—In- 100 km
side the fortress walls of this
city on the Tigris River, bomb- Tigris R.


making Kurdish militants are
facing down Turkish tanks, the SYRIA IRAQ
bodies of Kurdish fighters lie Med. LEB.
in snow-covered streets, and Sea Damascus Baghdad
thousands of civilians are
trapped by fighting that shows Sources: CIA; Institute for the Study of War THE WALL STREET JOURNAL.
no signs of easing.
Turkey’s military operation lamic history. unacceptable when it turns to
in this Kurdish stronghold is Since Dec. 2, large parts of armed resistance.”
meant to put an end to the as- Diyarbakir’s Sur District have Turkish security forces are
pirations of an emboldened been under 24-hour curfew. using tanks to demolish barri-
new generation of Kurdish Many of the 24,000 people liv- cades erected by Kurdish mili-
militants fighting for self rule ing in the now-closed military tants to mark the neighbor-
in a country that suppressed zone have fled, said Huseyin hoods where they say they
their rights for decades. The living room of Melek Alpaydin, a 42-year-old mother who was killed by fighting in Diyarbakir. Aksoy, the Ankara-appointed won’t accept Turkish govern-
But few people expect the governor of Diyarbakir. About ment rule.
showdown in the heart of Di- growing power of American- Kurdish lawmaker whom Mr. stepping up his calls for self- 4,000 residents are believed to Concerns about Turkey’s
yarbakir—the de facto Kurdish backed Kurdish fighters in Erdogan wants to see stripped rule, a politically charged be trapped in their homes military operation in Diyarba-
capital and site of one of three neighboring Syria—who are of parliamentary immunity. stance that skeptics see as a while Turkish forces try to up- kir were heightened by the
major military operations spearheading the fight against “As Kurds, we don’t want the precursor to Kurdish demands root what the governor esti- death of Melek Alpaydin, a 42-
against Kurdish militants in Islamic State—is propelling mistakes made 100 years ago for outright independence. mates to be no more than 100 year-old mother who was de-
southeastern Turkey—to bring Kurdish activists in Turkey to to be made again.” That is becoming an in- Kurdish militants. capitated by a shell or rocket
an end to the monthslong in- push for their own self rule. Mr. Demirtas leads a politi- creasing concern for Mr. Erdo- Since mid-December, when that crashed into her home
surgency that has claimed The outcome of Turkey’s cal group drawing inspiration gan, who has championed the Turkey sent 10,000 members outside the curfew zone while
hundreds of lives. broader military operation is from the successes of Kurdish expanding crackdown on Kurd- of its security forces into a she was sitting down for an
“Welcome to hell,” said a likely to have a big impact on militants in Syria, where they ish activists and insurgents military operation targeting afternoon meal with family.
member of Turkey’s elite po- the rekindled aspirations of are governing an autonomous across the country. thousands of Kurdish militants Residents in the neighbor-
lice force keeping watch at a millions of ethnic Kurds in region carved out of parts of One of the most important who have declared self-rule in hood said Ms. Alpaydin was
sandbagged checkpoint. Turkey, whose ancestors’ the country they took from Is- battlegrounds is here in Diyar- parts of cities and towns killed by an artillery shell
Turkish police have de- hopes of building a Kurdish lamic State rivals. bakir, where more than 2,000 across southeastern Turkey, fired by the Turkish military
tained scores of Kurdish lead- nation were thwarted by world “The Kurds are a growing Turkish security forces have more than 440 Kurdish fight- on Jan. 3. Gov. Aksoy said in-
ers across the country. Presi- powers after World War I. power in the Middle East,” Mr. spent weeks battling small ers have been killed, according vestigators haven’t figured out
dent Recep Tayyip Erdogan is Kurdish leaders say they Demirtas said. numbers of Kurdish militants. to the military. if she was killed by a Turkish
backing efforts to strip the want to make sure they don’t Emboldened by the gains in The militants have slowed the “It is unacceptable for military shell or by a Kurdish
country’s most prominent let this new opportunity slip Syria and prodded by Mr. Er- operations by planting hidden armed militants to be in the militant’s rocket.
Kurdish politician of immunity away. “The fate of the Middle dogan’s efforts to marginalize explosives throughout a neigh- city center,” said Gov. Aksoy. Turkish officials said they
so he can be charged for be- East is being rewritten,” said his pro-Kurdish Peoples’ Dem- borhood that is home to some “We respect people’s freedom are doing all they can to avoid
traying his country. And the Selahattin Demirtas, the top ocratic Party, Mr. Demirtas is of the oldest mosques in Is- of expression, but it becomes civilian casualties.

BY GORDON LUBOLD and the capabilities of the
Peshmerga, as those Kurdish
BAGHDAD—U.S. military of- forces put pressure on Islamic
ficials have expressed quali- State from the north, the fight
fied optimism about Iraqi against the militant group has
forces’ accomplishments become multipronged, U.S. of-
against Islamic State in the ficials add.
western city of Ramadi, dem- “What you’re ultimately
onstrating a determination now looking at is Daesh is be-
some American officers said ing hit on many fronts, and is
they haven’t seen in months. not simply capable of dealing

Crucial tests in the war with the level of evolving pro-

against the extremist group in fessionalism and capability
Iraq yet loom—most particu- that you see in the military
larly a difficult campaign to forces of the Iraqis,” said U.S.
retake the northern city of Lt. Col. Joe O’Callaghan, oper-
Mosul, which Islamic State ations officer for Task Force
seized in 2014. But the U.S. Erbil, in northern Iraq, using
military’s top uniformed offi- another name for Islamic
cer said American confidence State.
in Iraq forces has increased. Nonetheless, much work re-
“I believe the Iraqis now mains in the western region of Anti-immigration protesters gathered Saturday in Cologne, where over 500 complaints have been filed of alleged assault on New Year’s Eve.
have the momentum,” Marine Iraq, including in Fallujah and
Gen. Joe Dunford, chairman of
the U.S. Joint Chiefs of Staff,
said over the weekend after
visiting four sites in Iraq.
west to the city of Hit, Gen.
Dunford and other military of-
ficials said. Ramadi itself isn’t
yet a complete victory: Amid
MERKEL Paris Suspect Was in Migrant Home
FRANKFURT—A man shot and Dortmund.
served jail time in the past was
arrested on Saturday, the po-
lice said.
Even supporters of keeping
Gen. Dunford, who previ- the rubble of hundreds of U.S.- Continued from Page One and killed by police after au- “Investigations to date show Germany’s doors open to refu-
ously was commander of U.S. led airstrikes and heavy fight- The chancellor—Western Eu- thorities said he tried to attack there were no indications of gees described the Cologne
and allied forces in Afghani- ing, vestiges of Islamic State rope’s most influential political a Paris police station had re- further potential attacks,” the events as a wake-up call. They
stan, was careful to say he units remain. leader—has warned that with- sided in a refugee home in Ger- state office said. Further de- underlined the importance of a
didn’t want to overstate the The Iraqis’ ultimate test, out a united strategy, the EU’s many, officials said. tails wouldn’t be made avail- stronger police force and the
recent Iraqi successes, heavily still months away, lies in the cherished principle of open in- The crime office of the Ger- able for now, so as not to jeop- need to work harder at convey-
backed by American air power. northern city of Mosul, a city ternal borders will fall. man state of North Rhine- ardize French investigations, it ing Western values to the new
Gen. Dunford also rejected the several times the size of Ra- At home and abroad, politi- Westphalia said the man’s added. The identity of the man, arrivals. “I have no illusions:
idea that the Iraqis had ar- madi and one in which Islamic cians skeptical of Ms. Merkel’s rooms in a migrant home in who officials said tried to at- the debate over refugees and
rived at a turning point in the State is deeply entrenched. migrant policy pointed to the Recklinghausen were searched tack the station on Thursday over integration will not be the
fight against Islamic State, es- The counterterrorism force assaults as a turning point, after officials received a tip brandishing a meat cleaver and same after this New Year’s
pecially considering the mili- that led the Iraqi fight in Ra- casting the events as confirma- from investigators in Paris. wearing a fake explosive de- Eve,” said Christian Joisten, a
tant group held the initiative madi isn’t plagued by the tion of their warnings of a vio- Recklinghausen is located close vice, has yet to be established. city councilman in Cologne for
and the momentum as re- same depth of sectarianism as lent culture clash resulting to the larger cities of Essen —Monica Houston-Waesch the left-of-center Social Demo-
cently as October, when he the regular security forces, from the mass migration. crats.
first visited Iraq as chairman. U.S. officials said. However, Conservative Polish Prime tion to the crisis. the attacks and its apparent Some German lawmakers
But today, he said, he has the smaller, more specialized Minister Beata Szydlo said the Ms. Merkel described the hesitation to acknowledge that and pollsters say the Cologne
begun to see a shift with what force won’t be able to wage incidents “should shake up New Year’s Eve assaults as “re- the attackers may have been attacks won’t necessarily
has been accomplished not the broader fight on its own, public opinion at last.” UK In- pugnant, criminal offenses” asylum applicants. The police change public sentiment.
only in Ramadi but also in re- so it needs the regular forces. dependence Party leader Nigel that required a decisive re- chief, Wolfgang Albers, denied “For months people have
cent victories in Beiji, Sinjar “The big question is: So, the Farage, who advocates much sponse. “When crimes are trying to cover up the back- been saying, ‘The mood is
and other areas of Iraq. Iraqis can clear terrain, but stricter immigration policies committed, and people place grounds of suspected attack- about to swing,’ and it hasn’t
“I feel comfortable saying can they scale that up, and and wants his country to leave themselves outside the law ers. swung. The mood has stayed
the Iraqis have the momentum hold a large city like Ramadi the European Union, warned then there must be conse- The attacks have also pro- stable,” said Manfred Güllner, a
in Iraq,” Gen. Dunford said as or even Mosul for a large pe- the events in Cologne were quences for asylum claims,” voked an emotional debate in prominent German pollster.
he wound up his trip. riod of time?” said Phillip “not far removed from us” in she said. Germany on how to deal with Still, the tensions on display
U.S. officials say Islamic Carter, a senior fellow at the Britain, adding, “Whilst these Whether this response will sexual violence. Cologne Mayor in Cologne showed how deeply
State has lost about 40% of Center for a New American Se- men may not have EU pass- suffice to quell the public’s Henriette Reker drew heavy the reports of mass sexual as-
the terrain it once held across curity, a think tank in Wash- ports, they soon will.” concerns is uncertain. A poll criticism after saying that saults have rattled Germany.
Iraq. Between the resiliency of ington. “Those capabilities will The German chancellor re- published by the Sunday edi- women should keep an arm’s Mesic Ismeta, a 47-year-old
the Iraqi forces in the south take much longer to build than acted to the public outrage tion of the influential tabloid length distance from men in who said she herself came
a 1,000-person counterterror- over the assaults with what Bild showed 49% of Germans situations that could escalate. from Bosnia to Germany as a
ism force.” has become her trademark feared a repeat of the Cologne She later apologized, saying refugee in the 1990s, said that
Gen. Dunford’s assessment strategy after 10 years in events in their hometowns. she didn’t mean to set a code she was having second
echoes that of other U.S. offi- power: She sought to channel Similar New Year’s Eve as- of conduct for women and that thoughts about supporting an

cials who believe the Ramadi the public mood without sub- saults were reported on a the attackers were the ones re- open-door migrant policy.
battle underscores the grow- stantially changing course. smaller scale in the cities of sponsible in cases of sexual vi- “I was always in favor and
ing capabilities of Iraqi forces. She used tough language af- Hamburg and Stuttgart. olence. now I’m wondering whether
The battle plan for Ramadi, ter a meeting of senior party Authorities, who have de- While 19 people had been what I thought was right,” she
which Iraqis showed Gen. Dun- officials on Saturday, pledging scribed the violence in Cologne identified as possible suspects, said, standing on the train sta-
ford when he last visited here to more aggressively deport as unprecedented in the coun- the police continued to analyze tion square where the New
in October before the Iraqis migrants convicted of crimes. try, have also said that most video footage and witness Year’s Eve assaults were al-
attempted to retake the inside But she gave no indication that potential suspects had applied statements to determine leged to have occurred. “I
of the city, was much the way she would back away from her for asylum in Germany or were whether those people could be think every woman is afraid to
the battle actually played out. refusal to cap the number of in the country illegally. Co- tied to specific crimes. In addi- walk around here.”
Gen. Joe Dunford, right, with That reflected a new level of refugees Germany accepts or logne’s police chief was forced tion, a 19-year-old Moroccan —Monica Houston-Waesch
Turkish Premier Ahmet maturity in the Iraqi approach, from her insistence that Eu- out Friday amid criticism over man who was known to au- and Andrea Thomas
Davutoglu, in Ankara last week he said. rope come up with a joint solu- the police’s failure to prevent thorities since 2013 and had contributed to this article.
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THE WALL STREET JOURNAL. Monday, January 11, 2016 | A9


Egypt Convenes First Parliament in Four Years
BY TAMER EL-GHOBASHY ment has been characterized a document ratified in 2014 of the popular uprising that some newcomers who have de-
by Mr. Sisi as the final step in that gives the House of Repre- overthrew former President scribed the 2011 uprising as a
CAIRO—Egypt’s first parlia- a “road map to democracy” sentatives unprecedented Hosni Mubarak. catastrophe for Egypt and see
ment in nearly four years was that began when—as military powers to remove the presi- Members of the legislature Mr. Sisi as the only person who
sworn in on Sunday, with chief in 2013—he removed dent or prime minister. were elected during polls held can restore security and repair
YEMEN many prominent legislators Egypt’s first freely elected But the Egyptian Parlia- from October through to De- the floundering economy.
saying their priority is amend- president, the Muslim Brother- ment’s makeup reflects Mr. cember that were marked by Following the regional and
Deadly Strike Hits ing the constitution to further hood’s Mohammed Morsi. Sisi’s tightening grip on power lackluster voter turnout. local rise of Islamic State, Mr.
Hospital in North empower President Abdel Fat- A record 596 lawmakers as the Arab world’s most popu- The parliament reflects the Sisi has secured international
A projectile hit a Doctors tah Al Sisi. took individual oaths pledging lous country approaches a po- return of figures from Mr. support for his opposition to
Without Borders hospital in The convening of the parlia- to uphold Egypt’s constitution, tentially testy fifth anniversary Mubarak’s era, along with extremist groups.
northern Yemen on Sunday, kill-
ing at least four people and in-
juring 10, the medical-aid group
said, the latest in a string of
deadly incidents at its facilities
in the country.
Doctors Without Borders said
the hospital in Razeh, a district
in Yemen’s Saada province, was
hit at about 9:20 a.m. local time.
The explosion destroyed several
buildings in the complex, the
group said. It couldn’t confirm
the origin of the attack.
A Saudi-led military coalition
has been conducting airstrikes in
Yemen since March, aiming to
unseat Houthi rebels who are
backed politically by Iran, Saudi
Arabia’s regional rival. Saada
province is a Houthi stronghold.
Tamim al-Shami, a spokes-
man for the Houthi-run health
ministry, blamed a coalition
strike for the destruction of the
hospital. The Saudi-led coalition
couldn’t immediately be reached
for comment. —Asa Fitch

Separatist Elected
Leader of Catalonia
Separatist legislators in
Spain’s wealthy Catalonia region
elected a new president on Sun-
day, overcoming months of in-
fighting and ratcheting up pres-
sure on national leaders to set
aside their differences and form
a government to thwart the se-
cession bid.
The Catalan parliament
elected Carles Puigdemont, a 53-
year-old mayor and head of an
association of separatist munici-
pal leaders, as regional president.
He has said he is committed to
making Catalonia an indepen-
dent nation within 18 months.
His unexpected ascent came
through an 11th-hour deal on
Saturday between the main pro-
independence ticket and a small
far-left separatist party that
stubbornly objected to the re-
election of incumbent Artur Mas.
Had no president been elected
by midnight Sunday, Catalonia
would have been required to
hold new regional elections.
—Matt Moffett

Delegates to Try to
Revive Peace Talks
Delegates from Afghanistan,
Pakistan, the U.S. and China are
set to meet Monday in an effort
to revive collapsed Afghan peace
talks and bring an end to the
government’s long-running war
with the Taliban.
The U.S. in recent months
has been pushing the Afghan
and Pakistani governments to
renew efforts to restart the
peace process, which broke
down in July amid disagree-
ments on who would assume
the leadership of the Taliban.
At the top of the agenda for
Monday’s talks in Islamabad is a
proposal from the Afghan gov-
ernment in Kabul to identify in-
fluential Taliban representatives
who could be approached for
talks and commit to fighting
others, said Afghan and Pakistan
officials attending the one-day
meeting. Taliban representatives,
who have declined to comment
on the meeting, weren’t ex-
pected to attend.
—Jessica Donati

Arab League Offers
Support in Iran Spat
The Arab League backed
Saudi Arabia in its diplomatic
spat with Iran, triggered by the
kingdom’s execution of a dissi-
dent Shiite cleric, condemning
Tehran for failing to protect
Saudi diplomatic sites in the
Persian country.
“The Arab League won’t ac-
cept Iranian intervention in the
Arab region and sowing sectar-
ian strife,” Secretary-General
Nabil al-Araby said in a televised
news conference at the league’s
Cairo headquarters after an
emergency session that Riyadh
All member states supported
the statement except Lebanon,
which has a large Shiite popula-
tion and strong political ties
with Tehran.
Sunni Saudi Arabia and Shiite
Iran are vying for more influence
across the Mideast, mostly along
sectarian lines.
—Tamer El-Ghobashy
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A10 | Monday, January 11, 2016 * * THE WALL STREET JOURNAL.


A British Threat That Can’t Be Ignored ‘ElChapo’Felled

BY JOSÉ DE CÓRDOBA him global notoriety.
AND DUDLEY ALTHAUS “He was interested in see-
ing the story of his life told on
MEXICO CITY—Mexican film but would entrust its tell-
EUROPE FILE crime king Joaquín “El Chapo” ing only to Kate,” wrote Mr.
SIMON NIXON Guzmán was behind bars on Penn in an article published in

Sunday in the same maximum- Rolling Stone magazine on

security prison from which he Saturday night. The article de-
A British referendum on escaped six months ago, his tailed Mr. Penn’s visit with the
whether to remain a member dreams of movie glory dashed drug lord in October.
of the European Union is the thanks in part to an interview Mr. Guzmán had been
single biggest “known un- he gave to actor Sean Penn. drawn to Ms. del Castillo since
known” hanging over the Eu- Mexico’s government tried she came to his defense in a
ropean economy. to reassure citizens that this letter distributed through
The vote now seems al- time around, the country’s Twitter in 2012.
most certain to take place most famous inmate wouldn’t “Señor Chapo, wouldn’t it
this year. Prime Minister Da- escape—as he twice did from be cool that you started traf-
vid Cameron hopes to achieve federal prisons here. ficking with love? With cures
a deal at a summit in Febru- Mexico’s National Security for diseases? With food for
ary on the changes to the re- Commission said it had up- homeless children…?” wrote
lationship that he thinks are graded emergency protocols Ms. del Castillo in the letter,
necessary to U.K. leader David Cameron, in Germany on Thursday, hopes Britons will back EU membership. and the technology used to su- which caused a furor on Mexi-
persuade pervise staff and inmate move- can social media. She dis-
Britons to paigned for Brexit are un- Europe could stoke new ten- beyond the U.K. ments. It said the prison meets missed the criticism.
back contin- likely to trust Mr. Cameron sions in the province. Meanwhile, a Brexit would strict international standards. Ms. del Castillo became an
ued member- with the task of negotiating a A third area of concern throw the wider European In a cinematic twist, Mexi- American citizen in September,
ship. EU offi- complex and politically for investors is the future re- project into disarray, absorb- can officials said Mr. Guzmán’s tweeting a photo of herself at
cials say the fraught divorce settlement. lationship between the U.K. ing precious political space hope to have his life story the naturalization ceremony
parameters of the deal are al- and EU. As things stand, needed to focus on steps to turned into a biopic by Mr. with a message for Donald

ready hammered out. ny political instability those campaigning for Brexit bind the eurozone closer to- Penn and Kate del Castillo, a Trump, letting the Republican
Bookmakers put the arising from a rupture are unable even to agree gether, including completing Mexican actress famous for presidential candidate know
chance of Britons voting to within the Conserva- among themselves what kind its banking union and devel- playing a drug boss, helped there was one more American
leave the EU at 36%. That is tive party would likely be of future trading arrange- oping new mechanisms to lead security forces to the who doesn’t support him.
roughly the same probability compounded by wider insta- ment the U.K. should de- help the currency bloc re- drug lord. Mexican government offi-
implicitly assumed by institu- bility within the U.K. A Br- mand, let alone what kind of spond to economic shocks. Mexican officials said they cials said the two actors are
tional investors, according to exit vote would raise doubts arrangement the EU might located Mr. Guzman’s hideout under investigation, although

a survey by Absolute Strat- about the long-term viability be willing to concede. nevitably, a Brexit would in part by tracking the interac- the officials declined to give
egy Research. There may be of the political union among What is clear is that an raise questions about tions between the actors and more details of the probe. Ana-
powerful reasons to believe England, Scotland, Wales EU-lite arrangement similar whether other non-euro- Mr. Guzman’s lawyers. lysts say it is unlikely Mr. Penn
that Britons will ultimately and Northern Ireland. It to those currently enjoyed zone countries would follow The drug lord was recap- or Ms. del Castillo would be
vote to remain, particularly would be bound to trigger by Norway and Switzerland the U.K., sapping the EU of tured on Friday. The Mexican charged with any crime. Mara
when urged to do so by Mr. demands for a fresh vote on is out of the question, and the cohesion it needs to ad- government on Saturday said Buxbaum, a spokeswoman for
Cameron. But the possibility Scottish independence. Mr. Cameron has already ex- dress other common chal- it had restarted proceedings to Mr. Penn, and Ms. del Castillo’s
of a “Brexit” can hardly be A Brexit vote also risks plicitly ruled them out. Such lenges including the migra- extradite Mr. Guzmán to the spokesman declined comment.
dismissed as a minor risk. In- profoundly destabilizing the an arrangement would re- tion crisis, deepening of the U.S., where he faces charges “The main question to ask
vestors should prepare them- peace process in Northern quire the U.K. to continue to single market, and relations that include drug trafficking, is: Did this person do anything
selves for the consequences. Ireland. The Irish government accept the right of EU citi- with Russia, leaving the con- homicide and money launder- that’s in furtherance of the
Of course, the greatest im- has repeatedly argued that EU zens to live and work in the tinent more vulnerable to ing in multiple federal jurisdic- criminal activity?” said Dan
pact would be on the United membership has played a sig- U.K., the very issue that is economic shocks. tions. That process is likely to Suleiman, an attorney at Cov-
Kingdom itself. This would be nificant role in bringing peace most likely to have swung That could undermine take months. ington & Burling LLP in Wash-
felt via three main channels. to the province, providing a voters against continued corporate confidence just as Mr. Guzmán has long been ington, D.C.
The first is the risk of serious neutral space where the two membership. the eurozone urgently needs the stuff of legend in Mexico, U.S. law states that the ac-
political instability. Although sides could meet as equals. Many economists agree increased business invest- particularly after slipping out tor couldn’t be charged as be-
Mr. Cameron would likely to The prospect of establishing a that the combined impact of ment to help broaden a re- of a maximum-security prison ing an accessory after the fact
try to stay on as prime minis- new external EU border—po- this uncertainty is bound to covery currently overreliant in 2001 by hiding in a laundry unless he assisted Mr. Guzmán
ter even if defeated in the ref- tentially introducing new re- damage confidence and in- on consumer spending. A Br- cart and eluding capture for 13 “in order to hinder or prevent
erendum—he said as much in strictions on the freedom of vestment, damaging growth exit-induced resurgence in years, becoming the world’s his apprehension,” said former
a TV interview Sunday—it is movement of goods and peo- and weakening sterling. But the euro crisis would have most successful narcotics traf- federal prosecutor Jimmy Gu-
unlikely he could cling on for ple—along one of the most the economic consequences global consequences. That ficker along the way. But his rulé, now a law professor at
long. Those who had cam- volatile political fault lines in of a Brexit would be felt well much is a known known. second escape last July earned the University of Notre Dame.


You’re Invited to Chef ’s Table

with April Bloomfield

Join Michelin-star chef and restaurateur April Bloomfield for an evening of dining and
discussion that will stimulate your mind and appetite. Although famed for her work
with meat — taste a curated three-course meal inspired by Bloomfield’s new cookbook
“A Girl and Her Greens” and discover why her true love is vegetables.



@wsjplus #wsjplus

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THE WALL STREET JOURNAL. Monday, January 11, 2016 | A11



This year’s meeting will tackle the critical enterprise computing issues affecting business
today. Technology is radically changing the business landscape. How can chief information
officers and other top executives managing data deploy the best technology to address
competition, strategy, analytics and network vulnerability? The Journal is pleased to present
speakers at the forefront of managing change. They will share insights on maximizing new
technologies and the cost of falling behind.



CEO / Docker CEO, Co-Founder and Chairman / Box

Containment Policy: What does the Organizing the Business: Where is

innovation of container technology the future of enterprise cloud
mean for business? And when should computing headed?
a company make the leap?


CEO and Founder / Fast Forward Labs Principal / The Chertoff Group
Director / CIA (2006-2009)
Bring on the Data: Big data has launched Director / NSA (1999-2005)
a boom industry in data analytics and
science. Where’s this revolution headed Cybersecurity: A report from the
and how can companies turn all this data front lines.
to competitive advantage?



Co-Founder and CEO / Slack Assistant Secretary, Office of Cybersecurity and
Communications / U.S. Department of Homeland Security

Chairman / Intel Corporation TOM REILLY
CEO / Cloudera
Former CEO / Drugstore.com PETER SONDERGAARD
Former CIO / Charles Schwab SVP, Research / Gartner, Inc


To view the complete program or learn more about membership in the CIO Network,
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A12 | Monday, January 11, 2016 THE WALL STREET JOURNAL.


CARS past, Berkshire CEO Warren

Buffett has said that Geico
doesn’t see evidence that us-
age-based pricing would pro-
Continued from Page One vide an advantage. Through a
moting plug-in devices and/or spokeswoman, he declined fur-
smartphone applications, as ther comment.
well as cutting deals to piggy- State insurance regulators
back on auto makers’ in-car generally have welcomed us-
computers, all in hopes of get- age-based insurance programs
ting sensors into cars. because they are voluntary and
For insurers committed to provide the opportunity for
this new way of sizing up acci- drivers to learn how to improve
dent risk in policyholders, the their driving. Still, location
appeal is that they can better tracking raises bigger concerns,
identify safe drivers, who are and not just for the privacy im-
less likely to file claims, and plications, some consumer ad-
entice them with discounts off vocates caution.
the conventional pricing—po- Some people could get
tential reductions up to about higher pricing “not because of
30% are possible. The goal is to the manner of driving, but be-
keep those less risky customers cause of where and when they


long-term, while riskier drivers drive due to long commutes to
facing rate increases could be work or driving through neigh-
motivated to shop around. borhoods disfavored by insur-
Progressive, the fourth larg- ers,” says Birny Birnbaum, a
est U.S. auto insurer, says former Texas insurance regula-
nearly 80% of drivers qualify tor who now heads an Austin-
for discounts. Until recently, it based nonprofit, Center for
and other companies running Economic Justice, which advo-
these programs haven’t sur- cates for low-income consum-
charged those drivers they ers.
learn through monitoring are Progressive’s Mr. Pratt says:
worse than the traditional “It’s too early to tell how loca-
methodology indicated, in the Progressive CEO Glenn Renwick stands in front of a portion of the company’s servers that collect data on customers’ driving habits. tion data may factor into deter-
interest of attracting as many mining rate.”
participants as possible and posed more risk than those meant data could be sent di- Insurers are still on a learn-
building up databases to ana- with speeding tickets. rectly to Progressive’s comput- Behavior Problems ing curve when it comes to us-
lyze, though Progressive in late In the 1990s, its analysts ers. It began rolling out a rede- Top driving behaviors reported for drivers and motorcycle age-based systems. Last year
2014 began levying surcharges helped establish a correlation signed version in 2010, calling operators in fatal crashes, 2013 for instance, Progressive con-
of up to 10% in some states. between credit histories and it “Snapshot.” The name re- cluded Snapshot was overesti-
Progressive has about a claims by testing a hypothesis flected a changed tack: Instead Behavior Share of crashes in which behavior was reported mating the potential for acci-
quarter of its new customers that financially responsible of monitoring drivers all the Driving too fast for conditions dents from midnight to 4 a.m.
or speeding or racing 20%
using its monitoring device. people are more cautious driv- time, it decided to limit its as- driving on week nights, and
Allstate, which got into the ers. They factored that into sessment period to six months. Under the influence of alcohol,
now considers late-night driv-
game later but is ahead of Pro- pricing, so some applicants Mr. Renwick, a former engi- drugs or medication ing to be high-risk only on
gressive in rolling out a smart- who on the surface look risky neer at Bell Labs, says the com- Failure to keep in proper lane 8 weekends.
phone-application, says its could end up paying less, and pany concluded most people Insurers and their trade
take-up rate is about one in vice versa. Many rivals fol- have repetitive commuting pat- Failure to yield right of way 7 groups note that usage-based
three. lowed suit. terns and driving behavior, so programs are subject to regula-
Progressive’s managers then managers decided it would be Distracted (phone, talking, tory review by state insurance
proposed gathering informa- enough to just take a snapshot, eating, etc.) departments and must be in ac-
Winning trust tion directly from cars in hopes after which the device would Driving in a careless manner 5 cordance with laws that pro-
Chief Executive Glenn Ren- of crafting truly individualized be removed. hibit unfair pricing practices.
wick says Progressive recog- rates. Since 2008, nearly four mil- Overcorrecting/oversteering 5 To attract more users, All-
nized from the beginning that Over the next decade, it lion drivers have participated state in August announced new
it would be an uphill battle. tested a series of devices that in Progressive’s program. The Failure to obey traffic signs, features for users of its usage-
signals or officer
Early company surveys of peo- had to be installed or plugged most powerful predictor of ac- based “Drivewise” program.
ple’s interest in usage-based in- into a customer’s car. The de- cidents, the company says, is Swerving or avoiding* 4 They include points for deals
surance revealed that about vices were too cumbersome to hard braking. Progressive de- on merchandise, gift cards and
40% of people had a viewpoint catch on with the broader pub- fines that as a decline of 7 Driving in erratic, reckless, local offers through safe-driv-
or negligent manner 3
that was some variation on “No lic and too expensive for Pro- miles an hour in the space of a ing challenges, such as driving
way in hell.” gressive to put into widespread second. Progressive’s device *Due to wind, slippery surface, other vehicle, object, nonmotorist in roadway, etc. below 80 miles an hour and
“Insurance is not something use. beeps every time it senses a Note: More than one behavior may be present for the same driver/operator. avoiding hard braking for three
where people say, ‘I trust Still, Progressive gleaned hard brake to make drivers Source: National Highway Traffic Safety Administration via Insurance Information Institute straight days.
you,’ ” he says. new information, such as a aware of the risky behavior. THE WALL STREET JOURNAL. Allstate, which launched its
Progressive traces its inter- mile driven at 2 a.m. was in The conventional approach plug-in device in 2010 and the
est in data to its entry into the general four or five times risk- of grouping insurance appli- During her six-month Snap- Progressive’s computers after cellphone version four years
car-insurance business in 1937, ier than one driven at 7 a.m. cants into demographic pools shot test, she recalls a handful the six-month period is over. later, says about 925,000 of its
after other insurers had largely One early device contained reflects findings including that of beeps for hard braking. Progressive hopes to coax 20 million policyholders are
cornered the market for the Global Positioning System tech- the average married male is 3% Ms. Irwin says she recom- more participation out of its enrolled in its program. It is
safest drivers. Left to pick nology, but because location more likely to have an accident mends the program but notes customers when it launches a cutting expenses elsewhere but
through pools of rejects, Pro- tracking turned off so many in a given year than a married her friends don’t always bite. smartphone-app version of its not with Drivewise.
gressive studied accident re- consumers, Progressive female, according to Progres- “They have privacy concerns,” device in 2016. “We’re investing quite heav-
ports to find the relatively bet- stripped it out. sive. But married males with she says. David Pratt, who runs Pro- ily,” Allstate CEO Thomas Wil-
ter risks. It discovered, for In 2008, Progressive came the fewest hard brakes are 41% gressive’s Snapshot program, son said.
instance, that older people who out with a device that used less likely to have an accident says smartphones have made Technological innovation is
failed to yield at intersections wireless technology, which than the typical married female The ‘bunker’ Americans more comfortable rapidly eliminating some of the
as determined by the conven- At Progressive, data on with location tracking, so the hitches in the monitoring pro-
tional methodology, according about a million new trips pour company is once again re- grams. State Farm has a cell-
to Snapshot data. in each day, and are logged in searching GPS use, including in phone-app program in Ohio in
Allstate also tracks hard computer servers housed in a some of its Snapshot devices. which it provides, free, a small,
braking, defining it as a de- building called the “bunker” at With the spread of smart- Bluetooth beacon that a policy-
crease in speed of 8 miles an the company’s headquarters. phones lowering the barrier to holder puts in a glove compart-
hour or more in a second. The The servers hold data on 15 bil- entry, small and midsize insur- ment so that the app tracks
company has found that drivers lion miles of driving. ers are plowing ahead, tapping driving behavior only when the
who slam on brakes more than Progressive’s privacy policy into the large number of con- policyholder is in that particu-
eight times every 500 miles are says that Snapshot data is en- sulting firms, app developers lar car, as opposed to a taxi,
73% more likely to get into an crypted when transmitted to its and device makers available to bus or someone else’s car as a
accident in a given year. servers. According to the pol- help. passenger. Under many other
Customers who have signed icy, Progressive won’t sell per- Companies that don’t offer a cellphone apps, a policyholder
up include Vanessa Irwin of sonally identifiable Snapshot usage-based program could be has to go into the app to strike
Farwell, Mich. Three years ago, data to third parties, and it impacted by “adverse selec- out a given trip if he or she
she was attending community won’t use the data to resolve tion,” according to Carl Smith, wasn’t actually behind the
college, working part time and insurance claims without first a director of product manage- wheel.
couldn’t afford the couple hun- obtaining permission. It also ment in the U.S. car-insurance Paul Saffo, a specialist in
dred dollars a month she was won’t share the data with any operations of Spanish insurer technological change who
quoted to cover a 2003 Chevro- third parties “unless it’s neces- Mapfre SA, meaning they could teaches forecasting classes at
let Impala, thanks to a ticket sary or appropriate to service be stuck with many bad drivers Stanford University, sees usage-
for speeding on a 70 mph your insurance policy, detect or as rivals’ usage-based pro- based pricing as “probably in-
stretch of highway. Then her prevent fraud, perform re- grams attract good ones. Map- evitable long-term.” He says
grandmother saw Progressive’s search, or comply with the fre began rolling out a program U.S. consumers have shown in
Snapshot commercials. law,” such as in response to a in 2012. recent decades a willingness to
“My grandma kinda talked subpoena in a civil lawsuit or Among the few big insurers sacrifice privacy for conve-

me into it,” says Ms. Irwin, now by police when investigating that have yet to publicly ac- nience, and he believes they
22 years old. “She said, ‘What the cause of an accident. Pro- knowledge at least experiment- will continue to do so even as
can it hurt if it saves you gressive said it has received ing with usage-based insurance they complain.
money?’ ” Within a month, her subpoenas in “a small number is Berkshire Hathaway’s Geico “Privacy already has shifted
Vanessa Irwin uses Progressive’s Snapshot program. She says rates were cut by 30% to about of instances,” declining to pro- unit, which has bigger market from being a right to a good
she recommends it, but that her friends have ‘privacy concerns.’ $165 a month. vide specifics. The data stays in share than Progressive. In the that is purchased,” he says.

SCI-FI Krypton’s solar system down

to atmospheric density.
“That ripples down through
the costumes, the way the char-
says Jeremy Latcham, senior
vice president of production and
development at Marvel Studios.
“There was a long time when
into her one-woman show,
“Einstein’s Girl.”
The Exchange’s Mr. Loverd
acknowledges getting the minu-
The Exchange organizes
about 25 events yearly, from
loft parties with lectures on
topics like wormholes or hover-
Dr. Cail, the psychopharma-
cologist, says Marvel called
last year for help designing a
plausible serum to give a
Continued from Page One acters talk,” says Mr. Goyer. every movie had an electromag- tiae correct services “that small boards, to intimate salons in “S.H.I.E.L.D.” character super
ence more than ever. Exchange members are netic pulse in it,” he says. “For percentage of the population Hollywood mansions. “Family strength. Her solution: an ana-
There’s a hotline for that: global. When screenwriters for us to be cool now, we have to that can understand this stuff.” Guy” creator Seth MacFarlane bolic androgenic steroid mixed
844-NEED-SCI. a monster movie had questions riff on the real stuff.” But writers face fans who hosted one on evolution. with a liver-enzyme inhibitor.
It connects to the Science and about the Erebus Ice Tongue Exchange scientists aren’t have turned the Web into an ac- Some soirees match screen- Marvel says the screenwriters
Entertainment Exchange, the glacier, the Exchange connected paid. They often sign agree- countability tool. And shows like writers with scientists in added “gorilla testosterone
loft party’s host. Funded by the them with a member in nearby ments not to spill details and “MythBusters” have popularized events the Exchange calls and a drop of peppermint.”
nonprofit National Academy of Antarctica. typically don’t get into the movie-science debunking. “speed-dating,” including one Dr. Cail, who moonlights as
Sciences, it has more than 2,700 The Exchange isn’t trying to credits. There are also academic last month at NeueHouse Hol- a stuntwoman, gets an Ex-
scientists on call. play scientific gotcha with Hol- They have consulted on more critiques. The 2013 space lywood, a Sunset Boulevard change call every few months,
If something is “wrong” with lywood, says Jessica Cail, a Los than 1,300 projects. A quantum drama “Gravity” was a hit, but space where Lucille Ball and and “I go right to the jour-
a script, says Rick Loverd, the Angeles psychopharmacologist field theorist helped screenwrit- astrophysicist Neil deGrasse Ty- Orson Welles once worked. nals.” She also gives tips to
Exchange’s program director, it who has consulted through it on ers explain the quantum realm son publicly raised questions: “Enter the nerds,” said the help actors accurately portray
is often because the screen- projects like “Marvel’s Agents of mechanics that shrank Paul Why did satellite debris orbit Exchange’s Mr. Loverd, survey- the effects of drugs.
writer has underestimated how S.H.I.E.L.D.” Rudd in “Ant-Man.” east to west, and why didn’t ing the lobby. But the Exchange doesn’t
science has evolved. “They’re Her goal isn’t to make Producer Adam Fratto says Sandra Bullock’s hair float in Scientists, including an as- want to be the “correctness
writing something that they scripts worthy of peer review, he asked the Exchange whose zero-G? The movie makers, Dr. tronomer and microgrid spe- police,” says NAS President
think is futuristic, but it’s not.” she says. That would put audi- job it was to respond to alien Tyson says in an email, “needed cialist, shuttled room-to-room Ralph J. Cicerone, who started
David S. Goyer, co-writer of ences to sleep. In finding a contact. It put him in touch that twist of reality to intensify for seven-minute sessions. it in 2008 after conversations
the coming “Batman v Super- middle ground between fan- with the Planetary Protection the story.” Discussing cyberterrorism with “Airplane!” director Jerry
man: Dawn of Justice,” tapped tasy and realism, she says, she Officer at the National Aeronau- Audiences have finite during a panel at evening’s end, Zucker.
the Exchange while developing wants to make the science tics and Space Administration. “buys”—creative allowances— Maynard Holliday, a Pentagon In the end, says “Krypton”
“Krypton,” a TV show about seem “plausible-ish.” Los Angeles actress Gia they will give a movie, says robotics engineer, said a cyber- screenwriter Mr. Goyer, “how
Superman’s home planet. At Science-fiction features of Mora says she once asked an Marvel’s Mr. Latcham. The high- attack may require a “kinetic accurate can you make a
an Exchange event, he met the 1950s could chalk up mutant Exchange physicist how to tech Iron Man suit, he says, response,” with ground troops. movie about a guy who leaps
planetary scientist Kevin superpowers and other anoma- properly incorporate a joke “feels attainable” because it is “Movie title!” shouted some- over tall buildings in a single
Hand, who helped design lies to atomic gobbledygook, about NASA’s Bicep2 telescope based on plausible science. one. bound?”
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Monday, January 11, 2016 | A13

China Disappears Information BOOKSHELF | By Jeffrey Collins

trying to
Four bookstore employees
disappeared in October, three
while visiting the mainland and
mouthpiece Xinhua warned
that “malicious” short sellers
must be dealt with in a “firm-
investors are in the dark, and
China’s 90 million individual
shareholders even more so.
The Commercial
stand the
one in Thailand. Last month
co-owner Lee Bo vanished. “I
am not worried,” he had told
handed manner.”
The bellwether was the
arrest of Wang Xiaolu, a
When mainland
blocked Web searches for

“stock market crash,” Chinese

INFORMATION s t o c k the South China Morning Post. financial journalist at Caijing, investors who incurred losses
AGE market
“I have avoided going to the
mainland for years.” It turned
an independent Beijing-based
magazine, who reported in July
resorted to black humor on
social media. “Last month, my
Hume: An Intellectual Biography
By L. Gordon
pay a out he wasn’t safe in Hong that the government planned to dog ate what I ate,” one wrote. By James A. Harris
visit to a Kong. British Foreign Secretary “Last week, I ate what my dog (Cambridge, 621 pages, $55)

gritty Philip Hammond last week ate. This week, I ate my dog.”
building on Lockhart Road in complained in Beijing about There is a connection In addition to booksellers n the summer of 1776, the celebrated diarist James
Hong Kong. They’ll find a re- the snatching of Mr. Lee, a and journalists, Beijing has ar- Boswell visited the Edinburgh home of David Hume,
minder of the risks of operat- British citizen, calling it an between Beijing’s rested numerous senior finan- where the philosopher lay dying. Hume, atypically thin
ing in an authoritarian country “egregious breach” of China’s repression and last cial executives. Among them and “ghastly” in pallor, was nevertheless “placid.”
where providing information commitment to respect Hong are senior bankers at the Citic Interrogated by Boswell, he affirmed his view that the
is a crime. Kong’s rule of law and freedom week’s market shocks. brokerage as well as the presi- afterlife was an “unreasonable fancy.” With “death before his
On the second floor is of speech. dent of the country’s first eyes,” Boswell reported, Hume blithely predicted his own
Causeway Bay Books, long a There’s a connection be- private bank, China Minsheng. annihilation. “I maintained my faith,” wrote Boswell, but “left
popular destination for main- tween Beijing’s repression and pull back on propping up the Some arrests relate to corrup- him with impressions which disturbed me for some time.”
land visitors looking for infor- last week’s collapse of its stock market. Mr. Wang was tion, but others are for no This scene often serves as a miniature representation of
mation banned at home. It’s stock market. International detained, then forced on reason but to control markets. Hume’s career. Boswell’s watery piety crashes against
closed, at least temporarily, af- investors have long trusted national television to confess In all, executives from 34 Enlightenment reason. Superstition flinches before
ter five owners and employees Hong Kong as a haven for that he had published “private companies have disappeared, knowledge. The sang-froid of Hume’s godlessness amazed
were “disappeared”—appar- information about China. The information” and brought with only some reappearing. contemporaries, and modern atheists have treasured the tale.
ently snatched and detained Communist Party has always “great losses to the nation and Among those was Guo James A. Harris’s “Hume:
by mainland security forces— censored political speech in investors.” Guangchang, chairman of the An Intellectual Biography”
for selling books that offend China, but until recently the Publishing private informa- Fosun Group, who is known as punctures most of this
Beijing. Politburo understood that tion about markets is central China’s Warren Buffett. His in- mythology. Though an atheist,
The case shows Beijing is being part of global markets to financial journalism. Mr. terests include Cirque du Hume was nowhere near as
willing to create international requires an open flow of infor- Wang’s reporting about gov- Soleil, Club Med and the for- dogmatic as his current
incidents to control informa- mation. Beijing’s censorship ernment plans was accurate, mer Chase Manhattan Plaza in admirers. He was certainly not a
tion. Just before the store now suppresses economics as which was no defense. In- downtown Manhattan. Brokers rationalist. His reputation for
closed, its two best sellers well as politics. stead, Beijing used his case to and hedge-fund managers are philosophical intrepidity, fur-
were “2016: Collapse of the Chinese share prices have instruct other journalists it is also among the mysteriously thermore, has been overblown.
Communist Party of China” fallen 40% since summer. Bei- now a crime to report accu- missing. David Hume was born in 1711
and “Shen Bing’s Account: My jing is eager to stop the decline, rate information about mar- Global finance depends on a in Scotland, the third child of a
Story With Zhou Yongkang,” in with the government buying kets. The Chinese propaganda free flow of information. gentrified lawyer. He would spend
which the author, a state-TV shares directly as well as ministry issued a directive: “Do World markets are in un- much of his life at the family’s
anchorwoman, describes her through pensions and pressur- not use emotionally charged charted territory now that the country home, Ninewells. As a
affair with Mr. Zhou, a former ing patriotic brokers. It bans words such as ‘slump,’ ‘spike’ world’s second-largest econ- younger son, Hume required an occupa-
Politburo member now impris- large owners of a stock from or ‘collapse,’ ” it instructed. omy is censoring within and tion. He flirted with law and business and enjoyed some mi-
oned for corruption. There’s selling more than 1% of total “Do not conduct in-depth beyond its borders. The lesson nor government jobbery. But he always wished, Mr. Harris
speculation that the disap- shares at once and requires analysis, and do not speculate from China is that markets writes, “to live the life of a man of letters.” This aspiration
pearances are meant to stop a them to inform exchanges on or assess the direction of can’t function smoothly when was just becoming possible as an expanding commercial
planned book about the love three weeks in advance to sell the market.” accurate information is disap- print market replaced a reliance on aristocratic patronage.
life of President Xi Jinping. shares at all. The official The result is that global peared. Writing would eventually make Hume rich and famous,
but for many years he lived a transitory, modest life. He was
often unhappy. For much of the early 1730s, Hume endured

North Korea’s Cuban Friends an emotional breakdown. During this time, and periodically
thereafter, he lived with his family—unable to establish him-
self in the world and crippled by depression (the “disease of
You’d think story that the State Depart- the State Department’s list of pledged its loyalty to North the learned,” as one of his doctors called it). His gloom
that North Ko- ment became aware in June state-sponsors of terrorism. Korea. In March 2015, accord- emerged from his reading and from the belief that the stric-
rean dictator 2014 that a Hellfire missile The missile is only the lat- ing to Cuba’s state-run news tures of traditional Christian and Stoic morality were an im-
Kim Jong Un had gone missing and that it est example of the no good agency, North Korea’s foreign possible burden to bear.
wouldn’t have was “likely in Cuba.” that Cuba is still up to. In July minister visited Havana and Mr. Harris’s book is, as advertised, an intellectual
a friend in the Let’s face it: That was no 2013 Panama Canal authori- reminded Cubans that the two biography. It will not supplant E.C. Mossner’s standard
AMERICAS world these shipping error, as some have ties discovered 240 metric peoples “share a history of biography of 1954. As a historian of Hume’s ideas, however,
days. His re- speculated. Stealing weapons tons of weapons—including struggle together in the same Mr. Harris far surpasses Mossner. Hume wrote prodigiously:
By Mary
lentless pur- technology is what spies do for jet fighters and missiles—hid- trench against U.S. imperial- on philosophy, economics, politics, religion and English
suit of weap- a living, and getting hold of a den under a sugar shipment ism, which continues exerting history. Mr. Harris extracts no “system” from this variety. He
ons of mass sophisticated piece of U.S. aboard a North Korean ship economic pressure on our proceeds chronologically, fixing each work amid surrounding
destruction equipment is a major coup for that had sailed from Cuba and countries to this day.” The texts and debates. Mr. Harris’s Hume exists not in the flesh
and willingness to starve his Havana. was bound for North Korea. news agency also reported but on the page, engaging fellow philosophers, such as Man-
own people is evil madness. It is not a stretch to think that the minister brought a deville, Montesquieu and Shaftesbury.
Last week even communist that the regime will share, for “message from Jong-Un in or-
China condemned the supreme a price, everything there is to The Castro boys now der to expand and strengthen”
leader’s fourth nuclear test, know about the laser-guided, the excellent relations between The Enlightenment is often miscast as the ‘Age
which the chubby little psy- air-to-surface Hellfire—which have a U.S. Hellfire the two countries. of Reason.’ In truth, it dethroned rational
chopath called “the thrilling can be launched from a heli- missile to share In June 2015 Raúl Castro
sound of our first hydrogen copter or drone as well as from hosted Kang Sok Su, the sec- philosophy in favor of sociology and psychology.
bomb explosion.” a plane—with its good friends with Kim Jong Un. retary of international rela-
But Mr. Kim is not all Iran, Russia and North Korea, tions for the North Korean
alone. He still has the Carib- and even with other terrorist Workers’ Party. In September There are costs to Mr. Harris’s erudite method. Hume’s
bean’s Cosa Nostra—aka the organizations. Havana tried to play down Mr. Kim received Cuban Vice friendship with Adam Smith, his Continental travels, his
Castro family—as a friend and President Obama seems to the incident, calling the weap- President Miguel Díaz-Canel notorious falling out with the paranoid Rousseau: None of
ally. The Cold War may be think that the Castros have ons outmoded. But the U.N.’s in Pyongyang. Cuba’s state- this is narrated in detail. Mr. Harris’s textual explications
long over, but Cuba is sticking abandoned their revolutionary North Korea sanctions com- owned newspaper Granma can have a dry, lofty air. But patient readers are rewarded.
by the North Korean pariah. obsession with harming the mittee said the shipment reported that Mr. Kim sent Hume emerges as a product of the Enlightenment as it really
This bond exposes Ameri- U.S. The theft of the Hellfire demonstrated “intent to evade “an affectionate greeting” to was, not as it exists in complacent legend.
cans to grave risk. Analysts would have disabused even UN sanctions” and that it was the Castro boys during the In his earliest and most substantial writings, Hume
fret that Pyongyang is devel- Chauncey Gardiner of such “consistent with previous visit. It also said that Messrs. adopted Locke’s empirical outlook—the idea that all knowl-
oping missiles and miniatur- naiveté. attempts by” Pyongyang “to Díaz-Canel and Kim discussed edge is derived from the senses—but drove its inherent
ized warheads that will allow But not Mr. Obama. He was transfer arms and related the two countries’ close rela- skepticism further than Locke had dared. Hume denied our
it to lob a bomb into the conti- already engaged in a rap- materiel through similar tac- tions and mutual cooperation. capacity to understand, even imperfectly, material causation,
nental U.S. But having a des- prochement with the regime tics in contravention of Secu- This ought to worry U.S. and he abandoned any notion of “final cause” (or purpose)
perate ideological pal 90 miles when the State Department rity Council prohibitions.” national-security officials. But in the created order. He also denied the temporal stability of
from U.S. shores magnifies the learned that Havana had the Samantha Power, the U.S. Mr. Obama is busy worrying our individual personalities. That a rock would invariably
danger. In the past 21/2 years missile. If he issued an ulti- ambassador to the U.N., called about shaping his legacy. I’m shatter glass, or that I am the same man I was last week,
Cuba has tried to smuggle matum that it be returned, his it a “cynical, outrageous and not sure why: He’s the first were mere imaginative tricks used to order the chaotic wel-
weapons to Pyongyang, en- talks might have collapsed. illegal attempt” by the two U.S. president to bow to a ter of sense. They were not demonstrably true.
gaged in high-level meetings So six months later he countries to evade U.N. sanc- Saudi king, the first to open In Hume’s view, vanity and comfort-seeking were the key
with North Korean officials, went ahead with his plan to tions. the door for Iran to get the components of our “mental anatomy,” and the operations of
and secured U.S. military throw a lifeline to the eco- In the 13 months since Mr. bomb, and the first to prop up sentiment propelled human society. This privileging of
technology. Anybody want to nomically struggling Castros Obama’s announcement that the Castros even while they mental disposition was typical of the era, as was Hume’s
connect the dots? by restoring diplomatic rela- he would reopen a U.S. em- hold a stolen Hellfire missile. fundamental utilitarianism. The Enlightenment is miscast in
On Friday Wall Street Jour- tions and liberalizing Ameri- bassy in Cuba and use execu- His place in history is already most textbooks as the “Age of Reason.” In truth, the
nal reporters Devlin Barrett can travel to the island. In tive decrees to weaken the U.S. secure. Enlightenment dethroned rational philosophy in favor of
and Gordon Lubold broke the May Cuba was removed from embargo, Cuba has repeatedly Write to O’Grady@wsj.com. sociology and psychology. Hume’s “Treatise of Human
Nature” and “Enquiry Concerning Human Understanding”
undermined not just religion but rationalism as well.

In Age of Google, Librarians Get Shelved In mid and later life, Hume wrote essays and narrative
histories of England, reaching a wide audience and achieving
the fame he had long sought. These works flattered and
By Steve Barker librarians no longer hold an closed their library schools ies can easily justify this new charmed, rather than challenged, his readers. They con-

MLS degree. Public libraries around the same time. It is position: Techies are paid less tained real insight, as Mr. Harris shows, but they also re-
he next time you visit a have created a new position still possible to get an MLS de- than librarians or library asso- flected the mannered dilettantism of their era.
public library and see an called “library associate”—col- gree, but the remaining gradu- ciates and they offer skills the Hume remains most famous for his irreligion. His essays
older person at the in- lege graduates who do the ate programs are much smaller public increasingly needs. The defending suicide and attacking miracles vexed the
formation desk, someone near same work as librarians but and are usually consolidated in public library of the future orthodox, and they loathed him in turn. In his “Dialogue
retirement age, take a good receive lower salaries than other departments or schools. might be a computer center, Concerning Natural Religion,” he sabotaged the Newtonian
look. You may be seeing the their MLS counterparts. The mood among some staffed by IT professionals and theology of designed creation that was popular in his day.
last of a dying breed, the pro- librarians is pessimistic. A New few books or librarians. What caused the first cause? he asked. Why do we celebrate
fessional librarian. Mexico librarian recently told Those of us who hold MLS divine design amid so much decay and misery? These provo-
Years ago, a librarian was A library-science me: “I spend most of my time degrees and are still working cations, in fact, operated effectively against a fairly narrow
someone who held a master’s making change and showing recognize the inevitability of range of theological argument: a rational religion emerging
degree in library science (MLS) degree can’t compete people how to print from the these trends. But large seg- from Lockean empiricism.
issued by a graduate program with online search, computer or use the copier. I ments of the American public Mr. Harris notes that Hume sought to examine religion
accredited by the American sure don’t get the reference struggle with literacy, or want from a “maximally detached” point of view, in order to
Library Association. Those of us but we still have a role. questions like I used to.” to study for the high-school “weaken the hold” of superstition. The Enlightenment often
who attended library schools A colleague in the Washing- GED, or are learning English congratulated itself for such campaigns of disenchantment,
underwent rigorous prepara- ton, D.C., area expressed simi- and want to know where they but how plausible was such a project for a philosopher who
tion, usually assignments that The erosion of the MLS de- lar views: “If I didn’t spend my can register to vote. We can still privileged sentiment and utility over truth? Mr. Harris
forced us to become familiar gree has been mirrored by the time helping people look for help children with their home- reminds us that Hume’s own disbelief—and not just the
with the reference books and disappearance of library lost keys, wallets, jackets, work and play a role in our religiosity of his opponents—might well be psychologized.
research tools that filled the schools from American univer- sweaters, gloves, backpacks, communities, as we have been Hume preferred philosophy to religion because philosophy
university library. sities. The University of Chi- cellphones and laptops, I’m not doing for over a century. “has little capacity to interrupt for long the course of our
The Internet changed all cago and Columbia University sure I’d even have a job.” The role for librarians and natural propensities.” As one who sought “morality without
that. The library user who used once offered the best librarian One bright spot: Some public public libraries is shrinking. austerity, pleasure without effeminacy, and a love of life
to rely on a librarian for help training programs in the coun- libraries have created jobs for But I imagine that in another without a fear of death,” Hume knew that atheism could
can now Google his question try; both institutions closed “technology assistants,” posi- hundred years, we will still be bring its own relief. Whether it was true was beside the
and find more data in a few sec- their library schools in the tions filled by tech-savvy young here, in one form or another. point.
onds than a librarian was able early 1990s. people with community-college
to locate in hours of research. Vanderbilt and the Univer- degrees and plans for informa- Mr. Barker is a librarian in Mr. Collins is a professor of history at Queen’s University
Many people who work as sity of Southern California also tion-technology careers. Librar- the Washington, D.C., area. in Kingston, Ontario.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A14 | Monday, January 11, 2016 * * THE WALL STREET JOURNAL.


A First Amendment Do-Over Crossing the Aisle Hasn’t Advanced the GOP

efending free speech has been a nota- cise their free-speech right. The union won’t Ever the Keynesian, Alan Blinder the last 27 years. A continuing budget
ble strength of the current Supreme vanish, or even lose its monopoly bargaining has forgotten, or never learned, that resolution a la Harry Reid would have
the $700 billion stimulus package at least kept the deficit from expand-
Court, and on Monday the Justices power. It will merely have less money to spend early in Barack Obama’s first term ac- ing and let the Democrats suffer a loss
hear a case that gives them a to influence politicians. complished nothing other than bal- of some of their precious entitlements
rare and splendid opportunity The Justices can correct The other union defense looning debt and not holding unem- and solar and wind credits.
to repair damage to the First a 39-year-old error on lows is that California’s law al- ployment under 8% as it was supposed PAUL MAHLER
Amendment done by the teachers to “opt out” of to do. Yet Mr. Blinder says that more Columbus, Ohio
Court itself. unions and free speech. the portion of the fees that stimulus is “welcome” (“A Glimpse of
In Friedrichs v. California goes to politics. But this opt- What Bipartisan Compromise Looks Prof. Blinder’s characterization of a
Teachers Association, 10 pub- out system is onerous, re- Like,” op-ed, Dec. 31). Zero-percent provision in the budget bill delaying
lic school teachers object to a California law quiring a teacher to make the request each rates, also a stimulus, haven’t spurred two ObamaCare taxes as a Republican
that forces them to pay union fees that finance year within a narrow window that is usually strong economic and employment victory misses the mark. The taxes
growth. Further, his definition of com- were included in the Affordable Care
causes they oppose. For 39 years the Court has about six weeks. If the teacher forgets to do
promise is very curious. President Act in support of the fiction that the
allowed such coercion thanks to an anomalous so, he is forced to subsidize union political Obama is the least compromising 10-year cost of ObamaCare would not
1977 ruling in Abood v. Detroit Board of Educa- causes for the year. This isn’t close to being president in memory. And where was exceed $1 trillion. Delaying the taxes
tion. Now is the time to overturn it. the “carefully tailored” process that the the compromise by the Democrats supports the free lunch meme which
As the brief for the teachers says, California Court has typically required when govern- with the stimulus and ObamaCare? will make repealing, replacing or im-
runs the “largest regime of compelled political ment is infringing on such a fundamental DAVID W. OGILVYproving ObamaCare more difficult. It
speech in the Nation.” It does so by coercing right as free speech. Tucson, Ariz.seems unlikely that any of the 166
teachers to pay roughly 2% of their pay in “af- If one or more of the Justices lack the nerve Democrats (90% of the caucus) who
filiate fees” to the union even if they choose to overturn Abood, fearing a progressive media Simple math tells me that Donald voted for the budget bill, or the 22
not to join the union. and political backlash, the least they can do is Trump, Ted Cruz and Marco Rubio who did not, saw delaying the taxes as
The California Teachers Association then require governments to let teachers keep the have approximately 60% of the early a Republican victory. In any event,
Republican primary votes. They all rail Prof. Blinder notes that “postpone-
takes that money and spends it on collective political portion of their dues money unless
against the status quo in Washington, ment isn’t a big deal” for Republicans
bargaining as well as a variety of political they “opt in” to the union scheme. D.C., and promise to confront it ag- or Democrats.
causes. It also sends some of it to the National Unions are so afraid they may lose this gressively. Instead of bashing these Although Republican support for
Education Association to spend nationwide. case that they have even thrown themselves current primary leaders, your journal- delaying the taxes may have helped fa-
California and the union argue that this coer- at the mercy of that great progressive bete ists should read and reread Mr. cilitate “bipartisan compromise,”
cion is justified because all workers benefit noire, Antonin Scalia. The conservative Jus- Blinder’s in-your-face crowing that helping the Democrats to achieve their
from union collective bargaining. tice wrote an opinion in a 1991 case (Lehnert “the deal was a big win for America” goals and not provoking union allies
But as the teachers point out, collective v. Ferris) that tolerated forced dues for union to help you understand the legitimate with their Cadillac plans should not be
bargaining in government is impossible to bargaining, and the union is throwing that and growing conservative anger. This seen as a victory for the GOP.
separate from matters of ideological speech. back at him in unquiet desperation. budget is another example of what ALAN STEVENSON
For public teachers, collective bargaining in- However, Justice Scalia has since voted with “crossing the aisle” has done to us for Reno, Nev.
volves wages and benefits that inevitably im- the majority in cases that recognized the First
plicate fiscal policy and the tax burden. It Amendment problems with union-fee schemes,
also includes such controversial political including Harris and Knox v. SEIU in 2012. Jus- Football and the Goals of Higher Education
matters as teacher evaluations and tenure. tice Scalia has always been alert to threats to President John Fry makes several and football has played a role in that
Individual teachers who object to the union’s free speech, and we find it hard to believe he valid points in his essay explaining rise.
positions on these issues must nonetheless would tolerate California’s coercive design. why football would be out of place at Like President Fry, I cringe when I
subsidize them. Conservative Justices are wary of overturn- Drexel University (“We’re Glad We read about college athletic programs
This violates what the Court said in 2014 ing precedents, and for good reason. Continu- Say No to College Football,” op-ed, that have lost their way. That’s why I
(Harris v. Quinn) is a “bedrock principle” that ity is crucial to the integrity of the law, and the Jan. 4). But I disagree with the core am as proud of our athletes perfor-
“no person in this country may be compelled Court cannot be seen as a body that overturns of his argument. A well-run football mance as students as their achieve-
program can create innumerable ben- ments on the playing field.
to subsidize speech by a third party that he or settled law based on the election returns. But
efits to a national university. The evi- The bottom line is this: Football
she does not wish to support.” the Court has a special obligation to re-exam- dence from our experience at Tem- isn’t right for every school, but
In her dissent in Harris, Justice Elena Kagan ine cases in which a fundamental constitu- ple—records for enrollment, academic strong and vigilant leadership by
justified this state coercion for unions on tional right has been compromised. rankings, alumni giving, research coaches and athletic directors can
grounds that the government has an interest Abood is an outlier in Supreme Court juris- funding—suggests that the student make college football a tremendous
in labor peace. But no great harm to the state prudence, and this is the chance to send it to and alumni engagement created by asset to a great university.
or the public is caused by letting teachers exer- the mistake file. our football program has a positive NEIL D. THEOBALD
impact on our academic programs. President
We use the revenue generated Temple University
Keystone No, Kenya Pipeline Yes from football to subsidize our 16 non-
revenue sports. Temple football also

provides high visibility that benefits I note that Major League Baseball
ransCanada took Uncle Sam to court Kenya and Northeast Africa could certainly use
the entire university, as our recent doesn’t rely solely on scouting talent
last week to reclaim some of the dam- the investment and jobs that would come from success has shown. Our applications from colleges and universities. It has
age done by the Obama Administra- the oil project. Then again, so could the United are up another 12% from last year’s a farm system. Why can’t the NFL set
tion’s multiyear, drawn-out States. What’s with the double record, and I expect another highly up a farm system to develop players
rejection of the Keystone XL The U.S. says it wants standard on pipelines? diverse, academically talented class wherever they can be found, not just
pipeline. It may not come up to help finance an oil Meanwhile, TransCanada to enroll in the fall. Unlike schools from colleges and universities?
in the litigation, but someone said it is bringing an interna- that are struggling to fill seats, inter- DAVID J. LEIDEL
should point out that the same pipeline in Africa. tional arbitration case against est in Temple is at an all-time high Arlington, Texas
Obama Administration that the U.S. for not treating the
rejected Keystone seems to Canadian company the way it
have no problem supporting a new oil pipeline would an American company, as it is obliged to
project in Africa. do under the North American Free Trade Agree- Helping Children With Gender Dysphoria
That was the story last week out of Kenya, ment. The company said it would seek to re- Regarding Debra W. Soh’s “The tion possibly be a product of political
where U.S. Ambassador Robert Godec told cover some $15 billion in costs and damages, Transgender Battle Line: Childhood” correctness?
Kenya’s energy minister that Washington would and don’t be surprised if the case succeeds (op-ed, Jan. 5): There is good reason JOHN F. WINSLOW
help Nairobi raise $18 billion to finance its Pow- given the extraordinary regulatory barriers the why pediatrics is a branch of medicine. Washington
erAfrika project. The pipeline would stretch U.S. imposed on the investment. Though multi- We know that children are not “little
from Kenya’s Rift Valley to Lamu on the coast. ple reviews showed no environmental harm, adults” and the way in which we treat We have seen just how toxic politi-
“Kenya needs $18 billion worth of financing,” President Obama rejected the pipeline on arbi- them is much different than how we cal correctness can be when a subject
Mr. Godec said, according to a dispatch in Oil- trary political grounds. TransCanada also filed treat adults. We have hospitals specifi- is politicized. When it comes to how to
price.com, “so one of the questions we are dis- a suit in U.S. federal court claiming that Mr. cally dedicated to the care of children treat children with gender confusion,
and are aware of their physiological the truth becomes crucial. There
cussing is how we can work together with the Obama’s decision to block Keystone exceeded
differences—specifically the adoles- should be no shaming of those with
private sector and governments to raise that his constitutional authority. cent’s brain and its continual develop- “incorrect” points of view when the
sum, to find ways to make certain that this fi- These cases are worth watching, especially ment. Ask any parent who has raised a facts are far from known. I have only
nancing becomes available.” by those who still want the U.S. to welcome for- child to adulthood about the many one criticism. Ms. Soh states: “Trying
Has Mr. Godec checked with Secretary of eign investment. Meanwhile, U.S. taxpayers will “phases” their child has gone through, to turn a gay person straight is unethi-
State John Kerry, or, perhaps more important, want to keep an eye out to see if their dollars and how the emotions, personality and cal, because sexual orientation is im-
anti-oil Democratic financier Tom Steyer? are used to finance the Kenya project. character of that child have changed mutable.” That is poppycock.
throughout the years. It’s a difficult One of my best friend’s always re-
and complex issue that needs serious bellious daughter was a lesbian for 10
The Other Republican Campaign attention and should not be decided on
the merits of gender-identity politics.
years. That changed when she met, fell
in love with and married a man. These

When I was five I insisted on ex- issues are complicated and deserve far
ne of the big, if not often explicit, Re- reform plan he rolled out last week that would
ploring the world on my Big Wheel in more study. That won’t happen be-
publican debates this year is how the replace the hodgepodge of current federal pro- search of more speed. Fortunately my cause of the politics.
party can best reclaim the White House grams with “right to rise grants” that would parents didn’t buy me a sports car. SIMON SOBO, M.D.
and a new conservative politi- be administered by the DAVID MASUCCI Newtown, Conn.
cal majority. Will it be enough Some in the GOP are states. The grants would have Budapest
to ride the obvious wave of looking for a new a work requirement and time I find it ironic that the letters page
voter frustration and anger, or limits. In her attempt to discredit doctors’ has letters regarding the “possible”
does the GOP also need to of- anti-poverty agenda. Several participants efforts to support transgender chil- long-term carcinogenic effect of eat-
fer a more optimistic agenda stressed the benefits of the dren, Debra W. Soh offers a flawed ar- ing genetically modified soybeans and
that broadens its appeal? Earned Income Tax Credit, gument based on flawed research. By the next page has Ms. Soh’s article
The former attitude has dominated the which pays Americans below a certain income relying on “data” produced by Dr. Ken- that discusses treating children with
neth Zucker, a psychologist whose gen- “hormones to suppress puberty and
presidential nomination debating, but the lat- level who work. Chris Christie pointed out that der-identity clinic closed last year af- help the individual develop breasts or
ter was on stage Saturday in South Carolina he had doubled the EITC in New Jersey. We ter an external review found it “out of facial hair.”
at a forum sponsored by the foundation think the EITC has more problems than many step with current operational prac- l’ll take the long-term chance of a
named after the late, great Republican Jack conservatives admit, especially its vulnerabil- tices,” Ms. Soh thoroughly undermines possible carcinogen over a hormone
Kemp. Senator Tim Scott and Speaker Paul ity to fraud and its disincentive to work as it her own nonscientific musings. treatment that will impact a child’s life
Ryan hosted six GOP presidential candidates phases out over higher incomes. The reality is that people who sup- from the first day of treatment.
to discuss conservative policies to fight pov- As economist Casey Mulligan has docu- port transgender children also support PETER NASH
erty and improve economic opportunity for mented, the phase out of welfare benefits and letting girls play with trucks and buzz Omaha, Neb.
everyone. tax credits means that some recipients can their hair. We are fine with boys wear-
“We’ve been fighting a war on poverty for face a marginal tax rate of more than 100% as ing pink and painting their nails. But
over 50 years now, and I don’t think you con- they try to get ahead. Progressives ignore this there’s a difference between kids ex- We Need Gluten-Free Gas
pressing gender diversely and kids be-
clude anything other than this war is a stale- obstacle to success, but the Kemp forum par- ing transgender. One is about expres- I am encouraged by Merrill Mat-
mate,” Mr. Ryan said to open the event. “We’ve ticipants acknowledged it openly and made sion, the other about identity. thews’s “The Corn-Fed Albatross
treated poverty like they’re potholes that need clear any reform had to deal with it. What’s really happening here is that Called Ethanol” (op-ed, Jan. 6). My
to be filled up and then we move on,” adding The two candidates notable by their ab- doctors and parents are finally sup- key platform is to make all gasoline
that “we now have a safety net that is designed sence were Donald Trump and Ted Cruz. Per- porting our lives, even the youngest gluten free.
to catch people falling into poverty when what haps they think that as the front-runners in among us. To do otherwise danger- MIKE EISNER
we really need is a safety net that is designed New Hampshire and Iowa they don’t need to ously denies transgender children New Whig candidate for president
to help get people out of poverty.” worry about such wonky political issues as their very humanity—and their safety New Haven, Conn.
Thus the day reflected the intellectual fer- poverty and welfare reform. They’re riding the and well-being.
ment as conservatives seek alternatives to the frustration wave. JAY BROWN Letters intended for publication should
Human Rights Campaign Foundation be addressed to: The Editor, 1211 Avenue
Democratic agenda of ever-expanding benefits But if one of them does win the nomination,
Washington of the Americas, New York, NY 10036,
and what so often becomes permanent depen- he will need a message and agenda that attract or emailed to wsj.ltrs@wsj.com. Please
dency on government. more than GOP primary voters. The nominee A definition of bisexuality is the ca- include your city and state. All letters
One of the big themes is how to reward might even find he could use the ideas that the pacity to reorient gender desire from are subject to editing, and unpublished
work, which is the only sustainable route out other candidates took the time to discuss in one situation to the next. Could belief letters can be neither acknowledged nor
of poverty. Jeb Bush promoted the welfare South Carolina. in the immutability of sexual orienta-
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL. Monday, January 11, 2016 | A15


Trump and Cruz Have Trouble in the Middle

By David W. Brady tention to how each of the candidates half of swing voters unwilling to con-

is doing among independents. A long, sider him. Marco Rubio is the most
terrible way to forecast drawn-out primary that forces candi- competitive among independents: 37%
the 2016 contest is to dates to make strong appeals to the said in December that they would con-
gauge whose supporters party’s ideological base can hurt the sider voting for him; only 32% ruled
are the loudest. Presiden- eventual nominee in November. him out. All the other GOP candidates
tial elections are not There are two ways that we can are under water. Forty-seven percent
decided by partisans or ideologues. measure how independents see the of independents said they would
The arithmetic is pretty simple: Republican contenders. On the posi- never vote for Jeb Bush, and 43% said


41% of voters in the 2012 presidential tive side, we can ask whether voters the same about Chris Christie.
election described themselves as hold favorable views about a candi- Moderates are a little harder on the
moderates, and 29% as independents. date. Or, on the negative side, we can GOP contenders. Mr. Rubio again
Almost all Republicans (93%) and ask whether they would rule out vot- comes in first: 35% would consider
self-described conservatives (82%) ing for a candidate. Those White voting for him, and 36% wouldn’t.
House hopefuls with high favorability Thirty-five percent of moderates
ratings among swing voters have good would also consider voting for Mr.
Independents will decide prospects for winning a general elec- Bush and Mr. Christie, but their nega-
tion. Those whom independents and Donald Trump and Ted Cruz at the Dec. 15 GOP presidential debate in Las Vegas. tives are much higher: 48% have ruled
the general election, and moderates say they would not even out Mr. Bush, and 44% Mr. Christie.
they’re far from sold on the consider supporting start with a deep, Gov’s three most recent surveys; 28% 58% of moderates and 51% of The candidate with the lowest neg-
probably insurmountable, deficit. to 32% viewed him very unfavorably. independents told YouGov in Decem- atives among swing voters is John
Republican front-runners. The Internet polling organization Among moderates, almost no one (6% ber that they “would never vote for” Kasich: Only 30% of moderates and
YouGov has been tracking, since May to 7%) feels “very favorable” about Mr. Trump. The figures are a little independents say they would never
2015, a sample of 5,000 Americans, Mr. Cruz; many (28% to 35%) feel better for Mr. Cruz, but still about half vote for him. The problem for Mr. Ka-
voted for Mitt Romney, but that who have been asked roughly every “very unfavorable.” of moderates (47%) and almost as sich is that about a fifth of these vot-
wasn’t enough. Even if Mr. Romney six weeks about the presidential race. The problem for Messrs. Trump many independents (41%) say they ers say they have never heard of him.
had won every Republican or conser- Although Donald Trump is leading in and Cruz is not that voters don’t would never pull the lever for him. With a large field, the percentage
vative voter, it still wouldn’t have GOP primary polls, his ratings among know who they are. Mr. Trump How can anyone, under the cir- of people who say they intend to vote
been enough. independents are the worst of any started out with nearly everyone cumstances, expect either of these for a candidate is less relevant than
Because there are roughly 5% more candidate in the field. being able to rate him; only about 5% two to win a general election? For the percentage who say they will not
Democrats than Republicans, the GOP In YouGov’s three most recent sur- said they didn’t know or didn’t have the GOP to regain the White House, it vote for him. By this measure, the
needs a solid majority of indepen- veys, Mr. Trump was viewed “very an opinion. As for Mr. Cruz, in June will have to do much better, particu- current GOP front-runners are doing
dents to win a national election. In unfavorably” by an average of 43% of about a quarter of independents did larly given Hillary Clinton’s better very badly. As the Iowa caucus and
2012 Mitt Romney outpolled Barack independents. How does he fare not know enough about him. But over ratings. In December, 48% of moder- New Hampshire primary approach,
Obama among independents, 50% to among moderate voters? In August, the past six months that figure has ates said they would consider voting Republicans may want to consider
45%. But that didn’t take him across only 17% of moderates had a “very dropped to 4%—and most of those for Mrs. Clinton—a full 16 percentage this if they are serious about one of
the electoral college finish line. favorable” opinion of him; 47% had a voters moved into the “unfavorable” points better than Mr. Trump and 22 their own becoming president.
It is safe to predict that the pro- “very unfavorable” opinion. Those camp. Not a good sign. points better than Mr. Cruz.
portions that held in 2012 will be figures have hardly budged since. Already, large proportions of inde- Many of the other Republicans run- Mr. Brady is a professor of political
about the same this year. About two- Ted Cruz doesn’t do much better. pendents and moderates say that they ning for the 2016 nomination beat economy in the Stanford University
thirds of the voters will not be Repub- Only 13% to 16% of independents had have made up their minds about the Mrs. Clinton’s numbers, and unlike Mr. Graduate School of Business and a
licans. Thus it is vital to pay early at- a very favorable view of him in You- two Republican front-runners. A full Trump, none starts with more than senior fellow at the Hoover Institution.

A New Semester, a New Approach to Campus Turmoil

By Paul McHugh tance will be put between the stu- behaviors that we think are deter- colleges? First, let’s be clear: The needed: A person respected by the

dents and the Christakises. The mined by our reasoning and sense of racial protest and social disruption group, preferably from within the
ollege students are returning to school reports that Ms. Christakis, a situation are actually shaped—not like that at Yale was not another group, who recognizes the unhealthy
school after the winter break, lecturer in early-childhood education, always to our benefit—by people Selma March or Birmingham battle direction events have taken and
and administrators must be has chosen not to teach this spring, with whom we’re socially engaged, against Bull Connor and his dogs. intervenes to help the students—even
bracing for another semester like the and her husband is on what Yale even those at some remove from our Rather it was what psychiatrists call if only a few—see the advances in
tumultuous one just passed. That called a “scheduled leave.” immediate circle. an “emotional stampede,” by a group racial matters achieved, both at Yale
trivial circumstances like those at Overlooked was the fact that the Mr. Christakis, working with longi- of sensitive young people living in a and in America. Such a person would
Yale University in November could target of the campus confrontation, tudinal research such as the culture of suspicion who were pro- know from experience that injustices
provoke such unrest indicates how Mr. Christakis, is one of America’s renowned Framingham Heart Study voked into believing that they had can occur, but could also shed light
fraught race relations remain at outstanding physician-scientists— that followed more than 5,000 adults been gravely injured—a belief that on the good intentions and racial
schools striving to promote diversity. and a person ideally suited to making in a Massachusetts town for decades they no doubt still hold. Yet these progress at the university. Putting
Ironically, an incident caught on sense of the events that gripped beginning in 1948, showed that individuals remain students in good the “long view” in front of the stu-
video at Yale—one that for many campuses in recent months. One can obesity, smoking, alcohol consump- standing at Yale, with all the privi- dents is essential, emphasizing the
Americans seemed to epitomize how tion, drug use and even personal leges that entails, having suffered no achievements America has made in
badly American higher education has happiness and altruism spread essen- setbacks other than their shared racial relations in the past decades
gone off the rails—also offers an ex- The work of the Yale tially as a kind of contagion within sense of injury. and from which the Yale students
planation for this spasm of protests professor who was berated the social cluster of relationships in Now, college students in general have profited.
and points toward a more productive which people are embedded. worry about their academic perfor- Changing the viewpoint of a few in-
way of addressing students’ con- by students helps explain He revealed that what one accepts mance and its effect on their future, dividuals in the cluster could have—
cerns. the ‘emotional stampede’ as a “norm” in behaviors and physical but these young people bore the just as did the triggering event—a
The incident involved a Yale pro- appearance depends on those of oth- added concern that the Yale commu- ripple effect on their friends and
fessor named Nicholas Christakis, and how to address it. ers—up to and including the friends nity harbored subtle forms of social friends of friends. If that viewpoint
who was waylaid on campus by angry of friends of one’s friends. Interest- injustice reflective of a racist Ameri- became more their norm, the students
students. They were livid about a let- ingly, Mr. Christakis has also shown can culture. Like any group that thinks would have a better opportunity to
ter written by his wife, Erika, also a presume that eventually, when his that these aspects of our behavior itself beleaguered, these students get what they came to Yale for: a first-
Yale teacher, who had suggested that feelings about this sorry episode will change in a coordinated fashion were sensitive to the feelings of their rate education, a reputation for
the university’s recent admonish- become less intense, Mr. Christakis when those of our friends—and, fellows, saw loyalty to one another as accomplishment, and entrée into a
ments about Halloween costumes, will dissect it. But until that time, let again, those friends of friends we’ve a principle and were responsive to any place of responsibility in America.
cultural appropriation and racial me—someone who has never met the not met—change in the same way. evidence of distress. It would require a certain amount
insensitivity perhaps were unneces- man but admires and teaches his I use these discoveries in teaching With today’s technology, they were of courage to take up this task, given
sary, since young adults are capable work—identify what seem the salient psychiatrists how to manage pa- able to stay in close contact through how emotionally charged American
of deciding for themselves what to matters and how what we’ve learned tients with depression and addic- social media, reinforcing the norms campuses are today. But advances in
wear for Halloween and might even from Mr. Christakis’s work might tion. For example: We can encourage within their group. In essence they race relations always seem to be
learn from being “a little bit obnox- help address the current destructive, alcoholics to attend 90 meetings of constituted a tightly knit, volatile marked by the actions of a brave few
ious.” Mr. Christakis was caught in an distressful climate on many cam- Alcoholics Anonymous in the 90 social cluster drawing away from the leading the way.
ugly scene, with one student in par- puses. days after discharge so as to embed other students at Yale, poorly
ticular roundly cursing him. In his research and in his 2009 them in a community of people com- equipped to judge coolly events Dr. McHugh, former psychiatrist in
Eventually the campus settled book, written with James H. Fowler, mitted to abstinence and help them impinging on their fears. chief at Johns Hopkins Hospital, is
when Yale’s president reassured the “Connected: The Surprising Power of take on sobriety as a norm in the This culture of suspicion at Yale the author of “The Mind Has Moun-
students that he understood their Our Social Networks and How They future. and other universities must be reme- tains: Reflections on Society and Psy-
feelings and would take measures to Shape Our Lives,” Mr. Christakis has How do these insights apply to the died for the academic pursuit of chiatry” (Johns Hopkins University
protect them from insult. Some dis- demonstrated how thoughts and disturbances that have convulsed U.S. social diversity to succeed. What is Press, 2005).

After a Close Shave, the Beardless Status Quo Returns to Politics

By Christopher Oldstone-Moore American life. One can find them on amusement park workers until 2012, combination of male pride and anxi- regardless of party, seemed to disap-

blue-collar workers, elite athletes, and McDonald’s still tolerates beards ety. Men, in the vein of Teddy Roose- prove. In 1944, during Dewey’s first
merica’s highest-ranking facial Hollywood stars and Silicon Valley only for religious reasons. velt, sought to prove themselves by presidential run, the conservative
hair has fallen to the razor. In CEOs. Observers may brush this off A shaved face, since the early climbing mountains and hunting journalist Edith Efron wrote about
November Paul Ryan made as a fickle fashion, but there’s more years of the 20th century, has signi- his mustache—and about the mus-
headlines when he quit shaving, to facial hair than meets the eye. fied the right sort of manliness: mod- tache in general: “It perplexes. It
becoming the first House speaker Most Americans are not aware, for ern, orderly, professional. These House Speaker Paul Ryan fascinates. It amuses. And it repels.”
with a beard since the appropriately example, that in 1976 the Supreme norms are enshrined in prejudice, A letter to the editor a month later
named Frederick Gillett in the 1920s. Court upheld the right of employers custom and law. Now, however, this loses the beard, the most agreed: “The man who decides to
But last week, as Congress came back to regulate their workers’ facial hair. definition of manhood is being chal- derided facial hair since sport lip adornment asserts his mas-
into session, Mr. Ryan once again The justices recognized that mus- lenged from both the left and right. culinity and desire to tyrannize over
banished the bristles, saying that he taches and beards carried social sig- We can glean insight into what is Thomas Dewey’s mustache. the home,” wrote Cornelia Von Hes-
would begin the new year with a nificance that might undermine the afoot—or, rather, aface—from the sert, a prominent model. “No matter
fresh start and a fresh shave. esprit de corps in police departments, last time beards achieved cultural how prettily he waxes it, droops it,
Mr. Ryan’s flirtation with whiskers corrode discipline in schools, and dominance: the era stretching from elephants. The beard became a sym- shingles it, at heart he’s the Man’s
is emblematic of a recent resurgence threaten businesses’ bottom line. the 1850s to the 1880s. The shift to bol of masculinity, a solace as women Man and ruler of his own roost.”
of beards in nearly every sector of Walt Disney banned facial hair on beards then was impelled by a claimed new rights and authority. Mr. Ryan received a similar
The unshaven today are likewise tongue-lashing from radio talk-show
compelled by pride and worry. As in host Laura Ingraham, who sarcasti-
Notable  Quotable the late 19th century, our era extols
competition and celebrates self-reli-
cally referred to him as “the bearded
wonder” and said, “he’s got to lose
From Navy Secretary Ray ance. Traditional views of gender that beard; it makes him look ridicu-
Rupert Murdoch Robert Thomson
Executive Chairman, News Corp Chief Executive Officer, News Corp Mabus’s Jan. 1 “Memorandum for identity, marriage and family are un- lous.” Chalk one up for conservative
Gerard Baker William Lewis the Commandant of the Marine dergoing profound renovation. Men feminism: Women feel entitled to
Editor in Chief Chief Executive Officer and Publisher Corps” on “gender integration”: are again seeking the tangible assur- criticize the way a man looks, and
Rebecca Blumenstein; Matthew J. Murray, Deputy DOW JONES MANAGEMENT:
ance that a beard or mustache offers. shame him into changing his style.
Editors in Chief; Almar Latour, Executive Editor Anna Sedgley, Chief Financial Officer; Lastly, as we achieve full inte- However, there are powerful forces Which will it be: men regulated or
DEPUTY MANAGING EDITORS: Ashley Huston, Chief Communications Officer; gration of the force, mirroring even acting against this movement. Political unleashed? Mr. Ryan’s return to the
Paul Meller, Chief Technology Officer;
Michael W. Miller, Senior Deputy;
Mark Musgrave, Chief Human Resources Officer;
more closely the Nation we defend, leaders especially are held to an exact- razor indicates that we may soon
Thorold Barker, Europe; Paul Beckett, Asia;
Christine Glancey, News Operations and Talent; Katie Vanneck-Smith, Chief Customer Officer this is an opportunity to update the ing standard, because they must win witness “peak beard.” We live in
Neal Lipschutz, Ethics and Standards; OPERATING EXECUTIVES: position titles and descriptions to the public trust. In a study at Okla- uncertain and restless times, to be
Alex Martin, Enterprise; Ann Podd, Global Edwin A. Finn, Jr., Barron’s; Edward Roussel, demonstrate through this language homa State University last year, sure. But the history of Western civi-
Production; Andrew Regal, Global Head of Video; Innovation; Ingrid Verschuren, Data Strategy;
Jessica Yu, Global Head of Visuals
that women are included in these students were presented with paired lization has conditioned us, rightly or
Suzi Watford, Marketing;
Paul A. Gigot, Editor of the Editorial Page; Professional Information Business, Sales: MOSs [Military Occupational Speci- photos of bearded politicians and their wrongly, to read a well-shaved face
Daniel Henninger, Deputy Editor, Editorial Page Nancy McNeill, Global; William Ashworth, alities]. Please review the position clean-shaven counterparts. Female as the mark of a responsible and reli-
Americas; Florence Lefevre, Europe; Tomasz titles throughout the Marine Corps students perceived the hirsute men as able man.
Rustowski, Asia
Trevor Fellows, Head of Global Sales; and ensure that they are gender-in- less feminist, and said they were less
Chris Collins, Advertising; Christina Komporlis,
Circulation; Jason P. Conti, Legal;
tegrated as well, removing “man” likely to vote for them. Mr. Oldstone-Moore teaches his-
Joseph B. Vincent, Operations; Larry L. Hoffman, from their titles and provide a re- The Republican presidential nomi- tory at Wright State University. His
Production port to me as soon as practicable nee in 1948, Thomas Dewey, may book “Of Beards and Men: The
EDITORIAL AND CORPORATE HEADQUARTERS: and no later than April 1, 2016, so very well have lost that close election Revealing History of Facial Hair” is
1211 Avenue of the Americas, New York, N.Y., 10036 that it is included in the rest of the because he flouted convention with a just out from the University of Chi-
Telephone 1-800-DOWJONES
integration efforts. tightly cropped mustache. Women, cago Press.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A16 | Monday, January 11, 2016 THE WALL STREET JOURNAL.


U.S. Deploys B-52 After North Korea Nuclear Test

BY ALASTAIR GALE carry nuclear weapons, flew of the ironclad U.S. commit- plosive at its nuclear test self-defensive step for reli- such action evidence of the
over the Osan Air Base about ment to our allies in South site on Wednesday that it ably defending the peace on U.S.’s intention to invade.
SEOUL—The U.S. flew a 45 miles south of the inter- Korea, in Japan, and to the called a hydrogen-based nu- the Korean Peninsula and re- South Korea continued to
B-52 bomber close to North Korean border around mid- defense of the American clear bomb. gional security from the dan- blast anti-Pyongyang regime
Korea on Sunday, as Wash- day local time, the U.S. mili- homeland,” said Adm. Harry North Korean state media ger of nuclear war caused by messages and pop songs
ington and its allies seek tary said. The B-52, based in B. Harris Jr., commander of reported on Sunday that the U.S.-led imperialists,” Mr. across its border on Sunday
ways to pressure Pyongyang Guam, was joined by Ameri- the U.S. Pacific Command. leader Kim Jong Un had vis- Kim said, according to the from 11 banks of high-pow-
after its recent nuclear test can and South Korean fighter The flight was a calibrated ited the Ministry of People’s report. ered speakers, a move to
without escalating military planes before returning move to challenge North Ko- Armed Forces to congratulate North Korea had no imme- challenge North Korea’s ef-
tensions. home. rea’s military ambitions after officials on the test. diate reaction to the B-52 forts to keep an information
The bomber, which can “This was a demonstration it detonated a high-power ex- The detonation was “a flight, but it typically calls blockade on its people.


Clarity at
Sign Deals
Before Exit
your fingertips.

YANGON, Myanmar—This
country’s military-linked gov-
ernment, in its final weeks in
power, is passing legislation
that benefits departing law-
makers and awarding large
business contracts, including
one to a Chinese-led group to
build a sea port.
The legislation includes a
pension plan for departing law-
makers, most of whom belong
to the military-linked Union
Solidarity and Development
Party, which was defeated in
the country’s historic election
in November. Another proposal
would protect former presi-
dents from prosecution related
to acts taken in office and pro-
vide them with bodyguards.
The government of Presi-
dent Thein Sein has awarded
multiple contracts, which in
Myanmar don’t need legisla-
tive approval, without consult-
ing the next administration,
which will be led by the Na-
tional League for Democracy
under party leader Aung Saan
Suu Kyi, party officials said.
Mr. Thein Sein’s administra-
tion also transferred five idle
manufacturing plants last
month from the civilian-led
ministry of industry to the
military-controlled ministry of
defense. None of these actions
are prohibited under Myan-
mar’s political system.
Ye Htut, spokesman for Mr.
Thein Sein, said the presiden-
tial bill will “benefit not only

Suu Kyi’s party says

departing lawmakers
aren’t consulting the
next administration.

[Mr.] Thein Sein, but also fu-

ture presidents” and wasn’t
written with the departing
government in mind.
Government officials said
the awarding of contracts is
needed to keep the country
going during its political tran-
sition. The new parliament
will pick the country’s next
president by March.
But the moves have raised
concerns within the NLD,
whose officials said the gov-
ernment is rushing through
projects and leaving the next
administration with strains on
government resources.
“The current government From the instant you’re approved for your Wells Fargo Credit Card, you’re able to know
can agree on whatever con-
tract they want,” said Han everything going on with your account. Here are just a few of the ways you can do that:
Thar Myint, who leads the
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they should think deeply on
what the impact of the proj- With alerts, we can help you stay connected to your banking. You can monitor daily spending, track
ects are, what the benefits are purchases so you can budget better and get notified when purchases are made outside of the country
for the country and whether
they should delay some of or over a limit you set. Being connected helps you make sure it’s you who is making the purchases.
these projects.”
The moves suggest that the 2-Way Fraud Alerts
military intends to continue to
exert influence over the coun- If we note suspicious activity on your accounts, we’ll send you a text detailing the transaction in
try’s economic assets. Under question. You can respond by text to verify the transaction or open a fraud case. That way, you can
the new government, the mili-
tary will hold a quarter of the protect yourself against fraud. And with just a text, you can not only know what’s happening, but
seats in parliament and con- do something about it.
trol key ministries.
The contracts, to develop an
economic zone in Rakhine state Year End Statements
and build a deep sea port there, We give you free access to a personalized and simple to read summary itemizing all of your spending
were awarded in December to a
consortium of companies led for the year, even by category. We also combine it with info from your other Wells Fargo accounts, so
by Citic, a Chinese state-run it’s a great money management tool. It can even help you identify tax-deductible expenses.*
conglomerate. The economic
zone is one of three planned in
Myanmar and will be home to
the country’s first deep sea For more information, visit wellsfargo.com
port on the Bay of Bengal, a * Wells Fargo makes no warranties and is not responsible for your use of this
strategic asset for China, which information or for any errors or inaccuracies resulting from your use. You should
is developing infrastructure consult your own tax advisor regarding your tax needs.
along the Indian Ocean. Several
Credit card subject to credit approval. Mobile carrier text messaging and web access
local nongovernmental organi- charges may apply. Actual time to receive alert is dependent on wireless service and
zations have called for the Citic coverage within area. Alerts service may not be available in all areas. Gasoline alerts
contracts to be suspended, cit- may not include purchase amount. Account activity qualifying for alert service may
ing a lack of transparency vary by merchant network. Additional restrictions apply. © 2015 Wells Fargo Bank,
around the bidding process. N.A. All rights reserved. Member FDIC.
Citic officials didn’t respond to
requests to comment.
—Myo Myo
contributed to this article.
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To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com


Leading Ladies Deal Pumps Up

A Luxury Gym
Golden Globe revelry HEARD & SCENE | A21 PROPERTY | A20

WSJ.com/NY * * * * THE WALL STREET JOURNAL. Monday, January 11, 2016 | A17

Port Frets on Penn Revamp

Chairman of authority are expected to pay for nearly dubbed the Empire Station ity agreed to $8.3 million an-
all of it. Government funds are Complex. nual rental payments for
questions how much

expected to take care of the re- At issue is a 15-year-old 40,000 square feet.
it should have to pay; maining $325 million, of which agreement under which the Mr. Degnan, a New Jersey
$150 million is to come from Port Authority would pay $10.5 appointee who became Port
revisiting a 2000 pact the Port Authority. million annually over 35 years Authority chairman in July
But John Degnan, the Port to lease 250 square feet inside 2014, has peppered the
BY ANDREW TANGEL Authority chairman, is asking the new train hall for two agency’s staff with questions,
the agency’s staff about the ex- ticket counters and a kiosk. including how to justify the un-
The chairman of the Port pected financing at a time The Port Authority’s ex- executed lease deal “in the face
Authority of New York and when it also needs to come up pected rental payments—its of the dramatic reduction of
New Jersey is questioning his with funding for other big proj- share of the $325 million gov- leased space” yet increased
agency’s potential contribution ects. ernment contribution toward rent, according to a memo sent
of nearly half the public fund- The questions about financ- the Empire Station project— Saturday that was reviewed by
ing expected for a recently pro- ing come in the early stages of were valued at $150 million, The Wall Street Journal.
posed overhaul of New York’s a plan announced last week to according to a Cuomo adminis- Mr. Degnan noted in the
Cooper Union’s 41 Cooper Square building in the East Village. Penn Station. overhaul Penn and revive a tration official. memo that the agency hadn’t
The revamp of the Midtown long-stalled effort to build a The terms of this unexe- factored lease payments into

Leader Search
Manhattan station complex is train hall inside a neighboring cuted lease deal shifted signifi- its capital and operating plans.
estimated to cost more than $3 post-office building—a project cantly during negotiations in He questioned the lease’s cur-
billion, and private developers New York Gov. Andrew Cuomo 2000. Initially the Port Author- Please see TRANSIT page A18

At Cooper Union
Creates Friction
BY MIKE VILENSKY Cooper Union tuition-free
again is the priority, and that
Cooper Union was rattled the president should be fo-
last year by a state investiga- cused on that. Their suggested
tion of its finances, the depar- candidate: U.S. Sen. Bernie
ture of its president and Sanders, the Vermont Demo-
boardroom infighting so crat running for president who
heated that a psychoanalyst has made college costs a focus
had been hired. of his campaign.
Now the Manhattan arts Others involved say they
and engineering school hopes are searching for the right
to find a new leader who can candidate, and his or her com-
right the ship, but the search mitment to free tuition is one
is already reopening old of several important factors.
wounds. A job listing released last
In December, Cooper Union month intensified the board-
resolved a lawsuit and probe, room friction, with critics say-
both related to its decision to ing it doesn’t mention the
begin charging tuition. A state school’s unique circumstances,

court approved an agreement instead seeking an “innovative

that the school could continue leader to grow and build high-
charging but must examine quality programs” when the
how to return to a full-scholar- school ought to be scaling
ship model. back.
Jamshed Bharucha resigned “It’s very boilerplate, and
as Cooper Union’s president it’s very disappointing,” said
over the summer amid the Toby Cumberbatch, a Cooper
board’s negotiations to end the Union professor who was one The Brooklyn Nets lost to the Detroit Pistons in Michigan on Saturday, in what was the last Nets game coached by Lionel Hollins.
lawsuit and New York Attorney of the lawsuit plaintiffs and is
General Eric Schneiderman’s
Replacing Mr. Bharucha is
now, as part of the court set-
tlement, observing the board.
“You will never come up
Nets Dump Coach, Reassign General Manager
now the board’s most pressing with a candidate profile that BY ALEX RASKIN cision now, it enables our or- a record $197 million in player
business, but trustees and oth- makes every individual happy,” ganization to use the rest of salaries and luxury taxes for
ers involved in the search are Please see COOPER page A18 Frustrated by a 10-27 start the season to diligently evalu- the 2013-2014 season alone.
clashing over what they are to the season and a nine-game ate candidates with proven If anything, King’s demotion
looking for.  Former President Barucha losing streak at home, Brooklyn track records. It’s clear from was unexpected because prior
Some of them said making defends tuition decision.... A18 Nets owner Mikhail Prokhorov our current state of affairs that to Sunday, Prokhorov had been
on Sunday fired coach Lionel we need new leadership.” incredibly patient with the for-

Hollins and reassigned general That Hollins would be fired Former Nets coach Lionel mer Duke Blue Devils forward.
Weather N.Y. Sports Lineup manager Billy King to a differ- is hardly a surprise. The Nets Hollins, left, and GM Billy King. It’s also rare to see a general
Real Feel ent role in the organization. have gone from dropping nail manager dismissed in the mid-
TODAY’S 7 p.m. Monday Assistant coach Tony Brown biters to getting clobbered, be- to an impressive body of work dle of a season, although this is
9 a.m. 19°
HIGH Bruins @ Rangers will serve as an interim coach ing outscored by an average of since being hired in 2010. His the second time that it has
5 p.m. 21°
for the remainder of the season. 11.5 points per game during 2013 acquisition of former Bos- happened to King—the Phila-
Record High “After careful consideration, their current four-game losing ton Celtics legends Paul Pierce delphia 76ers fired him in De-
63° (1975) I’ve concluded that it’s time for streak. Putting the team in and Kevin Garnett left the Nets cember of 2007.
SUNNY, Sunrise/Sunset a fresh start and a new vision Brown’s hands for the remain- without control of any of their The timing puts the Nets in
COLDER 7:20 a.m./4:49 p.m. 7:30 p.m. Monday for the direction of the team,” der of the season is a sensible first-round picks until 2019. a precarious situation ahead of
Spurs @ Nets said Prokhorov, who will hold a decision, if not an exciting one. And while the Nets have made the NBA’s Feb. 18 trade dead-
news conference at Barclays King’s demotion was a bit the playoffs for three consecu- line. For the time being, assis-
Tuesday’s High Center on Monday to discuss more surprising. tive seasons, Prokhorov has tant general manager Frank Za-
41° For N.Y. sports coverage, see A22 the moves. “By making this de- It’s not that King can point paid a steep price, shelling out Please see NETS page A22

“First Republic understands how a law firm operates.”

V I N C E N T I & V I N C E N T I , P. C . (855) 886-4824 or visit www.firstrepublic.com
Vito R. Vincenti, Principal and Shareholder (center); Paul J. Vincenti, Principal and Shareholder (left); New York Stock Exchange Symbol: FRC
John V. Vincenti, Principal and Shareholder (right)
Member FDIC and Equal Housing Lender
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A18 | Monday, January 11, 2016 * *** THE WALL STREET JOURNAL.


TRANSIT ing way for new tracks and

platforms for more trains.
Mr. Cuomo’s separate Em-
pire Station plan aims to bring
Continued from page A17 more natural light and im-
rent market value and its ac- proved passenger flow to re-
counting treatment, and said make Penn, which has long
the Port Authority board would widely bemoaned by travelers,
revisit the deal at its February transportation experts and
meeting. civic groups.
A state official said the His plan would revive the
Cuomo administration is “con- stalled effort to put a train hall
fident that this vital project in the James A. Farley Post Of-
will be funded and completed.” fice building, a project long
In a brief interview, Mr. De- known as Moynihan Station.
gnan said the Port Authority Patrick Foye, a Cuomo ap-
board had a fiduciary respon- pointee who is the Port Au-
sibility to determine whether thority’s executive director,
the agency should still honor said the “new train hall would
the lease and “confirm that it benefit commuters in both
was properly handled.” states and beyond.”
“If those funds for any rea- Solicitations for developers
son are no longer available for who would construct the proj-
Penn Station, then the board ect in exchange for leveraging


should consider whether, in the busy transit hub’s real-es-
the context of the capital plan tate value were expected to be
and other competing needs, we released over the weekend.
are able to make a financial The Cuomo administration
contribution to an otherwise official said the Port Author-
worthy project,” Mr. Degnan ity’s contribution was tied to
said. an “air train” hub, including to
La Guardia Airport. Mr. Cuomo
has proposed such a rail link A woman jogged in the morning fog under the Manhattan Bridge last month during an unseasonably warm stretch of weather.
Amtrak is expected to the Queens airport, which

The Dog Days of Winter in the City

to contribute $100 isn’t accessible by train.
Another $75 million is ex-
million, the Cuomo pected from federal transpor-
administration said. tation grants, specifically
those intended to improve air Come the gentle, fragrant made December happen.” While the temptation re- more diabolical desire than to
quality and infrastructure re- days of May and June we’ll Starting with decorating mains, as an adult you’re share their happiness. But I
The Port Authority operates siliency, the Cuomo official look back at January and our tree, playing Santa—or at hardly allowed to complain. find it even easier to resist
major New York City airports, said. February and marvel at our least Santa’s helper—and As I emerged from the hitting the “like” button than
the PATH train between New A federal transportation of- resilience for having suffered throwing a successful New Brooklyn Bridge-City Hall I do under normal circum-
York and New Jersey and ma- ficial said it wasn’t immedi- through a polar vortex. Year’s Eve party. subway station on a recent stances.
jor bridges and tunnels be- ately clear which already- Though the weather thus far But I see January as the afternoon and confronted I can take some comfort,
tween both states. It is largely awarded grants New York this winter has been more lifeless trough gravity drags that windswept collection of though not a lot, that even if
funded by tolls and airport officials could potentially tap characteris- us down into after the adren- courthouses along Centre I were swimming with dol-
fees. for the project. tic of South- aline rush of the holiday sea- Street, I couldn’t think of phins I wouldn’t be posting
Officials there have been The Cuomo administration ern Califor- son. Symbolized by what cur- much to look forward to. about it on Facebook. My
grappling with how to pay for official said Amtrak is ex- nia during a rently passes for foliage: What makes it more dis- consolation is the belief that
an increasing list of major pected to contribute $100 mil- cold spell. dead and denuded Christmas tressing is that I have no im- seasoned globe-trotters don’t
projects, including a replace- lion in capital, but said a final I’ve al- trees piled high in front of mediate, or even distant, require the reinforcement of
ment of its aging Port Author- agreement for that amount URBAN ways apartment buildings awaiting travel plans. Especially to a providing daily updates about
ity Bus Terminal in Midtown hadn’t been reached. GARDNER thought, their appointment with the more hospitable climate. If their vacations in Caneel Bay
Manhattan and an overhaul of An Amtrak spokesman said RALPH without sci- wood chipper. you do, you can focus on your while their peers back home
La Guardia Airport. the passenger railroad is still GARDNER JR. entific evi- The obvious solution is to departure date as if you were are chained to their desks.
The Port Authority is also negotiating the terms for occu- dence, that take your pleasure indoors. steering a sailboat toward a Though a vacation in
planning to play a major role pying the Moynihan train hall. people, my- While nature, and feeling point on the horizon. Caneel Bay sounds pretty
in digging two new Hudson Once developers respond to self included, consider the part of it, has its therapeutic Exacerbating the misery good at the moment.
River rail tunnels, part of Am- a request for proposals, he season when they were born effects, there’s also some- these days is that many of us If there’s any advantage to
trak’s Gateway project. The es- said Amtrak would have “a the most felicitous of the thing to be said for declaring probably have friends who global warming, it’s that even
timated $15 billion to $20 bil- better sense of what—if any— year. But how can you say defeat; for adjusting your fo- are, at this very moment, sit- in the depths of January
lion plan would also expand additional funds may be neces- that if your birthday falls in cus on such creature com- ting on some Caribbean spring can’t be far behind. I
the current Penn Station, mak- sary to complete the project.” January, especially in the forts as sitting by a fire with beach sipping a rum punch, was returning from a run in
Northeast? a good book and a cup of tea, swimming in the aquamarine Central Park a few days ago
Perhaps if you’re a pas- if not something stronger. water of the Bahamas or St. when the sun hit some salt
sionate skier. But snow has But if you’re a New Yorker Bart’s, or bushwhacking on spread on a path just above
been scarce in these parts so chances are you don’t have eco-vacations. the Metropolitan Museum’s
far. Even the man-made kind. access to a working fireplace. I do. Temple of Dendur.
Snow is beauty’s message de- Chances are much better that How do I know this? Be- It made the crystals spar-
livery system this time of you’ll find yourself in a can- cause they’re Insta-gloating kle like diamonds.
year. Without it some of us yon of tall buildings, being and Face-boasting—continu- At that moment, I swear I
are bereft. buffeted by their wind-tunnel ously posting artsy shots on smelled spring in the air.
My wife disagrees with effect. social-media sites of tropical If nothing else, the season
my assessment of winter’s Just the sort of bone-chill- sunsets or rare butterflies tests your psychological resil-
blues. “I don’t mind down ing conditions that would they’ve encountered in Ama- ience, and your imagination.
time,” after the drama of the have caused you to cry in zonian rain forests.
holiday season, she said. “I pain and protest as a child. I’m sure they have no ralph.gardner@wsj.com

Former Cooper Union President Defends Policy

BY MIKE VILENSKY “Had I not raised the alarm Schneiderman’s analysis of the survive a professional review.”
as clearly and bluntly as I did, Cooper board’s finances as “a Matt Mittenthal, a spokes-
For charging tuition at Coo- even though it upset some hatchet job” and “riddled with man for Mr. Schneiderman,
per Union and breaking with people,” he said, “Cooper errors.” said Mr. Bharucha “played a
the school’s long-standing full- Union may have gone insol- That analysis, part of the major role” in the school’s re-
scholarship model, Jamshed vent in 2014.” broader investigation into the cent problems.
Bharucha, its former presi- Since departing the school, school’s financial plight, criti- “Establishing new leader-
A rendering of the Midtown Manhattan station complex. The dent, became Public Enemy Mr. Bharucha has been named ship at Cooper Union was a
project is estimated at over $3 billion, mostly in private money. No. 1 to activists opposed to a visiting scholar at Harvard critical part of giving the in-
the change. University’s Graduate School Jamshed stitution a fresh start, and it
Protesters camped inside of Education, advising stu- Bharucha is not surprising that the for-
his office and mocked him on dents on higher-education resigned in mer president is unhappy
social media. A group of stu- projects. He is starting a com- June amid with the light that was shed
dents petitioned to have him pany that uses data to provide protests and on his mismanagement,” Mr.
removed. Plaintiffs suing the financial and risk analyses to demands for Mittenthal said.
school over the change said colleges and universities, he his ouster. Mr. Bharucha said his fi-
they wouldn’t settle as long as said, and working on a book nancial plan helped increase
he remained in office. exploring similar issues, ideas access for the neediest appli-
But Mr. Bharucha, who re- he said that were inspired by cized the board’s moves, in- cants, pointing to an increase
signed in June amid New York his work at Cooper Union. cluding several made before in federal grants under his
state Attorney General Eric He has also continued to Mr. Bharucha became presi- watch, while keeping the
Schneiderman’s investigation defend the financial model he dent, as well as aspects of his school afloat.
of the school’s board deci- put in place there. leadership. “I believe I left Cooper
sions, said in an interview last In October, Mr. Bharucha Mr. Bharucha reiterated his Union in a far stronger posi-
month that he wouldn’t have published an essay on his per- critiques during the interview, tion than I found it,” he
handled matters differently. sonal website describing Mr. saying the analysis “wouldn’t added.

COOPER Mr. Bharucha said the tu-

ition change was necessary to
keep the school solvent and
that he left it “in a far stron-
Union alumnus who also sued
the trustees, is now a trustee
himself. “There are some en-
couraging signs, such as that
would consider the position, a
spokesman for the presidential
candidate said he “appreciates
the interest and is deeply
Continued from page A17 ger position than I found it.” the board is talking about bud- grateful for it, but Bernie is fo-
said Johnny Taylor Jr., a He declined to comment on get cuts,” he said. cused now on trying to get an-
trustee who is co-chairman of the search for his successor. “However, for Cooper to other job.”
the presidential search com- Board leaders also defend right itself,” he added, the Despite the disputes among
mittee. the price tag, describing it as trustees must “lead a coopera- trustees and others involved in
The committee tried to roughly half the actual cost of tive effort involving the entire the search, Mr. Taylor said the
Garmin VIRB X “find areas where literally al- a full year’s tuition, even as community to get back to the board will know when it has
Action Camera with G-Metrix™ most every person said these they work to eliminate it. “To tuition-free model.” found the right person.
are must-haves,” he said. “A give out a 50% tuition cut to The search began after Mr. “Everyone asked the Su-
Captures more action with rich, high candidate who has worked in everyone admitted is a high- Bharucha resigned in June. preme Court to define what
definition footage at 1080p/30fps an environment where you class problem in anyone else’s William Mea, the school’s vice pornography is, and they were
have had various disputes world,” Mr. Taylor said. president for finance and ad- like: ‘You know it when you
and up to 120 fps (at 480p) slow among stakeholders—that is a As part of the settlement, ministration, is serving as in- see it,’ ” he said.
motion and 12MP photos at up to quality we’re looking for.” some of the plaintiffs ended up terim president.
Founded in 1859 by the in- joining or monitoring the The ad for the position en-
10 frames per second $299.99 We Want to Hear
dustrialist and philanthropist board and taking a role in the courages applicants to apply
Peter Cooper, Cooper Union presidential search. by Feb. 15. Executive-recruiting From You
for the Advancement of Sci- The first meeting, held at a firm Korn/Ferry International Have something to say about
ence and Art was long known Manhattan law firm, “didn’t has been hired to help. an article in Greater New
for waiving tuition. In 2014, it seem as crazy as once de- Devora Najjar, a Cooper York? Email us, along with
began charging $20,400 annu- scribed,” said Mike Essl, a Union senior who served until your contact information, at
ally, a move that prompted Cooper Union professor who November as the student rep- gnyltrs@wsj.com. Your letter
student protests and the law- sued the board and is now resentative to the board, said could be published in our
NYC’s Oldest Photographic Emporium -Established 1898
298 Fifth Avenue, NY, NY 10001
suit to stop it and was a focus tasked with monitoring the trustee-student relations are weekly Feedback column on
OPEN 7 DAYS A WEEK of the attorney general’s inves- search. “It was procedural to improving. Since the lawsuit Friday. Letters will be edited
(corner of 5th Ave. & 31st St.)
212.564.1600 tigation. The cost remains the the point where it almost had ended, she said, “everything for brevity and clarity. Please
NYC Department of Consumer Affairs #0906861 same for the current academic no life.” has been more positive.” include your city and state.
year. Adrian Jovanovic, a Cooper Asked whether Mr. Sanders
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THE WALL STREET JOURNAL. * * * * * * Monday, January 11, 2016 | A19


Rise in Sexual Assaults Reported by Taxi Passengers

BY THOMAS MACMILLAN by strangers, with an increas- rape, touching and other lewd rie Cumbo proposed legislation for “ongoing 24/7, 365 monitor- said.
AND PERVAIZ SHALLWANI ing number committed in taxis acts, and the statistics don’t to require panic buttons in the ing of our licensees so that we Some women in New York
and other cars-for-hire, ac- specify whether the driver or back seat of cars for hire. are notified whenever a TLC li- said they do feel they need to
Just two hours into the new cording to police. passenger is the perpetrator. In an interview on WNYC’s censee has been arrested.” exercise caution when riding
year, a 25-year-old from New “Women going out to a bar The increase comes amid Brian Lehrer show last week, An Uber representative said alone.
Jersey hailed a yellow cab in or a nightclub in Manhattan, the rise in popularity of ride- Police Commissioner William technology keeps their passen- The back of a cab can feel
Upper Manhattan and fell believing that they’re doing hailing apps and questions Bratton encouraged women to gers safe. Riders see a driver’s like a sanctuary, said Bunny Mi-
asleep in the back seat. the right thing, they don’t about rider security. Mr. Shea, “buddy up” when hailing cabs name, photo, license plate chael, a 33-year-old artist from
She awoke to find the cab- want to drink and drive, they though, stressed that police are late at night. number, car model and overall Brooklyn’s Bushwick section.
driver sitting next to her, kiss- want to get home safe and get seeing the problem in all types Ms. Cumbo bristled at the rating before they get in an But, she added, “we live in New
ing her neck and reaching into in a cab,” NYPD Deputy Com- of cars for hire, including yel- suggestion. “I’m a single black Uber, spokesman Matt Wing York, where you’re vulnerable
her waistband, a law-enforce- missioner of Operations Der- low cabs. woman in the city of New York said, and every trip is GPS- everywhere. If something feels
ment official said. mot Shea said at a news con- and I should be able to walk tracked. This means “there is a wrong, it probably is.”
“How dare you violate me?” ference last week. “And then outside my house without a clear record and riders can Megan Lewis, a 36-year-old
the woman said, according to they’re getting driven and
Police say 14 rapes buddy,” she said. share their trip ETA, allowing actor and nanny, said she never
the official. The taxi driver passing out and waking up in in cabs were Representatives of the for- friends and family to track feels unsafe taking cabs alone.
apologized, returned to the a desolate area and they’re hire car industry stressed the their trip in real time,” he said. “The medallion number and ev-
front seat and took the woman getting sexually attacked.”
reported in 2015, up safeguards in place for passen- Bhairavi Desai, president of erything is right there,” she
to her destination, officials Police said there was a 6% from 10 in 2014. gers. Allan Fromberg, a spokes- the New York Taxi Workers Al- said.
said. Police later arrested the rise in reports of rapes in 2015 man for the Taxi and Limou- liance, advised passengers to In the case of the woman
driver, and he was charged over 2014, an increase from sine Commission, which make sure they are getting into assaulted early on New Year’s
with felony sexual abuse. 1,354 to 1,439. Reports of rapes Concerns about passenger licenses taxi and other for-hire a cab that is marked and li- Day, police said she took a
That incident, and at least by a stranger increased to 166 safety grew last spring when drivers, including Uber drivers, censed, so that it can be photo of the registration and
one other like it since the in 2015 from 117 in 2014, police the driver of a green borough said potential drivers go tracked. “It’s when you’re hail- medallion number displayed
start of 2016, come as New said, with 14 rapes in cabs in taxi was charged with raping a through a fingerprint-based ing a car that’s not a green cab on the car’s partition. Police
York Police Department offi- 2015, up from 10 in 2014. This 33-year-old passenger in criminal background check. or a yellow cab, that’s when used that information to track
cials say there is a rise in rape is in addition to attempted Brooklyn. Councilwoman Lau- This process, he said, allows that ride is off the radar,” she down and arrest the driver.

Four Teenagers in Custody After Brooklyn Rape

BY MARK MORALES against the four boys—one cial said. The gunman in the tives, the official said.
AND PERVAIZ SHALLWANI 14-year-old, two 15-year-olds group brandished the firearm The commanding officer of
and a 17-year-old, police and told the father to leave the 73rd Precinct reached out
New York City police appre- said. the area, police said. to community leaders about
hended four of five people on The victim was with her fa- The father then left and the incident on Friday, the of-
Sunday who were wanted in ther inside Osborn Playground searched for help. Meanwhile, ficial said.
connection with a sexual as- in the Brownsville neighbor- each member of the group The victim was also
sault of an 18-year-old woman hood around 9:10 p.m. when took turns raping the victim, brought to the Special Victims
at gunpoint inside a Brooklyn the attack happened, police police said. Unit, where she was given a
playground last week. said. The 39-year-old father full interview, the official said.
Two teenagers turned Mayor Bill de Blasio said found two NYPD officers and Detectives found surveil-
themselves into authorities at Sunday he was “disgusted and brought them back to the park lance footage from a deli that
a Brooklyn police station, deeply saddened by the hor- where they found the victim showed the suspected assail-
while two other teenagers rific attack.” but none of the attackers, the ants moments after the attack,


were apprehended in connec- The victim and her father official said. police said.
tion with Thursday night’s were drinking beer in the The victim was taken to The NYPD canvassed the
sexual assault, the New York playground when they were Kings County Hospital, where area hoping to find residents
Police Department said. surrounded by the five assail- she was treated for her inju- who could help identify the
Charges were pending ants, a law-enforcement offi- ries and interviewed by detec- attackers, the official said.

A Capital View New York Gov. Andrew Cuomo speaking at a news conference at
the Javits Convention Center in New York City on Thursday.

Cuomo Plans
College Classes
For Prisoners
BY CORINNE RAMEY of reducing the prison popula-
tion, she added.
New York Gov. Andrew The state spends about
Cuomo on Sunday outlined a $68,000 a year for each in-
broad plan of education and mate in the prison system, a
job training in and outside the Cuomo administration spokes-
state’s prison system. The man said. “Short term it’s
goal, he said, is to halt a cycle more expensive,” Mr. Cuomo
of imprisonment and recidi- said of his initiatives. “Long
vism that disproportionately term it’s actually more cost-ef-
affects men of color. fective.”
As of 2014, the state’s Advocates of overhauling

prison system had 53,565 in- the criminal-justice system

mates, 73.4% of whom were largely applauded Mr. Cuomo’s
African-American or Hispanic, announcement.
according to the state’s correc- The connection between
tions department. unemployment and recidivism
“We have to stop the cycle,” is one that academics have
said Mr. Cuomo, speaking at studied for decades, but has
Mount Neboh Baptist Church become politically popular
SOMEWHERE UNDER THE RAINB0W: The sky over New York state agency buildings in Albany after a thunderstorm on Sunday. in Harlem. only in recent years, said Ini-
The governor, a Democrat, mai Chettiar, director of the
has announced various initia- justice program at New York
tives since early January in University’s Brennan Center
trian struck by a sport-utility advance of his State of the for Justice, a law-and-policy
Greater vehicle in Teaneck.
Bergen County prosecutors
State address this Wednesday.
Mr. Cuomo’s $170 million

New York said 62-year-old Stalin Kappil,

of Teaneck, turned himself in
plan calls for spending $100
million in a year to turn fail-
The governor has
Watch Saturday on a charge of leaving
the scene of a fatal vehicle ac-
ing and high-needs schools
into so-called community
announced various
initiatives ahead of
cident. He was released after schools, which integrate
posting bond and is scheduled schools with social services. Wednesday’s speech.
to appear in municipal court on Within prisons, Mr. Cuomo

Wednesday. said he will expand higher-ed-

BROOKLYN A telephone number in Mr. ucation programming, funded “What’s really interesting in
Kappil’s name rang unanswered by $7.5 million in criminal-for- all of this is it’s clear they are
Two Men Are Killed Sunday morning. His lawyer’s feiture funds obtained by Man- talking about education and
In Weekend Violence name wasn’t immediately avail- hattan District Attorney Cyrus employment as a crime-fight-
Two men were killed and able. Vance Jr., Mr. Cuomo’s office ing strategy,” Ms. Chettiar
three others were wounded in a Authorities say 59-year-old said. said. “I think this gets at the
pair of violent incidents over the Steven Leitgeb was struck by Mr. Cuomo also proposed root of the problem of mass
weekend in Brooklyn, police said an SUV as he was crossing the $55 million for a jobs program incarceration much more so
on Sunday. The Tropicana Casino in Atlantic City, N.J. Lawmakers can’t agree intersection of Cedar Lane and and workforce training, partic- than sentencing reform.”
A 25-year-old man was on a ballot question allowing two new casinos in the state. Garrison Avenue and the driver ularly geared toward at-risk Richard Aborn, president of
found with a gunshot wound in fled the scene. Mr. Leitgeb was youth. After release from Citizens Crime Commission of
his chest near the intersection old man was shot in the leg and lantic City. But it says Mr. taken to a hospital, where he prison, the state will coordi- New York City, a public-safety
of East 93rd Street and Rutland another 29-year-old man was Sweeney’s plan does more than a died a short time later. nate transitional housing, job policy organization, said that
Road in East Flatbush just be- shot in the hip, police said. Both rival Assembly measure to limit —Associated Press programs and mental-health the various initiatives will be
fore midnight on Saturday, po- were also taken to Kings the damage to Atlantic City from and medical services. cost effective not only if they
lice said. Emergency Medical County Hospital, where they new in-state competition. LONG ISLAND In addition, Mr. Cuomo said reduce costs of incarceration,
Service workers rushed the vic- were listed in stable condition, Mr. Sweeney’s plan would the state court administrative but if they reduce costs, both
tim, identified as Tyrone Batts, police said. send half the tax revenue from
Police Arrest Suspect arm would no longer provide financial and otherwise, in-
to Brookdale University Hospital No arrests had been made as the new casinos to help Atlantic In Shooting of Girl employers with records of curred by crime victims.
and Medical Center, where he of Sunday afternoon in either City. It also would require that Long Island police have people who were convicted of While the availability of
died a short time later, police incident, police said. both of them be owned by exist- made an arrest in the killing of nonviolent offenses as 16- or higher education is laudable,
said. —Mark Morales ing Atlantic City casino operators. a 12-year-old girl hit by a stray 17-year-olds and have been access to college classes will
Hours later, a gunman The dueling bills differ on who bullet fired through her home’s conviction-free for 10 years. be limited to those who aren’t
opened fire on revelers at a NEW JERSEY could own the casinos and how window. Heather Mac Donald, a fel- serving life sentences, already
house party on Macon Street in much money they would send to Nassau County police say low at the conservative Man- have a high-school diploma or
Bedford-Stuyvesant just after
Casino Union Backs Atlantic City. 20-year-old Jakwan Keller was hattan Institute, said Mr. GED and are within five years
3:30 a.m. Sunday, police said. In- Sweeney Expansion —Associated Press arrested Sunday in Hempstead Cuomo’s initiatives wouldn’t of release, said Vivian Nixon,
vestigators believe the gunman Atlantic City’s main casino on murder, criminal use of a change crime or incarceration executive director of the Col-
started shooting because he workers union is backing state NEW JERSEY firearm and weapons-posses- rates. “He is perpetuating the lege and Community Fellow-
wasn’t allowed inside, a law-en- Senate President Steve sion charges. Information on myth that people are thrown ship, which helps connect for-
forcement official said. Sweeney’s plan for a referendum
Motorist Is Arrested his lawyer wasn't available. into prison lightly,” she said. merly incarcerated women
Steven Bell, 29 years old, on expanding casinos to northern In Teaneck Death Dejah Joyner, a seventh- So-called proactive policing, with higher education.
was shot in the neck and died a New Jersey. Authorities say an arrest grader, died on Oct. 17, a day such as stop-and-frisk or stop- “Most of them will get re-
short time later at Kings County Local 54 of the Unite-HERE has been made in the Christ- after she was shot. ping people for low-level of- leased and still not have de-
Hospital, police said. A 27-year- union opposes casinos outside At- mas-night death of a pedes- —Associated Press fenses, is a more effective way grees,” she said.
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A20 | Monday, January 11, 2016 * * THE WALL STREET JOURNAL.

What’s the
Deal Big Lease Play in Flushing
Crown Acquisitions
signs 99-year deal
valued at $1 billion;
site of Macy’s store
Luxury Gym Comes
To Park Avenue South BY KEIKO MORRIS
The owner of an early 20th
century office tower in Manhat- Family-owned Crown Acqui-
tan’s Midtown South is renovat- sitions signed a long-term
ing the property and bringing in ground lease valued at about

a luxury gym to occupy the $1 billion for a site in Flush-

lower floors. ing, Queens, occupied by a


Columbia Property Trust Inc. Macy’s department store.
and the fitness company Equinox Crown, a major player in
have signed a 20-year lease for The building at 315 Park Ave. New York City’s retail real es-
44,458 square feet at 315 Park South in Midtown South. tate market, last week signed
Ave. South., which sits a block a 99-year lease with the long-
from Madison Square Park. The president of L&L, which handled term owners of the property,
club will have four exercise stu- the Equinox deal. “Part of our Benider Co., for the approxi-
dios, a spa, retail space, a lounge plan is to reanimate the building.” mately 250,000-square-foot
and views of Park Avenue South, —Keiko Morris retail building on Roosevelt
said officials with the companies. Avenue, said Isaac Chera, a
The club is expected to open UPPER EAST SIDE Crown principal.
in the fourth quarter, taking over The property sits right at a
some of the space from global fi-
Construction Loan train station entrance and the The lease for this Flushing building is changing hands. Macy’s says it doesn’t plan to close its store.
nancial-services company Credit Set for Condo Tower epicenter of the Flushing
Suisse Group. Over the next two The development team of neighborhood, which has been The Crown deal is signifi- the works in Flushing, promis- The shopping center, located
years, about 175,000 square feet DDG and Global Holdings Inc. has a draw for both residential cant for its size but even more ing hundreds of rental apart- on the western end of Flush-
will become available in the closed on a $153 million construc- and commercial development so for its potential to redefine ments and luxury condomini- ing and at the base of a luxury
328,198-square-foot building tion loan for a 32-story condomin- in recent years. the area’s retail market, said ums accompanied by large residential project, has at-
when below market-rate leases ium tower under construction on The Macy’s lease of the Tim King, managing partner at blocks of retail space. tracted big brands such as
with Credit Suisse Group end. the Upper East Side. building expires in the short CPEX Real Estate LLC, a “Flushing has great demo- Target, Nordstrom Rack, Nike
Equinox “brings a lot of life The loan, provided by M&T term, said Mr. Chera, who de- Brooklyn-based commercial- graphics,” said Geoffrey Bailey, and Uniqlo.
and energy, which we think will Bank and Union Bank, completes clined to specify the number real-estate-services company, a broker with SCG Retail, Crown, now in its third gen-
attract the kind of tenants we construction financing for the of years remaining. He who isn’t involved in the which is marketing several eration of family operation,
are going for,” said Nelson Mills, $310 million building at 180 E. stressed that the deal is a Crown deal. Flushing retail projects. “You started as a chain of children’s
Columbia’s chief executive. 88th St., according to Joseph A. “long-term play” for Crown. Mr. Chera said the future of are seeing young Chinese who specialty stores but has grown
The location fills a gap in the McMillan Jr., DDG’s chairman and “We believe at some point the property is still undecided, are very affluent. You see a lot into a real estate business
Manhattan market for Equinox, chief executive. “To date, we’ve in the near future the rents but Mr. King said it wouldn’t of empty-nesters coming to with properties stretching
said Jeffrey Weinhaus, the com- funded construction largely with will be greater than what be a surprise if Crown worked Flushing and condos selling from Fifth Avenue in Manhat-
pany’s chief development officer. cash, and now our full capital Macy’s is paying,” Mr. Chera out an agreement with Macy’s out for $1,200 to $1,300 a tan to heavily trafficked down-
“The goal is to keep on filling structure is complete,” he said. said. The property is located that would allow it to rede- square foot.” town areas in the boroughs,
in the gaps…throughout the city Mr. McMillan said the 521-foot “on the 50-yard line in a velop the property and bring in Mr. Chera said it is rare to including Brooklyn. Brokers
so each neighborhood has conve- building will be the tallest resi- booming Flushing market- new tenants. That could triple find such a large retail site said that the family has been
nient access to an Equinox with- dential tower north of 72nd place,” he added. or quadruple the number of with future development po- able to tap into its expertise
out over saturating the market,” Street on the Upper East Side. A Macy’s spokesman said shoppers visiting the site and tential in such a dense, down- from its past retail business to
Mr. Weinhaus said. “Roughly half of the apartments that the company has no plans the immediate area, he said. town environment. The build- make savvy investments and
Columbia, a publicly traded will come with Central Park views, to close the store. The retailer, “This is the equivalent of ing sits on a 65,000-square- redevelop properties.
real-estate investment trust, pur- which is rare for new develop- however, has been under pres- dropping a pebble in a pond,” foot lot. The Flushing property is
chased the building a year ago ment in the area,” he said. sure. Macy’s, which reported Mr. King said. “The ripple ef- Size and scale in a well- the only one Crown controls in
for about $370 million and has Foundation work is expected disappointing holidays sales, fect of this transaction will populated urban setting also that neighborhood and is one
joined with L&L Holding Co., a to be completed in February and has announced plans to close have an extremely salubrious were motivating factors for a the company has been watch-
privately held real-estate com- construction is expected to wrap 36 stores in early spring and impact on merchants and Blackstone Group LP fund, ing for some time, Mr. Chera
pany, to manage, lease and over- up in 2018, he said. A mix of two- eliminate more than 4,000 landlords up and down Roose- which paid about $410 million said.
see the revamp of the property. bedroom to four-bedroom apart- jobs, with some employees to velt Avenue and Main Street.” last summer for most of the The deal “signifies our de-
“Often when we get involved ments will be priced from $3 mil- be relocated. The Flushing Flushing’s landscape al- 680,000-square-foot shopping sire to invest in best of class
in buildings, they have been off lion to $30 million. store wasn’t among those ready is shifting. A number of center and garage known as locations in strong urban re-
the radar,” said Robert Lapidus, —Emily Nonko listed as closing. mixed-use developments are in the Shops at SkyView Center. tail markets,” Mr. Chera said.

Developer Gets Major Win

GREATER In Court Battle With Family
In a harshly worded opin-

ion, a New York judge has
given a major victory to de-
veloper Jeffrey Feil in his war
with other family members of
the multi-billion-dollar Feil
real estate empire.
Supreme Court Justice
Shirley Kornreich ruled
against Mr. Feil’s brother-in-
law, Stanley Barry, in what

THEATER TUESDAY she described

DYNASTIES as “financially
PETER senseless liti-

GRANT gation” in
which Mr.
Barry “is pursuing a personal
vendetta” against Mr. Feil.
“The acrimony and conse- Family members, from left, Carole Feil, Marilyn Barry, Judith
quent expense associated Jaffe, and Jeffrey Feil, at a 2010 dedication of a research building.
with litigating ordinarily triv-
ial matters has risen to a The closely watched fight because he was asked by Mr.
level not ordinarily seen,” is one of three court battles Feil’s father in 1988 to leave
said the decision filed in late being fought in two states the family business. Mr. Barry
December. over a real estate empire that has said it was his decision to
Last week, Mr. Barry, 79 owns a nationwide portfolio leave.
years old, appealed the deter- that includes 26 million In her opinion, Justice
mination in a case that he square feet of space. Founded Kornreich held that Mr. Barry
launched in March 2012 over by Mr. Feil’s father, Louis Feil, hadn’t proved that the con-
one of the family’s many its holdings include the Fred tractors were overpaid or
holdings, Clermont York Asso- F. French Building on Fifth that there was a “quid pro
ciates, a company that owns Avenue and the General Elec- quo” scheme between Mr. Feil
two Upper East Side residen- tric building on Lexington Av- and the contractors. The “free
tial buildings with more than enue. work performed” on Mr. Feil’s
550 rental apartments. Mr. home “could not, on its own
Feil, 68, manages the build- cause harm to Clermont,” the
ings along with most of the
Mr. Feil said in court decision stated. “The only
family’s other properties. papers that Mr. harm to Clermont would be
Mr. Barry, who has a 12% alleged overcharges or faulty
stake in the company, had
Barry was ‘consumed work—neither of which was
been suing for at least $10 with animosity.’ shown.”
million in damages and for Justice Kornreich also de-
more access to records. He al- nied Mr. Barry’s request for
leged a wide range of abuses The biggest court battle, better access to financial re-
that Mr. Feil has denied. being fought in Louisiana, cords, noting he had been
Justice Kornreich dis- pits Mr. Feil against his sis- provided all that he has re-
Using the “Lion King” as a template, Disney’s live-theater missed Mr. Barry’s charges ters: Carole Feil, Judith Jaffe quested.
group has quietly turned “Aladdin” into one of Broadway’s saying they lacked proof and and Marilyn Barry, Mr. In legal papers filed as
said she agreed with Mr. Feil Barry’s wife. part of his appeal, Mr. Barry
top-grossing shows. Next step? International export. that Mr. Barry “simply does In the lawsuit that Justice listed several reasons for re-
not wish to see the case end, Kornreich ruled on, Mr. Barry versing the ruling. For exam-
regardless of merit.” alleged Mr. Feil abused his ple, Mr. Barry claimed Justice
Noting the expense of liti- control of Clermont, which Kornreich “wrongly held” that
Read more tomorrow in the Greater New York section. gation for more than three owns 444 E. 82nd St. and 445 he couldn’t allege “either a
years in the millions of dol- E. 80th St. Among other al- breach of fiduciary duty…or a
lars, her decision stated “this leged misdeeds, Mr. Barry ac- claim for an accounting” be-
action has been a net loss for cused Mr. Feil of overpaying cause he failed to directly
all parties, and future litiga- Clermont York contractors prove a quid pro quo agree-
tion would only continue to who also did free and dis- ment.
drain the company of more counted work on personal Mr. Barry’s papers go on


resources than Feil is even al- projects for Mr. Feil and em- to assert that the quid pro
leged to have misappropri- ployees of his management quo standard applies to crimi-
ated.” company. nal conduct but not to civil
© 2015 Dow Jones & Co., Inc. All rights reserved. 3DJ3078 Messrs. Feil and Barry de- Mr. Feil, in court papers, claims concerning an account-
clined to comment through countered that Mr. Barry was ing or breach of fiduciary
representatives. “consumed with animosity” duty.
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To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. * * Monday, January 11, 2016 | A21


An ‘It Girl’ Approach to the Golden Globes

lif.—The conversation that
has dominated the entertain-
ment business this past
year—or at least the press
around the entertainment
business—has been about
women in Hollywood. And
while the two movies that
seem to be getting the bulk
of Oscar talk at the mo-
ment—“The Big Short” and
“Spotlight”—are comprised
almost completely of male
ensembles, the Golden
Globes weekend here has


been pretty much monopo-
lized by talk of “It Girls.”
That’s not to say that
“The Big Short” and “Spot-
light” haven’t
had their place
in the sun
these past few
MARSHALL Pictures, its
HEYMAN honcho Brad
Grey and Via-
com CEO Phi-
lippe Dauman celebrated the
former, an unlikely comedy
about the American financial
crisis, with a splashy party Left, Bo Derek, John Corbett,
at the Chateau Marmont on Sharon Stone and Chris Noth
Saturday where the trays of at Bouchon. Alicia Vikander,
miniature crab cakes were above, at W Magazine’s party.
extensive and generous.
On Friday, many of the
same guests attended a party
at Bouchon that was more on
theme for “Spotlight,” a film
about the Boston Globe jour-
nalists who exposed the
years of abuse perpetuated
by leaders in the Catholic
Church in Boston.
Sponsored by Open Road
and Ketel One, the party fea-
tured recreations of Boston
Globe newspapers and lots
of Boston-themed foods, in-


cluding New England clam
chowder and mini stadium
hot dogs with baked beans.
On the way out, guests were
given boxed Boston cream
doughnuts. In fact, the only
thing that seemed to be
missing were priests.
Over the past several
years, W Magazine has taken
a real ownership of the
Golden Globes, much in the
way that Vanity Fair owns Cate Blanchett and Saoirse Ronan, left, and Adam McKay and Kristen Wiig, center, at W Magazine’s party. At right, Gina Rodriguez at the Moët & Chandon event.
the Oscars. The magazine
hosted its annual party on Saoirse Ronan (“Brooklyn”). ernan Shipka (“Mad Men”) “It’s about personality. It’s Aspiring filmmakers had planning to be her date to
Thursday evening at the For an L.A. party, there were and Lola Kirke (“Mozart in about being different and been invited to create and the Globes on Sunday. “He
Chateau Marmont with im- a surprising number of the Jungle”) were among the standing out.” submit 30- to 60-second has no attention span, so I
ages from its current great guests wearing black, which guests here, but producers Gina Rodriguez happens to films with the goal of not knew if he got excited by
performances portfolio a few local fashion designers Barbara Broccoli (“Spectre”) be an It Girl of the moment only winning a trip to Sun- something, it was good.”
strewed all over the sixth in attendance, including both and Stacey Sher (“The Hate- at the Golden Globes. She day’s Globes but also a “It’s not necessarily so
floor of the hotel. Andrea Lieberman and Mo- ful Eight”) fawned in partic- won, rather surprisingly, at $25,000 filmmaking grant. easy to make someone inter-
Many of the famous folk nique Lhuillier, suggested ular over British actress Bel last year’s ceremony for her Ms. Rodriguez had been one ested in 60 seconds,” added
in the photos showed up too, had to do with the rainy, Powley (“The Diary of a role on the CW show “Jane of the competition’s judges. Ms. Rodriguez. This, per-
and more. Among the guests chilly weather. Teenage Girl”), who wore a the Virgin.” The tables turned “It was actually a very dif- haps, encapsulated a new
were a bunch of ladies of the The weather was similarly Gucci green printed silk twill Friday evening at Roku on ficult task,” said Ms. Rodri- theory akin to Andy War-
moment, including Cate brisk but the outfits defi- blouse and an ivory tiger Sunset Boulevard, where Ms. guez, who whittled the num- hol’s, one that certainly can
Blanchett (“Carol”), Elizabeth nitely more colorful on Sat- embroidered silk jacquard A- Rodriguez was present at a ber of shorts down to 10, be applied to the current
Banks (“Love & Mercy”), Ali- urday, as W Magazine con- line skirt. cocktail party to celebrate then started asking her close modus operandi of an It Girl
cia Vikander (“The Danish tinued its celebration at the What makes an It Girl in Moët & Chandon’s Moët Mo- friends and family for their in 2016: “You put your best
Girl”), Brie Larson (“Room”), restaurant A.O.C. This was 2016 “is the same thing that ment Film Festival Competi- opinions. Chief among her 60 seconds forward,” she
Kirsten Dunst (the second an on-the-nose, annual It made an It Girl in 1816,” said tion and the brand’s 25-year advisers was her father, a said, “and you hope that
season of FX’s “Fargo”) and Girls lunch. Chanel Iman, Ki- W’s editor Stefano Tonchi. relationship with the Globes. boxing referee who also was someone digs it.”


Tessa Hadley Discusses Inspiration and ‘The Past’

BY ANNA RUSSELL Wall Street Journal is owned rather short-story-like way
by News Corp. The story fol- and building the novel that
In Tessa Hadley’s new lows four siblings who re- way. I think life does happen
novel “The Past,” two chil- turn to their family home in in short-story-shaped pieces,
dren wander into an aban- the country, to decide what actually.
doned cottage in the English to do with the house.
countryside. Outside, it is Over tea and biscuits at Who else do you love to
bright and green. Inside, her London apartment, Ms. read?
they find a stash of pornog- Hadley spoke about the I love Elizabeth Bowen.
raphy and the rotting corpse work, her literary heroes, the Bowen’s style is so tight and

of a beloved family dog. At enduring appeal of fictional formal. I love Colm Tóibín.
teatime, they don’t tell the families and unlikely places He has extraordinary sen-
adults. for inspiration. Edited from tences which never give you
For years, the London- an interview: anything that summarizes or
based Ms. Hadley has won tells you what you’re meant
fans with meticulously Your novels have some- to be thinking.
crafted stories about fami- times been described as [He and I] both love
lies—and the tensions just “quiet.” What do you think [Henry] James. One of
below their surfaces. Since about this label? [James’s] gifts to writing is
her first novel, “Accidents in They don’t seem quiet to to make you think you can
the Home” (2002), she has me. I don’t really know have a tiny story which can
had 22 short stories pub- where it’s come from. In become a huge, huge thing.
lished in the New Yorker, “Clever Girl,” there were two “The Golden Bowl” is actu-
drawing comparisons to Al- violent deaths, a teenage Author Tessa Hadley walking through an abandoned house and gardens in Somerset, England. ally just two couples, slightly
ice Munro and Anne Tyler. pregnancy, an adulterous af- dodgily assembled, and two
“We may have had more fair. What do I have to do? see there is a style, and then in a painful way. What were you doing of them having an affair. It’s
stories by Tessa in the last 13 [Laughs] suddenly you’re surrounded when you had that revela- not “War and Peace,” the
years than by any other au- In this one actually, by it. The story takes an inter- tion? French aren’t invading Rus-
thor,” said Deborah Treisman, there’s sexual passion and esting dip into the past Actually, as does happen sia, and yet it seems vast.
the magazine’s fiction editor. kids stumbling on the big, Where did the initial halfway through. How did to me, I was in the bath. It’s
At 59, Ms. Hadley, who ugly, dark facts of life: death idea for this novel come that structure develop? a very good place because Why are you drawn to
published her first work at and that stash of pornogra- from? I suddenly had a sense you’re just cut off from fid- stories about families com-
age 46, is well known for her phy. There’s a near-accident I do remember very viv- that something was too flat, dling and working and fuss- ing together?
short stories. But with “The at the end and a teenage idly the image that the story that I wasn’t sure I could ing around. The family and the novel
Past,” her sixth work—and love story. started with. It is Harriet in- sustain the tension quite seem to me a very inevitable
the first with a U.S. book advertently eavesdropping right without having a point You’ve become well- match. There’s something
tour—she is poised to reach Are you a big Alice on her brother making love to which I could attach the known for your short sto- about the rambling, slow-
a wider readership abroad. Munro fan? to his new wife. I had it like present more vividly. And ries. Do you feel like “The cookingness of the novel
Released last week in the Huge, huge fan. She was a moment in a film, a then suddenly I thought, Past” is your most novel- form, which is long, which
U.S. by Harper, the novel was really transforming for me slightly dark Bergman-esque “Why am I holding back?” I like novel? unfolds over time and takes
published in the U.K. in Sep- when I first read her. She moment in a film, that sense thought, I’m just going to I do, actually. In my first a configuration at the begin-
tember to high acclaim. has that exquisite style of how it would discomfort give in to the temptation; novel, and certainly in my ning and twists and changes.
Harper is an imprint of Har- which is so relaxed that at her and sort of break her up I’m going to go back 35 second, I was effectively I mean, that sounds like the
perCollins, which like The moments you almost can’t and make her all over again years or whatever it is. structuring each chapter in a shape of a family.
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To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A22 | Monday, January 11, 2016 * * THE WALL STREET JOURNAL.

Will Coughlin Fly the
Coop to Coach Eagles?
Tom Coughlin may soon Super Bowl wins and coach-
be back at MetLife Sta- ing against them for the di-
dium—not to be honored by vision rival Dallas Cowboys.
the team he led to two Seifert waited only two
championships but as coach years between leaving the
of a hated rival. San Francisco job and being
hired by then NFC West rival
Take a Number Carolina. (The Panthers later
moved to the NFC South.)
The Philadelphia Eagles Parcells also coached the
have asked for and received Jets the season after leading
permission to interview the New England Patriots to
Coughlin, according to re- Super Bowl XXXI, when they
ports. Seeing a coach you re- lost to the Packers.
placed turn up for a division The Jets faced a similar
rival is unusual even in the situation this season with
topsy-turvy NFL. Since 1990, Rex Ryan, whose father
it’s happened only eight Buddy (Eagles, Cardinals)
times, including twice by for- also makes the list of

mer Giants and Jets coach coaches who crossed the di-
Bill Parcells. And only Par- visional divide. Ryan was
cells (right) and former able to exact revenge
49ers coach George against the Jets by lead-
Seifert coached in a ing his Bills to two wins
division against against the team that
teams they had fired him, including one
previously led to the in the season finale
Billy King, right, was stripped of general-manager duties after leaving the Nets without control of a first-round draft pick until 2019 Super Bowl. that bounced Todd
For Parcells, Bowles and

Nets Hit Reset Button on Franchise

though, 13 seasons company from
expired between his the postseason.
time coaching the —Michael
Giants to a pair of Salfino
Continued from page A17 mer for three years and $60 Portland in exchange for soon- has denied that was the case,
nin is still listed on the team’s million, Lopez’s surgically re- to-be free agent Gerald Wallace but he was subsequently given
directory. Assistant coach Paul paired right foot has remained in 2012. The Trail Blazers permission to negotiate and
Westphal is also listed, al- in tact, and he’s averaged 19.8 ended up taking All-Star point sign with the Milwaukee Bucks, Turn-Coach
though he could yet leave the points, 8.6 rebounds and two guard Damian Lillard with the who gave the Nets a pair of fu- NFL head coaches since 1990 who led teams in the same division
team, according to one person blocks per game this season. sixth-overall pick while Wallace ture second-round picks as PLAYOFF SB FIRST
with knowledge of the situa- Unfortunately for Lopez, went on to sign a four-year, compensation. COACH DIVISION TEAM/ YEARS FIRST STOP STOP
tion. Brown will be his seventh coach $40 million contract with the King and Hollins might ulti- GIants 1983-90;
Bill Parcells NFC East Cowboys Y Y
King fared well with his since he was drafted by the Nets. mately be replaced by the same 2003-06
moves before the 2015 dead- franchise in 2009. And while The 2011 trade to acquire person, and a familiar face to Buddy Ryan NFC East Eagles 1986-96 Y N
line, dealing the ancient Gar- Brown is a former Net (he was point guard Deron Williams Nets fans. Current Kentucky 49ers 1989-96;
nett to Minnesota for power drafted by the team in 1982 and from Utah cost the Nets an- coach John Calipari is a friend George Seifert NFC West Panthers Y Y
forward Thaddeus Young, who spent the 1986-1987 season with other pair of draft picks, of Nets CEO Brett Yormark, and Marty Chiefs 1989-98;
Schottenheimer AFC West Chargers 2002-06 Y N
signed a four-year, $50 million the franchise), the odds are in though the move was cele- several reports have suggested
contract with the Nets over the favor of Lopez playing under his brated at the time. But Wil- that the 56-year-old Hall of
AFC East Patriots 1993-96;
Bill Parcells Y Y
off-season. This season, Young eighth coach next season. liams’s contract was bought out Famer will get an offer from Jets 1997-99
is averaging 15.6 points and 9.2 Such turmoil will ultimately over the off-season, and he now the team. Jets 1994;
Pete Carroll AFC East Patriots N N
rebounds per game while be King’s legacy with the Nets, plays with the Dallas Mavericks. Calipari coached the New 1997-99


shooting 51.7% from the field. as well as his litany of disas- Then there was the fiasco Jersey Nets for two full season Raiders 2004-05
Norv Turner AFC West N N
And even though King tried trous trades. Beyond the afore- that punctuated the 2013-2014 before being fired 20 games Chargers
and failed to trade center Brook mentioned move that sent season, in which then-coach Ja- into the 1998-1999 campaign, Jets 2009-14;
Rex Ryan AFC East Y N
Lopez on several occasions, the three first-round picks to Bos- son Kidd reportedly attempted but his stock has risen dramati- Bills 2015-
former All-Star remains the ton, as well as the right to to have himself promoted cally since his Wildcats won Source: Stats, LLC
cornerstone of the franchise. swap first-round picks in 2017, above King in the Nets’ basket- college basketball’s national
After re-signing over the sum- King sent a first-round pick to ball operations hierarchy. Kidd championship in 2012.




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To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com


BUSINESS & TECH. Kohl’s Weighs ‘The Force’
Invite Break-Ins Sale or Split-Up Is Felt in China

© 2016 Dow Jones & Company. All Rights Reserved. * * * * THE WALL STREET JOURNAL. Monday, January 11, 2016 | B1

Gain More
Drug Firms Ring In Higher Prices
BY PETER LOFTUS cost of already expensive average of 10.6% for more than In recent years, it has been Clinton, Bernie Sanders and

Clout Over Drugmakers didn’t let up on

price increases with the start
drugs, and come on top of re-
peated price hikes in recent
60 branded products with an-
nual U.S. sales of at least $10
million, according to Deutsche
common for drug companies
to push through annual price
increases in at least the high
Marco Rubio have attacked
drug prices, and proposed var-
ious measures to rein them in.

Boards of a new year, demonstrating

the industry’s pricing power in
the face of mounting criti-
Vanda Pharmaceuticals
Inc. on Jan 1 raised the price
of its new drug Hetlioz, which
Bank. Prices for eight of the
products went up at least 20%.
single digits around Jan. 1 for
many brands—and in some
cases additional increases
The new increases despite
this criticism “signals there’s
still pricing power,” Jefferies

BY JOANN S. LUBLIN cisms of prescription costs in treats a sleep disorder in blind throughout the year—analysts analyst David Steinberg said in
the U.S. people, by 10%, to $148,000 a said. But this latest round of an interview. “Unlike other
American businesses in- Pfizer Inc., Amgen Inc., Al- year, a spokeswoman said. price hikes is significant in countries, there’s no mecha-
creasingly are bowing to in- lergan PLC, Horizon Pharma Piper Jaffray analysts say the Amount that some big U.S. light of the political pressure. nism whereby regulatory au-
vestors’ demands for greater PLC and others have raised price of the once-daily capsule companies have raised prices Politicians, health-care pay- thorities can control price.”
boardroom clout, with dozens U.S. prices for dozens of is now 76% higher than when for dozens of branded drugs ers, doctors and patients have Mr. Steinberg said rebates
of companies revising their branded drugs since late De- it was introduced in 2014. since late December criticized drug pricing in re- and discounts are likely to
bylaws in recent weeks ahead cember, with many of the in- The Vanda spokeswoman cent months, saying medicines partly offset some of the latest
of this year’s annual meetings. creases between 9% and 10%, said the cost of Hetlioz is are out of reach for many pa- price increases, but companies
Proxy access, embraced by according to equity analysts. “within the price range of Pfizer also left prices un- tients and straining health- typically don’t make public the
117 U.S. companies during 2015, The increases are on list treatments that address simi- changed for about 10 products. care budgets. U.S. prescrip- magnitude of such conces-
gives shareholders more power prices, before any discounts or lar size populations,” noting A Pfizer spokesman said tion-drug spending rose 12.2% sions.
to oust directors and influence rebates that manufacturers that fewer than 1,000 patients the company offers “consider- in 2014, accelerating from Repeated increases in list
corporate strategy by letting sometimes provide insurers currently take the drug in the able discounts” off the list 2.4% growth in 2013, the Cen- prices eventually can wipe out
them list competing board can- and other payers. U.S. prices, and the company pro- ters for Medicare and Medic- the value of prior discounts,
didates on ballots for annual Some of the increases add Since New Year’s Day, vides medicines for free to pa- aid Services said last month. said Rick Bruzek, vice presi-
meetings. About 21% of S&P 500 thousands of dollars to the Pfizer has raised list prices an tients meeting income criteria. Presidential candidates Hillary Please see DRUG page B2
companies have adopted proxy
access, up from about 1% in

Detroit Remains Foreign Car Makers’ Mecca

2014, according to Institutional
Shareholder Services, a major
proxy-advisory firm.
Big businesses that handed
investors the keys to their India’s Mahindra sets Ford’s chairman is on a
boardrooms last year include
General Electric Co., AT&T up shop in Michigan to quest to reinvent the
Inc., Apple Inc., Citigroup learn from Big Three, company founded by
Inc., Occidental Petroleum
Corp. and McDonald’s Corp. avoid their mistakes his great-grandfather
These companies typically
changed corporate bylaws so BY JOHN D. STOLL BY CHRISTINA ROGERS
owners with at least 3% of
their shares for at least three TROY, Mich.—Decades ago, Years ago, when Tesla Mo-
years can propose a significant Japanese car companies trav- tors Inc. was still a tiny com-
portion of board members. eled to Detroit to learn to be pany, Ford Motor Co. Chair-
“The accelerated accep- like the Big Three. Today, one man Bill Ford Jr. dropped in on
tance of proxy access is un- of India’s top auto makers is the electric-car startup. Sens-
precedented,’’ said Avrohom J. following in their footsteps— ing “the winds of change were
Kess, a partner at Simpson Th- while hoping to learn to avoid coming,” the visit, along with
acher & Bartlett LLP. “We’re in Motown’s past mistakes. others he made to Silicon Val-
a new world.’’ The manage- Mahindra & Mahindra Ltd., ley tech firms, provided inspi-
ment lawyer advises boards a Mumbai-based conglomerate ration to reinvent the company
about governance. with a thriving tractor busi- his great-grandfather founded
“We could approach half of ness and infor- more than a century ago.
the S&P 500 companies within DETROIT mation technol- “It made me even more im-
two years’’ adopting proxy ac- AUTO ogy operation in patient,” Mr. Ford, 58 years old,
cess this year, said New York SHOW the U.S., quietly said in his office late last week,
City Comptroller Scott M. has amassed an characterizing the auto maker
Stringer, who oversees $162 engineering staff as turning over every rock to
billion in pension funds. He is about a dozen miles north of transition from strictly a seller
spearheading a campaign that Detroit. Plucking talent from of automobiles to a company

initially challenged 74 more Ford Motor Co., Tesla Motors able to respond to the rapid ur-
companies, including 3M Co., Inc. and Fiat Chrysler Auto- banization he sees coming.
NVR Inc. and Home Depot Inc., mobiles NV, the company aims The to-do list includes look-
to adopt or improve proxy ac- to catch up with industry lead- ing at a range of partnerships,
cess this year. ers by developing a vehicle including alliances and potential
Mr. Stringer’s new drive fol- able to meet American buy- acquisitions, and experimenting
lows his similar 2015 initia- ers’s demands and the nation’s internally with new business
tive, supported by an influen- tough regulatory standards. lines, such as ride-hailing and
tial bloc of public pension The Indian auto maker pay-by-minute car rentals.
funds in various locales. Forty- doesn’t sell many sport-utility For years, Mr. Ford has spo-
three of their 66 shareholder vehicles in developed markets. ken out about the problems cre-
resolutions for proxy access However, at home it is battling Mahindra’s Troy facility is within a 20-mile radius of more product-development resources than ated by increased congestion in
won majority support at an- global auto makers rushing to Munich, the home of BMW, Stuttgart, where Daimler resides, and Wolfsburg, VW’s base, combined. the world’s major cities and the
nual meetings last year. India, including Hyundai Mo- need for mobility alternatives as
TIAA-CREF, a big asset tor Co. and Honda Motor Co., doesn’t pivot, it is in danger of chief Rajiv Mehta calls “a hindra’s ability to meet the people’s attitudes toward car
manager, separately mounted which are gobbling up market running into the same fate Mecca for SUVs,” is a natural most stringent standards, ownership change.
a letter-writing campaign to share using resources and ex- that nearly shut down Detroit. place for the company to learn company officials say. “To me, it’s a way to reinvent
its top 100 U.S. holdings last pertise Mahindra lacks in its Mahindra stumbled in its how to do that. “Two years ago, a customer this company that makes it in-
year and urged those compa- domestic market. first attempt to go global, and Mahindra’s first made-in- [in India] wouldn’t have paid credibly relevant for the next 50
nies to improve the ability of In recent years, the com- several years ago ended an ef- Detroit project in its 70-year for ABS (anti-lock braking) or years,” said Mr. Ford, who has
shareholders to nominate di- pany has bought a Korean auto fort to bring an India-devel- auto making history—a large air bags,” Pawan Goenka, Ma- been chairman since 1999. “If
rectors. Thirty-nine firms maker, an Italian design house, oped pickup truck to the U.S., SUV the size of a BMW X5 hindra’s automotive chief, said we did nothing, we could be
made the move or committed an electric-vehicle maker and a setback that still has it tied dressed in camouflage—is be- in an interview. “Today, 75% of consigned over time to an ever-
to proxy access by early 2016. other assets in an attempt to up in litigation. The company’s ing tested on the streets of the customers want to buy dwindling number of traditional
“We are continuing to have boost its game, but its market senior executives say they are Metro Detroit. Global safety those options.” car and truck buyers.”
conversations” with the rest, share is still slipping, much still intent on becoming a and fuel economy regulations The marriage of an Indian Mr. Ford’s conviction is rep-
said Bess Joffe, head of corpo- like Indian rival Tata Motors global force and Detroit, which are tightening significantly, auto maker and the Motor City licated in the offices of auto
Please see PROXY page B2 Ltd. If the company’s focus Mahindra’s product planning and this SUV is showing Ma- Please see INDIA page B4 Please see FORD page B4

Golden Globes Take the Stage

Apple News Is Off to a Rocky Start
BY JACK MARSHALL “We’re in the process of fix-
AND STEVEN PERLBERG Reading News on the Go ing that now, but our numbers
Time spent on publishers' mobile properties are lower than reality,” he said.
Since it launched last Sep- “We don’t know what the right
tember, Apple Inc.’s News app 1.2 billion hours November number is,” but he added that
has attracted more than 100 910.7 million it was better to undercount
publishing partners world-wide 1.0 than overcount traffic.
hoping to capitalize on the Despite the glitch, Mr. Cue
growing consumption of news said Apple is pleased with the
on mobile devices. 0.8 product so far. He said most
There is one major problem: feedback from publishers has
Neither media companies nor 0.6 been positive. Usage has
Apple know how many people “scaled very fast…but it
are reading. doesn’t mean we don’t all want
The company mistakenly 0.4 more,” he said.
has been underestimating the A host of major publishers
number of readers using the 0.2 have signed up to distribute
News app since its launch, and their content via Apple News,

passing that inaccurate infor- including Time Inc., Vice Me-

mation on to publishers. 0 dia, The Atlantic, Business In-
Publishers don’t pay to post 2013 ’14 ’15 sider, the New York Times,
their content to the News app, Note: Data covers nearly 2,000 predominantly ad-supported media properties Washington Post and The Wall
but getting an accurate tally of Source: comScore THE WALL STREET JOURNAL. Street Journal.
users is important because it The app is still in its in-
can affect their ability to sell app; they keep 70% of ad reve- company missed the error as it fancy, but the audience-mea-
advertising and to manage nue if Apple sells ads on their focused on other aspects of the surement issue, along with
their resources accordingly. behalf. product. The company didn’t other uncertainties surround-
Apple allows publishers to Eddy Cue, Apple’s senior explain how the problem oc- ing the selling and serving of
Comedian Ricky Gervais returned to host the Golden Globes in Beverly keep 100% of revenue when vice president of Internet Soft- curred or say exactly when it ads, has raised questions
Hills on Sunday. Article on page B7 and more on WSJ.com/speakeasy. they sell their own ads into the ware and Services, said the might be rectified. Please see APPLE page B6
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B2 | Monday, January 11, 2016 * **** THE WALL STREET JOURNAL.


These indexes cite notable references to most parent companies and businesspeople
in today’s edition. Articles on regional page inserts aren’t cited in these indexes.

General Motors...........B4
Global X FTSE Greece
20 ETF.......................R7
Global X FTSE Portugal
Oculus VR....................C6
Pacific Investment
Pearson, Simon &
Railroads Face More Tough Track
Allstate.......................A1 20 ETF.......................R7 Warshaw...................C3 BY LAURA STEVENS analyst with Sanford C. Bern-
Alphabet Cl C.B4,R4,R12 Global X Funds............R7 Pennsylvania State stein.
Amazon.com ............... R4 Goldman Sachs Employees' Retirement
American Eagle ActiveBeta Emerging System......................C2 Railroad operators are fac- Union Pacific Corp. and
Outfitters..................B3 Markets Equity ETF.R2 Pfizer...........................B1 ing another rough ride this CSX have responded by lay-
Amgen.........................B1 Goldman Sachs Group Polen Growth year, as global uncertainty, ing off employees, storing lo-
Anbang Insurance Group .......................... C1,R2,R5 Fund;Investor............R4
Heartland Value Fund R9 Pratt & Miller sliding oil and commodity comotives and reducing op-
..................................... C3
Anchorage Capital Group Horizon Pharma..........B1 Engineering...............B4 markets and weakening man- erations. Norfolk Southern
..................................... C3 Hyundai Motor ...... B1,B4 Progressive.................A1 ufacturing rattle their big- Corp. closed down one of its
Apple.................B1,B6,C6 Illumina.......................B2 Prudential Jennison
Select Growth Fund.R4
gest shippers. three headquarters last year,
Arch Venture Partners Institutional
.....................................B2 Shareholder Services Q Beginning Tuesday, when and said it plans to cut back
Bezos Expeditions......B2 .....................................B1 Qualcomm...................B6 CSX Corp. reports fourth- on some operations affected
BlackRock...............C3,R5 Intel.............................B6 Quinn Emanuel Urquhart quarter results after the mar- by coal’s decline.
BlackRock Impact U.S. iShares Currency
Equity Fund...............R5 Hedged MSCI Eurozone
& Sullivan..................C3 ket closes, rail- One silver lining is that
BlueCrest Capital ETF............................R7 R-S-T THE WEEK roads are the reduced rail traffic has
Management.............C3 iShares MSCI EAFE ETF RatPac EntertainmentB7 AHEAD expected to de- enabled the railroads to im-
BlueMountain Capital R7 Regeneron
liver dour ex- prove their service. Accord-
Management.............C3 iShares MSCI Emerging
BP ................................ C6 Markets Minimum Rosneft........................C6 pectations for ing to an analyst report by
Bridgewater Associates Volatility ETF............R2 Saba Capital the year ahead. Nomura, the average speeds
..................................... C3 iShares MSCI Eurozone Management.............C3 The end of 2015 was at the four major U.S. rail-
Broadcom .................... B6 ETF............................R7 Samsung Electronics..B6
Saudi Aramco..............C6 hardly smooth, as an unsea- roads were up 15% as the
C-D iShares MSCI Ireland
Capped ETF...............R7 Sears Holdings............B3 sonably warm winter, higher year began, exceeding record
Calvert Investments...R5 SoftBank Group .......... C2
Chevron........................C6 iShares MSCI Italy retail inventories and indus- 2012 service levels.
Capped ETF...............R7 Sprint...........................C1
China Life Insurance...C3 Starbucks....................R4 trial weakness extended the Railroads may also be able
China Minsheng Banking iShares MSCI Spain
Capped ETF...............R7 Sutter Hill Ventures...B2 year’s slide in rail volumes. to command higher rates
..................................... C3 Tesla Motors...............B1
Chi-X Global................C3 J-K-M Intermodal shipments—con- from shippers who are seeing
Tesla Motors...............B4 tainers and trailers also car-
Citigroup.................B1,C1 Janus Capital Group...R9 Texas Instruments ..... B6
less in the way of fuel costs
Columbia Threadneedle Janus Real Return Fund Thermo Fisher Scientific ried by trucks—were an ex- being passed through to
Investments..............C2 .....................................R9
Columbia U.S. Social
.....................................B3 ception, but they grew only them, analysts said. And a
Janus Short-Term Bond Thomson Reuters.......R2
Bond Fund.................R5 Fund .......................... R9 slightly. federal requirement for
Thornburg Developing
CSX..............................B2 Kohl's...........................B3 World Fund;A............R2 Total U.S. rail traffic de- trucks to install new technol-
Daimler........................B4 Macy's.........................B3 Toyota Motor..............B4 clined 2.5% last year to 28 ogy could take as much as
Deutsche Bank............C3 Mahindra & Mahindra B1 TPG Capital.................C4 million carloads and contain- 7.5% of the fleet out of com-
Dewey & LeBoeuf.......B3 Marvel Studios.........A12 21st Century Fox........B7
DoubleLine Core Fixed McDonald's..................B1 ers, according to the Associa- mission in the second half
Income Fund;I...........R8 U-V-W
MediaTek.....................B6 tion of American Railroads. the year, according to Ste-
Dyax.............................C1 Microsemi....................C2 UBS Group...................C1
For this year, Stephens Inc. phens, adding an incentive
E-F Momenta Vanda Pharmaceuticals
Pharmaceuticals.......B3 B1 analysts forecast a 1.6% de- for shippers to use rail.
Exxon Mobil ................ C6

Morgan Stanley .......... C1 Van Eck Emerging cline. Hanging over the industry
Markets Fund;A........R2
Fiat Chrysler Mylan...........................B3
Van Eck Global............R2
Adding to concerns, China’s is Canadian Pacific Railway
Automobiles ............. B1 N-O-P Vanguard FTSE stock markets have plunged Ltd.’s $30 billion bid for rival
Fidelity Investments..R8
Ford Motor.............B1,B4
Netflix.........................R4 Emerging Markets ETF this month amid broader wor- Norfolk Southern. The pur-
New Regency Pictures .....................................R2 ries about that nation’s econ- suit has been rebuffed since
G - H -I .....................................B7 Via Technologies.........B6
Geico..........................A12 Nike.............................R4 Walt Disney................B7 omy. U.S. companies have its disclosure in November,
General Electric .......... B3 Occidental Petroleum.B1 Wimmer Financial...... R5 been relying on China for but CP has said its next steps
sales growth, and further tur- may include launching a

INDEX TO PEOPLE moil in that market will likely

affect intermodal traffic as
U.S. industrial production
plants have switched to natu-
ral gas, whose price in 2015
hit its lowest annual average
month, adding that coal in-
ventories were piling up in
both the North and South.
proxy fight to take the offer
directly to shareholders.
Any deal reached would be
Beizer, Julia ................ B6 Greenspan, Alan.........A2 Porat, Ruth ................. R4 feels the crunch. since 1999, according to the Mr. Levin said that some followed by a prolonged reg-
Bellovin, Steven..........B6 Grieves, Hugh.............R7 Pratt, David .............. A12 “Starting the year, obvi- U.S. Energy Information Ad- plants are running out of ulatory review, with the out-
Bernhardt, Keith.........R8 Haas, Rick...................B4 Renwick, Glenn.........A12
Bernstein, William ..... R8 Hansen, Julie..............B6 Rigrodsky, Seth...........C1
ously things don’t look very ministration. room to store coal, prompt- come uncertain. Meanwhile,
Bouchard, Andre ......... C6 Harrer, Laurentius......R7 Robbiati, Tarek............C2 rosy” for railroads, said Mark Coal volumes fell 12% in ing them to delay shipments. analysts say competitors like
Bush, Jeb....................A4 Harris, Britt.................C2 Roseen, Tom ............... R2 Levin, an analyst with BB&T 2015 to 5.1 million carloads, Rail shipments are lower BNSF Railway Co.—which
Cai, Jin-Yong...............C4 Hawken, Brennan........C1 Rubio, Marco...............A4 Capital Markets, citing the according to the AAR. On av- nearly across the board, in- has said it might go hunting
Carson, Ben.................A4 Hile, Pamela................C2 Ryan, Paul...................A4 manufacturing slowdown and erage, coal used to account cluding those of crude oil as for a partner—are standing
Chaum, David..............B6 Hollis, Dave.................B7 Sanders, Joel .............. B3 the increased competitive- for nearly 20% of railroads’ domestic producers have by. “I think there’s a chance
Christie, Chris.............A4 Hughes, Darren...........C2 Saputo, Dennis............C1
Clark, Matt..................C2 Hurley, Joseph............R8 Schachter, Ben............C6
ness of trucks due to low fuel revenue, but Mr. Levin now pulled back. The trends are that we could see something
Cohn, Bob....................B6 Kelly, David.................R7 Scott, Tim...................A4 prices. estimates the contribution is so dramatic that investors materialize, but I still say the
Comey, James.............B6 Liu Yunying ................. C3 Segalas, Spiros...........R4 Coal is the sector’s single closer to 13%. wonder if railroads will be probability is low,” said Jus-
Cruz, Ted.....................A4 Luckey, Palmer............C6 Shkreli, Martin..........R12 largest source of U.S. carloads, “Clearly it’s a challenging able to offset volume de- tin Long, an analyst with Ste-
Cue, Eddy .................... B1 Malhotra, Davinder.....R8 Singh, Kapil.................R8 accounting for about a third— environment for us with low clines with higher prices and phens.
Daigle, David...............R7 McLeod, Robert .......... R8 Smith, Gibson.............R9 and currently is also railroads’ natural-gas prices,” CSX fi- by cutting costs.
Davidowitz, Daniel ..... R4 Mehta, Rajiv ............... B1 Sperandeo, Victor.......R8
Davis, Steven..............B3 Micheletti, Ed..............C6 Srinidhi Kanuri,...........R8
biggest weakness. Coal vol- nance chief Frank Lonegro “I think flat is the new The Week Ahead looks at
Diaz, Chris...................R9 Miller, Samuel ............ B6 Stein, Jeremy ............. A2 umes have slumped as power said at a conference last up,” said David Vernon, an coming corporate events.
Eck, Jan van................R2 Miringoff, Lee.............A4 Stovall, Robert H........R1
Evans, Scott................C2 Moran, Michael A.......C2 Stovall, Sam ............... R1

Ficklin, Damon............R4 Musk, Elon..................B4 Tannuzzo, Gene...........C2 Inc. raised the price of its
Flatley, Jay..................B2 Nasgovitz, Bill ............ R9 Tarullo, Daniel ............ A2 drug Ampyra, which is used to Prescribed Pricing
Ford, Bill......................B1 Nasser, Jacques..........B4 Watters, Darrell..........R9
Ford, Nick....................R7 Neithart, Robert.........R7 Wilson, Tom..............A12 help multiple-sclerosis pa- Price increases since late December for selected branded drugs
Gates, Bill ................... B2 Noble, John.................C6 Wimmer, Per...............R5 tients improve walking, by 11%
Glasscock III, Sam ...... C6 Peng, Nicole................B6 Xiaohui, Wu ................ C3 Continued from the prior page on Jan. 1, to an annual cost of Drug (Manufacturer) Condition Increase
Goenka, Pawan...........B1 Peron, Matthew..........C2 Zittrain, Jonathan ...... B6 dent of pharmacy services at more than $23,650 a patient.
Graham, Lindsey.........A4 Petrou, Karen..............A2 Zuckerberg, Mark........C6 HealthPartners, a Blooming- Acorda offers rebates and Lidoderm (Endo) Pain 25%
ton, Minn., insurer and hospi- discounts off the list price that Viagra (Pfizer) Erectile dysfunction 12.9%
tal operator. are likely to cut about 40%

Hetlioz (Vanda) Sleep disorder in blind people 10%
vance notice that any share- Amgen raised the price of from the latest price increase,
holder was considering a the anti-inflammatory drug on average, Chief Executive Restasis (Allergan) Dry eyes 9.9%
shareholder proposal on the Enbrel by 8% in late December, Ron Cohen said in an inter- Namenda XR (Allergan) Alzheimer’s disease 9.9%
topic,’’ and directors had con- according to Raymond James, view. The company has raised
Continued from the prior page sidered proxy access for over a following an 8% increase in the price several times since Lyrica (Pfizer) Pain 9.4%
rate governance at TIAA-CREF. year, a 3M spokeswoman said. September and a 10% increase the drug was approved in Actimmune (Horizon) Chronic granulomatous disease 9%
The rapid spread of proxy ac- Fourteen of the other busi- last May. Enbrel costs about 2010.
cess also has been spurred by nesses that received Mr. $704 a week for the typical Dr. Cohen said it took more Trulicity (Eli Lilly) Type 2 diabetes 8%
companies’ expanded outreach Stringer’s proposal for 2016 dosing for treatment of rheu- than a decade to develop Enbrel (Amgen) Rheumatoid arthritis 7.9%
to major investors and direc- also have already endorsed matoid arthritis, according to Ampyra. He said Acorda is de-
Copaxone (Teva) Multiple sclerosis 7.9%
tors’ desire to avoid the ire of proxy access, a Stringer CMS, or more than $36,600 a veloping additional drugs for
proxy advisers that often op- spokesman said. Mr. Stringer year. conditions including Parkin- Note: Price increases don’t reflect any discounts offered by manufacturers
pose their re-election when dropped another two compa- The drug’s new cost is son’s disease. Ampyra gener- Sources: the manufacturers, Jefferies & Co., Deutsche Bank, Raymond James
management ignores a measure nies for technical reasons. about four times its cost at ated $315 million in sales for
garnering majority support. But some, such as NVR, op- launch in the 1990s, said Ray- the first nine months of 2015,
Dozens of companies made pose New York City’s efforts. mond James analyst Christo- or 87% of total company reve- wrinkle-smoother Botox, and vides financial assistance to
the change in recent weeks The home builder wants secu- pher Raymond. The price hikes nue. Namenda XR, a treatment for help patients afford its drugs.
amid looming deadlines for in- rities regulators to block the for Enbrel and other drugs The price hikes are “our Alzheimer’s disease. Botox There were some notable
vestors to submit 2016 annual city’s binding resolution from “seem to have increased in way of insuring that we can went up 3.8%. exceptions to the price in-
meeting proposals. At least 10 coming to a vote this year be- magnitude and frequency,” he survive and develop these pro- An Allergan spokesman creases. Valeant Pharmaceuti-
proxy access bylaws arrived ev- cause the company adopted a said. grams and bring these new in- confirmed the price increases cals International Inc., which
ery week during much of De- limited form of proxy access in An Amgen spokeswoman novative drugs to market,” he but declined further comment. came under fire last year for
cember, said Patrick McGurn, November. NVR requires in- said the price of Enbrel re- said. Horizon Pharma boosted sharply raising prices, hasn’t
special counsel for ISS. vestors to own at least a 5% flects its clinical benefits, Allergan, which has agreed prices for five drugs by 9% to raised prices since September,
3M beat the New York City stake before they can nomi- while helping fund “continued to be acquired by Pfizer for 9.9%, Jefferies said, including according to Deutsche Bank.
pension funds to the punch. nate directors. It declined to scientific innovation.” $160 billion, boosted prices by ActImmune, a treatment for A Valeant spokeswoman
The industrial conglomerate comment, as did Home Depot, Mary Brainerd, chief execu- an average of 9.1% for more hereditary diseases. The com- said changes in the company’s
disclosed its directors’ en- which lacks proxy access. tive of HealthPartners, said than 40 brands so far this pany’s price increases were product lineup have made
dorsement of proxy access, ef- Investors have yet to use drug-industry practices “are year, and left unchanged the subject of a page-one arti- pricing a smaller part of its
fective immediately, in a Nov. their improved entry into board- becoming increasingly intoler- prices for about 20 other cle in The Wall Street Journal expected sales growth. Valeant
10 regulatory filing. The same rooms. But “in the next two or able for consumers, health brands, according to Deutsche last year. canceled nearly all of its
day, the city’s pension funds three years, we might start to plans, doctors and hospitals.” Bank. The increases included A Horizon spokesman said planned price increases for the
sent 3M a similar proxy access see one or two instances,’’ said Drugmakers say they need 9.9% hikes for eye drug Resta- pricing for its products “isn’t fourth quarter, and expects fu-
measure for 2016. Cam Hoang, a partner at Dorsey to raise prices to fund risky sis, the company’s second a key driver” of its business, ture price hikes to be more
“We did not have any ad- & Whitney LLP. research. Acorda Therapeutics highest-selling product after and that the company pro- modest, she said.

Illumina Project Seeks Gene-Based Cancer Blood Test

BY RON WINSLOW highest, said Jay Flatley, Illu- monly used to diagnose can- nomes at exceptionally deep But he acknowledged that it
mina’s chief executive, who is cer. But advances in levels to develop a reliable is crucial to show the test
SAN FRANCISCO—Illumina also chairman of Grail. technology, including the abil- test. “doesn’t have a high false-pos-
Inc., seeking to build on its Illumina is the majority ity to cheaply sequence tumor There are big hurdles. itive rate,” and that it can dis-
strength in DNA sequencing, is owner of the company, which DNA, are just beginning to Broad screening programs for tinguish between potentially
launching a company that will is backed by more than $100 make such tests feasible. prostate and breast cancer, for aggressive cancers and those
develop and market a test to million in its initial financ- Grail’s test will focus on de- instance, often raise suspi- likely to have no health conse-
detect genetic evidence of can- ing. Arch Venture Partners is tecting cancer-associated mu- cions when no cancer is pres- quences. The company plans
cer in the blood. also a lead investor, with addi- tations in DNA fragments to ent—a false-positive result—or to work closely with regula-
The San Diego maker of tional participation from Be- screen people for evidence of find cancer that will never tors and insurers in develop-

gene-sequencing machines zos Expeditions, Bill Gates disease. The company will cause problems yet lead pa- ing the test, said Mr. Flatley,
said Sunday it is forming the and Sutter Hill Ventures, Mr. have a “preferential economic tients to undergo further tests adding that the price will have
company, called Grail, with a Flatley said. The company an- relationship with Illumina” and procedures that come to come in under $1,000 ini-
group of other investors, nounced the launch on the eve and its DNA sequencing ex- with harmful side effects. tially and come down further
marking the latest bet that so- of the annual J.P. Morgan pertise, Mr. Flatley said. Mr. Flatley said a blood test after that.
called liquid biopsies will be- Healthcare Conference here. That will make it possible avoids some such problems He said Grail will spend the
come a major tool for detect- Researchers have long The slide on which an Illumina to perform the especially de- because unlike, for example, next year refining the test be-
ing, diagnosing and managing known that evidence of tu- machine sequences DNA. tailed analyses of DNA frag- suspicious findings from mam- fore testing it in clinical trials
treatment of cancer. mors lurks in the blood, either ments needed to develop and mography, which can have a beginning in 2017. If all goes
The test will be designed to in the form of circulating tu- ably enable doctors and pa- validate the test and to market variety of causes, “we are ac- well, a test to detect evidence
screen people who have no mor cells or in fragments of tients to detect and moni- it at an affordable price. He tually measuring mutations of any cancer—what he
cancer symptoms and detect DNA that are shed from tumor tor the disease without painful estimated the company will from cancer cells.” It is “a di- termed a “pan-cancer screen-
disease at its earliest stages cells. That has raised hopes and sometimes misleading tis- have to sequence between rect measure of the cancer it- ing test”—could be on the
when the chance to cure it is for a blood test that could reli- sue biopsies that are com- 100,000 to 300,000 human ge- self,” he said. market by 2019.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. * * * * * Monday, January 11, 2016 | B3


Kohl’s Weighs Steps as Woes Mount Starboard

With shares down 40%,
the struggling retailer
is considering going
Macy’s on
private or breaking up Real Estate
Department stores have BY DAVID BENOIT
been under siege for decades, AND SUZANNE KAPNER
but lately their fortunes have
hit a new low that could spark Activist investor Starboard
a wave of deal making that Value LP is again urging
could sweep up companies Macy’s Inc. to find ways to
such as Kohl’s Corp. unlock the value of its vast
real-estate holdings, including
By Suzanne Kapner, its famous Herald Square store
Joann S. Lublin and in New York.
Dana Mattioli In a letter and presentation
the investor sent to Macy’s

Shoppers are flocking to management on Sunday, Star-

newer types of stores that sell board said it supports the re-
similar brands at deep dis- tailer’s recently announced
counts and buying more on- plans to cut costs and urged
line, leaving behind cavernous the company to follow through
stores that are difficult to fill with real-estate deals that
productively. Investors, too, could put more cash in its cof-
are abandoning the compa- fers as it struggles with lack-
nies. Shares of major depart- luster sales.
ment-store chains fell nearly In an emailed statement,
37% last year, while the overall Macy’s said it was reviewing
S&P 500 Index fell just 0.7%. Starboard’s letter and materi-
The troubles are prompting als. The company said Star-
some soul searching at these Analysts expect Kohl’s sales to total $19.3 billion in its current fiscal year, which ends this month, roughly the same as in 2012. board’s views are consistent
decades-old businesses. With with actions already under
sales shrinking, Sears Hold- $9 billion, or roughly half its from such firms, people famil- $1.75, leaving an enterprise have clean balance sheets, way at Macy’s. The company
ings Corp. has been selling off expected annual sales for the iar with the situation said. value of $1.2 billion. which makes it easier to advo- said it looks forward to con-
stores to raise cash. Macy’s current fiscal year. Kohl’s declined to comment. Representatives for Bon- cate for share repurchases, ac- tinued dialogue with Star-
Inc. is talking with real-estate Concerned that its de- Some smaller department- Ton and Sycamore didn’t im- quisitions or other alterna- board and other shareholders.
developers to take over space pressed share price could store companies have recently mediately respond to requests tives,” said Rohit Singh, Macy’s last week said it
in its flagship locations and make it a target for activist in- turned to private-equity suit- for comment on Sunday. managing director in UBS’s in- would seek out joint-venture
other stores. vestors, directors are consid- ors. In December, Sycamore Kohl’s problems aren’t as vestment-banking, consumer- partners to take minority
Kohl’s, a national depart- ering whether to hire an in- Partners completed a $3 bil- severe as those plaguing products and retail group. A stakes in some properties af-
ment-store chain with roughly vestment bank to advise it on lion deal to take private Belk Macy’s, and its shares trade at banker at another firm said: ter rejecting Starboard’s ear-
1,200 stores, is debating alternatives that could include Inc., a Southern chain with a premium to the rival chain. “A lot of our retail clients are lier call for a full spinoff of its
whether to pursue more dras- a sale to a private-equity firm, about 300 stores. In recent But Kohl’s directors are trying worried about activists.” real-estate holdings.
tic action, such as taking itself the person familiar with the months, Sycamore has ap- to get ahead of the situation, Founded in 1962, Kohl’s won Starboard’s letter, reviewed
private or breaking up the situation said. proached another re- one of the people said. Activist over shoppers by locating its by The Wall Street Journal, reit-
company, according to a per- The discussions are prelimi- gional chain, Bon-Ton Stores investor Starboard Value LP stores away from malls, stock- erates its view that the com-
son familiar with the situation. nary and directors might opt Inc., about combining with acquired a roughly 1% stake in ing them with affordable pri- pany’s properties are worth $21
Once among the fastest- not to explore such a strategy. Belk, according to people fa- Macy’s last year and is urging vate collections, some by big- billion, all told, and that the sale
growing retailers, the Menom- Kohl’s top executives are open miliar with the matter. the company to form joint name designers, and creating of even a small stake in Macy’s
onee Falls, Wisc.-based re- to the strategic review and the Bon-Ton, which operates ventures for its properties. Ac- racetrack-like aisles that made real estate could help drive the
tailer has stumbled in recent board is expected to discuss 270 stores mostly in the tivists have also propelled re- the stores easy to navigate. company’s shares higher.
years. Despite improvements the company’s multiple op- Northeast and Midwest, has cent deal making at Ann Inc., But that growth has stalled Starboard suggested two
that include recent sales gains tions further this week, the nearly $3 billion in sales but Jos. A Bank Clothiers Inc., Sta- recently. Analysts expect separate joint ventures, one
at existing stores, its shares person continued. A sale to a been unprofitable for the past ples Inc. and PetSmart Inc., Kohl’s sales to total $19.3 bil- for Macy’s landmark proper-
are down 40% from their high private-equity firm is an idea four years. Its share price has among other retail chains. lion in its current fiscal year, ties like Herald Square and a
of $79.07 on April 2. It ended that management has rejected fallen 77% in the past 12 “Activists love this space which ends this month, second for its hundreds of
Friday with a market value of in the past despite interest months and closed Friday at because retailers generally roughly the same as in 2012. mall locations.

Alcoa Gets Miners Sift for Gold in Discarded Ore Waste

pipelines that run as many as
40 miles long, to a processing

Contract JOHANNESBURG—Miners
are sifting through the detritus
plant. There, it passes through
filters and is finely ground be-
fore being treated with cya-

From GE of a century-long gold rush

here, scavenging through 150-
foot-high mounds of discarded
nide, which leaches the gold
particles out of the sludge.
The recovered gold is then

BY JOHN W. MILLER ore for traces of gold they may forged into rough bars and
still contain. flown to a nearby foundry—by
Alcoa Inc. said it The mounds are the legacy helicopter—to evade South Af-
would announce a $1.5 billion of a mining industry that has rican bandits, who often hijack
long-term supply con- yielded nearly half of the armored cars.
tract Monday with General world’s gold bullion and jew- For each ton of reprocessed
Electric Inc.’s aviation unit, elry since the precious metal ore, an average of just 0.2
underscoring the aluminum was discovered here in the late gram of gold is extracted. DRD-
producer’s efforts to offset dif- 1880s. After digging out raw Gold goes through two million
ficult conditions in its raw- ore from the ground, miners metric tons of ore a month. In
aluminum business. extract what gold they can its 2015 fiscal year that ended
The announcement will from the mix, leaving behind June 30, the company pro-
come the same day as New hills of discarded ore as waste. duced 150,145 troy ounces of
York-based Alcoa reports what Over the years, these A water cannon blasts mining refuse in Johannesburg. Miners are searching for gold in mounds of ore. gold, up 13% from the previous
is expected to be its worst mounds—many now overgrown year.
quarterly results since early with scrub or abutting shanty- While gold prices have fallen company here focused solely fort could go a long way toward The scavenging comes as
2014, including a 17% drop in towns—have been subsumed sharply from their all-time high on reprocessing mine waste. getting rid of the waste, critics conventional mining declines.
revenue from a year earlier by the sprawling city, becom- in late 2011, they are still buoy- Sibanye Gold Ltd., South Af- say the industry hasn’t gone far South African gold miners are
and earnings of two cents a ing part of its geography. But ant enough to make the effort rica’s top gold producer, and enough in addressing the envi- battling rising labor and elec-
share, according to a poll of the mounds still contain trace profitable. Executives also style AngloGold Ashanti Ltd., the ronmental hazards. tricity costs as they dig ever
analysts. Raw-aluminum prices amounts of gold. Until recently, the work as part of a cleanup world’s third-largest gold DRDGold uses water cannons deeper for dwindling reserves.
have fallen over 25% to about going back for those scraps drive, ridding the city of waste miner, are also now working to blast a ton of water every Output has halved in the past
$1,500 per ton in the past wasn’t worth the trouble. that irritates eyes and throats over old dumps. In the first four seconds at the mounds. On decade, pushing South Africa
year. Details of the GE Today, though, companies and contains cyanide, a chemi- half of 2015, about a fifth of one recent morning south of Jo- from first to sixth on the list of
deal were in a news release like DRDGold Ltd. are using cal used in conventional mining, AngloGold’s production came hannesburg, a DRDGold worker global gold producers.
viewed by The Wall Street high-powered water cannons to and uranium that is latent in the from going back through min- in goggles and a waterproof At today’s prices for gold—
Journal. Alcoa will disclose blast many of the towering dug-up earth. ing residue, as well as dis- jumpsuit was using his roaring about $1,100 an ounce—about a
fourth-quarter earnings after dumps open again, pushing “Hopefully one day, 20 years carded ore that was never pro- water cannon to turn a powdery quarter of the waste still lying
the market close on Monday. their contents through miles- from now, all the mine dumps cessed in the first place. gray cliff-face of one partially around the city is profitable to
As usual, it will be first major long pipes to processing plants in Johannesburg will be gone,” It is hard work for thin mar- vanished mound into a torrent reprocess, said Jaco Schoeman,
U.S. company to report, set- that can extract tiny gold rem- said Niël Pretorius, chief execu- gins. And while many inside and of ashy sludge. operations director at DRDGold
ting the tone during a volatile nants. tive of DRDGold, the biggest outside the industry say the ef- The slurry is pushed into subsidiary Ergo Mining Ltd.
time for the stock market.
Alcoa will supply advanced
nickel-based superalloy, tita- cer, Joel Sanders, say their clients
American Eagle May Disappoint THERMO FISHER SCIENTIFIC
nium and aluminum compo-
nents for engines and for en-
Business are prepared to take the financial
fraud case back to court, despite
Affymetrix Is Sold
gine parts made by GE. “We
greatly appreciate GE’s contin- Watch plea deals offered to both that
would have required having a fel-
For $1.3 Billion
Thermo Fisher Scientific Inc.
ued confidence in Alcoa’s ony on their record. They have will buy Affymetrix Inc. in a
aerospace capabilities,” said maintained their innocence. roughly $1.3 billion cash deal
Alcoa Chief Executive Klaus In court Friday, New York that would boost its biogenetic

Kleinfeld in the release. state court Judge Robert Stolz analysis portfolio, the company
Alcoa will make the parts in DEWEY & LEBOEUF said there was a “déjà vu aspect said Friday.
six U.S. states, as well as to all this.” Judge Stolz declared Under the terms of the deal,
France and Canada. Alcoa said
Dewey Retrial Won’t a mistrial in October once a jury which requires approval by Af-
its aerospace division secured Include Ex-Chairman failed to reach verdicts on major fymetrix shareholders, Thermo
“approximately $9 billion” in A watered-down retrial of counts against Messrs. Davis, Di- Fisher is to pay $14 a share in
contracts during 2015. It has former Dewey & LeBoeuf LLP Carmine and Sanders. cash. Affymetrix’s shares closed
also signed billion-dollar-plus executives is set for September, —Sara Randazzo Friday at $9.21. Thermo Fisher
deals to supply Boeing Co. and but the do-over of the financial said the deal would add 10
Airbus Group SE. fraud case won’t include the PHARMACEUTICALS cents a share to adjusted profit
Alcoa had already signaled firm’s ex-chairman, Steven Davis. in the first full year of owner-
plans to spin off its lucrative Under a deferred prosecution
Mylan, Momenta American Eagle Outfitters Inc. indicated core sales could be below ship and result in about $70 mil-
parts business during the sec- agreement finalized Friday, pros- In Biosimilar Venture Wall Street’s expectation, despite what the retailer called a solid lion in savings by year three.
ond half of 2016. The spinoff ecutors said they will dismiss Mylan NV and Momenta holiday. It said its same-store sales are up 4% so far in the quarter. Santa Clara, Calif.-based Af-
will also supply aluminum the charges against Mr. Davis af- Pharmaceuticals Inc. said Friday Analysts polled by Retail Metrics had forecast growth of 4.7%. fymetrix, which carried an accu-
sheet to auto makers. ter five years if he doesn’t com- they would jointly develop and mulated loss of about $500 mil-
As it trumpets parts-mak- mit any crimes in that period or commercialize six biosimilars. lion as of Sept. 30, has about
ing deals, Alcoa continues to practice law in the state of New Mylan will make an upfront $350 million in annual revenue,
close smelter production in York. Mr. Davis hasn’t admitted cash payment of $45 million to costs and eventual profits. a biosimilar for Orencia, a rheu- while Waltham, Mass.-based
high-cost areas like the U.S., any wrongdoing under the deal. Momenta and could pay up to Mylan will lead world-wide matoid arthritis treatment. The Thermo Fisher has about $17
Europe and Australia. Since Attorneys for Dewey’s former $200 million if milestones are commercialization, and Momenta companies didn’t identify the billion in annual revenue, accord-
2007, it has closed or sold 48% executive director, Stephen DiCar- reached. Each company will has the option to co-commercial- other five biosimilars in the deal. ing to regulatory filings.
of its raw-aluminum capacity. mine, and ex-chief financial offi- equally share the development ize in the U.S. The deal includes —Austen Hufford —Maria Armental
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B4 | Monday, January 11, 2016 * *** THE WALL STREET JOURNAL.


In Detroit, Trucks Take Back Seat GM

Passenger cars,
electric vehicles are
likely to occupy center
Trial Set
stage at auto show To Begin
General Motors Co. heads
As auto makers gather to to trial this week in a case in-
kick off Motown’s annual car volving a defective ignition
show, executives appear switch linked to 124 deaths,
poised to talk about every- continuing a legal battle over
thing but the hottest vehicles a safety lapse still dogging the
on the market. auto maker despite a raft of

The agenda is full of an- previous settlements.

nouncements regarding cars The trial, which is set to
that drive themselves, cars that start Monday, will begin the
plug into the wall and cars that same day GM takes the stage
aren’t versatile enough to in Detroit at the North Ameri-
be considered light trucks. Pick- can International Auto Show
ups, SUVs and crossovers repre- to highlight a future Chevrolet
sented 60% of December’s U.S. hatchback and electric car.
sales tally amid low gasoline The ignition-switch case,
prices, but those models are tak- part of consolidated litigation
ing a back seat. in a New York federal court,
The overwhelming majority will dredge up for a jury past
of vehicles slated for debut safety lapses the auto maker
Monday and Tuesday at the has worked to put behind it for
North American International Trucks and crossovers will play a bit part, even though they deliver the bulk of industry profits. Exhibitors prepare on the eve of the show. the better part of two years.
Auto Show in Detroit are ex- The trial is a reminder that
pected to be passenger cars or “There is little doubt that in sedan for 2016 and Chevy de- plans to make driverless cars, combined 10 semiautonomous GM still faces potential finan-
electric vehicles, according to North America, taller vehicles signers were drawing up a while a surge in demand for or autonomous vehicles within cial penalties as a result of the
an estimate published by Au- are the sales darlings, while Cruze hatchback, gas prices ride sharing pinches demand five years. Ford’s CEO plans to faulty switch even after reach-
tomotive News. Ford Motor many good sedans are strug- were around $3.50 a gallon for new vehicles. GM, Ford and morph the company into a ing settlements with the Jus-
Co.’s Lincoln brand, Toyota gling to find buyers,” Kelley Blue and sales of passenger cars rivals have all the same tech- transportation services pro- tice Department, shareholders
Motor Co.’s Lexus, Daimler Book analyst Jack Nerad said. were sizzling. nology, but Wall Street has vider. and thousands of consumers
AG’s Mercedes-Benz, Hyundai Trucks and crossovers will “Years ago when plans were given far more credit to Sili- None of those efforts shed totaling more than $2 billion.
Motor Co. and General Mo- play a bit part at Detroit’s made for vehicles that are be- con Valley than Detroit when much light on the profit out- Remaining lawsuits and addi-
tors Co.’s Chevrolet hope to show, even though they deliver ing launched in January 2016, it comes to the battle for the look for 2016, which is strong. tional government probes loom.
make a splash with new luxury the bulk of industry profits. there was little thought that future of a 125-year industry. Automotive bean counters GM’s trial in lower Manhattan
sedans, hatchbacks and econ- GMC plans a significantly up- fuel prices would be as low as As a result, the recent Con- are optimistic following 2015 stems from a May 2014 crash in
omy cars. But those vehicles dated version of the Acadia for they are today,” Mr. Nerad sumer Electronics Show was as transaction prices shot Oklahoma. Robert Scheuer, 49
require increasingly higher the first time since it was in- said. “If manufacturers had an- littered with announcements through the roof last year, ex- years old, alleges he suffered
discounts and rebates, and in- troduced nearly a decade ago. ticipated that, we might be by auto makers. ceeding $34,000, according to neck and back injuries because a
ventory is piling up. Honda Motor Co. wades back seeing more trucks and big ve- They want to bridge the gap TrueCar Inc. Sales of pricier defective ignition switch on his
Auto makers reported record into the pickup market with a hicles being launched in De- between the perception they trucks and SUVs enrich the in- 2003 Saturn Ion prevented the
2015 sales this past Tuesday. revised version of its midsize troit this week.” aren’t prepared for disruption dustry’s mix; so does the appe- air bag from deploying when his
The next day, the country’s top Ridgeline, previous versions of A bigger reason for the ap- and the reality that they are tite among buyers to load ve- car crashed into a tree, accord-
car salesman, AutoNation Inc. which fell flat. parent mismatch between pouring billions of dollars into hicles with features. ing to court records.
Chief Executive Mike Jackson, The lack of focus on the what auto makers want to talk efforts to avoid getting passed Mr. Scheuer’s Ion car, now
threw cold water on optimism cash cows is partially due to about and what consumers by. MORE ON WSJ.COM destroyed, is among roughly
by saying the biggest U.S. deal- the fact that product cycles want to buy: Google Inc., Tesla GM signed a $500 million 2.6 million older vehicles GM
ership chain is cutting back on are hammered out several Motors Inc., Apple Inc. and partnership with Lyft Inc. and Track the latest recalled in early 2014 for a
orders of passenger-car inven-
tory because consumers don’t
want them. Mr. Jackson wants
years before cars and trucks
are actually introduced. When
Ford engineers were dreaming
Uber Technologies Inc.
Tech giants are invading the
car business with the promise
unveiled a Bolt electric car capa-
ble of traveling 200 miles, or
320 kilometers, on a charge.
news as the auto
show in Detroit
begins, at
faulty switch that can slip out
of the run position, disabling
safety features including air
more trucks. up a new Lincoln Continental of more electric vehicles and Nissan/Renault SA will launch a WSJ.com/Business. bags. The lawsuit also alleges
the switch affected power-
steering and braking when it

FORD is in talks with Alphabet,

Inc.’s Google, to forge deeper
ties with Silicon Valley, where
Ford recently expanded its re-
assembler of other people’s
technologies and that’s not
where we want to be.”
In an interview, Mr. Fields
slipped from the run position.
A GM spokesman said the
company will show jurors the
ignition switch in the Scheuer
Continued from page B1 search lab. said he sees the new mobility case didn’t rotate and that the
executives across the globe. As part of this effort, Ford services as a natural extension vehicle’s air bags weren’t de-
Even as U.S. light-vehicle sales is considering creating a sepa- of Ford’s core auto business, to signed to deploy in the Okla-
sizzle at a record clip and low rate business unit dedicated to which the company will remain homa crash. The spokesman
fuel prices reignite America’s developing autonomous cars committed. But with newcom- added that GM already had re-
passion for profitable trucks and for use in ride-sharing and ers, including Tesla, Google and solved “a large majority of the
SUVs, the industry is pursuing fleets, say people familiar with Apple Inc. entering the auto ignition-switch personal injury
technologies built on the as- the plans. Ford would develop space, Mr. Fields also views the and wrongful death claims
sumption more people will stop software for components, in- industry as ripe for disruption, filed since the recall.”

wanting to drive gasoline-pow- cluding steering or braking, and says Ford is in a good posi- The Scheuer trial is the first
ered vehicles within 30 years. while Google would provide tion to take advantage of new of several “bellwether” cases
At this week’s North Ameri- the autonomous-driving soft- technologies to reach people in this year aimed at setting a
can International Auto Show, ware that governs those func- growing urban centers who pattern for additional settle-
car companies will outline tions, one of these people said. might not own a car. ments among GM and plaintiffs.
plans for autonomous vehicles, Google declined to com- “It used to be years ago peo- A federal judge is oversee-
ride-sharing and electric cars ment. Mr. Fields, when asked Bill Ford has long stressed the need for mobility alternatives. ple were exiting the city and ing so-called multi-district liti-
at a time when 60% of vehicles about whether Ford would going to the suburbs,” Mr. gation that culled together
being sold are light trucks that form a new subsidiary or com- Fields said. “What we’ve seen widespread personal injury,
consume more gasoline.
A primary reason: investors
pany to make strategic invest-
ments in ride-sharing, said,
Ford’s Road Under Bill Ford Jr. over the last decade or so is
the opposite happening, partic-
wrongful death and economic-
loss lawsuits tied to the defec-
have shown little faith in De- “We are open to all possibili- ularly among young people.” tive switch.
troit’s ability to sustain today’s ties.” Ford will roll out alter- 1999—Jacques Nasser becomes CEO, Bill Ford Jr. named chairman Like Mr. Ford, who spent a
profits. Wall Street has driven native-mobility announce- lot of time in Northern Cali-
up valuations of a band of auto-
motive upstarts, including Tesla,
ments in Detroit this week.
These moves could alter the
1999—Ford acquires Sweden’s Volvo Cars for $6.5 billion fornia meeting with tech lead-
ers as an eBay Inc. board Tesla Restricts
while shares of Ford and Gen-
eral Motors Co. have stalled.
direction established when Mr.
Ford took over as CEO in 2001.
2001—Bill Ford Jr. succeeds Jacques Nasser as CEO; keeps
chairman title
member, Mr. Fields is making
monthly trips to Silicon Valley. Its Autopilot
On the surface, investors His company was reeling from a He’s also hired fresh blood. BY MIKE RAMSEY
should be enthusiastic. The tire recall and hemorrhaging 2006—Former Boeing executive Alan Mulally named Ford CEO, Former investment banker and
company is earning record money. Resources were thin af- succeeds Bill Ford Jr. automotive analyst John Casesa, Tesla Motors Inc. imple-
profits in North America, due ter his predecessor, Jacques Nas- and former aerospace executive mented restrictions on where
in part to the success of its new ser, invested in a number of ven- 2008—Ford sells Jaguar and Land Rover to India car maker Tata Ken Washington are heading it will allow its vehicles to use
aluminum-bodied F-150 pickup. tures and luxury brands, so the Motors; sells controlling stake in Mazda Motor Corp. strategy and advanced research autopilot after many owners
Analysts expect 2016 to be an family scion implemented a respectively, for instance. took videos of themselves
even better year for Ford. “back-to-the-basics” approach. 2010—Ford sells Volvo to China’s Zhejiang Geely Holding Group Co. As Mr. Fields expands, how- driving hands-free in danger-
Led by Chief Executive In the years that followed, ever, Ford has learned from its ous situations.
Mark Fields, Ford is now look- Ford dumped a Norwegian 2014—Mark Fields named CEO, replacing Alan Mulally; Ford experience under Mr. Nasser. Tesla, through a software
ing to expand into new trans- electric-vehicle company it introduces new aluminum-bodied F-150 truck Mr. Ford’s engagement, there- update delivered via the Inter-
portation services. Last owned, as well as abandoning Source: the company, staff reports fore, is an important sign that net to its vehicles on Saturday,
month, the executive an- some of Mr. Nasser’s e-com- Mr. Fields’s plan has support. also added a self-parking or
nounced a $4.5 billion electric- merce pursuits and other non- moted to CEO after running “One of the things that Mark “Everybody in management “summon” feature that allows
vehicle plan through 2020, core assets. Mr. Ford hired Ford’s North American opera- and I talked about prior to him understands why we’re doing the owner to park or fetch his
and he has authorized a series Alan Mulally in 2006 to accel- tion for nearly a decade. His becoming CEO was that he this,” Mr. Ford said, referring or her vehicle remotely from a
of experiments that have engi- erate the moves; Mr. Mulally job is to figure out how to di- bought into the notion that to the various new services distance of up to 39 feet.
neers exploring new services, shed a list of luxury brands, versify once again without change is upon us,” Mr. Ford the company is weighing ven- Chief Executive Elon Musk
including car-sharing and test- including Jaguar, Land Rover, straying from Mr. Mulally’s so- said. “If we do this correctly, turing into. “It’s not an add- said during a third-quarter
ing autonomous cars. Aston Martin and Volvo, and called One Ford plan that fo- we can have a very different- on, it’s not something we’re conference call that the com-
Mr. Fields, named CEO in Ford’s controlling stake in cuses on building cars, trucks looking company 10 years from doing on the side.” pany would likely update the
mid-2014, could have an ace Mazda Motor Corp. and SUVs that are safe, smart, now. If we don’t do it correctly, —Alistair Barr software in its autopilot system
up his sleeve. The auto maker Mr. Fields, 54, was pro- green and fun to drive. we will be at best a low-margin contributed to this article. after drivers posted dozens of
videos of themselves doing un-
safe things, such as getting into

INDIA decade. Low gasoline prices,

cheap financing and a healthy
economy has General Motors
Co. and Ford back near the top
asked if he would be inter-
ested in joining Mahindra two
years later, he agreed after
several months of discussions.
“take too long” if something
didn’t change. Executives
started looking for a satellite
location, visiting Turin, Seoul,
pany has to live up to the
competition, or they will not
Mahindra’s Troy facility is
the rear seat while the car was
operating or reading a book.
Under the new update,
Tesla’s vehicles won’t be able
Continued from page B1 of the global auto industry, Mr. Haas initially was hired Tokyo, London, Stuttgart and within a 20-mile radius of to go into autopilot on resi-
represents how much the auto and Detroit’s sprawling supply to upgrade Mahindra’s product Silicon Valley. “Those who more product-development re- dential streets or roads with-
industry has changed since the chain, including several spe- development chops in Chen- know Detroit, know it is all sources than Munich, the out a center divider. The auto-
financial crisis. Detroit, known cialty companies capable of nai. His superiors knew the things automotive,” Mr. Haas home of BMW AG, Stuttgart, pilot also won’t be able to
for high labor costs and a slow developing a car on their own, company excelled at “frugal said. “It is what they breathe.” where Daimler AG resides, and exceed the posted speed limit
response to market fluctua- is thriving and looking for new engineering,” a mind-set that Starting with “five guys” a Wolfsburg, Volkswagen AG’s by more than 5 miles per hour.
tions, needed tens of billions business. keeps in mind the extremely few years ago, Mr. Haas’ team base, combined, according to Tesla added the autopilot
in bailouts to stay afloat in Rick Haas was among those limited resources of India’s car has ballooned to about 100, Ann Arbor-based Center for feature in October. Tesla’s au-
2008. In the downsizing that who left Detroit during the buyers, most of whom are pur- with many of the new hires in- Automotive Research. topilot allows hands- and feet-
followed, some of the domes- dark days, with no guarantee chasing their first vehicle. spired by the idea of working “Detroit isn’t outsourcing free driving in everything
tic industry’s talent left for of returning. A longtime Ford That needed to change if Ma- for a challenger. anymore,” said Lynn Bishop, from stop-and-go traffic to
greener pastures while others executive and University of hindra was going to sell its Mr. Goenka said the U.S. vice president of Pratt & highway speeds, and enabled a
waited for rebound. Michigan graduate, Mr. Haas SUVs in the lucrative U.S. mar- technical venture is expensive Miller Engineering in New car to parallel park itself.
At this month’s Detroit mo- joined Tesla in 2009 as pro- ket. and can’t continue to grow ex- Haven, Mich., which does pro- Tesla said the autopilot sys-
tor show, auto executives will gram manager for the com- Mr. Haas came to the con- ponentially, but it is necessary totyping work for Mahindra tem has been modified to im-
celebrate the healthiest indus- pany’s first electric sedan, the clusion that globalizing the to winning in India and else- and other companies. “We’re prove steering in common
try conditions in well over a Model S. When recruiters company from India would where. “Any homegrown com- being outsourced to.” highway driving.
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THE WALL STREET JOURNAL. Monday, January 11, 2016 | B5

Achieving it together
is the real success.

Here’s to our best year yet.

In 2015, we sold a record 1.58 million Hondas and Acuras in the U.S.,
with 95% manufactured in North America. This was also a record
production year. These are incredible achievements. But for us, the real
success comes from knowing that we did it together with all of you:
our customers, dealers, vendors and associates. This was made
possible through the power of our dreams. Thank you!

Honda and Acura products are made using domestic and globally sourced parts.
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To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B6 | Monday, January 11, 2016 THE WALL STREET JOURNAL.

TECHNOLOGY @wsjd | wsjd.com

Qualcomm The Problem With Backdoors

SeeksRecords I
’m going to say this as
plainly as possible,
since the message
doesn’t seem to be getting
through: if we compromise

the security of our comput-
ing devices in a misbegot-
ten attempt to stem crimi-
nal behavior or terrorism—
as some in law enforcement
BY DON CLARK pending investigation by the and government suggest we
U.S. Federal Trade Commis- do—then,
Qualcomm Inc. asked a sion and a probe in China we deserve
U.S. federal court to compel completed in 2015. what will
some of its biggest customers One recurring focus is Qual- follow.
and competitors—including comm’s practice of charging It is a
Apple Inc. and Samsung Elec- mobile-phone makers a royalty tempting
tronics Co.—to hand over any based on a percentage of the proposition
documents they provided to wholesale price of their de- KEYWORDS to think
South Korean antitrust au- vices, rather than licensing its that if only
thorities investigating the U.S. technology to other parties CHRISTOPHER companies
chip maker. such as chip makers, who sell MIMS such
The maneuver, which some lower-priced products. Basing as Apple
legal experts called unusual, its royalties on lower-priced Inc., Al-
risks setting off court battles products would reduce Qual- phabet Inc.’s Google
with companies that include comm’s royalty payments. and Microsoft Corp. would
two major purchasers of Qual- Qualcomm’s settlement create so-called backdoors


comm chips. Samsung and with Chinese authorities didn’t to encrypted data on our
manufacturers producing Ap- challenge that scheme. But the devices and networks that
ple products each accounted company in November said only law-enforcement or the
for more than 10% of Qual- such “per device” royalties government knows about,
comm’s revenue in the fiscal were deemed illegal by the they could take action when
year ended in September. staff of the KFTC, which in needed.
Qualcomm last week filed 2009 fined Qualcomm in a But this data has all
applications in the U.S. Dis- case still under appeal. A kinds of information, from
trict Court in San Jose, Calif., KFTC examiner’s report rec- our instant messages to our FBI Director James Comey speaking in New York last month about terrorist threats facing the U.S.
for subpoenas that would let it ommended that the company banking transactions, and
seek documents or other evi- be fined again and required to history has shown that once of ISIS could use encrypted fluential academics who other tools—such as looking
dence from seven companies. alter some business practices. backdoors are created, they communication technolo- work on cryptography and at the “metadata” on mes-
The other parties named are Qualcomm said at the time can be and are discovered gies to “go dark,” putting security, lawful hacking is sages, including who sent
Intel Corp., Texas Instru- that per-device royalties were by bad actors. their words beyond the an acknowledgment of the what and from where. This
ments Inc., Broadcom Corp., the industry norm, and vowed We already live in a world reach of spy agencies—are fact that our personal and data is often just as valu-
Via Technologies Inc. and the to contest the charges. in which our defenses are illegitimate. The thought mobile computers are in able, or even more valuable,
U.S. arm of MediaTek Inc. “We followed a practice breached regularly. The Chi- that a major terrorist at- fact quite insecure. than actual message con-
Those five companies cur- provided for under U.S. law nese government plausibly tack could be stopped if “Lawful hacking says tents. This kind of data,
rently or previously sold chips that allows us to obtain docu- could compile a dossier on only a messaging app like there are vulnerabilities in says Harvard professor of
used in mobile phones that ments reflecting that input the Web-browsing habits of WhatsApp weren’t en- the system, and it is better Internet law Jonathan
compete with Qualcomm pro- and other relevant information every U.S. citizen. Our net- crypted is an arresting one. to exploit those than to Zittrain, is pretty much al-
cessors or wireless modem to be better able to respond works are often compro- But here’s the problem with build in other weaknesses,” ways available to law en-
chips. Samsung and Apple, be- and defend our position with mised. State actors are out- that logic: you can’t ban says Mr. Bellovin, an author forcement.
sides being Qualcomm cus- the agency,” a Qualcomm gunning besieged corporate math. Which is to say, en- of the paper. My own view on this de-
tomers, make processors used spokeswoman said of its re- IT departments, leading to cryption is a well under- The FBI already has both bate is the same as John
in their own smartphones. quest for subpoenas. “There is an estimated half a trillion stood technology. Sophisti- computer forensics labora- Michael “Mike” McConnell,
Representatives of Apple, nothing adversarial about our dollars in damages annually, cated attackers will always tories and a “National Do- who was director of the Na-
Intel, Samsung and Via had no filings.” according to the Center for move to whatever en- mestic Communications As- tional Security Agency from
comment, while their counter- Samuel Miller, a specialist Strategic and International crypted communications sistance Center” designed 1992 to 1996.
parts at TI, Broadcom and Me- in high-tech antitrust law and Studies. It is ironic in today’s channels are available to specifically to exploit the In a recent op-ed, he
diaTek couldn’t be reached adjunct professor at the Uni- technology-driven world, but them, and there will always vulnerabilities in computers wrote that “If law enforce-
In its latest court docu- versity of California’s Hastings no less true: there is no such be many such channels. and mobile devices to gain ment and intelligence or-
ments, Qualcomm said it is College of the Law, called thing as “good enough” en- Here’s another moving access to their contents. ganizations face a future
seeking information that could Qualcomm’s tactic rare and cryption once a backdoor example, again used by Mr. While local law enforcement without assured access to
help prepare for antitrust aggressive. He added that the has been added. It is truly Comey: what about in cases doesn’t have the sophistica- encrypted communications,
hearings in South Korea that federal judges have latitude to binary. where phones contain evi- tion to bypass security on they will develop technolo-
are likely to begin in the deny subpoenas on grounds Policy makers never ad- dence of a crime—or even devices or the Internet on gies and techniques to meet
spring. It said the seven com- such as a finding that a U.S. dress this straightforward clues that could lead to the its own, it could access or their legitimate mission
panies supplied documents party is trying to circumvent technical fact, says Colum- location of someone who build similar labs at the goals.”
and testimony to Korea Fair foreign disclosure limitations. bia University professor of has been kidnapped or vic- state level or even through That sure sounds like
Trade Commission officials He predicted the companies computer science Steven timized? Fortunately, there multistate consortia, says lawful hacking, interception
that are kept confidential un- Qualcomm named would use Bellovin. That is why com- is a solution to both of Mr. Bellovin. of metadata, and many other
der South Korean procedures. such arguments to avoid pro- panies such as Apple are these issues, and it doesn’t Even when law enforce- techniques we don’t even
Qualcomm, though it is No. viding the documents. “There encrypting data on devices involve compromising the ment cannot decode the know about.
1 in the mobile-chip market, is precedent for this,” he said with no backdoors avail- security of our devices—se- contents of individual mes- And none require com-
gets the majority of its profit of Qualcomm’s move, but able, not even to them- curity, let us not forget, sages, says David Chaum, promising our already sur-
from patent royalties. Its li- added: “I think they are going selves. This isn’t to say that prevents countless one of the pioneers of se- prisingly flimsy online secu-
censing practices have spurred to run into headwinds.” that concerns voiced by FBI other crimes. It is called cure and encrypted commu- rity by weakening the
antitrust investigations on —Daisuke Wakabayashi director James Comey— “lawful hacking.” As out- nications, that hardly pre- encryption on which we all
three continents, including a contributed to this article. who has said that members lined in a paper by four in- cludes them from using depend.

Xiaomi Investors Give APPLE ers, and eventually relaxed re-

strictions on advertising.
In response to requests from

Valuation Closer Look Continued from page B1

among several publishers
publishers, Apple said it now
allows the integration of fea-
tures from measurement spe-
BY EVA DOU pared with a year earlier. about whether Apple’s service cialist comScore into the app.
Mr. Lei used “flash sales” to will live up to its billing as a Apple initially provided up-
BEIJING—A year ago, Xi- sell smartphones with iPhone- significant advancement in dig- dates about the app’s usage by
aomi Corp. founder Lei Jun rivaling hardware at a fraction ital news distribution. emailing spreadsheets that give
announced to his staff in an of the price. He swallowed Even with the undercount- a high-level overview of usage,
open letter that the Chinese thin margins, betting he could ing, many publishing execu- but publishers want a more ro-
smartphone maker was the later sell services to users. tives said they expected to at- bust self-service dashboard to
world’s most valuable technol- Investors swooned. tract more readers from the access that information.
ogy startup. “We will journey In December 2014, Xiaomi app. The publishers declined to Media outlets say they have
into the constellations, to raised a $1.1 billion round disclose the usage data Apple questions about advertising,
places where others haven’t that valued the company at has shared. too.
dreamed of,” he wrote. $46 billion, topping even “The traffic has been mod- If they sell their own ads,
Living up to those high ex- ride-sharing startup Uber est relative to the enormous Apple requires that publishers
pectations has been a chal- Technologies Inc. at the time, install base of iOS devices,” use its iAd advertising technol-
lenge. Xiaomi missed its 2015 although Uber has since re- said Julie Hansen, president of ogy to insert, or “serve,” them.
sales target of 80 million gained the lead. Business Insider, which is now Many publishers would prefer
smartphones, according to But Xiaomi’s smartphones, publishing all of the content it to use ad-serving tools pro-
people familiar with the com- which once sold out in min- produces to Apple News. vided by other companies such
pany, and investors are begin- utes in limited batches via on- Apple News is available in as Google Inc. Requiring pub-
ning to question its $46 billion line flash sales, are now easily the U.S., U.K. and Australia on lishers to devote resources to a
valuation, which was based on available—a shift that analysts devices running iOS9, the lat- tool they only would use for
yet unrealized plans to gener- say signals slowing demand. est version of Apple’s mobile Apple News could make them
ate substantial revenue from Also, a slowdown in China’s operating system. question whether it is worth it.
Internet services. smartphone market has laid Mr. Cue said 40 million peo- Mr. Cue said he was sur-
China’s economic slow- bare Xiaomi’s weaknesses. Xi- ple have used the Apple News prised by the extent to which
down, coupled with turbulence aomi has lost market share app to date. The company publishers call on Apple to
in the country’s stock market, against established competi- hasn’t released data on how handle ad sales. He said Apple
is prompting investors to take tors with more financial and many people use it more regu- has accelerated the develop-

a second look at China’s high technological firepower such larly and how much traffic ment of its iAd network and
startup valuations. Companies as Huawei Technologies Co., publishers are getting. expects to launch a self-ser-
such as Xiaomi, which raised which overtook Xiaomi as Bob Cohn, chief operating vice ad-buying platform in the
vast sums on China’s mobile- China’s top handset maker in officer at the Atlantic, said the next two months to help in-
Internet boom, now are facing the third quarter 2015, accord- magazine had a good experi- crease ad spending.
growing pressure to live up to ing to Canalys. Huawei, which ence working with Apple, but Despite the setbacks, pub-
expectations. “With China’s sold more than 100 million echoed the concerns about its lishers remain hopeful about
economy slowing, many start- mobile devices last year, is audience and publishers’ abil- the potential of the service and
ups will need to be more cau- beefing up its marketing over- ity to extract advertising reve- Apple’s Eddy Cue said 40 million people have used its News app. say Apple has been responsive
tious in their expansion strate- seas. Huawei’s engineering nues. to their feedback.
gies,” said Nicole Peng, an strength and brand image, “The main thing for us is the traffic we’re seeing so far Publishers have several op- “Provided the product con-
analyst for market-research built up over decades, make it how big of an audience Apple from Apple News, and have tions to distribute their con- tinues to scale, we remain bull-
firm Canalys. difficult for Xiaomi to compete News can generate, and that’s been particularly happy with tent through services such as ish on its potential, and we’re
Xiaomi shot to the top of in China, analysts say. still an open question,” he said. the relationship,” said Julia Facebook’s Instant Articles happy to be part of the early
China’s smartphone market in “The competition in China’s Executives from Apple, in- Beizer, director of product at and Snapchat’s Discover. The wave, even if it means the tool-
2014 with the novel idea of smartphone market has inten- cluding Mr. Cue, met with the Washington Post. draw of these platforms is the set is in the early stages,” Ms.
selling hardware by gathering sified tremendously this year,” publishers late last year to A spokeswoman for The potential to reach a large num- Hansen said.
a large user base, a business said a Xiaomi spokeswoman, discuss the product and ad- Wall Street Journal, which was ber of people on mobile de- “They have been good part-
model usually favored by In- who declined to comment on dress concerns. Mr. Cue said among the publishers that met vices, and media companies ners when we’ve brought is-
ternet companies, not those the company’s valuation or say Apple will continue to spend a with Mr. Cue, declined to com- welcomed Apple’s entry into sues to the table,” Mr. Cohn
selling a physical product. whether it met its 2015 sales lot of time getting feedback ment. The New York Times the mix. said.
Sales that year tripled to 61 target. She said Xiaomi sales from publishers. didn’t return requests for Facebook had its own early —Daisuke Wakabayashi
million smartphones, com- were within expectations. “We have been happy with comment. hiccups working with publish- contributed to this article.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL. * * * * * * Monday, January 11, 2016 | B7

‘Revenant,’ ‘Martian’
Take Honors at Globes
‘The Force’ Is With China
Disney’s ‘Star Wars’
BY JOHN JURGENSEN by bringing back three-time
host Ricky Gervais. Armed makes healthy debut
The 73rd annual Golden with a glass of beer, he lobbed in the challenging but
Globe Awards brought some verbal bombs, resulting in
focus to an unpredictable many bleeped words and visi- critical movie market
awards season Sunday night as ble cringes in the audience.
films including “The Reve- In the television categories, BY BEN FRITZ
nant” and “The Martian” were wins by Amazon and USA Net- AND LAURIE BURKITT
honored by the Hollywood For- work highlighted the rapid
eign Press Association. changes in that industry in re- The Force awakened in
“The Revenant,” a raw tale cent years. China this weekend, albeit not
of the American frontier, USA emerged from basic ca- with the Death Star-size start
racked up a trio of top awards, ble’s B-list, having rebranded it enjoyed in the West.
including best motion picture its programming with grittier Walt Disney Co.’s “Star
drama, beating out leading serial dramas. The network’s Wars: The Force Awakens”
contenders such as “Spotlight” stylish hacker thriller “Mr. Ro- grossed an estimated $53 mil-
and “Mad Max: Fury Road.” bot” won best TV series lion in the world’s second-larg-
The film also earned a best-ac- drama. And film veteran Chris- est movie market on Saturday


tor win for Leonardo DiCaprio. tian Slater won best support- and Sunday—the last market
And Alejandro González Iñár- ing actor award for his turn in where it hadn’t already opened.
ritu won best director for a that show as the ringleader of That is a very healthy start, in-
punishing production that re- a group of computer sabo- cluding the biggest Saturday
portedly pushed cast and crew teurs. movie gross to date in China.
to their limits. The category for best TV However, the China results
20th Century Fox’s strategy series, musical or comedy, has aren’t close to the record-
of putting “The Martian” into become a proving ground for smashing results the film has
competition as a comedy paid online shows. Amazon’s “Mo- enjoyed in the U.S., where it Concession-stand workers wore ‘Star Wars’ masks at a Shanghai movie theater on Friday.
off with a best-picture win in zart in the Jungle,” set in the had the biggest-ever opening
that category. Matt Damon, the world of classical music, weekend and is now the high- and Canada, “Star Wars” faced
whose character delivered beat out competitors from est-grossing film of all time. Estimated Box-Office Figures, Through Sunday its first serious challenger
one-liners in a virtual mono- Hulu and Netflix and took the Last April, the action sequel SALES, IN MILLIONS since opening on Dec. 17. “The
logue from outer space, won trophy a year after “Transpar- “Furious 7” grossed $55.8 mil- Revenant,” starring Leonardo
best actor in a film comedy. ent” earned Amazon its first lion on its first day alone in DiCaprio in a story of survival
“Joy” star Jennifer Law- Golden Globes. China, a Sunday—or more than 1. ‘Star Wars: The Disney $41.6 $812 -54 and revenge set on the 19th
rence collected her third “Mozart in the Jungle” also “The Force Awakens” totaled Force Awakens’ century American frontier,
Golden Globe—and her third seized the baton in the race for over two days in the country. 2. ‘The Revenant’ 20th Century Fox $38 $39.6 8,385 opened to $38 million, accord-
for a film directed by David O. best actor in a TV comedy, as “Furious 7” went on to become ing to estimates.
Russell—for best actress in a Gael García Bernal beat out the most successful American 3. ‘Daddy’s Home’ Paramount $15 $116.3 -49 That put it close behind
film comedy or musical. fellow nominee (and last year’s movie ever in China, with a to- 4. ‘The Forest’ Focus Features $13.1 $13.1 “The Force Awakens,” which
Brie Larson won the best winner) “Transparent” star tal gross of $373 million. 5. ‘Sisters’ Universal $7.2 $73.9 -44 grossed $41.6 million on its
actress award for role as a Jeffrey Tambor. China was always poised to fourth weekend in theaters.
*Friday, Saturday and Sunday Source: Rentrak
mother held captive with her Broadcast networks weren’t be the most challenging major “The Revenant,” a produc-
young son in the drama entirely left out. Actress Taraji market for “The Force Awak- tion that went over budget,
“Room.” P. Henson won her first Golden ens.” The original three “Star global distribution, said given looked at what was going on cost New Regency Pictures
Sylvester Stallone, who re- Globe for her lead role in the Wars” movies never played in how new “Star Wars” is to many outside China and I longed to and RatPac Entertainment
prised his role as Rocky Balboa Fox hit “Empire.” China, outside of film festivals, Chinese, “we’re very encouraged see this film,” Mr. Liu said. about $135 million to produce,
in the movie “Creed,” earned a The afterglow continued for and three follow-ups generated by this start and what it repre- Some moviegoers attended meaning it needs to continue
standing ovation from the ce- “Mad Men,” which finished its only modest box office as they sents for the long-term future of because of the film’s record- performing well in the weeks
lebrity crowd and a trophy for seven-season run last spring, opened early in the develop- the franchise in China.” setting reputation. “It did so to come to be a financial suc-
best supporting actor, nearly as Jon Hamm won for best ment of the country’s now- On opening day in the coun- well in America, we couldn’t cess. Twentieth Century Fox
40 years after his Golden performance in a TV drama. booming movie market. try Saturday, some fans were not come see it,” said Guo Jia- released the movie. (21st Cen-
Globe nomination for “Rocky.” Other TV winners included But “Star Wars” needs big excited to see the movie. But bao, a 22-year-old from the tury Fox and The Wall Street
Closing his acceptance Lady Gaga for best actress in a box-office results from China crowds didn’t fill every seat. northern Chinese city of Ji Lin. Journal-owner News Corp
speech, Mr. Stallone said, “I limited series of movie (FX’s to challenge the world-wide Fan Liu Xin, a 43-year-old So far, “The Force Awakens” were part of the same com-
want to thank my imaginary “American Horror Story: Ho- record of $2.79 billion set by investment banker from Bei- has grossed a total of $1.73 bil- pany until mid-2013.)
friend, Rocky Balboa, for being tel”) and Maura Tierney for “Avatar,” released in 2009 by jing, brought his 11-year-old lion globally. A record-setting After previously playing in
the best friend I ever had.” best supporting actress in a 21st Century Fox’s Twentieth son with him, hoping he might $812 million comes from the four theaters in two weeks to
The HFPA built advance TV series (Showtime’s “The Century Fox. share his Jedi obsession. U.S. and Canada. build buzz, “The Revenant” has
buzz and courted controversy Affair”). Dave Hollis, Disney’s head of “From the time I was small, I This weekend in the U.S. grossed a total of $39.6 million.

Weather The WSJ Daily Crossword | Edited by Mike Shenk

Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day.
Edmonton -0s <0 1 2 3 4 5 6 7 8 9 10 11 12 13 Down 29 Put on hold
20s 20s 0s 14 15 16
1 Did some 30 Seeming clone
Vancouver C l y
carpentry 31 Clinic offering
40s 17 18 19
2 Boxing venue 32 Port in the 49th
10s 10s
P d
Portland 30s 20 21 22 3 Michael Phelps state
Helena Montreal
30s 0s Ottawa has won 18 33 City of western
Billings 20s AAugusta
g t 40s 23 24 25 26
Eugene Boise
Bismarckk 4 Show that Colombia
10s Mpls./St. Pa
Paul T
Toronto A b y
Albany t
Boston 50s
Pierre 27 28 29 30 31 32 debuted in 34 Dismounted
30s k
Milwaukee rtford
Hartford 60s Oct. 1975
oux FFalls
Sioux t
Detroit Buffalo 38 Informed about
10s Ch g
Chic 70s
Chicago Cleve d
Cleveland New Yorkk
ew Y 33 34 35 36
5 Optic nerves
50s Reno Salt Lake
L Cityy
C es Moines
Des i
Cheyenne Omaha Phhil d lphi
Philadelphia 39 West of “She
20s Pittsburgh
g 30s 80s 37 38 39 connect to
Sacramento 20s Indianapolis Done Him
Denver Charles
h l t
Charleston hington
hi gton D.C.
Washington DC 90s them
an Francisco
San Topekak Kansas p g d
Springfield 40 41 42 43 44 Wrong”
Coloradod City 6 High-tech help
LLas p
Springs 40s St.. Louis
Richmond d 100+
41 Marisa of
60s 40s Ve Vegas h
Wichita LLouisville
Lou ill
40s Raleigh
l igh
h 45 46 47 for motorists
h ill “Empire”
Los A
Ange l
Angeles 30s Santaa FFe Memphishi
C h l 7 Departed
Alb q q
Albuquerque C b
Columbia 48 49 50 51 52 42 Need to repay
Phoenix Oklahoma City Warm Rain 8 “Evil Woman”
San Diego Atl t
Little Rock 43 Subscribed
T c
D ll
Dallas Birmingham
i h