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FRIDAY - SUNDAY, MARCH 24 - 26, 2017 ~ VOL. XLI NO. 143 WSJ.com ASIA EDITION
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What’s British Citizen Named as Attacker

News London police say
Khalid Masood was
the perpetrator of
Business & Finance
London terror attack
BY JENNY GROSS
F ederal prosecutors
are building cases that
would accuse North Korea LONDON—Police identified
of directing the theft of the suspected Islamist terrorist
$81 million from Bangla- who carried out the deadly
desh’s account at the New rampage outside Parliament as
York Fed last year. A1 Khalid Masood, a 52-year-old
British-born man who had pre-
 MSCI kicked off its an-
vious convictions but who
nual review to determine
Prime Minister Theresa May
whether to add domestic
said wasn’t seen as “part of the
Chinese shares to its
current intelligence picture.”
global benchmarks. B1
Masood was born in Kent,
 Hartford Financial is east of London, and had most
withdrawing a request to recently been living in the
replace dozens of funds West Midlands, police said. He
available to its variable- wasn’t the subject of any cur-
annuity customers. B5 rent investigations, and U.K.

DOMINIC LIPINSKI/PA/ASSOCIATED PRESS

authorities had no prior intelli-
 Lenders in the eurozone
gence about his intent to
snapped up $252 billion in
mount a terrorist attack. He
four-year loans from the
had been known to police, how-
ECB, the highest since
ever, and had a range of con-
June of last year. B5
victions unrelated to terror of-
 German prosecutors fenses, police said, the most
launched a probe into alle- recent one for the possession
gations that Daimler em- of a knife in 2003.
ployees may have commit- Police say Masood on
ted fraud linked to sales of Wednesday mowed down pe- Forensic officers outside Parliament on Thursday, a day after a rampage that killed three people and left 29 in the hospital.
diesel-powered cars. B3 destrians on a crowded bridge
before crashing his car near the U.K. since 2005, when coor- than a decade, Mrs. May said Islamic State claimed re-
 The market for sand—a
key ingredient in frack-
the gates of Parliament and dinated bombings by Islamist the perpetrator had been in- sponsibility for the attack, say- Aftermath
stabbing a policeman, leaving extremists on buses and sub- vestigated years earlier over ing in a statement on its affili-  Man celebrating wedding
ing—is surging once again
three dead. He was shot to way trains claimed 52 lives. extremist concerns but that au- ated Amaq news agency that it anniversary among dead.. A4
as U.S. oil production re-
death, authorities said, and In a speech to Parliament thorities had no prior intelli- was a response to U.S.-led co-  Terror lull in U.K. comes to
bounds. B1
dozens were injured in the the day after the deadliest act gence of his intent and viewed alition strikes against the ex- abrupt end............................. A4
 Apple will soon start most serious act of terror in of terror in the U.K. in more him as a “peripheral figure.” Please see ATTACK page A4
assembling iPhones in In-
dia, aiding its efforts to
gain a foothold in the fast-
Score One for China
growing market. B4
 Daewoo’s state-run cred-
HOW RUSSIA MEDDLES
itors unveiled a $2.6 billion
rescue package for the South
Korean shipbuilder. B3 IN ELECTIONS
 Tencent hired a Stan-
ford-trained researcher,
who formerly led Baidu’s
Big Data Lab, to oversee its
In Bulgaria, officials say ex-spy advised pro-Moscow party to manipulate voters
fledgling AI program. B4
CHINA STRINGER NETWORK/REUTERS

BY JOE PARKINSON AND GEORGI KANTCHEV Kremlin, according to the officials. It was
World-Wide delivered by a former Russian spy on a U.S.
SOFIA, Bulgaria—In the run-up to presi- sanctions list, three of them said.
dential elections in Bulgaria last year, the In November, the Socialists’ candidate,
 British police identified country’s opposition Socialist Party received Rumen Radev, emerged victorious. Now, the
the suspected Islamist ter- a secret strategy document proposing a road party—which wants to end European Union
rorist who carried out the map to victory at the ballot box, according sanctions against Russia and limit North At-
deadly rampage outside to five current or former Bulgarian officials. lantic Treaty Organization operations
Parliament as Khalid Among its recommendations: plant fake around the Black Sea—is a front-runner in
Masood, a British-born RARE WIN: China defeated rival South Korea, 1-0, for just the news and promote exaggerated polling data. parliamentary elections to be held Sunday.
man who had previous third time, in a soccer match tinged by geopolitical tension. A3 The source of the roughly 30-page dos- “I’m very worried,” said Rosen Plevneliev,
convictions. A1 sier, intercepted by Bulgaria’s security ser- a Kremlin critic who was Mr. Radev’s prede-
vice, was a think tank connected to the Please see SPHERE page A6
 The House Intelligence
panel’s GOP chairman said
U.S. intelligence agencies in-
tercepted information about
people involved in the
Trump transition team. A5
Feds Tie North Korea to Bangladesh Heist
 Trump’s power to push BY ARUNA VISWANATHA target alleged Chinese middle- the bank’s account at the New Richard Ledgett, the deputy cusing on Chinese individuals
ambitious goals through AND NICOLE HONG men who prosecutors believe York Fed to four bank ac- director of the National Secu- or businesses, according to the
Congress faced an early and helped North Korea orches- counts in the Philippines. rity Agency, said he was “opti- people familiar with the mat-
high-stakes test, when the Federal prosecutors are trate the theft, the people said. The efforts to build federal mistic about the truth of that,” ter. Treasury authorities are
House was slated to vote on building cases that would ac- The cases being pursued cases, people familiar with the when asked about reports of a considering sanctions against
a health-care overhaul. A5 cuse North Korea of directing may not include charges against process said, reflect a decision connection between the two the alleged middlemen, these
one of the biggest bank rob- North Koreans, but would likely at the Justice Department that cybercrimes. people said, an approach the
 Schumer urged Demo-
beries of modern times, the implicate North Korea, people there is merit to the view of “If that linkage is true, that government is increasingly us-
crats to block Gorsuch’s Su-
theft of $81 million from Ban- close to the process said. some private security research- means a nation-state is rob- ing to go after suspected law-
preme Court nomination. A5
gladesh’s account at the Fed- In the heist, cyberthieves ers that the Fed heist was linked bing banks. That is a big deal; breakers who are unlikely to
 The president’s choice eral Reserve Bank of New York used the SWIFT access codes to the hacking in 2014 of Sony it’s different,” he said on Tues- land in U.S. custody.
to lead the SEC told law- last year, according to people of Bangladesh’s central bank Pictures Entertainment, which day during a panel discussion The North Korean mission
makers any conflicts of in- familiar with the matter. in one February 2016 weekend the Federal Bureau of Investiga- at the Aspen Institute. to the United Nations and the
terest wouldn’t harm his The charges, if filed, would to transfer $81 million from tion blamed on North Korea. Federal investigators are fo- Please see THEFT page A2
ability to be the nation’s
top markets regulator. B5
 A former Russian law- Aspire to Play College Basketball? INSIDE
It Sure Helps to Be a ‘Jalen’
maker who fled to Ukraine
and received citizenship was
gunned down in Kiev. A3
i i i
 Taliban forces have re-
taken the district of Sangin Teams have 65 players named for a 1990s
C.F. MARTIN & CO.

in Afghanistan, following a
surge in fighting. A3 ‘Fab Five’ star; ‘Jalen power rankings’
 The U.N.’s air-safety
arm is pushing for video
BY ALEXANDRA BERZON This year there are 65
recorders to be installed in
future airliner cockpits. A3
AND CHRIS KIRKHAM Jalens, Jaylens, Jaylans and
other versions of the name on
CRUISES FOR A RIDE TO HANDCRAFT
 The U.S., Canada and On the road to March Mad- Division I basketball teams, up THE ANTI- THE TOP OF HARMONY IN
Latin America’s leading
nations have agreed to
ness this season, Kent State
University basketball team-
from 58 last year. Six years
ago, there were just four.
CRUISE CROWD THE WORLD WATCHMAKING
challenge Venezuela’s au- mates Jalen Avery and Jaylin By comparison, there were
thoritarian regime. A3 Walker faced Jalen Jenkins of only 85 Mikes or Michaels, 14 OFF DUTY, W1 MANSION, W7 W&J REPORT
George Mason University, Wof- Pauls and 82 players with vari-
CONTENTS Markets...................... B8 ford College’s Jaylen Allen and, ations of the name John.
Books...................... A7-9 Off Duty.............. W1-6
twice, Jaylen Key of Ten players who
Business News...... B3
Crossword.............. A12
Heard on Street.... B8
Opinion.............. A10-11
Technology............... B4
U.S. News.................. A5
Northern
University.
Illinois go by some version
of the name Jalen
Google Faces Challenge in Policing Content
Life & Arts.............. A12 Weather................... A12 “I always had an- entered the NCAA BY JACK NICAS cific audiences. Yet some of sites and videos.
Mansion............ W7-12 World News....... A2-4
other Jalen on my Tournament last those ads have appeared on But its software can be a
China: RMB28.00; Hong Kong: HK$23.00;
Indonesia: Rp25,000 (incl PPN);
team,” said Mr. week. It was a bad Google’s commitment to videos supporting terrorism, blunt instrument. Technology
Japan: Yen620 (incl JCT); Korea: Won4,000; Walker, a 19-year- week for all 10, as all better police the millions of prompting brands such as it has used in the past has al-
Malaysia: RM7.50; Singapore: S$5.00 (incl GST)
old freshman, “ever of their teams were websites and videos across its AT&T Inc. and Johnson & lowed ads on many controver-
KDN PP 9315/10/2012 (031275); MCI (P)
NO. 066/01/2017; SK. MENPEN R.I. NO: 01/ since, like, elemen- knocked out during advertising network is compli- Johnson to cancel some of sial videos, removed them
SK/MENPEN/SCJJ/1998 TGL. 4 SEPT 1998
tary school.” Jalen Rose the first weekend. cated by the very scale and di- their advertising on Google or from innocuous ones, and mis-
The name Jalen is That included, in a versity that has made the net- its YouTube video platform. takenly censored other vid-
on the rise in college sports, major upset, Jalen Brunson’s work so attractive to Google says it will increase eos—errors that could multi-
particularly basketball. That is Villanova University, which was marketers. its use of technology—in ad- ply as Google more
because thousands of babies many fans’ pick to repeat as Google has built a massive dition to thousands of re- aggressively polices content.
born during the 1990s heyday national champions. advertising business in part by viewers—to screen content, Google, a unit of Alphabet
of Jalen Rose, the “Fab Five” The name is nearly nine automatically placing brands’ part of changes it announced Inc., apologized Monday after
s Copyright 2017 Dow Jones & University of Michigan star and times as popular in men’s col- ads on an unparalleled group this week to strengthen its the software improperly
Company. All Rights Reserved
midtier NBA player, are reach- lege basketball and five times of third-party websites and policies and enforcement to blocked some popular videos,
ing adulthood. Please see JALEN page A2 YouTube videos to target spe- pull ads from controversial Please see GOOGLE page A2
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 | Friday - Sunday, March 24 - 26, 2017 THE WALL STREET JOURNAL.

WORLD NEWS

Turkey’s Referendum Could Backfire on Erdogan showing a nation starkly di-
vided along the middle—with
a significant part of Mr. Erdo-
gan’s own Justice and Devel-
opment Party, or AKP, elec-
torate balking at the idea of
scrapping Turkey’s tradition
of parliamentary democracy.
MIDDLE EAST CROSSROADS “This is a huge problem for
YAROSLAV TROFIMOV them: They were thinking
they will easily get 60%,” says
vincing. They have no argu-
mentation except saying that
we are bringing dictatorship
or a one-man administration,
which is not true.”
Yet, the very fact that the
outcome is now in doubt has
re-energized the opposition
to Turkey’s leader—just
months after his hold on au-
thority, in the wake of the
leashed all-out war against
Party Breakdown Kurdish militants and then
MHP lawmakers rescued a Turkish referendum plan, called snap elections within
but many voters from the party say ‘No’ months. The AKP regained its
majority amid the nationalist
Support for the constitutional changes, by political party fervor. In a similar attempt to
Yes No Undecided rally the nationalist vote, he
stoked diplomatic confronta-
AKP (ruling Justice and Development party) tions with the Netherlands
82.2% 9.0% 8.8% and Germany in recent weeks.

S
Etyen Mahcupyan, a political July putsch attempt, seemed MHP (Nationalist Movement Party) uch an appeal to the
ISTANBUL—Appearances consultant who served as ad- beyond any challenge. Turkish nationalist elec-
18.7% 71.5% 9.8%
can deceive. viser to former Prime Minis- The stakes can’t be higher. torate that traditionally
Only one campaign is in ter Ahmet Davutoglu, a lead- If Mr. Erdogan loses, that HDP (leftist opposition People’s Democratic Party) follows the MHP party, one of
sight less than a month be- ing figure in AKP. “And if we would be his most dramatic four represented in Turkey’s
fore the April 16 referendum have a surprise on election setback since coming to 6.6% 87.9% 5.5% parliament, is indispensable
that would give Turkey’s day, it will be to the benefit of power in 2003, shattering his for Mr. Erdogan’s referendum
CHP (central opposition Republican People’s Party)
President Recep Tayyip Erdo- the ‘No’ vote. The government aura of near-magic invincibil- plans. He managed to pass the
gan vast new powers. has created a ‘Yes’ atmo- ity. A referendum defeat could 2.4% 92.7% 4.8% referendum legislation, which
Building-size billboards sphere and many people are also change the geopolitical Note: Figures may not total to 100 due to rounding
required the support of three-
feature a giant likeness of afraid of admitting that they trajectory of one of America’s Source: Metropoll poll of 1,000 likely voters conducted fifths of lawmakers, only
Mr. Erdogan will vote ‘No,’ and are not tell- most important partners in February 2017; margin of error: +/-2.0 percentage points THE WALL STREET JOURNAL. thanks to a new alliance with
urging the ing the truth to the pollsters.” the Middle East and the North the MHP’s leadership.
nation to Atlantic Treaty Organization confidence and new hope.” has been to escalate crises That parliamentary support

E
vote “Yes.” ven though the referen-
On TV net- dum campaign unfolds
works, gov- under the state of
ernment offi- emergency imposed following
cials brand those opposing July’s failed coup attempt
this executive presidency against Mr. Erdogan, Turkey’s
plan as traitors or supporters voting process makes outright
of terrorism. Finding any evi- ballot-stuffing difficult.
dence of the “No” campaign Mr. Erdogan’s camp, of
can be mission impossible. course, can still win the ref-
And yet, despite such a erendum. “We are sure we
charged environment, a refer- will receive a majority,”
endum victory for Mr. Erdo- AKP’s deputy chairman Yasin
gan looks surprisingly uncer- Aktay said in an interview.
tain. Opinion polls keep “The opposition is not con-
alliance—just as Mr. Erdogan
is steering Turkey further and
further from its traditional
bonds with the West.
“If ‘No’ wins, an irreversible
situation will arise for the first
time for AKP. They see this as
a matter of life or death,” said
Sezgin Tanrikulu, a lawmaker
for the opposition CHP party.
“If that happens, AKP will not
be the same AKP and Turkey
won’t be the same Turkey. Cit-
izens, who now have so much
despair, will acquire new self-
A referendum defeat, if it
occurs, wouldn’t force Mr. Er-
dogan, whose mandate runs
until 2019, to step down, and
wouldn’t necessarily prompt
new elections in the immedi-
ate future. But it would al-
most certainly usher a period
of new political instability as
Mr. Erdogan struggles to re-
gain momentum against em-
boldened foes.
Mr. Erdogan’s strategy in
the past, when faced with
challenges to his authority,
and create new ones, at
home and abroad. That’s
something that many, in Tur-
key and Western capitals,
fear may happen in coming
weeks, and even more so
should voters reject his pro-
posals on April 16.
In the summer of 2015, af-
ter an election in which AKP
failed to secure absolute par-
liamentary majority for the
first time, Mr. Erdogan—in-
stead of moving to create a
coalition government—un-
has yet to translate into back-
ing by actual MHP voters,
cautioned former MHP law-
maker Sinan Ogan, who is op-
posed to the proposals.
The MHP secured 11.9% of
votes in Turkey’s most re-
cent elections, in November
2015, and represents a criti-
cal swing constituency.
“The key to the referen-
dum is now with MHP,” said
Mr. Ogan. “And in MHP, the
top says ‘Yes’ and the grass-
roots say ‘No.’ ”

GOOGLE THEFT approach is expected to be

similar to that used in Sep-
tember against a Chinese busi-
nesswoman, Ma Xiaohong,
ment against four men, includ-
ing two Russian government
spies, accusing them of being be-
hind Yahoo Inc.’s 2014 security
Continued from Page One Continued from Page One some of these people said. breach and stealing information
such as a music video by pop Chinese Embassy in Washing- Ms. Ma and her trading com- about more than a half billion
stars Tegan and Sara, from a ton didn’t respond to requests pany were also accused of help- online accounts. Prosecutors al-
restricted version of YouTube for comment. ing North Korea, and targeted leged the hackers sought infor-
designed for schools. “Our sys- The U.S. attorney’s offices by parallel Treasury Department mation for intelligence purposes
MATT ROURKE/ASSOCIATED PRESS

tem sometimes make mistakes and FBI field offices in Los An- sanctions. They were accused of and for criminal schemes to steal
in understanding context and geles and Manhattan had both helping blacklisted North Ko- money. The accused couldn’t be
nuances when it assesses been investigating the Bangla- rean companies evade U.S. sanc- reached for comment.
which videos to” restrict, the desh theft, but Los Angeles tions, move hundreds of mil- Bangladesh Bank is one of
company said in a post about took the leading role in the lions of dollars and procure raw scores of foreign institutions, in-
the incident. past year, according to people materials, potentially for use in cluding governments and cen-
The incident sparked an familiar with the matter. Pyongyang’s nuclear-weapons tral banks, keeping money at the
outcry among YouTube video That shift occurred because program. Ms. Ma couldn’t be New York Fed, enabling them to
creators who speculated government investigators linked reached for comment and hasn’t make payments in U.S. dollars
Google was blocking gay and Brands such as AT&T have canceled some advertising on Google. the code used to perpetrate the pleaded in the case. and purchase sovereign securi-
lesbian content in the re- cyberheist with the Sony hack, ties, among other things. The
stricted version of the site. but there’s so much subjectiv- block advertising without hu- which authorities in Los Ange- New York Fed handles such ac-
Google responded that gay ity to what is or is not appro- man review. les had been investigating. counts out of a special unit
and lesbian content is avail- priate,” said Adam Kleinberg, Even enforcing its existing Private security researchers
The audacity of the within its markets division.
able in the restricted version, head of San Francisco ad policies can prove challenging have traced the Bangladesh theft sent shockwaves The audacity and size of the
“but videos that discuss more agency Traction Corp. for Google. The company has heist to a hacking group known theft, conducted through odd
sensitive issues may not be.” For years, advertisers have placed ads on many sites ped- as Lazarus, which they say was
through the global orders seeking millions of dol-
Google added in a state- increased spending with dling fabricated news stories, also behind the Sony hack. In money transfer system. lars for vague consulting fees
ment that while no system for Google, which helped pioneer including a promotion for one 2014, the FBI blamed North Ko- and expenses, sent shock
catching inappropriate content the automated ad-buying sys- of its own products—the new rea for the Sony breach, which waves through the global
“will be 100% perfect,” mea- tem, called programmatic ad- Pixel smartphone—next to a exposed embarrassing emails money transfer system.
sures it announced this week vertising, that gives marketers story that falsely claimed and led the studio to pull from Federal prosecutors in Man- The thieves also transferred
“will further safeguard our ad- the reach and accuracy to tar- Yoko Ono had an affair with theaters a comedy that in- hattan continue to investigate $20 million to the account of a
vertisers’ brands and we are get specific audiences on far Hillary Clinton. volved a plot to kill North Ko- breaches of overseas financial nonprofit in Sri Lanka, but that
committed to being vigilant corners of the internet. As Google ramps up its rean leader Kim Jong Un. institutions that are potentially transfer was halted after a bank
and continuing to improve But ad and tech executives policing of sites and videos, “The whole security com- related to the Bangladesh heist executive in Colombo noticed
over time.” say the nature of that system it could end up upsetting munity has said that the at- and may have been carried out that the name of the beneficiary
Google and Facebook Inc. make it hard to police. website owners and video tack tools and techniques used by the same hackers, people fa- had been misspelled. That
have been reluctant police- “The advantage is you have creators—the people it relies in Sony are the same ones miliar with the matter said. money was later returned to
men of the internet, prefer- access to a million publishers on to produce the wide vari- used in Bangladesh,” said Eric Court documents describe a Bangladesh’s foreign-currency
ring to portray themselves as and a billion articles. The dis- ety of content against which Chien, an engineer with secu- similar attack against a bank in reserve at the New York Fed.
neutral platforms for con- advantage is you have access it can sell ads. For instance, rity vendor Symantec Corp. Ecuador. SWIFT, the money- Philippine authorities re-
necting users and advertisers to a million publishers and a Google’s plan to expand its Prosecutors haven’t publicly transfer network, disclosed an- turned $15 million of the $81
to content created by others. billion articles,” said David ad ban on any content that filed any charges stemming other against a bank in Vietnam. million in November, after a Chi-
But as users spend more Rodnitzky, chief executive of advocates harm to certain from the Sony hack. The Justice Department nese casino operator there
time and advertisers spend ad agency 3Q Digital. “It is groups of people—based on a There remains a minority brought its first case accusing turned over the money to au-
more money on their plat- very challenging to truly con- specific characteristic, such view among some federal offi- another country’s government thorities. Nearly $60 million was
forms, pressure is mounting trol where an ad shows up.” as their religion, gender or cials that evidence doesn’t prove officials of cyberespionage in paid to two other casinos and
on the tech giants to con- Google sells ad space on race—is likely to force that North Korea was behind the 2014, indicting Chinese military another gambling junket opera-
front their gatekeeping role more than 2 million third-party Google to confront fringe Bangladesh theft, according to officials, and has stepped up its tor in Manila, but the Anti-
and decide what kind of con- websites and millions more sites and videos. people familiar with the discus- efforts to file such charges, Money Laundering Council of
tent is permissible. YouTube videos. Each day, that Separately, the new policy sions. Some officials believe the linking state-sponsored cyber- the Philippines said it was un-
Google is mostly facing inventory grows by thousands could also ensnare some high- hackers who carried out the spying with criminal activity. able to trace it further.
pressure to remove ads from of websites and nearly 600,000 profile voices. Google removed theft may have appropriated, China rejected the accusa- —Robert McMillan
objectionable websites and hours of videos. ads from several videos by tweaked or repurposed the mali- tions at the time. The defen- and Katy Burne
videos, which can cut off Google software automati- YouTube’s top star, Felix Kjell- cious code that the U.S. govern- dants aren’t in U.S. custody and contributed to this article.
their funding, but it also ex- cally scans YouTube videos’ ti- berg, who goes by PewDiePie, ment made public after the Sony the case hasn’t progressed, but
amines whether controversial tles, descriptions, images and that included anti-Semitic hack—which wouldn’t necessar- U.S. officials have said China THE WALL STREET JOURNAL.
videos can remain on its You- dozens of other signals for jokes or Nazi imagery. Mr. ily indicate they are linked to pulled back from some of its cy- Dow Jones Publishing Company (Asia)
Tube site at all. signs that it shouldn’t include Kjellberg said reports on those North Korea—the people famil- berespionage activities in the 25/F, Central Plaza, 18 Harbour Road,
Hong Kong
“The problem is thorny be- ads, such as nudity or refer- videos by The Wall Street iar with the discussions said. wake of the charges. Tel: 852 2573 7121 Fax 852 2834 5291
cause not only is there such a ences to terrorist attacks. In Journal and others took his If middlemen in the Bangla- Last week, the Justice De-
Andrew Dowell, Asia Editor
long tail [of sites and videos], many cases, the software can humor out of context. desh theft are prosecuted, the partment announced an indict- Troy McCullough, Senior News Editor, Asia
Darren Everson, International Editions Editor

JALEN
Hugo Restall, Editorial Page Editor
to hold her purse in the wait- were born in the U.S. with
A Jump in Jalens ing room, she recalled. So she some version of the name, or
Mark Rogers, Advertising Sales
Jacky Lo, Circulation Sales
Boys born in the U.S. named Jalen or a similar-sounding name* decided to combine the two nearly 0.4% of all male births. Jacquelyn Drozdoff, Communications
Simon Wan, Technology
8,000 The year Jalen Mr. Rose Mr. Rose Mr. Rose in NBA men’s names. “I should have (The most popular name that
Continued from Page One Rose was born, enters the drafted finals, won patented that name,” said Ms. year was Jacob.) Jonathan Wright,
Managing Director Asia & Publisher
as popular in college football as there were fewer University into the most-improved Rose, 75. Mr. Rose said in an inter-
it is among the general popula- than five boys of Michigan NBA player of the year Nowadays, when she hears view he’s proud his name is his Advertising through Dow Jones Advertising
6,000 named Jalen Sales: Hong Kong: 852-2831 2504; Singapore:
tion of college-age American parents calling out “Jalen! legacy, even if he risks getting 65-6415 4300; Tokyo: 81-3 6269-2701;
males. Jalen!” to their children in pub- eclipsed. “It’s the most impor- Frankfurt: 49 69 29725390; London: 44 207
842 9600; Paris: 33 1 40 17 17 01; New York:
Surprisingly, names of much lic, she stops to talk to them. “I tant thing that has happened in 1-212 659 2176.
bigger basketball stars, includ- 4,000 say: ‘You better represent that my life,” Mr. Rose said. “I give Or email: Mark.Rogers@wsj.com
ing Kobe Bryant, LeBron and name,’ ” she said. Her older my mom all the credit because Printers: Hong Kong: Euron Limited, 2/F., Block 1,
Tai Ping Industrial Centre, 57 Ting Kok Road, Tai
Shaquille, never approached children are William, Kevin and I had absolutely zero to do Po, Hong Kong; Indonesia: PT Gramedia Printing
the same level of popularity. 2,000 Tamara. with it.” Group, Jalan Palmerah Selatan 22-28, Jakarta
10270; Japan: The Mainichi Newspapers Co., Ltd.,
(Six babies born in 2002 were Government data lend cre- 1-1-1 Hitotsubashi, Chiyoda-ku, Tokyo, 100-8051;
named “Shakobe.”) dence to the notion that the Korea: JoongAng Ilbo. 100 Seosomun-ro, Jung-gu,
Seoul, 100-814. Publisher/ Printer: Song, Pil-Ho;
The first of the next-genera-
tion Jalens to enter the Na-
0
name essentially originated
with Mr. Rose. There was only CORRECTIONS  Malaysia:Dasar Cetak (M) Sdn Bhd, Lot 2, Jalan
Sepana 15/3, Off Persiaran Selangor, Seksyen 15,
40200 Shah Alam, Selangor. (ROC No: 048885)6;
tional Basketball Association,
Jaylen Brown, is a rookie this
1973 ’80 ’90 2000 ’10
*Analysis includes 44 different spellings that phonetically all sound identical to ‘Jalen.’ The
a handful of Jalens or Jalons
born before he became a public AMPLIFICATIONS Singapore: Singapore Press Holdings Limited, 82
Genting Lane Media Centre Singapore 349567

year for the Boston Celtics. vast majority are Jalen, Jaylen, Jaylon, Jaylin and Jaylan. figure. Beginning in 1992 and Trademarks appearing herein are used under
Source: WSJ analysis of Social Security Administration data license from Dow Jones & Co.
Nine now play in the National THE WALL STREET JOURNAL. 1993, when Mr. Rose’s Michigan ©2015 Dow Jones & Company. All rights reserved.
Football League. team was one of the best in the The surname of Michael USPS 337-350; ISSN 0377-9920

“First off, I feel old right main hobbies, described intern- The name Jalen was a rarity country, the number of baby Dunne, founder of consultancy
NEED ASSISTANCE WITH
now,” Mr. Rose, 44 years old, ing at a venture-capital firm in the U.S. before Jeanne Rose Jalens suddenly exploded, ac- Dunne Automotive Ltd., was
YOUR SUBSCRIPTION?
said as he began a radio ap- while a freshman at University gave birth to her fourth child cording to Social Security Ad- misspelled as Dunn in a Busi- By web: http://wsj-asia.com
pearance last year with Mr. of California, Berkeley, and said at a Detroit-area hospital in ministration data. ness & Finance article Thurs- By email: service@wsj-asia.com
By phone: Hong Kong: 800 901 216; Australia:
Brown on draft day, noting the he doesn’t drink or smoke. 1973. She hadn’t decided what The name peaked in 2000, day about car makers’ con- 0011 8000 322 8482; China: 400 991 1174;
name connection. He pointed Mr. Rose pointed out that at to call her son and didn't have the year Mr. Rose lost in the cerns about trade barriers in India: 000 800 440 1938; Indonesia: +62 21
2970 2702; Japan: 0120 779 868; Korea: 0030
out there were some key differ- age 19 he preferred to drink a close relationship with the NBA Finals with the Indiana the Chinese market. 844 0063; Malaysia: 1800 804 612; New
ences between himself and Mr. malt liquor and play video- baby’s father, James, whom Mr. Pacers and won the league’s Zealand: 0800 442 434; Philippines: 1800 1441
Readers can alert The Wall Street 0033; Singapore: 1800 823 2042; Taiwan:
Brown, then 19, who listed po- games. “I ain’t going to put my Rose never met. Her brother, Most Improved Player award. Journal to any errors in news articles 00801 444 141; Thailand: 001800 441 8323
etry and chess as among his demons on him,” he said. Leonard, had been nice enough That year, around 7,400 boys by emailing wsjcontact@wsj.com.
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. Friday - Sunday, March 24 - 26, 2017 | A3

Ex-Russian Lawmaker Is Slain in Ukraine
Denis Voronenkov fled
to Kiev last fall and had
become a strident
critic of Vladimir Putin
BY JAMES MARSON
MOSCOW—A former Rus-
sian lawmaker who fled to
Ukraine and received citizen-
ship there was gunned down
in central Kiev on Thursday in
what Ukraine’s president
called “an act of state terror-
ism” by the Kremlin.
The slaying of Denis
Voronenkov, an ex-policeman
and prosecutor who was
WORLD NEWS
sia’s now-defunct Federal Drug
Control Service, he had knowl-
edge of corruption schemes of
Kremlin-connected elites. In an
interview last month, he said
he had retained bodyguards
because he feared for his life.
He was a personal acquain-
tance of security-service vet-
eran Alexander Litvinenko, who
was killed in London when Brit-
ish police say undercover Rus-
sian agents slipped a fatal dose
of radioactive polonium into his
tea during a meeting in a res-
taurant. The Kremlin ordered
his killing, Mr. Voronenkov
said, because Mr. Litvinenko
was helping British authorities
investigate Russian mafia net-

SERGEI SUPINSKY/AGENCE FRANCE-PRESSE/GETTY IMAGE

wanted in Russia on fraud
charges, comes amid height-
ened tensions between the two
neighboring countries over Rus-
sia’s support for a three-year
insurgency in Ukraine’s east.
Mr. Voronenkov, a former
Communist Party lawmaker,
was leaving the upscale Pre-
mier Palace hotel in central
Kiev with a bodyguard Thurs-
day morning when an un-
known assailant opened fire
with a pistol, Kiev police said.
The bodyguard was wounded
but managed to injure the at-
tacker, and both were taken to
the hospital, police said. The
unidentified assailant later
died, officials said.
Mr. Voronenkov’s defection
to Kiev was a potential embar-
rassment to Moscow. A former
high-ranking official in Rus-
works in Spain. Russian offi-
cials have denied involvement.
Opponents of the Kremlin
say they are targets of Russian
security services. A lawyer rep-
resenting the family of a dead
Russian whistleblower fell from
a window Tuesday under un-
clear circumstances. Vladimir
Kara-Murza, an opposition ac-
tivist, says he has been poi-
soned twice in recent years.
His ally Boris Nemtsov, an op-
position leader, was gunned
down near the Kremlin in 2015. Ukrainian police work around the body of former Russian lawmaker Denis Voronenkov, who was shot and killed in Kiev on Thursday.
In a statement Wednesday
about the lawyer, Sens. John tacked, and killed, and no one against Mr. Voronenkov in Yanukovych, who fled to Rus- Russian media. But he became
McCain and Ben Cardin de- is ever held responsible.” February over the alleged mis- sia in February 2014 amid a strident critic of Mr. Putin,
nounced “the culture of bru- Mr. Voronenkov, 45 years appropriation of a Moscow street protests against his rule. calling the annexation of Cri-
tality that [Russian President] old, left Russia for Kiev last building in 2011. As a member of Russia’s mea a mistake and decrying
Vladimir Putin has created in fall with his wife, an opera Mr. Voronenkov gave evi- parliament, Mr. Voronenkov Russia’s Federal Security Ser-
Russia, where those who speak singer and former lawmaker. dence to Ukrainian authorities voted for the annexation of Cri- vice, or FSB, as all-powerful.
the truth about corruption and Russia’s Investigative Commit- in the treason case against for- mea and wrote legislation that —Alan Cullison
tyranny are persecuted, at- tee announced fraud charges mer Ukrainian President Viktor restricted foreign ownership of contributed to this article.

U.N. Agency Presses for Cockpit Video Recorders

BY ANDY PASZTOR goal is to re-create for investi- years. cant aid to investigators in Mr. Quinn said public ex-
gators precisely what flight Pilot groups around the various crashes in which ter- pectations demand trade-offs
The United Nations’ air- crews saw during emergency globe have strongly opposed rorism or pilot suicide were between pilot privacy and “a
safety arm is pushing for situations, as well as to deter- the concept, setting the stage suspected. very clear and overdue need”
video recorders to be installed mine whether cockpit displays for what promises to be a The agency doesn’t have di- to determine precisely what
AKO STILLER/BLOOMBERG NEWS

in future airliner cockpits
world-wide to assist investiga-
tions of serious incidents and
crashes, in a move that puts
safety gains above privacy
drawbacks, according to
agency documents and people
familiar with the details.
Such a step has been op-
posed by pilots for decades
due to concerns that such
filming, which could poten-
tially capture their images
during a fatal accident or be
used by airlines to monitor
crews in nonemergency situa-
tions, would violate their pri-
vacy rights.
The proposal by the Inter-
national Civil Aviation Organi-
zation, the world’s leading ad-
were consistent with crew
commands and actual flight
conditions.
The agency wants airliners
built in the next decade to
adopt the technology. Older
aircraft would be exempt.
The ICAO spelled out its
Proposed cameras would record proposal, which hasn’t been
instruments and switches. reported before, in letters this
year seeking comments from
vocate of air safety and national aviation regulators by
technical standards, aims to April 20.
allay those concerns by using The ICAO is the first major
new technology that would regulatory authority or stan-
avoid recording faces or bod- dard-setting organization to
ies of aviators. formally call for using such
The ICAO envisions systems technology to help unravel ac-
designed to capture only im- cidents. Even if adopted, the
ages of flight instruments and phasing-in of cameras would
the position of switches. The likely take at least several
testy debate over its potential
benefits and downsides, in-
cluding costs and risks of im-
proper release of images.
Accident investigators, in-
cluding the U.S. National Trans-
portation Safety Board and the
Transportation Safety Board of
Canada, have long advocated
cockpit-video cameras as im-
portant supplements to tradi-
tional cockpit-voice recorders
and flight-data recorders.
“There’s no question it
would help when a crash in-
volves an intentional act,” said
Richard Healing, a former
NTSB member.
ICAO experts have deter-
mined that video images
would have provided a signifi-
rect enforcement authority. occurred each time a commer-
But national regulatory bodies, cial aircraft goes down.
industry trade associations Debates over the ICAO’s
and airline managers typically proposal are expected to last a
embrace its standards, which year or more, according to in-
largely end up as mandatory dustry officials, as the agency
rules. International treaty ob- responds to comments from
ligations and ICAO’s ability to countries, regional safety or-
publicly identify countries that ganizations, pilot representa-
balk also give the agency’s tives and other parties. The fi-
pronouncements substantial nal resolution could vary
clout. significantly from the pro-
“It’s long past due” because posal, according to safety ex-
“tragedies have occurred while perts inside and outside ICAO.
ICAO has been studying the is- An agency spokesman said
sue,” said Kenneth Quinn, a pilots would be able be able to
former senior U.S. aviation erase the images at the end of
regulator who now heads the flights. The recordings would be
aviation practice of the law stored in crash-resistant “black
firm Pillsbury Winthrop Shaw boxes,” which would have to be
Pittman LLP. accessed for viewing.

WORLD NEWS China Keeps Cup

VENEZUELA
Hopes Alive in
Governments Agree Soccer Surprise
To Test Venezuela China’s soccer team stunned
South Korea in a spirited victory,
The U.S., Canada and Latin defusing fears of fan unrest over
America’s leading nations agreed a feud between Beijing and Seoul.
to challenge Venezuela’s authori- Thursday’s match, watched
tarian regime. over by 10,000 security officers,
Fourteen nations plan to is- was a must-win for China, with its
sue a joint statement in coming faint hopes of reaching the 2018
days calling on the government World Cup at stake. The 1-0 result
of President Nicolás Maduro to against a favored South Korea—
release political prisoners, return only China’s third-ever victory over
full powers to the National As- its regional rival—prompted cele-
sembly, and set a timetable to brations in host city Changsha.
hold regional elections, according China’s ties with South Korea
to Mexican Foreign Minister Luis have frayed over Seoul’s deploy-
Videgaray. ment of a U.S.-made missile sys-
CHINA STRINGER NETWORK/REUTERS

—David Luhnow tem, which Beijing says under-

and José de Córdoba mines its own security.
Authorities capped atten-
SYRIA dance in Helong Stadium at
31,000, while police and paramil-
U.S. Military Backs itary units guarded the South
Fresh Offensive Korean team and fans number-
ing fewer than 200.
U.S. forces are providing airlift —Chun Han Wong
and artillery support for a newly
launched operation in Syria, Pen-
tagon officials said, deepening

Taliban Forces Retake Southern Afghan District

American involvement in the six-
year conflict.
The U.S. has increased sup-
port for operations in and
around the city of Tabqa, which
includes the nearby Tabqa Dam,
adding to the train-and-advise
mission U.S. special-operations
forces have been providing for
many months.
—Gordon Lubold
EGYPT
President Sisi
To Visit Washington
Egyptian President Abdel Fat-
tah Al Sisi will visit the White
House on April 3 for a meeting
with President Donald Trump, a
U.S. administration official said.
Mr. Sisi has been intent on
closer relations with the U.S.
—Carol E. Lee
BY JESSICA DONATI “All of Sangin district is now deaths in Helmand alone February called for more The U.S. military has sought
AND EHSANULLAH AMIRI cleared of the enemy and under peaked at almost 300 in 2010, troops to be deployed to Af- to prevent the Taliban from
Taliban control.” and at least two U.S. Special ghanistan to bolster efforts to holding on to entire provinces.
KABUL—Taliban forces Taliban forces have ramped Forces soldiers were killed support government forces, Last year, it dispatched Special
have again retaken the district up pressure on the govern- there over the past year. now bearing the brunt of the Operations forces to at least
of Sangin in Afghanistan’s Hel- ment ahead of their annual This year, the U.S. military long-running conflict. half a dozen capitals to pre-
mand province, officials said, summer offensive, attacking wiped 30,000 suspected ghost The collapse of the district vent them from collapsing and
following a surge in fighting district centers in neighboring soldiers—who couldn’t be center comes ahead of the de- conducted airstrikes to sup-
that threatens government Kandahar and Uruzgan prov- proved to exist—off the pay- ployment of hundreds of U.S. port local troops.
control over swaths of south- inces as well. The offensive, roll, nearly a fifth of the army, Marines to Helmand this spring. U.S. Special Operations forces
ern Afghanistan. which usually begins in April, as part of a broader crack- The Taliban have already were back in Sangin overnight
The Taliban said a month of is expected to pose a particu- down on corruption. captured most of Helmand, helping to evacuate beleaguered
sustained attacks on Sangin larly stiff challenge this year The Afghan government making sweeping gains last Afghan troops from the main
helped it dislodge the govern- to an Afghan government that currently controls or influ- year when government forces district buildings. Once the cen-
ment there. is grappling with rampant cor- ences just half of the country’s pulled out of several northern ter had been cleared, the U.S.
“The enemy escaped through ruption and high rates of attri- districts, U.S. government data districts. The provincial capi- military bombed the buildings
air last night and left vehicles, tion among its forces. released in February showed, tal, Lashkar Gah, is under fire and vehicles left behind, to try
tanks and large amount of In Sangin, U.S. and British a near 15% decline since No- daily and officials say the city to prevent assets falling into en-
weapons and ammunition,” forces have suffered some of vember. The top U.S. military could fall this year, potentially emy hands.
Qari Yousaf Ahmadi, a Taliban their heaviest losses since the commander in Afghanistan, triggering the collapse of other —Habib Khan Totakhil
spokesman, said on Thursday. war started in 2001. Coalition Army Gen. John Nicholson, in fragile southern provinces. contributed to this article.
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
A4 | Friday - Sunday, March 24 - 26, 2017
Pause in Violence Ends Abruptly
‘This is a day we
planned for but hoped
would never happen,’
police official says
BY PAUL HANNON
It was July 7, 2005, when
four Islamist extremists set off
three bombs on the London
Underground and a fourth on a
double-decker bus, killing 52
people, wounding more than
700 others and searing the
date so deeply into the British
psyche that it became known
simply as 7/7.
Since then, the U.K. has
been spared a major act of ter-
rorism and staged Summer
Olympic Games without inci-
dent, even as cities such as
Paris, Brussels and Baghdad
have been convulsed by
spasms of terrorist violence.
Throughout the hiatus, se-
nior U.K. counterterrorism and
intelligence officials cautioned
that it wouldn’t last, and on
Wednesday, under cloudy,
early spring skies, their warn-
ings were realized.
“This is a day we planned
for but hoped would never
happen,” said Mark Rowley, as-
sistant commissioner for Lon-
Victims of Deadly Assault Are Remembered
BY SARAH MCFARLANE
AND DENISE ROLAND
LONDON—One was a police
officer and soccer fan, guard-
ing Parliament unarmed. One
was an American tourist cele-
brating his 25th anniversary in
London with his wife. And one
was a school administrator
who worked just across the
Thames from Big Ben.
The three people killed in
Wednesday’s Westminster ter-
rorist attack drew an array of
tributes on Thursday from
those who knew them and
those who came to know them
only through tragedy.
Police Constable Keith
Palmer, 48 years old, was a
military veteran and father of
one who carried no weapon
when he tackled the assailant
in Wednesday’s attack outside
the gates of the U.K. Parlia-
ment. The attacker, named by
police on Thursday afternoon
as Khalid Masood, stabbed Mr.
Palmer to death before he was
killed by armed police.
Charlton Football Club, a soc-
cer team in south London, said
Mr. Palmer had been a longtime
fan and season-ticket holder.
MP Called Hero for
Aiding Fallen Officer
Lawmaker attempted CPR
after victim was stabbed
LONDON—When a police of-
ficer was stabbed by a sus-
pected terrorist outside the
Houses of Parliament, an un-
likely figure rushed to his side:
Tobias Ellwood, a New York-
born U.K. lawmaker and British
army veteran.
Wearing a dark suit and tie,
Mr. Ellwood was among the first
to reach the mortally wounded
police officer and attempt CPR.
ATTACK
Continued from Page One
tremist group. The group has
often claimed responsibility for
such attacks but the nature and
scope of its involvement—or
whether it was involved at all—
remains unclear.
A Utah man visiting Europe
was killed and his wife was se-
riously injured in the attack.
Kurt Cochran and his wife, Me-
lissa, were celebrating their
25th wedding anniversary, a
family spokesman said. Melissa
remained in the hospital on
Thursday.
Police were working to piece
together the details of the at-
tack at the heart of Britain’s
democracy, searching six prop-
erties and arresting eight peo-
ple. Amid heightened security
at a landmark that has endured
for centuries, lawmakers were
returning to parliamentary
business, vowing to remain
strong in the face of terrorist
violence.
“Today we meet as normal,
as generations have done before
us and as future generations
HK JP KO ML SI
TERROR IN LONDON
People help an injured woman on Westminster Bridge.
don’s Metropolitan Police and number of officers trained to
the force’s top counterterror-
ism official.
Little is yet known about
use firearms to enable the cap-
ital’s mostly unarmed force to
respond better to gun-wielding
the genesis of Wednesday’s at- terrorists.
tack. Still, even before the But it was a rare speech in
bloodshed on the Thames, December by the head of MI6,
signs that London wouldn’t the U.K.’s foreign intelligence
remain immune much longer service, that, more than any-
to terrorism by Islamist ex- thing, signaled that the titanic,
tremists were accumulating largely behind-the-scenes
bit by bit. struggle to prevent another 7/7
Police in London said last couldn’t insulate Britain from
year they were increasing the terrorist violence permanently.
Kurt W. Cochran and his wife, Melissa, were celebrating their 25th wedding anniversary in London.
“As an immediate tribute, a red pected terrorist mowed down
and white scarf has been placed pedestrians on Westminster
on his seat which will remain Bridge in central London, a
until the next home game on family spokesman confirmed.
Tuesday, April 4th, while the He had been celebrating his
club will discuss ways in which 25th anniversary with his wife,
it can commemorate his life at Melissa, who was injured and
the game itself,” the club said. remains hospitalized.
American tourist Kurt W. Co- “Kurt will be greatly missed,
chran was killed after the sus- and we ask for privacy as our
leagues in Westminster.
“He’s somebody who always
gives a strong impression of
calmness and confidence,” said
Julian Lewis, a Conservative law-
maker who has known the 50-
year-old Mr. Ellwood for more
PARLIAMENT TV/REUTERS
than a decade.
The police officer, identified
by authorities as Keith Palmer,
was later pronounced dead. He
was attacked after the assailant
crashed his car on the grounds
Lawmaker Tobias Ellwood of Parliament and was stopped
while trying to enter the building.
Images of his efforts, as he knelt Terror has hit home for Mr.
next to the victim with a bloody Ellwood before. A brother of
smear on his forehead, immedi- his died in a terror attack in Bali,
ately saw him hailed as a hero Indonesia, in 2002. In the after-
by the British media and his col- math, he and his wife even trav-
will continue to do, to deliver a
simple message: We are not
afraid and our resolve will
never waver in the face of ter-
counterterror policeman, told
reporters that authorities be-
lieve “the attacker acted alone
and was inspired by interna-
rorism,” Mrs. May said. “And tional terrorism.”
we meet here in the oldest of all He said hundreds of officers
parliaments because we know had worked through the night,
that democracy and the values searching six addresses in Lon-
it entails will always prevail.” don, Birmingham and else-
After saying late Wednesday where in the U.K., but didn’t of-
that four people had been fer details on those who had
killed by the attacker—who been arrested. Several extrem-
rammed a vehicle into pedes- ist suspects have in the past
trians and stabbed a police of- been connected with Birming-
ficer—police gave a lower ham, Britain’s second-largest
death toll Thursday, saying city, and the surrounding Mid-
three people had died. Twenty- lands region.
nine people were in the hospi- The car used in the attack
tal, seven of them in critical was rented in the Birmingham
condition. area, Enterprise Rent-A-Car
Mrs. May spent 40 minutes said. The company said an em-
speaking with some of the vic- ployee identified it based on a
tims and staff at a London hos- license plate from an image of
pital, government spokesman the attack, and the company
James Slack said. alerted authorities after run-
Mrs. May said that in addi- ning another check.
tion to 12 Britons admitted to “We are cooperating fully
the hospital, the victims of the with the authorities and will
attack included one American, provide any assistance that we
three French children, two Ro- can to the investigation,” En-
manians, four South Koreans, terprise said.
one German, one Pole, one Witnesses to Wednesday’s
Irish, one Chinese, one Italian assault said the attacker drove
and two Greeks. a sport-utility vehicle into peo-
Mark Rowley, the U.K.’s top ple on Westminster Bridge be-
IN UK FR MN PR
In his address, the spy chief,
Alex Younger, informed the
British public that the scale of
the terrorism threat to the U.K.
was “unprecedented” and that
the country’s intelligence and
security services had “dis-
rupted” 12 terrorist plots since
June 2013.
The 2005 bombings them-
selves marked the end of a
period of peace that followed
the end of three decades of
attacks by Irish republican
terrorists on London and
other British cities, during
TOBY MELVILLE/REUTERS
which the Houses of Parlia-
ment and other symbols of
British tradition and might
were repeatedly targeted.
The last major attack in the
heart of Britain’s government
occurred in 1991, when the
Irish Republican
launched three homemade
Army
mortar shells at 10 Downing
Street, the prime minister’s of-
fice. Four people received mi-
nor injuries.
For all their experience
with violence by Irish republi-
can militants, British security
officials have characterized
the 2005 attacks as a water-
shed in their approach to ter-
rorist threats. The blasts
marked the first suicide bomb-
ings in Britain and the coun-
FAMILY PHOTO
family mourns and as Melissa
recovers from her injuries,” said
Clint Payne, Melissa’s brother
and Kurt’s brother-in-law.
President Donald Trump
wrote Thursday on Twitter, “A
great American, Kurt Cochran,
was killed in the London ter-
ror attack. My prayers and
condolences are with his fam-
eled there to search for his body,
Mr. Lewis said.
Before he embarked on a ca-
reer in politics, he spent six
years in the Royal Green Jackets,
an infantry regiment of the Brit-
ish army.
Mr. Ellwood’s actions on the
street outside the centuries-old
Palace of Westminster brought
him instant attention.
He remained with the
stricken officer until an emer-
gency helicopter arrived and he
walked away surrounded by po-
lice, photos show. There was
blood on his hands and on his
forehead above his glasses. His
tie was still knotted.
—Joshua Robinson
Prime Minister Theresa May addresses lawmakers about the attack.
fore hitting a fence surround-
ing Parliament. He ran at a
police officer guarding the
complex and stabbed him, au-
thorities said, before being
shot and killed by police.
The nearby DLD College
London identified one of the
victims as Aysha Frade, a mem-
ber of its administration team.
THE WALL STREET JOURNAL.
try’s first major attack by Isla-
JOEL FORD/AGENCE FRANCE-PRESSE/GETTY IMAGES
mist extremists.
The U.K. dramatically in-
creased its spending on coun-
terterrorism and intelligence.
Counterterrorism hubs con-
sisting of police and intelli-
gence service were formed
around the country. Laws were
amended to make it easier for
authorities to prosecute people
for planning attacks, distribut-
ing terrorist propaganda or at-
tending training camps.
But while the U.K. had until The London Eye
Wednesday been free of at-
tacks inflicting multiple casu-
alties, the years since 2005
had not been entirely peaceful.
Tourists
In May 2013, soldier Lee
Rigby was murdered by two
British converts to Islam near
Stranded
Woolwich barracks in south
London. And last year, law-
maker Jo Cox was stabbed and
High Above
shot in the village of Birstall, a
murder described by a judge
as motivated by Nazism and
Bedlam
by prosecutors as an act of LONDON—When their Lon-
terrorism. don Eye gondola suddenly
A number of planned at- came to a stop nearly 44 sto-
tacks have been foiled. In 2012, ries above the South Bank of
nine men received prison sen- the Thames, the visiting
tences for a plot to attack the Hutchinson family from subur-
London Stock Exchange and ban Boston had no idea why.
other offenses.
—Jenny Gross By Stu Woo,
contributed to this article. Denise Roland
and Mike Bird
“It was scary at first,” re-
called Anne Hutchinson, as
she described how she, her
husband, Jim, and son Jack,
ily and friends.” from Lincoln, Mass., were
Aysha Frade, a 43-year-old stranded high above London
school administrator from the for three hours.
U.K. with close family links to “We didn’t realize what
Spain, was killed after being was going on until we saw
trapped under the rear wheel of the flashing lights on the
a double-decker bus that was hit bridge,” said Mr. Hutchinson,
by Masood’s rented sport-utility referring to Westminster
vehicle. Masood then aban- Bridge, the site of the attack
doned the vehicle, rushed onto where a suspected terrorist in
the grounds of Parliament and a car cut through a throng of
assaulted Mr. Palmer. pedestrians. The suspect then
Besides Ms. Cochran, a fur- stabbed a police officer to
ther 28 people were injured, death, authorities said. The
including three police officers. alleged assailant was then
On Thursday, the British shot and killed.
media and former colleagues The Hutchinsons and a
singled out Mr. Palmer as the family friend were among the
hero of the incident. Police thousands of tourists that be-
and members of Parliament came entangled in the bedlam
held a minute’s silence on that followed Wednesday’s at-
Thursday to remember him. tack in one of the most-vis-
“He was someone who left ited swaths of real estate in
for work today expecting to re- the world.
turn home at the end of his Authorities cordoned off
shift and he had every right to the bridge and the surround-
expect that would happen,” As- ing area for hours, as police
sistant Commissioner Mark searched for possible accom-
Rowley, the U.K.’s top counter- plices in the attack, emer-
terrorist policeman, said at a gency vehicles made their
press conference on Wednesday. way through packed streets
Mr. Palmer served in the and medical personnel treated
Metropolitan Police force for 15 the injured.
years, the last three as part of Ana Stiankovic, a 35-year-
the Parliamentary and Diplo- old tourist from Belgrade,
matic Protection Command, Serbia, was in the Caffé Nero
said Ken Marsh, chairman of the opposite the Houses of Parlia-
Metropolitan Police Federation. ment when she heard two
From 1987 to 2001, Mr. gunshots. She said police im-
Palmer served as a reserve in mediately locked up the cof-
the Royal Artillery Regiment fee shop and kept people in
of the British army and was a there for about an hour. “I
Bombardier, the equivalent was shaking the whole time,”
rank of corporal, by the time she said.
he left, a spokesman for the Spanning the Thames for
Ministry of Defence said. nearly 300 yards, Westminster
Prime Minister Theresa May Bridge connects Big Ben, Par-
told Parliament that among the liament and Westminster Ab-
injured were 12 Britons, one bey on the north side with the
American, three French chil- carnival rides and street per-
dren, two Romanians, four formers of the South Bank. So
South Koreans, one German, packed are its sidewalks with
one Pole, one Irish, one Chinese, tourists, joggers and couples
one Italian and two Greeks. taking wedding photos that
—Jon Sindreu in London pedestrians sometimes walk in
and Zusha Elinson the bike lanes or in the street.
in San Francisco —Niki Blasina
contributed to this article. contributed to this article.
“He was every inch a hero,”
Mrs. May said. “And his actions
will never be forgotten.”
The gravely injured included
a 29-year-old Romanian archi-
tect visiting London to cele-
brate her boyfriend’s birthday.
She was knocked into the
Thames, where a nearby boat
rescued her. She was in a criti-
cal condition after brain sur-
gery to remove a blood clot,
her country’s ambassador to
the U.K., Dan Mihalache, told
Romanian TV.
PRESS ASSOCIATION/ZUMA PRESS
The threat level in the U.K.
remained unchanged at “se-
vere,” meaning an attack is
highly likely. The highest level,
“critical,” means authorities
have specific intelligence that
an attack is imminent.
At Parliament, the British
flag flew at half-staff. Lawmak-
ers returned to work largely as
“She was highly regarded and usual, though it was slower
loved by our students and by than normal, with only one en-
her colleagues,” the school trance open and the area still
said. closed off to traffic. The sur-
The police officer who was rounding area, typically bus-
stabbed to death was identified tling with tourists taking self-
as Keith Palmer, a 48-year-old ies, was quiet.
husband and father, who tack- —Zusha Elinson, Christopher
led the attacker as he rushed Whittall and Joshua Robinson
toward Parliament. contributed to this article.
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.
Trump Term
On Line With
Health Vote
Outcome of overhaul
seen as setting path
for rest of presidency
after uneven start
BY PETER NICHOLAS
AND CAROL E. LEE
Donald Trump’s negotiating
skills and power to push ambi-
tious goals through Congress
faced an early and high-stakes
test Thursday, when the House
was slated to vote on a health-
care overhaul that he has
steadily elevated to a core pri-
ority of his young presidency.
The outcome could set a
trajectory for the rest of his
presidency, and that helps ex-
plain why Mr. Trump has
stepped up his role in passing
legislation that would unwind
the Affordable Care Act signed
seven years ago by his prede-
cessor, Barack Obama.
After a bill-signing cere-
mony this week, Mr. Trump
asked a few House Republicans
in attendance to stick around
and talk to him privately in the
Oval Office. He then raised the
health-care vote.
A person briefed on the
conversation said Trump’s
message to the lawmakers was
essentially this: I’m doing this
for you; what are you doing
for me?
It was the sort of tough-
love message that has been in-
fused in some of Mr. Trump’s
final arguments. But even if
GOP Lawmaker Sparks New Battle Over Spy Claim
BY BYRON TAU
AND REBECCA BALLHAUS
The Republican chairman of
the House Intelligence Commit-
tee ignited a new battle over
President Donald Trump’s
claims that he was spied on by
the Obama administration, say-
ing that U.S. intelligence agen-
cies intercepted information
about people involved in the
Trump transition team.
Rep. Devin Nunes (R., Calif.),
who is leading a congressional
investigation into alleged Rus-
sian interference in U.S. elec-
tions, shared his information
with the media and Mr. Trump
before he gave it to other mem-
bers of his committee. The
move drew criticism from mem-
bers of the committee in the
House and Senate and prompted
the ranking Democrat on the
panel to redouble his push for
an independent investigator to
take over the Russia probe.
Mr. Nunes, who offered little
public evidence for his disclo-
sures other than reports pro-
vided by sources he declined to
name, said the surveillance of
the incoming president’s team
appeared to be due to what is
called “incidental” collection,
meaning that Trump transition
officials whose information was
intercepted weren’t the in-
Agriculture Pick Concerned About Budget Cuts
BY JACOB BUNGE
The Trump administration’s
nominee to head the U.S. De-
partment of Agriculture told
Senators on Thursday that the
federal regulator will need to
function more efficiently to
cope with a smaller budget
proposed by the president.
Sonny Perdue said during his
confirmation hearing that he
had “some concern” about Pres-
ident Trump’s proposal to cut
the USDA’s discretionary budget
by one-fifth, to its lowest level
since 1988. But he said Georgia
did “more with less” when he
was Georgia’s governor and that
U.S. taxpayers should expect the
USDA and other federal agen-
cies to run efficiently.
“I view this budget similar
to when, as governor, I got a
revenue estimate I didn’t like,”
Mr. Perdue told members of
the Senate Committee on Agri-
culture, Nutrition and Forestry
during one of the final confir-
mation hearings for a cabinet
nominee. “I didn’t like it, but
the House passed the bill, his
work is hardly done: The Sen-
ate looms as perhaps an even
greater obstacle, with several
clusters of Republicans already
proclaiming their opposition
to the House-crafted measure.
Republicans can afford no
more than two defections in
the Senate, assuming all Dem-
ocrats vote against the bill.
Passage of the bill would
give Mr. Trump some needed
momentum after an uneven
start to his term. His latest
travel ban is tied up in court.
FBI Director James Comey,
testifying on Capitol Hill this
week, debunked Mr. Trump’s
tweets alleging that Mr.
Obama wiretapped Trump
Tower during the campaign.
The latest Gallup tracking
polls show that his job ap-
proval rating is at 40%, with
55% disapproving.
Should Mr. Trump win pas-
sage, he would validate years
of Republican efforts to repeal
the Affordable Care Act and
deliver on one of his primary
campaign promises.
“This is the vote. This is the
time to act....This vote needs
to happen,” White House press
secretary Sean Spicer said in a
briefing Wednesday. “There is
no Plan B. We have a Plan A
and a Plan A.”
Defeat, though, would raise
questions about the deal-mak-
ing skills that Mr. Trump has
long touted as a strength that
distinguishes him from past
presidents. It also could force
Republican House Intelligence Chairman Devin Nunes during a Washington news conference on Wednesday.
tended targets. He added it was
“possible” the president had
some of his communications in-
tercepted, though he declined
to elaborate on what sort of in-
formation the intelligence
agencies collected and how it
was collected.
The disclosure by Mr. Nunes,
a onetime senior adviser to Mr.
Trump’s transition team, repre-
sented a possible political life-
line to Mr. Trump as he battled
for credibility after Republican
you manage to it.”
He arrived at the hearing
Thursday with his extended
family taking up much of the
first two rows of seats, and
much of the farm industry be-
hind him. Last month, a coali-
tion of nearly 700 U.S. agricul-
ture and food groups called on
the Senate committee to speed-
ily approve Mr. Perdue, who
they said could be one of just a
few agriculture secretaries to
have worked in the farm sector.
Mr. Perdue also received an
endorsement from his prede-
cessor, Tom Vilsack, who
headed the U.S. Department of
Agriculture during both of Pres-
ident Barack Obama’s terms.
If confirmed to lead the
USDA, Mr. Perdue will inherit
a sector in turmoil. A series of
bumper crops around the
world have led to massive sup-
plies of foodstuffs from wheat
to beef and butter, sinking
prices for farmers and ranch-
ers. U.S. farm incomes are on
track to decline for a fourth
straight year, falling to about
Friday - Sunday, March 24 - 26, 2017 | A5
U.S. NEWS
SHAWN THEW/EUROPEAN PRESSPHOTO AGENCY
President Trump and Health and Human Services Secretary Tom Price walking to a meeting with House Republicans this week.
the president to re-evaluate that begins to raise doubts that Democrats “own the Consult/Politico shows that a
the governing coalition Repub- about how much they can get failed ObamaCare disaster” 43% plurality believe congres-
licans assembled in the wake done in the first year, which is and predicted that, if Republi- sional Republicans are “mov-
of the 2016 elections. a very important year in his cans waited, the system would ing too fast” on the legislation
If Republicans can’t pass a presidency.” “fall of its own weight.” and should “take more time
health-care overhaul despite Leon Panetta, who worked White House aides say the and examine other proposals.”
control of both the legislative in both the Bill Clinton and president came around to the Overall, 40% approved of the
and executive branches, some Obama administrations, notion that he had to embrace bill and 37% disapproved.
veterans of past administra- said: “There’s no question the a health-care overhaul as a Congressional aides said a
tions wonder if the party can president is putting a lot on first-order priority to address shift in momentum began
usher in other pieces of the the line with this health-care the possibility that some early last week, when House
Trump agenda that are backed vote. This is a moment that re- state insurance markets Speaker Paul Ryan began
up on the runway, including ally does determine whether would collapse. speaking to Mr. Trump multi-
new spending for roads, he’ll be able to break the grid- Mr. Spicer said Mr. Trump ple times a day. By Friday, the
bridges and ports. lock with a Republican major- had made progress in winning president said in a meeting
“Failing to move it out of ity. If he loses, it’s going to be over skeptical lawmakers, with House Republicans, “I
the House risks a cascade ef- damaging.” “piece by piece, member by want everyone to know I am
fect that suddenly pushes back Not too long ago, Mr. member.” 100% behind this.”
other initiatives like tax re- Trump seemed ambivalent Congressional aides say One Republican congres-
form and the infrastructure about waging an immediate they have seen Mr. Trump’s sional aide said: “They real-
program,” said Craig Fuller, effort to repeal the Affordable personal involvement grow— ized that to get this done the
who worked eight years in Re- Care Act and install a substi- and they concede they needed president has to get behind
publican President Ronald tute system. Before taking of- his help. it,” and “that they had to lock
Reagan’s White House. “And fice in January, he tweeted A new poll from Morning it down.”
or special prosecutor should phone conversation or email
take over the investigation. exchange with a U.S. resident
“The chairman will need to to simply the mention of an
decide whether he is the chair- American on a lawfully or-
man of an independent investi- dered wiretap. Mr. Nunes said
gation into conduct which in- the surveillance in question
cludes allegations of potential appeared to be legally autho-
coordination between the rized as part of foreign intelli-
Trump campaign and the Rus- gence-gathering activities on
sians or he is going to act as a behalf of one or more govern-
surrogate of the White House ment agencies.
SHAWN THEW/EUROPEAN PRESSPHOTO AGENCY
because he cannot do both,” Mr. Nunes described himself
said Mr. Schiff. as “alarmed” by the new reve-
His position drew support lations, specifically the fact
from Sen. John McCain (R., that members of Mr. Trump’s
Ariz.), who told MSNBC that inner circle were “unmasked”
the breakdown on the House and named in classified U.S. in-
panel shows that “no longer telligence reports.
does the Congress have credi- Typically, the identities of
bility to handle this alone.” U.S.-based individuals who are
Mr. Schiff said on Wednesday inadvertently monitored or
that he has seen “more than cir- mentioned as part of surveil-
cumstantial evidence” of collu- lance are a closely guarded se-
sion between the Russian gov- cret. “Unmasking” refers to the
ernment and associates of Mr. process of unredacting the
and Democratic lawmakers and tured a bipartisan effort by the Trump in Moscow’s 2016 elec- name of a U.S. person in classi-
law-enforcement officials de- House and Senate to investi- tion interference. fied reports. Only a small num-
bunked his Twitter claims that gate claims of ties between the He was asked on MSNBC ber of senior officials have the
former President Barack Obama Trump campaign and Russia whether the evidence is “cir- authority to reveal the identi-
ordered he be wiretapped. and may have accelerated the cumstantial.” “I can tell you that ties of U.S. people caught up in
Mr. Trump said Wednesday process of bringing in an inde- the case is more than that and I surveillance.
he felt “somewhat” vindicated, pendent investigator. can’t go into the particulars, but Mr. Trump wrote on Twitter
though Mr. Nunes’s comments Rep. Adam Schiff (D., Calif.), there is more than circumstan- this month that Mr. Obama had
offered no evidence to support the senior Democrat on the in- tial evidence now,” he said. tapped Trump Tower during the
Mr. Trump’s original claim. telligence committee, com- Mr. Nunes’s disclosures ap- election, a claim Mr. Obama re-
With his extraordinary plained about the chairman’s peared to raise more questions jected through a representative.
breach of protocol—sharing leadership of the committee—re- than they answered. For in- —Siobhan Hughes, Shane
such information publicly—Mr. newing a broader debate about stance, “incidental collection” Harris and Carol E. Lee
Nunes instead may have frac- whether an independent panel can refer to everything from a contributed to this article.
U.S. WATCH
FBI and dismay, after dozens of
half the record $123 billion accused by police of paying threats that prompted evacua-
farmers earned in 2013. bribes to meat inspectors in a Suspect Arrested in tions of Jewish community cen-
He will also need to navigate corruption scandal, Mr. Perdue Threats on Centers ters around the country.
a planned overhaul in U.S. trade said blocking all Brazilian-pro- —Nancy Shekter-Porat
policy, critical to an industry duced meat from import to the Israeli police on Thursday ar- and Scott Calvert
that produces far more food U.S. may be a step too far. The rested a teenager suspected of
than can be consumed by Amer- USDA, which inspects shipments making dozens of security-re- WASHINGTON
icans and has come to rely heav- of foreign-produced meat, al- lated threats to Jewish institu-
ily on sales to foreign countries. ready stepped up scrutiny of tions in the U.S. and elsewhere Top Democrat Urges
When asked about Brazil, Brazilian meat in response to that put the communities on Move Against Gorsuch
where meatpackers have been the scandal, but Mr. Perdue says edge, officials said.
that he’s worried “if we go to The 19-year-old was arrested The Senate’s top Democrat will
embargoing there will be retali- in southern Israel as part of a oppose Judge Neil Gorsuch’s con-
ALBIN LOHR-JONES/PRESS POOL/EUROPEAN PRESSPHOTO AGENCY
ation there for our products continuing monthslong interna- firmation to the Supreme Court
around the world as well.” tional investigation that involved and urged his Democratic col-
Mr. Perdue took many ques- the Federal Bureau of Investiga- leagues to block the nomination.
tions related to trade, and he tion and other security agencies Sen. Chuck Schumer of New
said he’s already discussed with in the U.S. and Europe, an Israeli York said he couldn’t support
Commerce Secretary Wilbur police spokesperson said. President Donald Trump’s nomi-
Ross and other administration The suspect, who is Jewish nee, saying he feared he was in-
officials the importance of trade and holds dual Israeli and Ameri- sufficiently independent of the
to the U.S. farm sector. “Food is can citizenship, will remain in po- Trump administration and con-
noble to trade,” he said. lice custody for questioning until cerned about his testimony this
President Trump in January March 30, a local judge has week before the Senate Judi-
withdrew the U.S. from the ruled, according to the police. ciary Committee and his history
Trans-Pacific Partnership on The judge asked that the sus- of decisions on the 10th Circuit
trade, which had been sup- pect not be named at this stage, Court of Appeals. Mr. Schumer
ported by many farm groups, the spokesperson added. urged his Democratic colleagues
and Mr. Trump also plans to Officials at some U.S. Jewish to use a procedural maneuver
revamp the North American organizations greeted news of known as a filibuster.
Former Georgia Gov. Sonny Perdue Free Trade Agreement. the arrest with a mix of relief —Byron Tau
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
A6 | Friday - Sunday, March 24 - 26, 2017
SPHERE
Continued from Page One
cessor as president. “Russian
activity across Eastern Europe
has gone to a new level.”
Neither Bulgaria’s presi-
dency, the Socialist Party nor
Russia’s foreign ministry re-
sponded to repeated calls for
comment on the report. There
is no suggestion Mr. Radev
was aware of the document,
and the president has made no
comment on allegations of
Russian meddling here.
Russia has long denied do-
ing anything nefarious in Bul-
garia and Eastern Europe and
says it is pursuing its legiti-
mate interests in nations
where it has deep economic
and cultural links. Moscow
sees NATO’s eastward expan-
sion as a threatening intrusion
into an area it considers
within its longstanding sphere
of influence.
Leonid Reshetnikov, the for-
mer Russian spy, acknowl-
edged meeting with the leader
of the Bulgarian Socialist
Party, but denied delivering
any document. “Someone is
making this up,” he said in an
interview in the Moscow head-
quarters of the Double-Headed
Eagle Society, an office deco-
rated with portraits of Presi-
dent Putin and Tsar Nicholas
II. “Whoever [did this] is in-
terested in breaking things up,
in cooling off the relations be-
tween Bulgaria and Rus-
sia…It’s just fiction.”
Across broad swaths of cen-
tral and Eastern Europe,
where less than 30 years ago
populations rose up against
Soviet domination and turned
to embrace the West, Russia is
regaining influence and under-
mining the position of the EU
and the U.S.-led trans-Atlantic
alliance.
Earlier this month, repre-
sentatives of Poland, Georgia,
Ukraine and the Baltic states
appeared before a U.S. Senate
panel to seek American help to
blunt Russian inroads. Esto-
nia’s ambassador to Washing-
ton warned Russians were
working to “create tensions
and sow confusion” in the EU.
Their plea comes as citizens
from Sofia to Budapest and
beyond who once had high
hopes for Western prescrip-
tions of democracy and market
economics have become disil-
lusioned by financial and po-
litical crises and a big influx of
migrants into Europe from the
Middle East and Africa.
Russian President Vladimir
Putin is exploiting that dy-
namic across Europe’s poorer
eastern flank, deploying an ar-
senal of weapons old and
new—including propaganda
and economic leverage, hack-
ing and political subterfuge—
to bolster allies and discredit
the West, according to re-
gional officials, Western diplo-
mats and analysts.
Authorities in the small Bal-
kan nation of Montenegro al-
lege that Russia orchestrated a
coup attempt aimed at derail-
ing its NATO membership.
Moscow says it wasn’t in-
volved in the attempt, which
failed. In Hungary, Slovakia
and Bulgaria, the Kremlin has
backed right-wing and euro-
skeptic nationalist groups, Eu-
ropean security officials say,
while across the region, web-
sites hostile to NATO and
Brussels have mushroomed.
“It’s Russia’s aim to under-
mine the political cohesion in
Western institutions,” says
Anders Fogh Rasmussen, a for-
mer head of NATO and prime
minister of Denmark. “We ha-
ven’t yet fully grasped the
consequences.”
As Moscow stands accused
of deploying an array of digital
tools in an effort to sway the
U.S. presidential election, and
Western European govern-
ments warn of Russian med-
dling as they hold their own
polls this year, critics say the
Russian model is visible in its
most advanced form in coun-
tries like Bulgaria, which next
year is scheduled to hold the
EU’s rotating presidency for
the first time.
That is prompting alarm
that the Kremlin is using these
states to establish beachheads
inside critical Western institu-
tions.
Shortly before Bulgaria,
once one of the Soviet Union’s
staunchest allies, joined the
EU in 2007, Russia’s ambassa-
dor to the bloc told a Sofia
newspaper: “We are hoping
that you will be our special
partner, a kind of Trojan horse
in the EU.”
Opponents of Russia say the
Kremlin has done everything it
can to make that prophecy
come true in a country that is
Bulgarian officials say a former Russian spy delivered a campaign plan from Moscow to Socialist Party Chairwoman Kornelia Ninova.
also one of the newest mem-
bers of NATO.
The EU’s poorest member
state, Bulgaria has for centu-
ries shared deep historical and
economic ties with Russia, in-
cluding the Orthodox Christian
faith and Slavic culture. Many
in the country’s aging popula-
tion, bruised by economic mis-
management and endemic cor-
ruption, feel nostalgic for the
communist past.
The high-water mark for
Bulgaria’s EU embrace was
2009, when a new pro-Euro-
pean party won a landslide
victory and initiated market
liberalizations and an anticor-
ruption drive that appeared to
cement the country’s pro-
Western orientation. But years
of weak growth and corrup-
tion stifled that momentum,
creating a vacuum Russia was
well-positioned to fill.
Bulgarian security officials
allege that Moscow bankrolled
protests in 2012 and 2013 that
helped topple a pro-Western
government. Russian hackers
have attacked numerous sensi-
tive targets in the country and
interfered in the 2015 munici-
pal elections, Bulgaria’s former
president said in an interview.
Pro-Russian websites have
proliferated.
Given Bulgaria’s extreme
energy reliance on Russia,
which provides over 90% of its
natural gas and all the fuel for
its Soviet-built nuclear power
station, and the important role
of Russian companies in the
national economy, the Center
for Strategic and International
Studies, a Washington-based
think tank, concluded in a re-
port last year that Bulgaria “is
at high risk of Russian-influ-
enced state capture.”
Last August, as Bulgaria’s
politicians were gearing up for
the current cycle of presiden-
tial and parliamentary elec-
tions, Kornelia Ninova, chair-
woman of the Socialist Party,
attended a private meeting in
a boutique Sofia hotel with the
former Russian spy, Mr.
Reshetnikov.
The silver-haired Mr.
Reshetnikov, a fluent Bulgar-
ian speaker and Balkan spe-
cialist who once headed the
analysis section of the Krem-
lin’s Foreign Intelligence Ser-
vice, or SVR, had long culti-
vated connections to the
Socialists and other leading
Bulgarian politicians. The So-
cialist Party evolved from the
ruling Communists after the
collapse of the Berlin Wall, a
transition that included re-
nouncing Marxism-Leninism.
Mr. Reshetnikov attained the
rank of lieutenant general in
the SVR before retiring in
Leonid Reshetnikov, right, meeting with Mikhail Fradkov, his successor as head of the Russian Institute for Strategic Studies, and
Russian President Vladimir Putin in January. Mr. Reshetnikov has been called ‘the right hand of Mr. Putin on the Balkans.’
IN DEPTH
Long Shadow
Russia retains strong economic ties to Bulgaria, especially in the
energy, media and telecommunications sectors, and to certain other
former Soviet satellites.
30% of GDP
Russia’s economic
25 footprint*
20
15
10
5 comfortably, with 59% of the
0 A few days after Montene-
2009 ’10 ’11 ’12
*Revenue, assets, and investment flows for Russian-owned and controlled companies was used
to estimate the share of Russian business in the overall economy. †2014 data unavailable
Source: Report by Center for Strategic and International Studies, Washington,
and Center for the Study of Democracy, Sofia
2009. He then became director
of the Russian Institute for
Strategic Studies, a Moscow
think tank that until he took
over was a formal part of the
SVR. The institute didn’t re-
spond to requests for comment.
Mr. Reshetnikov played
down the meeting with Ms. Ni-
nova, saying they spoke for
only 30 minutes and that he
was mainly on holiday in Bul-
garia. “My granddaughters
were vacationing in the moun-
tains there; I came to pick
them up and take them to
Moscow,” he said in the inter-
view.
The precise relationship of
Mr. Reshetnikov—a self-styled
commentator who has long
predicted the demise of the
Putin is deploying an arsenal of weapons to
bolster allies and discredit the West.
West—with the Kremlin is
murky. Some analysts argue he
is but one of a handful of po-
litical actors competing to
spearhead Moscow’s regional
operations.
“There’s myth-building here
of course, but he’s a player,”
said Mark Galeotti, a specialist
on Russia’s security services at
the Institute of International
Relations Prague.
In November, Mr. Reshet-
nikov told Russian and Bulgar-
ian media that he and Ms. Ni-
nova had discussed a possible
presidential bid by Mr. Radev
weeks before he was publicly
anointed as the Socialists’ can-
didate.
When first asked about the
meeting by Bulgarian media,
Ms. Ninova denied it had taken
place. She later acknowledged
Bulgaria 24.4%
Latvia 16.0%
Serbia† 14.2%
Slovakia 11.1%
Hungary 9.2%
’13 ’14
THE WALL STREET JOURNAL.
meeting Mr. Reshetnikov, but
said that they didn’t discuss
Mr. Radev.
“The truth is that Mr.
Radev was not Mr. Reshet-
nikov’s proposal,” Ms. Ninova
said in an interview. Of the
August meeting, she said; “It
was the first and last time I
met him.”
Senior government officials
say another aspect of the
meeting was never made pub-
lic: Mr. Reshetnikov’s pur-
ported hand delivery of the
detailed election-campaign
game plan from Moscow. Ms.
Ninova didn’t respond to re-
peated requests for comment
on the report.
Bulgaria’s State Agency for
National Security, the coun-
try’s equivalent of the U.S.
Federal Bureau of Investiga-
tion, obtained a copy of the
document, people familiar with
the matter say. In keeping with
protocol for the most sensitive
intelligence matters, the secu-
rity services allowed only a
handful of the country’s top of-
ficials to read—or receive a
briefing on—the document, ac-
cording to these people.
The document included rec-
ommendations to commission
weekly surveys that would ex-
aggerate the Socialists’ sup-
port, according to senior offi-
cials who read it. The
document offered advice on
how to burnish the candidate’s
image by planting stories with
Moscow-friendly news outlets.
The stories were to be closely
coordinated, publishing first in
THE WALL STREET JOURNAL.
European Union,” and “NATO
is a tumor.”
The number of such sto-
ries in Bulgarian media rose
from around 50 a day during
the summer months to up to
400 a day in the two weeks
before the election, Mr.
Velichkov said, adding that
social-media channels
showed a similar trend.
“It’s the old KGB tricks
adapted for the social-media
age,” Mr. Velichkov said. “The
EU doesn’t know how to re-
spond.”
A Bulgarian polling com-
pany, Gallup International,
which isn’t related to U.S. poll-
ster Gallup Inc., accurately
predicted Mr. Radev’s victory.
The company, which is being
JODI HILTON FOR THE WALL STREET JOURNAL
sued by Gallup Inc. for using
its name without authoriza-
tion, also co-published a Feb-
ruary poll that said citizens of
four NATO members, including
Bulgaria, would choose Russia,
rather than NATO, to defend
them if they were attacked.
Those results were at odds
with a similar poll by Gallup
Inc., published a few days ear-
lier, showing that most NATO
members in Eastern Europe,
fringe blogs before entering including Bulgaria, see the alli-
mainstream media en masse to ance as protection.
create maximum impact and Gallup International didn’t
ultimately become election respond to requests for com-
talking points for the party. ment.
The report recommended “This wrapped-in-secrecy
the party emphasize issues poll had no details on method-
that dovetailed with Kremlin ology nor funding sources,”
policy: calling for an end to said Ilian Vassilev, Bulgaria’s
Russian sanctions, criticizing former ambassador to Mos-
NATO and talking up the U.K.’s cow. “Russian media strate-
vote to leave the EU. gists and their Bulgarian prox-
It wasn’t possible for the ies used the Western name to
Journal to verify to what ex- fool people about its credibil-
tent any such proposals were ity and spread their message.”
implemented or whether they In the months following his
helped Mr. Radev. He won victory, Mr. Radev, a fighter
pilot who studied at Maxwell
vote. Air Force Base in Montgomery,
Ala., has sought to balance
grin authorities said they had more pro-Russian positions
foiled an allegedly Russian- with a renewed commitment
backed coup attempt and plan to the West.
to assassinate the prime min- He has repeatedly argued
ister in November, Mr. Reshne- that sanctions against Russia
tikov stepped down as head of should be lifted, but has also
the Russian institute. In De- reaffirmed Bulgaria’s commit-
cember, he was sanctioned by ment to the EU and NATO,
the U.S. government for his playing down his ties to Mos-
role as a board member at cow. “Labeling people is a sim-
Tempbank, a Russian lender plistic political practice,” he
that has financed the govern- told reporters in a trip to
ment of Syrian dictator Bashar Brussels.
al-Assad. Still, concerns are mounting
Srdjan Darmanovic, foreign at NATO headquarters. “Every-
minister of Montenegro, which thing has become a game of
hopes to become part of NATO political football in Bulgaria,”
this year, says Mr. Reshetnikov said one NATO official. “Every-
“has acted as a propaganda one is trying to play to pro-
fist” in his country. Mr. Plev- Russian voters.”
neliev, the former Bulgarian Two weeks after Mr.
president, described Mr. Radev’s victory, outgoing De-
Reshetnikov as “the right hand fense Minister Nikolay
of Mr. Putin on the Balkans.” Nenchev was charged with vi-
One of Mr. Radev’s first olating a contract with Russia
stops on the campaign trail because he planned to shift
last September was a visit to maintenance work on the Bul-
the annual gathering of Bul- garian air force’s Russian-
garia’s National Russophile made MiG-29 fighters away
Movement, an important pro- from Russia to Poland, a fellow
Moscow group. NATO member. Now, he is on
“The cultural and spiritual trial in a closed court.
bond between our two na- Mr. Nenchev says he has
tions is an advantage for us,” done nothing wrong and
Mr. Radev told a cheering blames his prosecution on
crowd of thousands waving “Russian proxies” in Bulgaria.
Russian and Bulgarian flags. In his first interview as
“Russia must not be branded president, Mr. Radev told na-
an enemy.” tional television last week
In the weeks before the that he expects to welcome
vote, the number of pro-Rus- Mr. Putin in Sofia next March.
sian and anti-Western news Mr. Radev said the two presi-
items mushroomed, according dents could be patrons of Bul-
to media monitors and politi- garia’s national holiday mark-
cal analysts. Hundreds of so- ing the 140th anniversary
cial-media accounts, often since Russian troops helped
with variations of the same the country’s liberation from
name, amplified the message, Ottoman rule.
posting and retweeting these Campaigning in the parlia-
stories thousands of times. mentary elections set for this
Vassil Velichkov, a tech en- Sunday, the Socialists have
trepreneur and former gov- called on the EU to lift inter-
ernment adviser who runs a national sanctions against
data analytics company Russia over the annexation of
called Sensika, says that a Crimea, arguing that they hurt
media-monitoring algorithm the Bulgarian economy and its
he developed detected a trade with Russia and have
surge in anti-Western articles promised to restart construc-
with phrases such as “Attack tion of a major Russia-backed
against Putin,” “Death of the gas pipeline.
According to the latest
opinion polls, the Socialists
and center-right GERB were
each poised to capture around
30% of the vote. The Socialist
Party’s chances of forming a
coalition to govern are consid-
ered strong, since many of the
other parties in the race are
also pro-Russian. A win for the
Socialist Party would put it in
charge of Bulgaria’s two power
centers—the presidency and
the parliament—for the first
time in nearly a decade.
“Bulgaria and Russia are
brotherly nations,” Svetlana
Sharenkova, a Socialist candi-
date for parliament, said in a
speech at a party congress last
RUSSIAN LOOK/ZUMA PRESS
month. “Just as we respect the
rules of the EU and NATO,
they need to respect the real-
ity of our special relations
with Russia.”
—Nathan Hodge in Moscow
and Julian E. Barnes in
Brussels contributed to this
article.
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.
‘It is our duty, to ourselves and to our children, to see the new world as it is now.’ —Yitzhak Rabin
The Hawk and the Dove
Yitzhak Rabin:
Soldier, Leader, Statesman
By Itamar Rabinovich
Yale, 272 pages, $25
BY ELLIOTT ABRAMS
MORE THAN TWO DECADES have
passed since Yitzhak Rabin was shot
to death by a right-wing extremist in
November 1995, and in the years
since his assassination he has be-
come a potent icon for the Israeli
peace movement. Rabin’s signing of
the Oslo Accords with the Palestine
Liberation Organization and his fa-
mous handshake with Yasser Arafat
on the White House lawn in 1993
have made him, as Itamar Rabinovich
writes in analogizing Rabin to John
F. Kennedy and Abraham Lincoln in
the first chapter of his biography,
“the subject of a new mythology.”
But the truth, as Mr. Rabinovich
convincingly argues, is that “it is
wrong to remember and commemo-
rate Rabin as a dovish leader.” Rabin’s
primary concern throughout his life
was Israeli security—and throughout
his long career in the military he
proved himself capable of carrying out
extremely tough action.
Born in Jerusalem in 1922 to par-
ents who had emigrated from the Rus-
sian empire, Rabin joined the pre-
independence Jewish security forces
in 1941 after an interview with a
young officer named Moshe Dayan.
During the years until Israel’s inde-
pendence in 1948, Rabin rose through
the ranks, working first with, and then
against, the British who ruled Manda-
tory Palestine; he was even jailed by
them for five months in 1946.
It was Rabin who, as a senior offi-
cer in the new Israeli Defense Forces
in 1948, gave the order (under instruc-
tions from Prime Minister David Ben-
Gurion) to fire on the Altalena, a ship
carrying arms to the rival militia led
by Menachem Begin, in what remains
one of the most hotly contested inci-
dents in Israeli history. It was Rabin
who signed an order to expel Arab
residents from Lydda in what has be-
come a deeply controversial episode
in Israel’s war of independence. Later,
it was Rabin who, as minister of de-
fense, put down the First Intifada—
the violent Palestinian uprising
against Israeli rule in the West Bank—
with considerable force.
Mr. Rabinovich, the distinguished
Israeli scholar and diplomat whom
Rabin selected to be Israel’s ambassa-
dor to Washington, served in that post
from 1993 to 1996, and was president
of Tel Aviv University from 1999 to
2007, easily establishes that the prime
Zero Degrees
By Charles W.J. Withers
Harvard, 321 pages, $29.95
BY ROBERT P. CREASE
IN FEBRUARY 1894, a French anar-
chist named Martial Bourdin planned
a terrorist attack on the Royal Obser-
vatory in Greenwich, England, the
site used to establish the prime me-
ridian, the benchmark for world-
wide geographical coordinates. Bour-
din’s exact motives for this crazy act
were unknown; he died after his
bomb prematurely exploded. But the
episode inspired Joseph Conrad’s
novel “The Secret Agent” (1907),
whose protagonist plans to attack
the observatory and prime meridian
as the emblem of international coop-
eration and the power and authority
of science.
In “Zero Degrees,” Charles W.J.
Withers, a professor of historical ge-
ography at the University of Edin-
burgh and the Geographer Royal for
Scotland, tells how the observatory
became that emblem. The story in-
volved scientists and politicians set-
ting aside national, ideological and
even religious differences to reach an
agreement for the global good.
The prime meridian is a baseline
used in the grid system of longitude
and latitude by which map makers,
mariners, astronomers and the Global
Positioning System “read” locations
on the globe and fix exact time. Lati-
tude, the north-south position in this
grid, has a natural zero point in the
equator. But no such natural zero
point exists for longitude, or the east-
west position, so humans have had to
take matters into their own hands.
RIVALS Shimon Peres, left, and Yitzhak Rabin in 1975.
minister was a man of great complex-
ity. As a military officer, he lacked
charisma and was “an excellent num-
ber two” and an “unusually efficient
staff officer” rather than a bold com-
mander. He was “unusually shy and
introverted, awkward with unfamiliar
people,”—hardly the makings of a suc-
cessful politician.
How, then, was he twice elected
the country’s leader? Here, luck took
center stage. Rabin had been chief of
staff during Israel’s smashingly suc-
cessful Six Day War of 1967. After
serving as ambassador in Washington
from 1968 to March 1973, he returned
home—and, when Israel was attacked
by Egypt and Syria in October of that
year, he held no government or mili-
tary position. Though Israel recov-
ered from the surprise attack and
went on to victory, the shock of the
war and very large losses discredited
those who had been in power. Rabin
was remembered for the 1967 tri-
umph and “untarnished by the Octo-
ber setback,” as Mr. Rabinovich puts
it. So the Labor Party chose him as
its candidate in April 1974, ahead of
Shimon Peres, after Golda Meir re-
signed as prime minister.
Rabin’s first tenure as prime minis-
ter, from 1974 to 1977, was not a great
success and, as Mr. Rabinovich writes,
it “ended in disgrace” over an illegal
bank account belonging to his wife
and his unseemly acceptance of vari-
ous fees while serving as ambassador
to the U.S. His second term as prime
Getting on the Grid
Ptolemy and many other ancient
geographers thought an obvious zero
point was the Canary Islands, which
they regarded as the western end of
the world. Some later geographers
hoped that the agonic line—where
the North Pole and the magnetic pole
line up so that a compass points true
north—might do. But the Canary Is-
lands turned out not to be the
world’s end, while the agonic line,
which passes through parts of North
and South America, is not straight
and moves over time. Without a nat-
Candidates for the prime
meridian included Paris,
the manger at Bethlehem
and the Great Pyramid of
Giza. Greenwich won.
ural zero point, geographers and as-
tronomers often set the prime me-
ridian at convenient landmarks in
their home country.
By the 19th century, however, rail-
way collisions, maritime accidents
and growing international collabora-
tions highlighted the need for a com-
mon world-wide system to fix pre-
cise geographical locations and
standardize time. National scientific
academies and observatories linked
by telegraphic networks now pro-
vided the expertise and technology
to make simultaneous time determi-
nations, prompting astronomers,
navigators and international mer-
chants to lobby for a common zero
longitude point.
The French wanted Paris, the
Swedes Uppsala, the British some-
BOOKS
minister, from July 1992 to his murder
on Nov. 4, 1995, was far more conse-
quential: This was when he signed the
Oslo Accords. Under the Accords, Is-
rael recognized the PLO as the sole
voice of the Palestinian people, al-
lowed Arafat to return from exile in
Tunis and began negotiations on a
Palestinian “entity” that would even-
tually become a state.
The mystery of Rabin is why, given
his decades of staunch defense of Is-
raeli security, he agreed to the Oslo
Accords and, more, why he actively
sought a deal with Hafez al-Assad to
give the Golan Heights back to Syria.
Rabin had pledged to the Israeli
public that he would do neither. As
early as 1977, writes Mr. Rabinovich,
he had told President Carter that he
desired no negotiations with the PLO,
no Palestinian state and no negotia-
tions with Syria. In a 1989 speech, he
called for negotiating with local Pales-
tinian leaders rather than the PLO,
and reiterated his opposition to the
establishment of a Palestinian state
between Israel and Jordan. During his
election campaign in 1992, he came
out against giving back the Golan.
So what happened? According to
Mr. Rabinovich, the pivot point was
the outbreak of the First Intifada in
1987. Rabin was defense minister then,
and the Palestinian terror campaign
led to “a radical change” in his “out-
look and policy.” Mr. Rabinovich does
not really explain why—nor, more
strikingly, did Rabin explain it to Is-
place in London—St. Paul’s Cathedral
was a popular choice. In the United
States, the possibilities included Phil-
adelphia, New York, Washington and
even New Orleans, whose advantage
was that it was almost exactly 90 de-
grees away from the Greenwich Ob-
servatory, which was being used by
British astronomers, making the
math easy. Many politicians wanted
to place the prime meridian in the
middle of an ocean so as not to divide
or favor particular countries. Strong
arguments existed for placing it in-
stead at an observatory, to facilitate
time determinations.
Proposals with religious overtones
included the manger at Bethlehem
and the city of Jerusalem. One of the
wackiest but most passionately ad-
vanced candidates was the Great Pyra-
mid of Giza. This was the favorite of a
populist movement in the U.S. that
used over-the-top rhetoric, conspiracy
theories, fabricated “facts,” xenopho-
bia and assertions of American superi-
ority to promote the Pyramid—which,
after all, appears on every U.S. dollar
bill—as the standard for all measure-
Friday - Sunday, March 24 - 26, 2017 | A7
GETTY IMAGES
raelis at the time, nor in 1993 during
his secret negotiations with Assad (via
the U.S.), nor when he permitted his
party rival Shimon Peres to open se-
cret talks with the PLO in Oslo.
Rabin, writes Mr. Rabinovich, “re-
mained ambivalent about making a
deal with the PLO” and had actually
Rabin wanted a deal with
Syria over the Golan
Heights, but, faced with
the futility of dealing
with Assad, he chose
to go the Oslo route.
ordered Peres in writing to stop the
Oslo talks at one point. But he under-
estimated both Peres’s determination
and Arafat’s desperation. By 1993,
“he could make a significant move on
one track of the peace process; he
preferred it to be the Syrian-Leba-
nese track,” Mr. Rabinovich says. But
faced with the likely futility of nego-
tiations with Assad, he chose to go
the Oslo route.
But again, why did Rabin feel he
had to abandon years of pledges and
accept such concessions? No doubt he
felt some American pressure to make
peace. No doubt he worried about his
own political fate; “his coalition was
fraying,” the author writes, with the
ment systems. Other Americans criti-
cized the “pomp and vanity” of insist-
ing on an American prime meridian,
pointing to the “useful pride” that
would be gained by the United States
participating in an honest interna-
tional effort.
“Zero Degrees” culminates in a
conference that took place in Wash-
ington, D.C., in October and November
of 1884, at which 40 scientific and
GETTY IMAGES
diplomatic delegates from 25 coun-
tries met in the Diplomatic Hall of the
State Department and ratified in prin-
ciple the choice of Greenwich. It was
only a recommendation, but it proved
to be the key episode in consolidating
a world-wide consensus.
Several colorful protagonists ani-
mate Mr. Withers’s tale, among them
the deaf scientist and educator Fred-
erick Barnard, namesake of Barnard
College; Charles Daly, president of the
American Geographical Society; and
Charles Piazzi Smyth, darling of the
xenophobic anti-reform movement.
But Mr. Withers’s telling focuses less
on people than on arguments and the
text of resolutions.
right-wing religious Shas Party threat-
ening to leave the coalition. No doubt
he felt pressured by his rivalry with
Peres, which is a key theme of this
book: Their “relationship was poison-
ous from the outset,” Mr. Rabinovich
recounts, and Rabin’s 1979 memoir
had included a “bitter tirade” against
Peres, whom he memorably called “an
indefatigable intriguer.” But stopping
Peres at Oslo would have created an
explosion within the Labor Party and
the Israeli Left. “It is impossible to
separate the Oslo process from the
complex relationship between Rabin
and Peres,” Mr. Rabinovich notes.
None of this is fully persuasive.
Mr. Rabinovich explains the steps by
which the tough military leader came
to abandon his promises to Israeli
voters, but not his underlying moti-
vation. The only deeper explanation
we are offered is striking: “In private
conversations with confidants Rabin
expressed concern over the Israeli
public’s and the IDF’s ability to
shoulder the price of a long-term,
seemingly endless conflict.” Rabin
had collapsed in the lead-up to the
1967 war from nervous exhaustion
and been out of action for two days.
Did he project his own fatigue onto
the nation? If so, he greatly underes-
timated Israel’s stamina.
Mr. Rabinovich is a great admirer
of Rabin, writing of their “close and
deep relationship” and of Rabin’s
“bold, historic decisions.” He mourns
the assassination that “interrupted
the historical process [toward peace]
and destroyed its momentum.” And
yet, Mr. Rabinovich acknowledges
that while it is “quite realistic” that
Rabin would have won the 1996 elec-
tions, “that he would have come to
an agreement with Arafat is less so.”
In 2000 at Camp David, Arafat re-
fused a generous peace offer from Is-
raeli Prime Minister Ehud Barak, and
then encouraged the violence that
became known as the Second Inti-
fada—so it is unrealistic indeed to
think that he would have been a reli-
able peace partner for Rabin. The
visible reluctance with which Rabin
shook Arafat’s hand on the White
House lawn in 1993 showed Rabin’s
doubts about the treaty he had just
signed and the new path it appeared
to signify. In the end, even the warm
esteem in which he holds Rabin does
not prevent Mr. Rabinovich—a
scholar with an abiding commitment
to historical accuracy—from present-
ing a portrait of his friend in full.
Mr. Abrams, a senior fellow at
the Council on Foreign Relations,
handled Middle East affairs at
the National Security Council
from 2001 to 2009.
In that respect, “Zero Degrees” is
not a popular science book. Its dry
and frequently repetitious account is
in stylistic contrast to, say, Dava So-
bel’s much-celebrated “Longitude”
(1995), about clockmaker John Harri-
son, whom Ms. Sobel breathlessly calls
a “lone genius who solved the greatest
scientific problem of his time,”
namely, how mariners could calibrate
Greenwich time. The truth, Mr. With-
ers notes, is “more complicated,” for
the background to that achievement
included geographers, scientists, in-
struments and observatories to set up
the problem and draw up an outline of
a solution. A more popularly oriented
treatment (like this review) would
have begun with mention of the ter-
rorist attack on Greenwich rather than
burying it in the book’s last few pages
as part of an account of the Washing-
ton conference’s “afterlife.”
The story that unfolds in “Zero De-
grees” is about more than the scien-
tific development that is its ostensible
subject. It is about how an interna-
tional community of scientists and
politicians managed to set aside differ-
ences to reach agreement. It shows
just how slow and difficult this can be
in the face of resistance posed by ide-
ologies, shortsighted interests and jin-
goistic nationalism. Finally, it shows
how international cooperation can
harness the power and authority of
science to benefit human life all over
the globe. The modern world couldn’t
exist without such agreements. But it
is virtually impossible to imagine mod-
ern politicians with the integrity and
courage to make them, which gives Mr.
Withers’s account its poignancy.
Mr. Crease is co-author, with
Alfred Scharff Goldhaber,
of “The Quantum Moment.”
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
A8 | Friday - Sunday, March 24 - 26, 2017
‘He who reads the Bible in translation is like a man who kisses his bride through a veil.’ —Hayim Nahman Bialik
The Language of Survival
The Story of Hebrew
By Lewis Glinert
Princeton, 281 pages, $27.95
Hayim Nahman Bialik:
Poet of Hebrew
By Avner Holtzman
Yale, 250 pages, $25
BY BENJAMIN BALINT
THE OTHER DAY, I took some Ameri-
can visitors to the Shrine of the Book
in Jerusalem to see the Dead Sea
Scrolls. My guests were struck not so
much by the parchments themselves
as by the sight of a group of Israeli
fourth-graders, their noses pressed to
the display cases, reading aloud from
texts that were two millennia old.
In “The Story of Hebrew,” Lewis
Glinert, a professor at Dartmouth Col-
lege, aims to track the fate of the He-
brew language “from the Israelites to
the ancient Rabbis and across two
thousand years of nurture, abandon-
ment, and renewal.” The most ambi-
tious attempt since William Chom-
sky’s groundbreaking 1957 study,
“Hebrew: The Eternal Language,” Mr.
Glinert’s biography of Hebrew suc-
ceeds in representing the language
not just as a vehicle of communication
but as a crucible of national cohesion.
Mr. Glinert’s narrative, related with
impressive sweep, begins with the clas-
sical Hebrew of biblical literature. The
Bible’s sublime idiom is marked by sty-
listic suppleness and breadth, he says,
that could encompass “narrative,
prophecy, law, proverbs, philosophy, el-
egy, romance” and much else. The era
of biblical Hebrew reaches as far back
as the second millennium before the
Christian era, and Mr. Glinert suggests
that the spoken language survived the
Jews’ exile to Babylon, their return and
their struggles under Roman rule.
Spoken Hebrew seems to have died
with little fanfare around A.D. 200,
more than a century after the de-
struction of the Temple in Jerusalem.
But throughout the diaspora, Jews
used written Hebrew to scaffold elab-
orate edifices of religious and legal
interpretation. Though stateless, He-
brew would flourish as a written me-
dium of cultural continuity. If the
Jews safeguarded Hebrew, it was
said, the holy tongue safeguarded
“the people of the Book.”
The first of these edifices, the Mish-
nah, was compiled in the second and
third centuries. This record of religious
teachings and laws “created a rich lexi-
cal heritage that could be passed on to
future generations,” Mr. Glinert writes,
“and that Hebrew poetry and prose
would draw upon long after Hebrew
Nabokov’s Favorite
Word Is Mauve
By Ben Blatt
Simon & Schuster, 271 pages, $25
BY JEFF BAKER
WHEN THE FEDERALIST PAPERS
were published in 1788, the author
was listed simply as Publius. But the
85 essays defending the new Constitu-
tion, as Americans found out after Al-
exander Hamilton’s death in 1804,
were in fact written by Hamilton,
James Madison and John Jay. Hamil-
ton wrote the overwhelming majority,
as he made sure everyone knew in a
note written shortly before his fateful
duel with Aaron Burr. Hamilton
claimed credit for 63 essays; he said
Jay penned five and Madison wrote 17.
But when Madison later said that
he had actually written 12 of the es-
says that Hamilton claimed credit for,
the authorship of each of the Federal-
ist Papers became a subject of intense
debate. Historians argued about the
disputed essays for some 150 years
until two statisticians, Frederick Mos-
teller and David Wallace, used word
frequency and probability to prove
that all 12 essays in question were
written by Madison. The 1963 break-
through came when the statisticians
realized—after months of work count-
ing words by hand—that Hamilton
used “while” but never “whilst” and
Madison did the opposite. Dozens of
other word patterns confirmed Madi-
son’s authorship. The correct totals:
Hamilton wrote 51 essays, Madison
29, and Jay five.
Messrs. Wallace and Mosteller’s re-
search became a foundation of what is
called stylometry, the study of lan-
guage based on recurring word pat-
had ceased to be a spoken language.”
The Babylonian Talmud—another
great edifice of interpretation, setting
out the authoritative commentary on
rabbinic law—expanded Hebrew’s ex-
pressive possibilities by inflecting He-
brew with Aramaic, the lingua franca
of the ancient Near East.
In the ensuing centuries those who
standardized Hebrew’s grammatical
architecture and honed its philologi-
cal precision saw the language not
just as a precious possession in itself
but also as a fulcrum of Jewish life.
“It must constantly be on our lips,”
the Egyptian-born linguist and sage
Saadiah Gaon wrote in the year 902,
“for it affords us an understanding of
the Divine Law.”
While Hebrew commingled with
Arabic in Islamic Spain, it preserved a
separate reservoir of expression in the
realms of law and liturgy. During the
golden age of Hebrew literature,
roughly the 10th to the 13th centuries,
Andalusian poets like Judah Halevi
and Solomon ibn Gabirol wielded a
Hebrew of astonishing allusive density
in order to blur the lines between sa-
cred and sensual.
In a pair of chapters on the ne-
glected story of how Hebrew figured in
the Christian imagination, Mr. Glinert
tells how Christians learned Hebrew
both to access “hebraica veritas,” or
Hebrew truth, and to monitor the Jews
in their midst “with the goal of master-
ing the mischief and the falsehoods of
the Jews,” as a 14th-century writer put
it. Martin Luther’s call for “sola scrip-
tura,” or “only the Scriptures,” led Prot-
estants back to the original texts of the
Hebrew Bible. In the 15th to 17th centu-
ries, Christian Hebraists put Hebrew at
the center of Western humanism.
In the 18th century, leaders of the
Jewish Enlightenment sought to
Algorithms Meet Adverbs
terns, expressions and punctuation.
Such textual analysis has practical ap-
plications in law, politics, advertising
and, perhaps most powerfully today,
search engines. Every comma is one
more tiny piece of Big Data that estab-
lishes an online identity as distinct as
a fingerprint. Nowadays it would take
a few minutes on a laptop to figure
out who wrote the Federalist Papers.
In “Nabokov’s Favorite Word Is
Mauve: What the Numbers Reveal
About the Classics, Bestsellers, and
Our Own Writing,” Ben Blatt, a writer
with a degree in applied mathemat-
ics, uses computer-assisted text anal-
ysis to find out, for example, how
Tolkien uses the word
‘he’ 1,900 times in ‘The
Hobbit.’ The word ‘she’?
It appears just once.
many adverbs are in all the novels
written by Ernest Hemingway, Ste-
phen King and Mark Twain. Data-
driven journalism is all the rage, and
Mr. Blatt’s goal is to release the
hounds of stylometry into the fiction
stacks and see what happens. We
know that D.H. Lawrence loved ani-
mal similes—“like a caged hawk,” he
writes in “The Rainbow”; “like an in-
dignant turkey,” he writes in “The
Lost Girl”—but did he love them
twice as much as Jack London and 10
times as much as Edith Wharton?
He did, as Mr. Blatt proves in his
fitfully amusing but frequently mad-
dening study. Mr. Blatt is a diligent
counter of adverbs and animal similes,
but his idea of scientific rigor is to
pose a question—Do English writers
use “bloke,” “blimey” and “brilliant”
BOOKS
emancipate Jews from the confines of
the ghetto; by making Hebrew an aes-
thetic equal to European languages,
they hoped to open the doors to mo-
dernity. Their efforts, while incom-
plete, prepared the ground for a small
group of secular Eastern European
writers in the following century to dig
channels through which Hebrew’s hid-
den vitality could course once more.
These cultural Zionists brought about
a rebirth of Hebrew, an achievement,
Mr. Glinert writes, “without precedent
in linguistic and sociopolitical history.”
In its early stages, this revival
didn’t seem to have much prospect for
success. For the pious, Mr. Glinert
says, “using the holy tongue for every-
day speech smacked of desecration.”
For pragmatists, resurrecting a book-
ish tongue that lacked words for to-
mato, theater, microscope or fun
seemed either ridiculous or inconceiv-
able. Even the father of political Zion-
ism, Theodor Herzl, envisioned a Jew-
ish state of German speakers.
And yet the history-hallowed lan-
guage returned to its native soil by
the sheer will of pioneers like Eliezer
Ben-Yehuda (1858-1922), the author of
a 16-volume dictionary of Hebrew us-
age. When Ben-Yehuda arrived in Je-
rusalem in 1881, having first left his
native Lithuania to study in Paris, he
was unwavering in his commitment to
the idea of restoring the Jewish lan-
guage and the Jewish homeland to-
gether. He published a Hebrew news-
paper, founded the forerunner of what
became the Hebrew Language Acad-
emy and advocated Hebrew as the lan-
guage of instruction in the Jewish
schools in Palestine. In November
1922, the British mandate recognized
Hebrew as the official language of the
Jews in Palestine. A month later, Ben-
Yehuda succumbed to tuberculosis,
more often than American writers?—
and attempt to answer it by searching
for those words across thousands of
books. Once he comes to a conclu-
sion—yes, “bloke” is used 27 times
more often in the British National
Corpus (1980-93) than in the Corpus
of Contemporary American English
(1990-2015)—he expands the search to
the “Harry Potter” series, then “Harry
Potter” fan fiction, then online erot-
ica, until he runs out of steam. His
readers will have skipped ahead,
THERE’S A CERTAIN RING TO IT J.R.R. Tolkien in 1955.
maybe to the part about how an au-
thor’s novels become longer as her
books become more popular. It’s true.
Mr. Blatt can prove it.
“The adverb is not your friend,”
Stephen King wrote in “On Writing.”
Mr. Blatt attempts to prove this by
running some tests on Hemingway’s
adverb rate. It’s low: 80 adverbs end-
ing in –ly (sleepily, irritably, sadly,
etc.) per 10,000 words across 10 nov-
els. Mr. Blatt follows up with charts
that show that the most acclaimed
novels by Hemingway (“The Sun Also
Rises” and “A Farewell to Arms”),
William Faulkner (“The Sound and
TIM BOWER
having fulfilled his dream of relaunch-
ing Hebrew as a spoken language for
the first time in nearly two millennia.
In such a way was Hebrew “torn from
biblical sleep,” in the Israeli poet Ye-
huda Amichai’s phrase.
No one better embodies this renais-
sance than H.N. Bialik (1873-1934), the
poet who stood at the vanguard of the
migration of Hebrew literature from
Bialik’s verses were
emblazoned on banners,
set to music, memorized
by schoolchildren.
They were a rousing
call to self-defense.
mute dormancy in Eastern Europe to
articulate maturity in the land of Is-
rael. In “Hayim Nahman Bialik: Poet of
Hebrew,” Avner Holtzman, a professor
at Tel Aviv University, gives a capti-
vating account of how Bialik’s poetry
was amplified by a “rich orchestration
of citations from, references to, and
resonances of a wealth of Jewish
sources, spanning the Hebrew Bible,
the Mishnah, and the Jewish prayer
book.” By writing in the first-person
collective, a mode both inimitably sin-
gular and self-consciously national—
and by weaving an “intertextual fab-
ric,” as Mr. Holtzman writes—Bialik
reclaimed old sonorities to achieve an
inventiveness never before seen.
Bialik was born in 1873 near the
Ukrainian town Zhitomir. When he
was 7, after the death of his father, his
destitute mother sent him to live with
a pious grandfather. Although Yid-
dish—Hebrew’s handmaiden, as he re-
the Fury” and “As I Lay Dying”) and
John Updike (the Rabbit Angstrom te-
tralogy) are those with the lowest ad-
verb rates.
Mr. Blatt drills down to what
could be considered an unreasonable
level: He downloads more than 9,000
novel-length fan-fiction stories and
concludes that amateur writers use
–ly adverbs more than the pros do.
The amateurs are wildly, gracelessly
and spectacularly unsuccessful in
their excess.
GETTY IMAGES
Guess what else? Men don’t write
about women the way that women
write about men. Mr. Blatt finds that
J.R.R. Tolkien uses the word “he” just
under 1,900 times in “The Hobbit” and
the word “she” only once. Elmore
Leonard used “he” more than “she” in
every one of his 45 novels. Joseph Con-
rad, Cormac McCarthy and Herman
Melville did the same: more “he” than
“she” in each of their novels. Surpris-
ingly, the same is true for female nov-
elists. Jane Austen is the only one
among the unspecified number Mr.
Blatt surveyed who used “she” more
than “he” in every one of her books.
THE WALL STREET JOURNAL.
garded it—was Bialik’s mother tongue,
“the idiom of biblical Hebrew,” Mr.
Holtzman says, “became a corner-
stone of his literary education.” Steal-
ing away from his studies at a presti-
gious Lithuanian yeshiva, or religious
academy, Bialik arrived penniless in
Odessa, then a hub of Hebrew culture
on the shores of the Black Sea.
In syllables shaped by the collision
of tradition and modernity, Bialik
poured forth verses in a range of reg-
isters—pastoral portraits, martial ep-
ics, reveries of childhood, stirring Zi-
onist hymns. But his most influential,
and most searing, poem consisted of
nearly 300 lines of rhyming couplets
about the Kishinev pogrom in 1903—a
notorious two-day rampage in the
southwestern reaches of imperial Rus-
sia. “In the City of Slaughter,” as he
called the poem, was widely read as a
denunciation of the humiliations of
life in exile and as a rousing call to
self-defense.
After the Russian regime banned
Hebrew literary activity, Bialik fled
from Odessa to Germany, before set-
tling in 1924 in Tel Aviv, where he
would spend his final decade. Though
his muse waned, his efforts on behalf
of Hebrew renewal did not. He served
as president of the academy, founded
by Ben-Yehuda, that coined and vetted
new words. He set up publishing
houses, edited literary journals and
made himself a ubiquitous and be-
loved presence in Palestine.
Admirers hailed him as the Hebrew
Pushkin, the Jewish Goethe. His
verses were emblazoned on banners,
set to music and memorized by
schoolchildren. The artist Marc Cha-
gall, visiting in 1931, attested: “I came
to Tel Aviv and saw that Bialik is not
only a poet, but also the city’s spiri-
tual mentor. All shopkeepers buy and
sell, and read, newspapers that say:
Bialik spoke, Bialik wrote, Bialik is
here, Bialik is there.”
The poet’s 60th birthday, in 1933,
was marked as a national holiday, a
celebration of his part in fashioning a
living vernacular adequate to modern
life. He died the following year, 30
years to the day after the death of
Herzl, as Mr. Holtzman tellingly notes.
Taken together, Messrs. Glinert and
Holtzman suggest that, despite mil-
lennia of fluctuations, Hebrew escaped
extinction with its distinctiveness te-
naciously intact and its future auspi-
ciously assured. To read these books
is to appreciate Hebrew as the gram-
mar of a dynamic dialogue between
the claims of the ever-changing pres-
ent and the imperatives of the past.
Mr. Balint, a writer in Jerusalem, is
the author of “Kafka’s Last Trial,”
forthcoming from Norton.
In 2001, Elmore Leonard famously
advanced a list of 10 rules for writing.
It included a prohibition on the word
“suddenly” and a restriction of two or
three exclamation points per 100,000
words of prose. Mr. Blatt tries to
catch him breaking his own rules and
finds that Leonard used “suddenly”
often in his early westerns but not
once in the nine novels he wrote after
2001. Same story with exclamation
points: Leonard didn’t eliminate
them, but his frequency was nowhere
near that of Tom Wolfe (no surprise!)
or Tolkien (who was also a “super-
user” of “suddenly”).
It’s easy for Mr. Blatt to look for
word patterns and unmask Mr. King
or J.K. Rowling when they publish un-
der pseudonyms. That rumor, first ad-
vanced by a radio talk-show host in
1976, about J.D. Salinger and Thomas
Pynchon being the same person? No
way. Word choice is constant, Mr.
Blatt writes, and “authors do end up
writing in a way that is both unique
and consistent.” For one thing, Mr.
Pynchon rarely uses the same word to
begin two consecutive sentences. In
his novel “Bleeding Edge,” only 1.6% of
the more than 10,000 sentences be-
gins with the same word as the previ-
ous sentence.
The results of a random set of Mr.
Blatt’s experiments are enlightening—
who would have thought that Nabo-
kov’s favorite word was “mauve”?—
but not always in the way he
imagines. Algorithms are fast and ac-
curate, but it turns out that literature
can hold its own against those who
try to break it into pie charts and
probability graphs. Finding the magic
takes more than a download. You have
to read the book.
Mr. Baker is a writer and editor in
Portland, Ore.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL.
The President Fells a Demagogue
Ike and McCarthy
By David A. Nichols
Simon & Schuster, 385 pages, $27.95
BY THOMAS MALLON
IN THE SPRING OF 1954, the Senate
Permanent Subcommittee on Investi-
gations spent $198.67 on witness fees,
$40.90 for subpoena service and $450
on an amplifier that allowed the new
television-viewing public to hear every
word of the Army-McCarthy hearings.
The complete budget ($24,605.67) was
a miracle of thrift when one considers
its efficacy in thwarting Sen. Joseph
McCarthy’s demagogic and spectac-
ularly ineffective hunting of com-
munists in government (of which, yes,
there were some). The 36 days of
hearings dissipated what one of the
era’s famous theatrical characters,
Tennessee Williams’s Big Daddy,
would call a “powerful and obnoxious
odor of mendacity.”
McCarthy had gained control of
the subcommittee—which would
soon enough be investigating him—at
the beginning of 1953, thanks to the
paper-thin majority that Republicans
had ridden to on Dwight Eisen-
hower’s coattails. The chairmanship
allowed the Wisconsin senator to
hire as the subcommittee’s counsel
the cunning Roy Cohn, along with G.
David Schine, the Tab Hunter-ish ob-
ject of Cohn’s affections.
There was a trickiness to McCar-
thy’s position. As a fellow Republican,
he couldn’t openly lambaste Eisen-
hower, whose detestation of him and
his methods was quietly evident. Nor
would Ike “get down in the gutter”
with him, as the senator wanted;
there was party unity to consider and
the danger of a challenge from
McCarthy for the 1956 presidential
nomination. Eisenhower also had to
worry about what McCarthy “had” on
him, the sort of nothing from which
the senator was always serving up a
witches’ brew.
As David A. Nichols emphasizes in
“Ike and McCarthy: Dwight Eisen-
hower’s Secret Campaign Against Jo-
seph McCarthy,” his meticulous new
study of their year-and-a-half political
war, “Eisenhower, if not frightened,
was clearly concerned that McCarthy
might resurrect Ike’s friendly postwar
associations with communists and So-
viet leaders in Germany.” And so, dur-
ing 1953, the two men fought a series
of “small skirmishes,” previews of the
following year’s showdown. After fail-
ing to derail the president’s nomina-
tion of Chip Bohlen as ambassador to
the Soviet Union, McCarthy went af-
ter the Voice of America’s supposedly
Charlton Heston
By Marc Eliot
Dey Street, 553 pages, $29.99
BY SCOTT EYMAN
CHARLTON HESTON probably
sealed his critical fate when, in 2000,
he stood in front of the National Rifle
Association, raised an antique mus-
ket over his head and intoned, “From
my cold, dead hands!” It was spoken
in the same thundering voice in
which he had uttered “Behold His
mighty hand!” as he parted the Red
Sea as Moses.
Heston got an Oscar for “Ben-Hur”
(1959), but he never got much re-
spect. Tall and commanding, with a
Charlton Heston was
earnest, hard-working
and unfailingly decent.
profile that could have been chiseled
on an Etruscan coin, critics assigned
demerits to Heston for his stoicism,
lack of humor and insufficient flash
at a time when Marlon Brando, Mont-
gomery Clift and James Dean were
the rage.
Left to his own devices, or those of
an unimaginative director, Heston was
a stand-and-deliver actor, with a habit
of grinding his teeth to indicate either
passion or intent. “The Pigeon That
Took Rome,” (1962) his sole attempt at
romantic comedy, is thankfully forgot-
ten. But Marc Eliot’s biography, “Charl-
ton Heston: Hollywood’s Last Icon” is
a welcome event if only because it re-
stores a sense of balance, offering
some overdue appreciation to an actor
‘May we never confuse honest dissent with disloyal subversion.’ —Dwight D. Eisenhower
slack anti-communism and sent Cohn
and Schine on a sort of honeymoon
hunt for subversive literature in U.S.-
run libraries abroad.
Eisenhower played it cool in public,
giving addresses in support of free
speech and dealing in what he called
“principles, not personalities.” He
took almost fetishistic care not to use
McCarthy’s name, even when having
to greet him (“Hello there!”) on a pub-
lic occasion. Mr. Nichols states his ap-
proving thesis on the first page of his
preface: “By the end of 1954, McCar-
thy’s political influence had been es-
sentially destroyed. How did that hap-
pen? . . . Dwight D. Eisenhower made
it happen.”
The author’s praise for the presi-
dent’s strategy can border on the ful-
some, but it is supported by facts
and some new source material. Mr.
Nichols’s Eisenhower plays a long
game that draws on “traditions of
military deception.” His administra-
tion’s mobilization against McCarthy
was a story that “most of the era’s
great reporters” were unable to see,
and Eisenhower continued to throw
dust into the eyes of the historians
who came after them. “Even in his
memoirs,” Mr. Nichols points out
when describing the final confronta-
tion with McCarthy, Eisenhower lied
in ascribing to the Army a proactiv-
ity that was actually coming from
the White House.
By the spring of 1954, McCarthy
had updated his “twenty years of
treason” catchphrase to “twenty-one,”
in order, Mr. Nichols observes, “to in-
clude the Eisenhower administration.”
Henry Cabot Lodge Jr., U.S. ambassa-
dor to the United Nations and a close
presidential adviser, believed that
McCarthy decided to go after the
Army because of Eisenhower’s indeli-
ble identification with it, whereas
William Rogers, the deputy attorney
general (and later secretary of state
under Nixon), said, “Joe never plans a
damn thing.” Whichever the case, by
the time McCarthy humiliated Gen.
Ralph Zwicker, a hero of D-Day, for
not giving him the answers he wanted
about the bureaucratic promotion of
an Army dentist with onetime leftist
affiliations, the senator and Roy Cohn
had been risibly at war with the ser-
vice for months. David Schine had
been drafted in November 1953, and
the thought of his golden boy peeling
potatoes on KP inspired more fury in
Cohn than any pinko with a security
clearance. He repeatedly demanded
that the secretary of the Army, Robert
Stevens, and its legal counsel, John
Adams, secure passes and privileges
for Schine. If Schine were sent over-
seas, Cohn vowed, McCarthy would
“wreck the Army.”
An Actor With Integrity
whose belief system mitigated against
a full appreciation of his worth.
The man that emerges from Mr. El-
iot’s book is earnest, hard-working and
unfailingly decent: Heston was married
for 64 years to his wife, Lydia, and
seems to have been a deeply responsi-
ble father to his two children. Profes-
sionally, he approached his characters
through voluminous research, which
meant he found them intellectually,
with emotion trailing behind. Although
never a laugh riot, he was capable of
irony, as in his delicious Richelieu in
Richard Lester’s “The Three Muske-
teers” (1973).
He was born John Charles Carter
in 1923 and was raised in the back-
woods of Michigan. His parents di-
vorced when he was 10 years old, and
he and his mother eventually moved
to Chicago. Shortly after his mother
remarried Chet Heston, she peremp-
torily told her son that he would now
be known as Charlton Heston—the
name he used at Northwestern,
where he met his future wife, the
name he used during his service as a
radioman during World War II and
the name he used when he became a
movie star after the war.
Heston’s dignified demeanor and
his loping, big cat walk gave him the
majestic presence of a born movie star,
but it’s possible he was not a born ac-
tor. Certainly, he wasn’t a born athlete.
“He tended to be clumsy, nothing came
naturally to him,” Joe Canutt, who
helped teach Heston to handle the
horses and chariot for “Ben-Hur,” tells
Mr. Eliot. “We spent hours, days,
weeks working the clumsiness out . . .
He was one of the hardest-working,
most conscientious actors I ever
worked with; he listened, he learned
and he never missed.”
Conscientious is perhaps the defin-
ing adjective for Heston, who had as
BOOKS
COMMITTEE MEN Sen. Joseph McCarthy and his chief counsel, Roy Cohn,
during the Army-McCarthy hearings in April 1954.
The eventual investigation of all
this, which exploded into the televised
hearings, was a great human specta-
cle, full of pratfalls and tragedy. Army
Secretary Stevens, for one, fell into
spells of drink and delusions of hero-
ism. The deepest personal mystery
has always been why McCarthy in-
dulged Cohn. What did Roy have on
Joe? Was it evidence, beyond the ru-
mors, of the senator’s homosexuality?
In John Adams’s memoir, “Without
Precedent” (1983), the Army counsel
describes a car ride with the two of
them during which “Cohn was raining
systematic abuse on McCarthy, who
periodically turned to me to ask if I
couldn’t arrange to get Dave [Schine]
assigned to New York.” Mr. Nichols’s
narrative is relentlessly chronological,
but he does briefly consider “the
strange hold Cohn had over the sena-
tor” without coming to any conclu-
sions. The matter is by now probably
beyond historical solution.
On Jan. 21, 1954, White House
Chief of Staff Sherman Adams ordered
Adams to “draw up a detailed chrono-
logical account” of the pressures ap-
plied to the Army on Schine’s behalf.
This was the beginning of the end for
McCarthy. Copies of the document be-
gan to circulate in Washington. Eisen-
hower lied to the press about the re-
port’s origins, and he arranged for
Stevens to lie about them, too.
Mr. Nichols outlines the anti-
McCarthy contributions of various
administration figures, including
Vice President Richard Nixon, who
early in Eisenhower’s term had tried
to get the senator to switch his focus
“from communism to corruption.” In
the reporter Tom Wicker’s phrasing,
Nixon’s “foot-in-the-other-camp sta-
tus,” his sterling anti-communist
good a batting average as any movie
star of the post-war generation. Be-
sides “The Greatest Show on Earth”
(1952) and “The Ten Commandments”
(1956) for DeMille, there is “Touch of
Evil” (1958), “The Big Country” (1958),
“El Cid” (1961), “55 Days at Peking”
(1963), “The Agony and the Ecstasy”
(1965), “Major Dundee” (1965), “The
War Lord” (1965), “Khartoum” (1966),
YOUNG GENT Heston ca. 1955.
“Will Penny” (1968) and “Planet of the
Apes” (1968). Not all great or even
good films, but all united by Heston’s
determination to tell epic stories.
The star frequently used his box-of-
fice power to enable artists to make
their pictures. Not only did Heston
suggest that Orson Welles direct
“Touch of Evil,” he kept insisting on it
until Universal capitulated, in spite of
Welles’s inability to make films to or-
der and the fact that his pictures in-
variably lost money. Welles wrote a
smashing part for himself as a malig-
nant variation on Falstaff, but didn’t
bother to do anything equally distin-
Friday - Sunday, March 24 - 26, 2017 | A9
GETTY IMAGES
credentials, allowed him to make the
approach to the committee almost in
the way he would later have political
cover in going to China. But after the
showdown had become inevitable,
Nixon accepted Ike’s highly specific
instructions and delivered, on na-
tional TV, “a soaring hymn of praise
for Dwight Eisenhower.”
Eisenhower took care
never to use McCarthy’s
name, even when he had
to greet the senator in
public: ‘Hello there!”
The president wanted the Army-
McCarthy hearings televised and
quashed any efforts to cut them short.
Their minutiae—the “fried-chicken
lunch,” the “shamefully cut-down”
photograph—spawned a core of buffs
not dissimilar to those obsessed by
the Kennedy assassination or Water-
gate. The extravaganza’s most quot-
able utterance—Have you no sense of
decency, sir, at long last?—appeared
to have been ad-libbed by Army coun-
sel Joseph Welch, but he had dili-
gently prepared to be outraged at just
the right moment. Welch been cast in
his role by Thomas E. Dewey after
Eisenhower approved having the New
York governor search for just the
right lawyer to oppose McCarthy.
Six months after the hearings
ended, McCarthy was censured
(though the word used in this case
was “condemned”) by the Senate. Two
and a half years beyond that he was
dead at the age of 48. His body was
ceremonially brought into a Senate
guished for Heston. Nevertheless, Hes-
ton always said Welles was the most
talented man he ever worked with.
He also fought alongside Sam
Peckinpah for “Major Dundee,” even
tossing in between $100,000 and
$300,000 out of his own salary to en-
able the director to shoot some addi-
tional scenes after the studio cut the
production off. Heston fronted the
money for Rod Serling to
do a re-write on the
script for “Planet of the
Apes” and then went out
and recruited Franklin
Schaffner to direct.
When Heston’s poli-
tics migrated from lib-
eral to conservative in
the mid-1960s, mostly
over Vietnam and what
he came to regard as the
appeasement wing of the
Democratic Party, he re-
mained, at all times, a
good citizen. He partici-
pated in Martin Luther
GETTY IMAGES
King’s March on Wash-
ington in 1963, served as
the president of the
Screen Actors Guild
from 1966 to 1971,
helped set up the American Film In-
stitute in the late 1960s and lobbied
President Ronald Reagan to preserve
funding for the National Endowment
for the Arts (in both his liberal and
conservative periods, Heston be-
lieved in the value of government
support for the arts.) He never took
a dime for his activities with the
NRA because he believed he was
fighting for principle.
The blowback within Hollywood
over Heston’s alliance with the NRA
was considerable. He told the head of
the AFI, Jean Firstenberg that if she
wanted to take his name off the AFI’s
chamber so profusely packed with
flowers that Roger Mudd, then a
young reporter, remembers having to
duck out for a breath of air.
Mr. Nichols asserts: “President
Harry Truman had openly denounced
McCarthy for three years, but his at-
tacks had only enhanced the senator’s
prestige; Ike ruined him in half that
time.” For all that was commendable
in Ike’s efforts against McCarthy, he
frequently fell short of full courage.
The president and Attorney General
Herbert Brownell, for instance, both
wobbled on the Fifth Amendment,
making the invocation of constitu-
tional privilege before a congressional
committee grounds for a federal em-
ployee’s investigation. And the broad
language of Executive Order 10450, is-
sued in 1953 to get rid of the loyalty-
review boards that had helped spur
McCarthy’s rise to power, made it
possible to fire employees deemed
susceptible to blackmail. Substituting
personal peril for political protec-
tions, it ended up being brutal toward
homosexuals in the government and
claimed more victims than McCarthy’s
investigations ever did.
Cleanly written and consistently ju-
dicious, Mr. Nichols’s book would have
gained additional power by deviating
from its moment-by-moment timeline
to explore the motivating biographies
of its important figures or to look at
the ironies of how the “executive priv-
ilege” Eisenhower invoked to keep ex-
ecutive-branch employees from hav-
ing to testify before McCarthy’s
committee was welcomed by liberals
in the 1950s, but would appear diabol-
ical to them when invoked by Richard
Nixon in the 1970s.
“Ike and McCarthy” shows how
hard it was, and how long it took, for
a president to rein in a single senator.
It remains for the reader to discern in
this book a rough, inverted image of
our own time, with the polarity re-
versed between the White House and
the Congress. Eisenhower’s secretary
of state, John Foster Dulles, saw Euro-
pean governments fearing “an Ameri-
can fascism” that seemed to be rising
from the Capitol Hill office of a franti-
cally impulsive crowd-pleaser who
dispatched press releases as if they
were modern-day tweets. A Washing-
ton Post editorial from March 4, 1954,
posited that “Senator McCarthy’s ar-
rogance may yet save President Eisen-
hower from the worst consequences
of his own timidity.” Perhaps Presi-
dent Trump will soon make the same
gift to a half-dozen or so morally
troubled Republican senators.
Mr. Mallon’s books include “Finale:
A Novel of the Reagan Years” and
“Fellow Travelers.”
masthead, he would understand. She
didn’t, but there is no question that his
support for the NRA cost him the hon-
ors that would otherwise have been
his due in his last years: the AFI Life
Achievement Award, and so on. Hes-
ton’s son Fraser tells Mr. Eliot he also
thinks it cost his father acting jobs.
I interviewed Heston several times
for one book project or another, and
he was invariably helpful and forth-
coming. Unlike his son, he didn’t think
his politics hurt him professionally,
and he had penetrating insights about
directors. “If you can’t make a career
out of two films for DeMille and two
films for (William) Wyler, you just
aren’t trying,” he observed. He also
ventured the borderline brilliant idea
that William Wyler should have di-
rected El Cid rather than Ben-Hur.
“Ben-Hur didn’t really need Wyler,” he
said, “but El Cid did.”
Somewhere in the 1970s, the mov-
ies got smaller and so did Heston’s
ambition. He began appearing in
threadbare but commercial pictures
like “Skyjacked” and “Earthquake,”
and he followed the trend down to
television work in the 1980s, most
prominently Aaron Spelling’s “The Col-
bys” which he told me amounted to
“exercising my craft, if not my art.”
In 2002, he was driving to Para-
mount, a studio he had worked at
since 1950, when he got lost. Soon af-
terward, he was diagnosed with de-
mentia. Typically, his concern was for
others. “I have lived the life of two
people,” he told his family. “I’m sorry
for you, for what you’re going to have
to experience.” He died six years later,
a gentleman to the last.
Mr. Eyman’s 15th book about the
movies, “Hank and Jim,” is due out
in October. He teaches film history
at the University of Miami.
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A10 | Friday - Sunday, March 24 - 26, 2017 THE WALL STREET JOURNAL.

OPINION
REVIEW & OUTLOOK Trump’s Russia House
The tale of Russia in- If one reads the government’s Jan.
Hong Kong’s Unhappy Selection terfering in the U.S.
presidential election
6 “Clapper Report” on Russian med-
dling in the 2016 election, it is clear

S
unday is the day Hong Kong fought over China’s while Mr. Leung remained comically neu- has become a hall of that its real message is about a sophis-
in 2014, when student-led demonstra- tral. He outpolled Ms. Lam by 17 points in a Hong mirrors that distorts ticated Russian effort to undermine
and diminishes every- the Western democracies. That
tors massed on downtown streets for Kong University public survey, suggesting he
one who comes near broader subject is almost certainly
75 days. Angered by the ero- might be able to govern with WONDER
it—the Trump presi- what the current Russian investigation
sion of Hong Kong’s rule of Promised a vote, some popular support. LAND
dency, Democrats, is about, with the 2016 campaign a
law, media freedom and other Losing could be a gift be- By Daniel
liberal institutions, they de-
the city gets another cause the role of Hong Kong Henninger
members of Congress, subset example.
the intelligence com- But rather than develop counter-
manded that China’s central Beijing-imposed leader. Chief Executive is increas- munity and the media. measures against the Putin subversion
government honor its prom- ingly to serve Beijing’s will Vladimir Putin must be agog in Mos- effort, America’s politics wallows in
ise to let the semiautono- while catching flak from the cow at how easy it is to make America the Trump vs. Democrats smackdown.
mous former British colony elect its leader Hong Kong public. When the city last had a real subvert itself. Mirror No. 3 is the House Intelli-
democratically. Beijing refused, so on Sunday election, in September for the semidemocratic But let’s walk through the funhouse gence Committee hearing, whose
a new Chief Executive will be imposed on the local legislature, 2.2 million voters turned out door and stare at the first mirror, the membership degraded instantly into
one reflecting the face of former Presi- partisanship. The committee insists it
city in a precooked exercise sure to inflame and some 55% backed the democratic opposi-
dent Barack Obama. This nightmare will issue a serious report. The odds
local politics. tion. More than 20% backed candidates calling starts with him. look low.
Despite the televised debates, ads and other for greater self-determination or independence The details of a March 1 New York We’ve now come to the biggest,
trappings of a democratic contest, this is no from Beijing. These views were once marginal Times story deserve to be repeated most distorting mirror of all—FBI Di-
election. As in Iran, or villages in mainland but have gained support in recent years amid with as much manic intensity as news rector James Comey.
China, the government decides who can run the crackdowns and illegal abductions of Hong sites report the repudiation of Donald
and all but determines who will win. Of 7.2 Kongers by Chinese agents. Trump’s claim that Mr. Obama wire-
million Hong Kong residents, only 1,200 can September’s election marked another roll- tapped Trump Tower. The FBI investigation
vote, most of whom are business elites or back of Hong Kong’s autonomy, as Beijing barred Well, he didn’t, but Mr. Obama did is a hall of mirrors that
other worthies loyal to Beijing. The hugely un- two winning candidates from taking seats in the plenty else. This is the lead sentence
popular departing Chief Executive, Leung legislature, ostensibly for refusing to swear alle- of that Times story: diminishes everyone near it.
“In the Obama administration’s last
Chun-ying, won office in 2012 with 689 votes, giance to China in their oaths of office. Beijing days, some White House officials
a number that the public quickly turned into did this even as local courts were set to rule on scrambled to spread information about To whom, exactly, do the FBI direc-
a derisive nickname. the case, and without a request from local au- Russian efforts to undermine the pres- tor and his “investigation” report? Is
This time Beijing backs Carrie Lam, a career thorities, an unprecedented intrusion in Hong idential election—and about possible James Comey accountable to anyone?
civil servant who proved her loyalty as Hong Kong’s legal system. The effect was to popular- contacts between associates of Presi- Not to Attorney General Jeff Ses-
Kong’s No. 2 official during the 2014 protests, ize pro-independence feeling even more, espe- dent-elect Donald J. Trump and Rus- sions, who, like Loretta Lynch before
when she faced down student leaders at a pub- cially among young people. sians—across the government.” him, is out of the picture. Deputy At-
lic meeting and refused to compromise. Hong This betrayal of Deng Xiaoping’s promise of This is what they did: “At intelli- torney General nominee Rod Rosen-
Kong law says Beijing isn’t allowed to inter- “one country, two systems” is a tragedy for gence agencies, there was a push to stein isn’t even confirmed.
vene, but Chinese envoys make no secret of Hong Kong and China. The hope when Britain process as much raw intelligence as Indeed, it is difficult to see how
possible into analyses, and to keep the any of the 17 agencies implicated in
their preference as they pressure electors by handed Hong Kong to China two decades ago
reports at a relatively low classifica- this Russian investigation are ac-
phone and in person. Even some in the pro- was that the free and prosperous city would in- tion level to ensure as wide a reader- countable to anyone beyond their
Beijing camp complain about how aggressively spire the mainland to follow its political lead. ship as possible across the govern- nominal chain of command for what-
the “invisible hand” has favored Ms. Lam. Instead Beijing has resisted liberalization at ment—and, in some cases, among ever it is they’re doing.
Her chief rival is former Financial Secretary home and is gradually turning Hong Kong into European allies.” The “investigation” Mr. Comey iden-
John Tsang, who is hardly a democrat but has a another Chinese city. Denying free elections for Earlier, on Jan. 12, the Times also tified at the Nunes-Schiff hearing es-
more common touch and sometimes shows inde- Chief Executive and booting duly elected law- reported that U.S. Attorney General sentially consists of cops walking the
pendence from Beijing at least symbolically, as makers from office invites more protest and Loretta Lynch signed rules that let the beat and knocking on doors for clues.
when he cheered Hong Kong’s soccer team over dysfunction in China’s financial center. National Security Agency disseminate The 17 agencies set loose in January
“raw signals intelligence information” by the Obama administration are an
to 16 other intelligence agencies. unfocused perpetual-motion machine.
Terror on the Thames That is, the Obama administration
put in motion the tsunami of anony-
This uncapped Beltway hydrant likely
will do little about the real Putin pro-

B
mously attributed stories that is en- paganda threat, but it will gush raw,
ritish authorities have warned for of Brits have traveled to the Middle East to join gulfing and disabling America’s gov- unverified anecdotes to animate media
years that another terror attack is Islamic State, the U.K.’s relative safety to date ernment today. melodramas about the current presi-
“highly likely,” and they were proven is a credit to its intelligence services. They knew the drill. In 2011 the dency and private U.S. citizens.
right on Wednesday with a New details about the at- Obama White House leaked details of The spectacle is damaging public
bloody assault in Britain’s ad- A reminder that tacker raise questions for SEAL Team Six’s assassination of confidence in the credibility of both
ministrative center amid British counterterror author- Osama bin Laden within hours of the the intelligence agencies and the U.S.
crowds of tourists. Violence
the Islamic State ities, however. Officials say operation. They politicized the SEALs media. America needs both. The sys-
and murder for their own threat is global. Masood was born in Britain and commoditized leaking, just as they tem can’t handle another Comey punt.
sake are still the jihadist call- and had been investigated now have politicized and undermined Staffers from the Senate Intelli-
public confidence in U.S. intelligence gence Committee have been to the
ing card. years ago but was not be- agencies. CIA headquarters to look at what it’s
Police say the attacker, 52-year-old Khalid lieved to be a threat. No dragnet is foolproof, Mirror No. 2 reflects the face of got. That’s not enough. We need clo-
Masood, drove a car into pedestrians on West- but security services owe an account of Donald Trump, who took a legitimate sure. Someone with authority and
minster Bridge, a site popular for views of whether theirs needs refining in light of new complaint about all this and then, via judgment, such as arriving Deputy AG
Parliament and barely two blocks from Down- evidence and experience. tweets and public statements, put him- Rosenstein, should scrub through
ing Street and the government offices along The attack appears to have originated in self and then his presidency at war what the Obama NSA distributed, and
Whitehall. Masood is alleged to have left the Birmingham, around 120 miles northwest of with 17 intelligence agencies. The no- make a call.
car armed with a knife and then tried to enter the capital, where the perpetrator rented the surprise result is pretty ugly. If, on a scale of 1 to 10, this investi-
Parliament, stabbing a police officer before car. Residents of that city have been tied to As well, Mr. Trump brought on Paul gation is a 2, pull the plug. If some
being shot. other terror cases, and in 2014 a government Manafort and Roger Stone, who’ve discrete piece of it is an 8, make that
built mansions on the foreign-connec- public and proceed. If someone needs
Three victims and Masood were confirmed investigation uncovered an attempt by some
tions swamp, and former Defense In- a defense lawyer, tell them now.
dead, with 29 injured, some severely. One of groups to impose extremist teaching in state- telligence Agency director Mike Flynn, John le Carré wrote entertaining
the dead was the police officer. Most of the run schools. Police rely on members of local who fantastically sat at a table in 2015 fiction. What this Washington Russia
victims were pedestrians on the bridge that communities to tip them to potential threats, with Mr. Putin to celebrate RT, Rus- House has produced for the American
spans the River Thames. and the concern should be whether pockets sia’s primary external propaganda arm. people is an open-ended fiasco.
Islamic State (ISIS) on Thursday claimed re- of Birmingham’s community are prone to radi- No wonder someone took a look. Write henninger@wsj.com.
sponsibility for the attack, using language sug- calization. Eight people were arrested in raids
gesting Masood had been inspired by, but not in Birmingham, London and elsewhere after
explicitly directed by, the group. Wednesday Wednesday’s attack.
was the first anniversary of the ISIS attack on After weeks of calm in Europe—and years
the Brussels airport and subway station that in which the ISIS threat on Britain went un-
Only President Trump
killed 32 and injured hundreds. fulfilled—it was tempting to feel safer.
ISIS has long said it is targeting Britain, Wednesday’s attack is a warning against
Can Go to Ukraine
and the use of vehicles as deadly weapons has complacency, as is the U.K. and U.S. ban on By Anders Fogh Rasmussen a restoration of Ukrainian control over
become one of the group’s hallmarks, with the electronic devices on flights from certain

P
truck rampages in Nice in July and Berlin in countries, arising from new information resident Trump is eager to pro-
December. Those attacks also were carried out about potential threats. mote his domestic agenda, but
under ISIS inspiration but not its direct con- The terror threat remains far-reaching, and lingering questions about his
trol, and were deadlier than the London at- the need continues for surveillance, interroga- campaign’s Russia connections are
tack. It is no longer useful to describe such tion and the disruption of terror networks getting in the way. To put an end to
terrorists merely as “lone wolves” when ISIS abroad to keep the jihadists on defense. Coun- the speculation and move past this de-
bacle, his administration must articu-
and other groups can so easily inspire violence terterrorism officials know that more attacks
late a clearer policy on Russia. The
over the internet. may come as ISIS is forced out of its sanctuar- easiest way is by devoting greater ef-
Mark Rowley, Britain’s counterterrorism ies in Mosul in Iraq and Raqqa in Syria. Amid fort to solving the Moscow-fueled war
chief, said earlier this month that authorities the political recriminations in the U.S. over in Ukraine.
have thwarted 13 planned attacks of various election-related wiretapping, keep in mind U.S.-Russia relations may need to
scales since 2013. Considering that hundreds that intelligence is crucial to public safety. get worse before they can get better.
Shifting to a harder line is the only
way for Washington to gain leverage
America’s Forfeiture Reforms on Moscow, change the dynamics in
Ukraine, and gain congressional sup-
its sovereign border.
Moscow has remained in the Donbas
because the West has allowed it to. The
U.S. can demonstrate Western resolve
by ramping up sanctions on Moscow
and increase the cost of Russian inter-
ference by supplying defensive weapons
to Ukraine. Kiev could then hold elec-
tions in the country’s east free from the
threat of violence that shrouded the
Reagan demonstrated how a
show of strength can reframe
the terms of engagement.

A
s liberals howl that Republican states screen TVs, boat motors, 18-wheelers, tablets port for the Trump foreign policy. Mr. referendum on Crimea’s status in 2014.
Trump has an example to follow. Even Mr. Trump should also consider ap-
in the U.S. have become redoubts of and even power drills.
as the Cold War raged, President Ron- pointing a special envoy to oversee the
right-wing radicalism, it’s worth high- Like many states, Mississippi required little ald Reagan beefed up the U.S. military sanctions on Russia and help negotiate
lighting a civil-forfeiture re- accountability by law en- presence in Europe. He spoke from a a settlement in the Donbas.
form backed by the ACLU A right-left coalition forcement. In one case, a position of strength when he urged So- Some will say it is politically impossi-
that Mississippi GOP Gover- moves to hold police woman’s furniture was seized viet leader Mikhail Gorbachev: “Tear ble for Mr. Trump to stand up to Russia,
nor Phil Bryant signed last on suspicion that the items down this wall.” given everything that went on during
week with bipartisan legisla- more accountable. were purchased by her boy- Today the East-West division is the campaign. But Reagan demonstrated
tive support. friend with drug proceeds. symbolized not by a wall but by the how a show of strength can reframe the
Amid a broader push to ra- After the charges were dis- dangerous status quo taking hold in terms of engagement. By getting tough
tionalize criminal justice, many states are re- missed, most of the furniture save a couch Ukraine. The Minsk agreements, nego- with Moscow, Mr. Trump could con-
viewing their civil-forfeiture laws that allow were returned. What happened to the couch tiated in 2014-15, were designed to de- found his critics. And the American pub-
liver a cease-fire and alleviate the war lic—including most members of Con-
law-enforcement agencies to seize property remains a mystery.
in the country’s eastern Donbas re- gress—would welcome a return to
they suspect to be related to a crime without Mississippi’s reforms, which were pushed by gion. They have failed to bring about normal U.S.-Russia relations.
actually having to obtain a conviction or even the Institute for Justice and had nearly unani- either goal. It is in everyone’s interest to defuse
submit charges. Police and prosecutors can mous support in the legislature, would curb the The blame largely goes to Russia, the ticking time bomb in eastern
auction off the property and keep the pro- most egregious abuses. Law enforcers would which continues to foment instability Ukraine and find a new formula for en-
ceeds to pad their budgets. have to obtain a seizure warrant within 72 in the Donbas while denying any re- gagement. For Kiev it could lead to
If the defendant is later found innocent, it hours and prosecute within 30 days, so they sponsibility. But at what point do we greater security; for Moscow it could
can take years to repossess the confiscated couldn’t take property while trying to formulate accept that the best we can hope for mean the end of economic sanctions;
property. Since the legal expenses may exceed a case. Agencies would also be required to pub- from these agreements is a volatile and for President Trump it could be the
the property’s value, many don’t bother try- lish a description of the seized property along frozen conflict that benefits Moscow gambit that finally puts his Russia de-
and no one else? It’s time for a new mons to bed and shows him as the Rea-
ing. Perverse incentives also create a huge po- with its value and petitions contesting the for-
approach, this time including Ameri- ganesque leader he longs to be.
tential for abuse. Prosecutors might agree to feiture to an online public database. can leadership.
reduce charges if defendants don’t contest Although agencies won’t have to account Before trying to craft a political set- Mr. Rasmussen is founder of Ras-
their forfeited property. Police could seize for how they spend the forfeiture windfall, the tlement, Kiev needs to see improve- mussen Global, a consultancy. He
items with high resale values and then conjure public will finally be able to police misconduct ments in the security situation in the served as prime minister of Denmark
a criminal connection. In 2015 the Mississippi by law enforcement in criminal raids. That’s east. This must include the withdrawal from 2001 to 2009 and secretary gen-
Bureau of Narcotics snatched ATVs, flat- something even liberals can cheer. of Russian troops and proxy forces and eral of NATO from 2009 to 2014.
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THE WALL STREET JOURNAL.
Keeping Our Promise to Repeal ObamaCare
By Paul Ryan
T
he election of Donald
Trump and a Republican
Congress provides an op-
portunity: We can immedi-
ately halt the leftward
drift of American social policy, while
renewing prosperity through market-
based, state-driven solutions that
empower people instead of bureau-
crats. This is the stuff of conservative
dreams. But it will become reality
only if Republicans keep the prom-
ises we have made.
That’s what the American Health
Care Act is all about. It is the boldest
and most conservative health-care
legislation to come before Congress
Our bill guts the failing law
and enacts conservative
reform without pulling the
rug out from under anyone.
in decades. Bold because it disman-
tles the progressive health-care ex-
periment and replaces it with a dy-
namic, patient-centered system.
Conservative because it applies
America’s founding principles—free-
dom, free enterprise and federalism—
to the problems of the day.
Repeal of ObamaCare must hap-
pen, and urgently—not because of
any ideology but because American
families are already paying the price
of the law’s collapse. The average
premium for a midlevel ObamaCare
policy rose 25% this year. One out of
three counties now have only a single
insurance provider to choose from.
This trend will only worsen: Humana
has announced it will not offer cover-
age in the ObamaCare marketplace
for 2018. Others are threatening to
withdraw. As the CEO of Aetna said
Democrats Don’t Want a Judicial ‘Rubber Stamp.’ Or Do They?
By Ronald A. Cass
‘W
ill you rubber-stamp a
president whose adminis-
tration has asserted that
executive power is not subject to ju-
dicial review?” Sen. Patrick Leahy of
Vermont demanded to know in his
opening statement at Judge Neil Gor-
such’s confirmation hearing. Illinois
Sen. Dick Durbin worried that Judge
Gorsuch wouldn’t “stand up to this
president.” Clearly Democrats want a
justice who will not defer to the
president (or at least not to this
president).
Or do they? In her opening state-
ment, California’s Dianne Feinstein
objected to an opinion in which Judge
Gorsuch questioned judicial deference
to executive-branch officials’ readings
of the law. “It’s called the Chevron
doctrine,” she explained. “This legal
doctrine has been fundamental to how
our government addresses real-world
challenges in our country and has
been in place for decades.”
Judge Gorsuch was right to ques-
tion how much courts should defer to
administrators. The Administrative
Procedure Act—the basic charter for
government decision-making and ju-
dicial review of administrative ac-
tions—instructs reviewing courts to
By Mark Dubowitz
P
resident Donald Trump prom-
ised to rigorously and radically
enforce the Iran nuclear agree-
ment, which he called “the worst deal
ever negotiated.” It sounds tough,
but it’s an approach that plays into
the hands of the Iranian mullahs.
The Joint Comprehensive Plan of
Action presents the Trump adminis-
tration with a bedeviling paradox: The
greater the focus on enforcement, the
higher the likelihood Iran will emerge
with nuclear weapons.
The deal contains limited, tempo-
rary and reversible constraints that
disappear over time. The Interna-
PUBLISHED SINCE 1889 BY DOW JONES & COMPANY
Rupert Murdoch
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last month, the individual market is
in a death spiral.
Our plan takes a radically different
approach. Instead of imposing arro-
gant and paternalistic mandates, it
would increase choice and competi-
tion, creating a vibrant market where
every American will have access to
quality, affordable coverage.
Achieving this goal will require a
three-pronged approach: Use the bud-
get reconciliation process to repeal
ObamaCare and replace it with the
foundation for a patient-centered sys-
tem. Take administrative action
through the U.S. Department of Health
and Human Services to further deregu-
late the market. And draft additional
legislation that we cannot pass through
the reconciliation process.
The American Health Care Act is
the linchpin. It is modeled on legisla-
tion introduced during numerous
Congresses by Tom Price, now the
secretary of health and human ser-
vices. It reflects decades of policy
making by conservative scholars and
organizations.
The bill effectively guts Obama-
Care—all its taxes, mandates and
spending. It initiates a stable transi-
tion, without pulling the rug from un-
der anyone. And it puts in place good,
conservative health-care policies.
First, the legislation gives control
of Medicaid back to the states. This
is—without question—the biggest en-
titlement reform in generations.
Medicaid is a critical lifeline for
millions of Americans. Far from mod-
ernizing the program, ObamaCare
threw more money at Medicaid and
set it on an unsustainable course of
growth. With all the bureaucracy and
strings attached, too many doctors
won’t take Medicaid patients. It is a
broken system.
Under our plan, for the first time,
Medicaid spending will be capped,
and states will have the option to re-
ceive a pure block grant. No two
“decide all relevant questions of law,
interpret constitutional and statutory
provisions, and determine the mean-
ing or applicability of the terms of an
agency action.”
If courts find the law gives an ad-
ministration official discretion over a
particular judgment, such as how to
assign television-broadcasting li-
censes, the role of the courts is lim-
ited to assuring that the decision was
reasonable—not capricious and not
an abuse of discretion. But judges are
supposed to say what the law is.
With hundreds of federal agencies
executing tens of thousands of pages
of federal law, the line between
matters of legal interpretation and
matters of administrative discretion
becomes critical. In Chevron v. Natu-
ral Resources Defense Council (1984),
the Supreme Court tried to clarify
the line between the two. The jus-
tices in Chevron said that when the
meaning of a law is ambiguous, that
could reflect a congressional grant of
discretion to administrators. Unfor-
tunately, Chevron’s language was
confusing enough that some judges
thought it instructed them to defer
to administrators on core matters of
legal interpretation.
Justice Antonin Scalia, long one of
Chevron’s staunchest defenders,
The Delusion of the Iran Nuclear Deal
tional Atomic Energy Agency (IAEA)
may be able to detect Iranian viola-
tions. But Iran doesn’t need to
cheat. In fact, it has every incentive
not to do so.
Under the terms of the agree-
ment, Iran’s uranium and plutonium
pathways to atomic weapons expand
over time. The deal allows for Iran
to ramp up the testing of advanced
centrifuges in seven years and in-
stall these centrifuges in its Natanz
enrichment facility in nine years.
Breakout time, the amount of time
needed to enrich one bomb’s worth
of fissile material to nuclear grade,
drops from one year to months and
then weeks.
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Chief Executive Officer and Publisher
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OPINION
The U.S. Capitol in Washington.
states are the same, and we believe if
we let governors tailor benefits to
the needs of their most vulnerable
constituents, those people will get
better care and Medicaid will be put
on more stable financial footing.
Second, our bill equips state insur-
ance markets to take care of people
with pre-existing conditions without
driving up costs for everyone else.
For decades, many states success-
fully served high-risk populations by
segmenting them from the market
into “risk pools” and directly subsidiz-
ing their coverage. This gave the most
vulnerable Americans access to af-
fordable coverage and stabilized mar-
kets, but without requiring higher
premiums on healthier individuals to
offset the costs. Wisconsin’s program,
which featured strong consumer pro-
tections and relatively low premiums,
had the second-highest participation
rate in the nation.
ObamaCare effectively did away
with these programs. Instead the law
relied on mandates to cross-subsidize
care—with disastrous results. Our
plan goes back to what works. The
strongly disagreed with that view and
frequently emphasized why the
proper view of Chevron gave no def-
erence on legal interpretive ques-
tions. In Babbitt v. Sweet Home Chap-
ter of Communities for a Great
Oregon (1995), Scalia chastised col-
leagues for deferring to the interior
Senators demand Gorsuch
‘stand up to the president’
and defer to executive-
branch bureaucrats.
secretary on the scope of his author-
ity to protect endangered species by
letting the secretary define a key stat-
utory term. For Scalia, that gave judi-
cial power to the executive branch. He
deferred when it was logical to inter-
pret the law as giving discretion to an
administrator, but only so far as the
discretion fit the law.
Judge Gorsuch raised questions
about Chevron deference last year,
in Gutierrez-Brizuela v. Lynch. The
10th U.S. Circuit Court of Appeals,
on which Judge Gorsuch sits, had
held in 2005 that the Justice Depart-
ment had the authority to waive a
In less than 15 years, the majority
of restrictions on vital components
of a military-nuclear program van-
ish. At that point, Iran will emerge
with an industrial-size nuclear pro-
gram with a near-zero breakout ca-
pability and much easier ways to
sneak around restrictions.
After the disappearance of the
arms embargo three and a half years
from now and the missile embargo
in six and a half years, Tehran can
significantly enhance its military
power by acquiring advanced con-
ventional weapons and further ex-
panding its long-range ballistic-mis-
sile program to include inter-
continental ballistic missiles. No
country developing ICBMs has ever
not obtained nuclear weapons.
The IAEA faces daunting tasks: It
must monitor an enormous nuclear
program, widely dispersed on a terri-
tory more than twice the size of
Texas. It will need to secure access to
military sites in order to block weap-
onization activities, but Iran’s Su-
preme Leader Ali Khamenei has said
these are out of bounds. It will have
to ensure that uranium isn’t diverted
to clandestine enrichment sites,
which could be powered by a small
number of easier-to-hide advanced
centrifuges.
And, with an Iranian economy pos-
sibly doubled in size by then, with
hundreds of billions of dollars of for-
eign investment from Asia, Europe
and Russia, few countries will join the
U.S. in snapping back sanctions should
Iran violate the deal. With Iran at
near-zero nuclear breakout, even the
most crippling sanctions aren’t likely
to stop a determined regime.
Friday - Sunday, March 24 - 26, 2017 | A11
AFP/GETTY IMAGES
bill establishes a stability fund to
help states set up their own risk
pools and reinsurance mechanisms.
These programs would provide direct
support for people with pre-existing
conditions, giving states more power
to create dynamic markets for con-
sumers. Ultimately this would lower
costs for everyone else, so that more
people can purchase a plan that
meets their needs.
Third, our legislation expands
health savings accounts, which a Re-
publican Congress established during
George W. Bush’s presidency in 2003.
ObamaCare imposes strict limits
on how you can spend your health-
care dollars. This bill nearly doubles
the allowable contributions to HSAs,
making it easier to pay out-of-pocket
costs. Giving people more purchasing
power will create incentives to shop
around, look for the best services and
demand more transparent prices—all
of which helps lower costs.
Fourth, the bill equalizes the tax
treatment of health care, addressing
an unfairness conservatives have
long sought to rectify.
provision of immigration law requir-
ing certain illegal immigrants to stay
outside the U.S. for 10 years before
applying for legal permanent resi-
dent status.
Two years later, the department’s
Bureau of Immigration Appeals took
a different view of the law. It later
told Hugo Gutierrez-Brizuela he’d
have to leave the country pursuant to
its interpretation of that same law.
The 10th Circuit concluded the Chev-
ron precedent required it to defer to
the BIA’s interpretation—but it ex-
empted Mr. Gutierrez-Brizuela, hold-
ing that the administrative interpre-
tation did not supersede the judicial
one until a court said so.
In a concurring opinion, Judge
Gorsuch observed that Chevron and
its progeny “permit executive bu-
reaucracies to swallow huge
amounts of core judicial and legisla-
tive power.”
Ms. Feinstein worried that Judge
Gorsuch’s approach would undermine
the authority of administrators to
make decisions on matters such as
fuel-economy standards. Sen. Al Fran-
ken of Minnesota similarly worried
that Judge Gorsuch and other Trump
appointees would not defer to judg-
ments the senator would approve. “I’m
concerned that this administration
If rigorous enforcement looks to
be a daunting task, what could the
Trump administration do to get out
from under this deal and perhaps
into a better one?
First, Mr. Trump must address the
Iranian threat the way Ronald Rea-
gan treated the Soviet one. In the
early 1980s, Reagan instructed his
The Islamic Republic
doesn’t need to cheat to
get the bomb. Indeed, it
has every incentive to hope
that the deal is enforced.
National Security Council to develop
a comprehensive assault to under-
mine the Soviet Union. The Trump
NSC needs a similar plan, one that
uses both covert and overt economic,
financial, political, diplomatic, cyber
and military power to subvert and
roll back the Iranian threat.
Mr. Khamenei has alluded to his re-
gime being “on the edge of a cliff” as a
result of the 2009 democratic upris-
ings. Mr. Trump should create the dis-
tinct impression that America will help
the millions of Iranians who despise the
regime to push it over that edge.
Second, the Trump administration,
with an assist from Congress, needs to
reinvigorate the sanctions regime
aimed at Iran’s support for terrorism,
ballistic-missile development, human-
rights abuses, war crimes, and desta-
bilizing activities in the Middle East.
These sanctions need to target, in par-
ticular, the Islamic Revolutionary
Right now, the tax code discrimi-
nates against people who don’t get
health care from their jobs. It makes
no sense that those who have insur-
ance through work see a tax benefit,
while those who don’t, get nothing.
Our bill would level the playing field by
creating an age-based refundable tax
credit. People who don’t get coverage
through work or a government pro-
gram will be able to use this tax credit
to buy the coverage they want.
Taken together, these ideas put the
patient—not some bureaucrat—at the
center of America’s health-care sys-
tem. Consumers get the freedom to
choose the plan that meets their needs
instead of Washington’s mandates.
Health insurers and providers com-
pete against each other for customers,
instead of jockeying for favoritism in
Washington. This is American free en-
terprise at its finest, and Congress can
put it to work by sending our bill to
President Trump’s desk.
Republicans have been waiting for
this day, and working toward it, for
seven years. In election after election,
we promised to repeal and replace
ObamaCare. When I became speaker,
we pledged to turn those platitudes
into bold ideas. We did that, with the
“Better Way” plan put forward last
year. Now we have the chance to make
those ideas a reality.
To govern is to choose. An opposi-
tion party does not have to make deci-
sions: It can demand everything and
vote for nothing. But a governing party
has a responsibility to follow through
on the promises it has made.
By passing the American Health
Care Act, we will deliver on our
promise to repeal and replace
ObamaCare. By applying conservative
ideas and principles, we will remake
our health-care system for genera-
tions. The responsibility is ours, and
so is the opportunity.
Mr. Ryan is speaker of the House.
sees common-sense health and safety
rules as a burden on big business,” he
told Judge Gorsuch. “I’m concerned
that they want to appoint pro-corpo-
rate judges who are willing to substi-
tute their own judgment on these mat-
ters for those of experts.”
Judge Gorsuch and other Chevron
critics aren’t, however, telling Congress
what standards to adopt or what defer-
ence to grant administrators. They
simply want to ensure that administra-
tors receive deference only when Con-
gress grants them discretion.
That approach to judicial review
respects the Constitution’s separa-
tion of powers, the Administrative
Procedure Act and the rule of law. It
is what a judge who is not a rubber
stamp does—and Judge Gorsuch’s
skepticism of excessive deference
ought to come as particularly good
news to anyone wary of the current
administration.
Instead, Judge Gorsuch’s critics
have had to tie themselves in knots,
portraying him as a “rubber stamp”
who isn’t deferential enough. Oh well,
I guess that’s politics.
Mr. Cass is dean emeritus of Bos-
ton University School of Law and the
author of “The Rule of Law in Amer-
ica” (Johns Hopkins, 2001).
Guards Corps, which controls strate-
gic areas of Iran’s economy.
Foreign diplomats may balk, but
these sanctions are fully compliant
with the nuclear deal. International
banks and companies will think twice
about working with Iranian compa-
nies if doing so might mean losing ac-
cess to the U.S. market. The Trump
administration should work with Con-
gress to design a statutory architec-
ture that freezes the Iranian nuclear
program where it is today and impose
new crippling sanctions if it expands
in any way that drops nuclear break-
out time to less than one year.
The Trump administration also
needs to put Iran on notice that the
U.S. will use force to counter Iranian
aggression. Sanctions without the
credible threat of military action will
always be insufficient to change the
regime’s calculus.
While putting the squeeze on the re-
gime, the administration should make
it clear to the Chinese, Europeans and
Russians that Washington is prepared
to negotiate a follow-on agreement
that addresses the fatal flaws of the
original deal. Tehran, still struggling to
attract foreign investment because of
its continued malign activities, can
benefit from such an offer if it’s pre-
pared to come back to the table and
halt its subversive behavior.
Rigorously enforcing the Iran deal
is a delusion. There is a better way
forward than enabling the Islamic
Republic to take patient pathways to
nuclear weapons, ICBMs and regional
dominance.
Mr. Dubowitz is chief executive of the
Foundation for Defense of Democracies.
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
A12 | Friday - Sunday, March 24 - 26, 2017 THE WALL STREET JOURNAL.

LIFE & ARTS

MEDICINE

Med School Pledges More Compassion

After a tragedy, a New York institution weighs changes to make conditions for doctors-in-training more humane

other idea: identifying 15 to 20

BY LUCETTE LAGNADO
therapists willing to lower their
fees for students. The school also
A NEW YORK CITY medical school would like to ask students to have
has embarked on a soul-searching regular mental-health checkups,
campaign of culture change after a with an “opt-out” possibility if they
27-year-old student there jumped to don’t wish to have them.
her death last summer from her Jonathan Ripp, an internist on
eighth-floor dorm residence. the faculty of the Icahn School
“Rocked by waves of anguish, an- who co-chaired the working group
ger and frustration, guilt, fear and on well-being, believes young doc-
profound sadness,” the Icahn tors and trainees are suffering be-
School of Medicine at Mount Sinai cause medicine has changed.
is trying to forge a kinder, gentler “There are a lot of new pressures
system of training, according to an and physicians are being scruti-
essay by a dean at the school in the nized more than before,” he says.
New England Journal of Medicine. An older generation “could spend
The school is considering signif- most of the time looking at the
icantly expanding access to men- patient and speaking with the pa-
SASHA MASLOV FOR THE WALL STREET JOURNAL

tal-health specialists, as well as tient,” whereas now, “you have 15

changing aspects of its grading minutes to see someone.”
system. Another idea on the table: Dr. Ripp’s group suggests dedi-
creating a hub for activities re- cating space on campus to a clear-
lated to student health and well- inghouse where young doctors and
being. students could avail themselves of
“Medical school is a cauldron,” a “menu of well-being”—such as
says David Muller, the school’s finding a psychiatrist or signing
dean for medical education, and up for a mindfulness training ses-
the author of the essay that prom- sion. His group wants “protected
ises to improve conditions for Si- dedicated time” built into the
nai’s doctors-in-training, both stu- schedules of medical students and
dents and residents. The residents The Icahn School of Medicine at Mount Sinai in New York is considering steps to ease pressures on doctors-in-training. trainees, to allow them to take a
are at the front lines of care, Dr. break, meet with peers, and review
Muller added in an interview, and charged with figuring out how to admission that the kids look fine,” tragedy “gives us a chance to stressful incidents such as the
“feel very often helpless and hope- improve Sinai’s academic culture says Liselotte Dyrbye, professor of pause and look at what is the mat- death of a patient. “Until now, it
less, the machine is intense and and doctors’ well-being. “We are medicine at Mayo Clinic in Roches- ter with our medical system—what was expected you would deal with
churns on relentlessly.” so focused on taking care of pa- ter, Minn. “It is as if they go do we do to contribute to the it,” Dr. Ripp said, “but it is not
One morning in August, the tients, to give quality care, but ab- through our training process, and stresses and tribulations.” normal to experience a death and
fourth-year medical student took sent from our education is how we they develop worsening mental Dr. Singh, along with about 30 go about your business.”
her life on Mount Sinai’s campus on can take care of ourselves,” she health.” Dr. Dyrbye blames this on faculty members, medical stu- Sinai tackled one source of
New York’s Upper East Side. Several said. an “absurd” medical system: “It is dents, fellows and residents, took angst—a grading system marked
months earlier, a medical resident, In 2014, two other young doc- the curriculum, it is the learning part in the task force, and pro- by quotas for third- and fourth-
also female, committed suicide at tors-in-training at two different environment, it is the type of stuff posed steps to remedy the aca- year students that limited “hon-
the school’s West Side campus. New York-area medical schools you do as a [young] physician, and demic culture. They were split ors,” a coveted distinction that
Jordyn Feingold, a first-year committed suicide. “We are all in it is not unique to Mayo, it is not into three areas—mental health, helps an individual enter residency
medical student, lived next door to the same very, very, scary boat,” unique to Sinai.” physician well-being and the programs—to 25% of the class. Af-
the woman who committed suicide Dr. Muller said. It isn’t clear what drove Kathryn learning environment. ter “honors,” the “high pass” dis-
in August. Ms. Feingold had ar- The deaths underscore a Stascavage—the student referred to Dr. Singh’s group, which focused tinction was limited to 25%, while
rived at Sinai only 10 days before broader problem, researchers say: as “Kathryn” in the New England on mental health, grappled with the remaining half of the class
the tragedy and recalled how she That young doctors and medical Journal essay—to suicide, nor what making it easier to consult a thera- would receive a “pass” grade. The
and her peers were racked by students face grueling academic role the pressures of medical pist. That meant both removing the school has rejiggered the distribu-
“cognitive dissonance”—excited pressures and are experiencing school may have played.Through stigma of psychiatric care, and ar- tion to allow one-third of students
about starting training but dis- high rates of burnout, depression Dr. Muller’s office, the family de- ranging access to affordable practi- to receive “honors,” one-third
traught at the tragedy. Ms. Fein- and psychological strain. clined to comment. tioners, since many don’t accept in- “high pass” and one-third “pass,”
gold, who is 24 and has a master’s But it isn’t because individuals Even so, Prameet Singh, vice surance. One proposal calls for Dean Muller said, with an eye to
in applied positive psychology, drawn to medicine are necessarily chair of psychiatry at Mount Si- making more therapists in the in- creating a system that will drop
joined a task force Dr. Muller more prone to angst. “We found at nai’s West Side campus, says the stitution available to students. An- the limits altogether.

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-15 1 2 3 4 5 6 7 8 9 10 11 12 57 Frequent feature PUZZLE
-10
13 14 15
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58 “Seasons of
0 16 17 18 Love” show
5 26 Lanternfish’s
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44 45
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CALEB
54 55 56 4 Parsley family 39 Gave addresses
T-storms herb 40 Tropical sorbet
57 58 59
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60 61 62
6 Giraffe’s cousin 42 Coin with a
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yd y Flurries polar bear on the
7 Penna. neighbor reverse
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Melbourne
Ice STAR SEARCH | By Marie Kelly 8 Absence of effort 43 Crime scene
Global Forecasts City
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this week’s contest some Tauruses slitherer
s...sunny; pc... partly cloudy; c...cloudy; sh...showers; Geneva 15 6 c 18 5 c Ottawa 3 -3 sn 3 -8 c 10 Star turn at the 45 Yoga posture
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Havana 28 16 s 29 16 pc Philadelphia 13 10 pc 23 9 pc 22 Super Bowl slants
Today Tomorrow Hong Kong 24 20 pc 23 15 c Phoenix 26 14 s 27 13 s scheduled for 11 Proficiently 47 Archipelago unit
City Hi Lo W Hi Lo W
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TECHNOLOGY: APPLE POISED TO START MAKING IPHONES IN INDIA B4

BUSINESS & FINANCE

© 2017 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Friday - Sunday, March 24 - 26, 2017 | B1

Yen vs. Dollar 111.2330 À 0.06% Hang Seng 24327.70 À 0.03% Gold 1246.40 g 0.23% WTI crude 47.84 g 0.42% 10-Year JGB yield 0.057% 10-Year Treasury yield 2.421%

MSCI Considers Chinese Stocks A Threat

Index firm consults
fund managers on
adding A-shares, a
move Beijing seeks
BY GREGOR STUART HUNTER
MSCI first formally con-
sulted fund managers in 2014
Gang, an analyst at Central
China Securities. “Without a
Rises for
Banks
on whether to include China freely convertible capital ac-
A-shares, or domestic listings count, other types of market
denominated in onshore yuan, liberalization are built on
In China
in its flagship emerging-mar- wobbly ground.”
ket index. MSCI declined to Fang Xinghai, vice chairman
include China’s local-currency of the China Securities Regula-

DAVID PAUL MORRIS/BLOOMBERG NEWS

Index provider MSCI Inc.
has kicked off its annual re-
view to determine whether to
add domestic Chinese shares
to its global benchmarks, a
step that could potentially di-
vert billions of dollars of capi-
tal to Asia’s biggest markets.
MSCI sent an updated con-
sultation document to fund
managers Wednesday after
U.S. markets closed. The
changes from last year’s pro-
posal include a two-thirds re-
duction in the number of
stocks to be included initially.
The index provider will
also consult the market on
whether to reclassify Argen-
tina as an emerging market,
and whether to put Nigeria in
a standalone category outside
its other benchmarks. Both
are currently classified as
frontier markets.
shares in June last year, cit- tory Commission, said in Feb-
ing difficulties accessing mar- ruary that the commission
kets and concerns around would be happy to see the in- BY SHEN HONG
stock suspensions. clusion of A-shares, though it
China has since launched is a business decision that be- SHANGHAI—A new specter
the Shenzhen Stock Connect, longs to MSCI. Last June, Qi is haunting China’s financial
which allows global investors Bin, a senior official at the system: the negotiable certifi-
to directly buy stocks in the CSRC, said eventual inclusion cate of deposit.
country’s second-biggest of A-shares in the MSCI index An explosion in banks’ use
stock market for the first is a certainty. of the bondlike loans, whose
time, reviving hopes that Chi- The Hong Kong exchange after the launch of Shenzhen Connect. One of MSCI’s new propos- durations range from a month
nese shares could be added als calls for 169 stocks to be to a year, is testing Beijing’s
this year. Alibaba Group Holding Ltd. anticipation of a rush of in- included in the index—down resolve to cure the economy of
The MSCI China Index is Chinese regulators haven’t ternational investment were from 448 previously—repre- its addiction to debt-fueled
up 14.3% so far this year, out- yet addressed several key among the factors that helped senting only large-cap compa- growth and investment booms.
performing both the com- concerns raised by investors, stoke a market frenzy in nies accessible through the As authorities push up key
pany’s Asian and emerging- but the odds of inclusion are China that spring, creating a Shenzhen Connect program short-term interest rates in
market benchmarks. China is increasing, said Hue Lu, se- bubble that burst a few days and a similar program linking their campaign to deflate asset
the biggest domestic market nior investment specialist after the index provider said Hong Kong and Shanghai. bubbles swelled by borrowed
not featured in MSCI’s flag- covering Asia Pacific and the country wasn’t yet ready Companies with equivalent money, the interest rates
ship indexes. Greater China equities at BNP for inclusion. Hong Kong listings already charged on these NCDs is ris-
MSCI’s emerging-market Investment Partners, the as- “The Chinese leadership has part of the MSCI China Index ing so fast that it is starting to
Asia and China benchmarks set-management arm of toned down their anticipation would be excluded. The off- expose banks to the risk of in-
currently include mostly Hong France’s biggest bank. for MSCI inclusion this year, shore yuan, rather than its on- vestment losses and abrupt
Kong-listed shares and U.S. Government support for which lowered market expec- shore counterpart, would be funding squeezes.
listings of companies such as MSCI inclusion in 2015 and tations as well,” said Zhang used for index calculations. This is causing worries
about a potential repeat of the
crippling cash crunch of 2013.

Baidu Loss “NCDs carry a lot of risk,

and if not handled properly
they could lead to a system-

Of Scientist wide liquidity crisis,” said Liu

Dongliang, senior analyst at
China Merchants Bank.

Is Blow for Banks, mostly small or mid-

size ones, have been raising
record sums via NCDs, selling

AI in Nation 4.4 trillion yuan ($639 billion)

worth this year, 65% more
than in the same period of
Artificial intelligence may
be tech’s hottest sector, and
Chinese internet giants and
startups alike have been en-
Rising rates on a
gaged in fierce competition booming new type of
to poach top talent from
Google, Facebook, Microsoft
bondlike loan could
and elite universities around squeeze lenders.
the world.
Few of these
hires had the
status of An- 2016. They use the proceeds to
drew Ng, whom buy higher-yielding, longer-
Baidu Inc. re- term assets such as corporate
RACHEL WOOLF/BLOOMBERG NEWS

cruited in 2014 bonds or investment products

CHINA as its chief sci- issued by fellow banks.
CIRCUIT entist to over- NCDs initially offered
LI YUAN see AI re- banks the attractions of low
search. One of cost and no collateral require-
the top brains ments, but since October the
in the field, Mr. Ng formerly average cost of issuing the
led Google’s deep-learning AA-rated three-month NCDs
project Google Brain. He has has risen to 4.72% from
also taught a machine-learn- The cost of sand used by shale-oil drillers has rebounded along with the price of oil, putting pressure on energy companies’ profits. 2.90%—in some cases exceed-
ing course at Stanford Uni- ing yields on AA-rated one-

Demand for Fracking Sand Mounts

versity that more than
100,000 students have taken
online, ensuring his influence
for years to come.
That is why his resigna-
tion as Baidu’s chief scientist
this week deals such a
blow—not only to Baidu, but
to efforts of Chinese tech
companies to compete
against their U.S. rivals.
As ambitious as they are,
China’s tech firms are behind
the likes of Google, Facebook
Inc. and Microsoft Corp.
when it comes to AI, so they
have had to rely on free-
agent talent to help lead and
inspire their engineers. Now
their ability to retain top for-
eign talent is in question.
Will they ever be able to get
a top AI scientist like Mr. Ng?
“There’s very little high-
level AI talent at Chinese
companies. Many are just so-
so and not original,” said
Dong Jielin, an adjunct pro-
fessor at the Research Cen-
ter for Technological Innova-
tion at Tsinghua University
in Beijing. “They won’t be
able to produce first-class
work without the guidance
of high-level talent.”
The next big money-mak-
ing opportunities in tech in-
clude driverless cars, indus-
trial robots and preventive
health care, and they all
BY CHRISTOPHER M. MATTHEWS But the millions of pounds
AND ERIN AILWORTH of sand being poured down
wells is pushing up sand
The market for sand—a key prices, eroding some of the
ingredient in fracking—is surg- profits that energy companies
ing once again as U.S. oil pro- have managed to regain since
duction rebounds, and the ris- the oil bust ended. Some are
ing price of the tiny grains concerned sand supplies, di-
threatens to cut into energy minished during a two-year
companies’ profits. oil-price downturn, could stall
Now that crude oil is selling the drilling renaissance.
for about $50 a barrel, Ameri- “Companies are worried
can shale companies have about it,” said James West, a
rushed back into the oil patch, managing director at Evercore
and they are using more sand ISI, an energy investment
to help supersize their wells. bank. “I think the threat of a
Sand props open underground bottleneck, at this point, is
fissures, which allows oil and probably understated.”
gas to escape to the surface. The tightening mar-
High-Court Case Could Curb Patent Suits
BY JOHN D. MCKINNON
WAS H I N GT O N — B u s i -
nesses, particularly those in
the tech sector, are closely
watching a case to be argued
in the Supreme Court next
week challenging a system
that has led to a concentration
of patent cases in plaintiff-
friendly jurisdictions such as
JIM LO SCALZO/EUROPEAN PRESSPHOTO AGENCY
year corporate bonds.
“If the issuance cost rises
further and exceeds your in-
vestment returns, you’ll have
ket has already sent prices 2014 at the height of the U.S. no choice but to dump your
marching toward $40 a ton or drilling boom. bonds, which will further pres-
above, by some estimates, up Demand for sand has al- sure an already-fragile bond
from $15 to $20 a ton in the ready returned to pre-bust lev- market,” Mr. Liu said.
second half of 2016. Increasing els, said George O’Leary, direc- China introduced the NCD
sand orders are also raising tor of oil-field services in 2013 as part of a broader
demand for railcars and trucks research at Tudor Pickering, a overhaul to end a rigid inter-
to transport it from mines in Houston-based energy invest- est-rate regime and let banks
states like Wisconsin to shale ment bank. set deposit and lending rates
fields in Texas and Oklahoma. Sand accounted for between freely. The market took off last
Some predict that demand 5% and 7% of the cost of a year, when issuance hit 13 tril-
for sand may outstrip supply well last fall, and Mr. O’Leary lion yuan, up from 5.3 trillion
by next year, creating a short- expects that percentage to rise yuan in 2015 and just 899 bil-
age that could linger for most as exploration and production lion yuan in 2014.
of 2018. Tudor, Pickering, companies use more of it this This boom came just as Bei-
Holt & Co. estimates the sec- year. He thinks the price of jing scored an initial victory in
tor will need 120 million tons sand could hit $50 a ton before cutting down banks’ use of an-
of sand by next year, more year end, though that is still other form of short-term
than double the demand in Please see SAND page B2 loan—repurchase agreements,
or repos—for similar specula-
tive purposes. The total trans-
action value of repos, which
use bonds as collateral, fell to
35.8 trillion yuan in February
from a record 59.8 trillion
Red Hat Inc., have filed many make it out to be. yuan in August, when the Peo-
friend-of-the-court briefs in Still, current rules have re- ple’s Bank of China began
the case, TC Heartland LLC v. sulted in “an extraordinary tightening. The PBOC cut the
Kraft Foods Group Brands LLC, concentration of patent cases fund supply for the most pop-
urging the Supreme Court to in a handful of districts, most Please see BANKS page B2
tighten the rules on where notably the Eastern District of
patent suits can be brought. Texas,” said Peter Brann, a
In recent years, the largely
rural and sparsely populated
Eastern District of Texas has
Maine lawyer who helped
write a friend-of-the-court
brief filed by numerous inter-
INSIDE
attracted as much as 44% of net companies and other busi-

hinge on AI in one way or an-
other. That is why Baidu and
other Chinese companies are
making such big bets there.
In China, AI research
didn’t become a big focus at
top universities until recent
years, said Kai-Fu Lee, chief
executive of venture-capital
firm Sinovation Ventures. As
a result, Chinese companies
like to hire Chinese-born en-
gineers who studied at U.S.
universities, he says, many
Please see YUAN page B4
eastern Texas.
The companies, often de-
fendants in a patent-litigation
boom of the last decade, are
looking to the high court to
curb what they say is “perva-
sive and pernicious forum
shopping” by plaintiffs who
claim to own the patents and
often seek damages in the mil-
lions of dollars.
Sen. Jeff Flake (R., Ariz.) has
Dozens of tech firms and
groups, including Intel Inc.,
sponsored legislation governing Dell Inc., Adobe Systems Inc.,
where a case can be brought. eBay Inc., Oracle Corp. and
all new patent-infringement nesses and associations in this
lawsuits in the U.S., aided by case. If TC Heartland wins, he
its reputation for plaintiff- added, “I think it will have a
friendly rules and juries, as dramatic effect…on patent
well as knowledgeable judges troll litigation.”
and lawyers. Patent trolls, known more
Despite the criticism, Texas politely as “nonpracticing en-
jurisdiction has some defend- tities,” often do little except
ers, including big firms such
as Ericsson Inc., as well as Al-
acquire software patents and
fire off demand letters and file
0% FINANCING
lergan Inc. and other pharma- lawsuits. Suits by these firms, PINCHES
ceutical companies, who argue
in friend-of-the-court briefs
some of which have grown
large enough to be publicly
RETAILERS
that the Eastern District of traded, represent a dispropor-
Texas isn’t the renegade that Please see PATENT page B2 MARKETS, B8
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 | Friday - Sunday, March 24 - 26, 2017
INDEX TO BUSINESSES
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.
A
AbbVie.........................B8
adidas..........................B8
Adobe Systems...........B1
Alphabet......................A1
B Federal Reserve..........B8
Baidu ........................... B1
BlackRock....................B5
C Google.........................A1
Cargill..........................B8
China Merchants
Bank.........................B1
CME Group..................B5
D Intel.............................B1
Daewoo Shipbuilding &
Marine Engineering..B3
E L
eBay.............................B1
INDEX TO PEOPLE
A F
Adams, David..............B2
B J
Boyazny, Maria...........B7
C Schardt, Drew.............B7
Clayton, Jay ................ B5
Cochran, Kurt W.........A4
D O
Dong-bin, Shin............B2
PATENT
Continued from the prior page
tionately large share of cases
in the Eastern District of
Texas. A coalition of inventors
and patent owners said in its
own Supreme Court brief that
concerns about the Texas dis-
trict are “greatly overblown,”
and that tightening the rules
could be harmful to innova-
tors.
The concentration of pat-
ent-infringement cases in the
rural Texas district “is cer-
tainly an indication that some-
thing is amiss,” said Sen. Jeff
Flake (R., Ariz.), who has
sponsored legislation in the
past to tighten patent venue
rules governing where a case
can be brought.
In the Supreme Court case,
TC Heartland—an Indiana-
based maker of low-calorie
sweeteners—was sued for pat-
ent infringement by Kraft in
Delaware, another popular
venue for plaintiffs. TC Heart-
land sought unsuccessfully to
have the case transferred to
Indiana, where the company is
based.
Now TC Heartland is asking
the Supreme Court to overrule
the venue rules used by federal
courts since 1990. TC Heart-
land wants the high court to
reinstate an older, more re-
strictive standard. It argues
that Congress didn’t intend for
more recent changes in general
venue rules to apply to patent
cases, while Kraft argues that
the later changes do apply.
But the real concern for
most businesses is in the East-
ern District of Texas, where
the number of new patent-in-
fringement cases has soared
from a few hundred annually a
decade ago to a peak of more
than 2,500 in 2015, by far the
highest total for any district,
according to data from Lex
Machina.
The Texas district became
an improbable hotbed for pat-
ent litigation after judges ad-
opted procedural rules that
were perceived by defendants
as friendly to patent-infringe-
ment plaintiffs—for example,
Hollywood Skids Overseas
BY ERICH SCHWARTZEL
Hollywood received a wake-
up call on Wednesday, cour-
tesy of a report showing the
international box office edged
lower in 2016, a troubling re-
versal for an industry that has
come to rely on overseas con-
sumers as attendance in the
U.S. and Canada stagnates.
The Motion Picture Associa-
tion of America found the over-
seas box office declined slightly
in 2016 to $27.2 billion, from
$27.3 billion in the prior year. In
a turnabout from previous
years, slight growth in the total
global box office came from the
U.S., where attendance was flat
but ticket prices rose.
Box office in the U.S. and
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BUSINESS & FINANCE
Enanta
Pharmaceuticals......B8
Export-Import Bank of
Korea.........................B3
F
M
MB Global Partners....B7
N
Nike.............................B8
Lotte Weighs In on China
R South Korean firm’s
G Raymond James
Financial....................B5
chairman calls missile-
Gilead Sciences...........B8
Red Hat.......................B1 defense tensions a
S
H ‘misunderstanding’
Sony ............................ A2
Hartford Financial
Sony Pictures
Services Group ......... B5
Entertainment..........A1
BY JONATHAN CHENG
I
T
SEOUL—Shin Dong-bin, the
Tyro Partners..............B8
Intercontinental chairman of South Korea’s
Exchange...................B5 Tyson Foods................B8
Lotte Group, says he loves
Y China. China doesn’t appear to
Lotte Group.................B2 YouTube.......................A1 feel the same way about his
business empire.
When the South Korean
government identified last
year a golf course owned by
P Lotte as a site for a U.S.-built
KIM HONG-JI/REUTERS
Frade, Aysha...............A4 Palmer, Keith..............A4 missile-defense system, it put
Pedersen, Chris...........B5 the company in the crosshairs
S of one of the world’s most
Jae-yong, Lee..............B2 fraught geopolitical disputes.
N “If the government asks a
W
Ng, Andrew.................B1 private corporation like ours
West, James...............B1 to give up the land, then I ‘We definitely want to continue our business in China,’ says Lotte’s Shin Dong-bin, shown in December.
Z don’t think we have the luxury
O’Leary, George..........B1 Zhang, Tong................B4 of rejecting the government,” retail stores in the country. said of China, describing it as could cost Korean businesses up
Mr. Shin, 62 years old, said in They halted construction on the land of his ancestors. “We to $20 billion, with the tourism
a rare interview this week. new Lotte projects, citing vio- definitely want to continue industry and duty-free stores
making pretrial discovery
more burdensome and costly
for defendants.
The district—comprising
Lotte, South Korea’s fifth-
largest conglomerate, with in-
terests that include luxury ho-
tels, chemicals, chewing gum
lations of fire and safety
codes.
Lotte, whose 94 affiliates
earn about $80 billion in an-
our business in China.”
Lotte, which was founded in
Japan in 1948 and is one of
the most visible brands in East
bearing the brunt.
In January, Mr. Shin
planned a trip to China to de-
fuse the rising geopolitical
smaller cities such as Tyler, and duty-free stores, has be- nual revenue, said at least 76 Asia, has invested some $5 bil- standoff. But he was forced to
Marshall and Beaumont—also come a test case of China’s of its 99 Lotte Mart hyper- lion in China, where it has cancel when South Korean au-
was attractive to plaintiffs be- ability to wage economic war- marts in China have been tem- 25,000 employees, Mr. Shin thorities blocked him from
cause of its relatively low fare against its neighbors to porarily closed. A confection- said. The country accounts for leaving the country, citing his
caseloads and fast-moving further its objectives. ery joint venture in Shanghai about 10% of the conglomer- alleged involvement in a cor-
dockets. Beijing vehemently opposes with Hershey Co. was forced ate’s overall sales. ruption scandal that toppled
Critics contend that the cur- deployment of a missile-defense to halt production this month. While Lotte had begun di- the country’s president, Park
rent federal standard for venue shield in South Korea, citing its And videos circulated online versifying away from China by Geun-hye and put the de facto
in patent litigation also con- radar’s ability to reach into Chi- showing Chinese citizens de- the time tensions started to leader of the Samsung con-
tributed by allowing plaintiffs nese territory. Seoul and Wash- stroying Lotte products on rise last year, Mr. Shin said it glomerate behind bars. Like
to seek out friendly districts ington say the system—known store shelves and, in one case, is too important a market to Ms. Park and Samsung’s Lee
such as eastern Texas, almost as Terminal High-Altitude Area taking to a pile of Lotte goods give up. Jae-yong, Mr. Shin has denied
anywhere in the country. Defense, or Thaad—is needed to with a bulldozer. Lotte isn’t the only South wrongdoing.
Many lawyers in the area defend South Korea and the Asked early this month Korean business empire whip- If he had been permitted to
are worried about the poten- 28,500 U.S. troops based there about any backlash against sawed by the geopolitical dis- visit China in January, Mr.
tial impacts of the case. from North Korean leader Kim Lotte, a spokesman for China’s pute. Amorepacific Corp., a Shin said, he is confident he
“If the Supreme Court were Jong Un’s expanding weapons Foreign Ministry said China cosmetics giant valued at could have lowered the ten-
to reverse, it would under- program. welcomes foreign companies about $22 billion in July, be- sions. But that probably isn’t
standably result in a dramatic As the missile-defense pro- as long as they follow the law. fore the Thaad standoff, has possible at this point, he
drop in the number of cases posal became reality, winning “Whether they can succeed in since lost more than a third of added, given the hardening of
that get filed in the Eastern approval at a Lotte board China depends on the Chinese its value as the Chinese con- positions on both sides.
District of Texas,” said Eric meeting in late February, Bei- market and Chinese consum- sumers it relies on steered Mr. Shin admits he doesn’t
Findlay, a lawyer in Tyler who jing began to ramp up pres- ers,” he said. clear of its products. have a plan to solve the quan-
mainly represents defendants sure on the conglomerate. Mr. Shin, the Lotte chair- Amorepacific cited “inter- dary, hoping instead that
in patent-infringement cases. China’s official Xinhua man, said he was surprised by national affairs” Thursday in South Korean elections on
The boom in litigation in News Agency, in an English- the Chinese response. saying that it is “fully aware May 9 will deliver a new presi-
the district has encouraged language commentary last “There seems to be some of the attention and concerns dent who can help smooth
practices that have left the month, warned Lotte that it misunderstanding,” Mr. Shin of our stakeholders” and that over relations with China and
district open to criticism. For was “playing with fire” in al- said in the interview this it remains committed to the clear the way for Lotte to re-
example, to support their ar- lowing its golf course in week, which the company said Chinese market. sume its business operations
gument for keeping cases in Seongju, in southern South was his first with a Western A report from the Korea De- there.
eastern Texas, many plaintiff Korea, to host the facility. media outlet since he became velopment Bank on Wednesday “I hope it fades away,” he
firms that are based elsewhere Chinese officials began sus- chairman in 2011. said China’s economic retalia- said. “I don’t have the an-
have formed subsidiaries and pending operations at Lotte’s “I love that country,” he tion over Thaad, if expanded, swer.”
located them in the area.
Many lease small offices scat-
tered around Tyler, Marshall
and other cities.
Two consumer groups, the
Electronic Frontier Foundation
BANKS Asset Management Co., a bond
fund that manages two billion
yuan in assets.
As issuance costs rise, more
turing NCDs could intensify as
China’s money market shows
fresh signs of stress. The
benchmark seven-day repo
yuan in NCDs mature this
month, while calculations by
analysts at China International
Capital Corp. indicated that
and Public Knowledge, said in Continued from the prior page Chinese banks are being rate hit a 26-month high on about half of the NCDs out-
a friend-of-the-court brief that ular overnight and seven-day forced to sell new NCDs just to standing would mature be-
many of the offices amount to repos, raised the borrowing repay old ones. tween February and May.
$639B
“sham headquarters.” costs and imposed restrictions “When your borrowing cost The worry is that if one
A recent analysis for The on leveraged investments us- is getting close to 5% and your bank has trouble rolling over
Wall Street Journal by RPX ing the tool. bond is yielding only a little its NCDs or defaults on them,
Corp., a patent data and risk Financial institutions rang- over 4%, you must be borrow- it could cause chaos like that
management firm, showed that ing from banks to brokerage ing money to prevent a liquid- Amount banks in China have of 2013, when widespread
the most popular address for firms to private-equity funds ity crisis,” Mr. Wang said. raised with NCDs this year panic pushed the cost of over-
patent plaintiffs in recent years had borrowed enough via re- Even without the fresh pain night loans to a record 25%.
has been a 1930s office building pos to leverage their bets as of rising interest rates, the If rising interest rates fur-
known as the Energy Center in much as four to five times, mismatch between the NCDs’ ther squeeze NCD issuers’
downtown Tyler. Over the past seeking to maximize returns short lifespan and the bonds’ Tuesday, accompanied by talk profit margins or cause invest-
decade, around 50 firms lo- from dwindling bond yields. longer duration leaves banks that a couple of small, rural ment losses, they may be able
cated at the Energy Center “You could say that NCDs with a liquidity hole needing lenders had defaulted on in- to survive for a time, the CICC
have filed at least 884 patent have replaced repos as the constant plugging. terbank loans. analysts wrote—but “if it per-
suits involving roughly 1,200 new toy for banks to add le- Anxiety among small banks, The pressure is imminent: sists for more than two quar-
defendants, according to the verage,” said Wang Ming, a which have limited access to According to research firm ters, many banks won’t be able
analysis. The Energy Center ac- partner at Shanghai Yaozhi funding, about redeeming ma- Rhodium Group, 1.53 trillion to cope with it.”
counts for more such lawsuits
than any other U.S. address, ac-
cording to the analysis.
SAND their own sand mines to insu-
late themselves from bottle-
necks. Pioneer, a prolific driller
2,500 pounds of sand per foot
4Q 2016
Continued from the prior page in the Permian Basin, plans to Field (State)
below the $60 to $70 a ton
paid in the third quarter of
nearly triple its Texas sand
production by the end of 2019.
Piling Up Appalachia
(Pennsylvania,
Average amount of sand being
Canada rose 2% to $11.4 billion, 2014, before the bust really Pioneer’s sand use has Ohio, and
used by drillers in selected West Virginia)
but the number of tickets held took hold. surged 70% since 2013 to 1,700 2,000
fields, quarterly 2,288 lbs
steady at about 1.32 billion. The To achieve efficiencies of pounds a foot. The company
average ticket price in 2016 scale during the two-year will test wells this year using Delaware
was $8.65, up 22 cents, or 2.6%, downturn, producers drilled 3,000 pounds a foot. (West Texas)
from the previous year, accord- megawells, which run under- The expense is compounded 1,919
ing to the National Association ground for more than a mile by the logistics of moving sand
1,500 Eagle ford
of Theatre Owners. horizontally, blasting larger from mines to well sites thou-
(South Texas)
John Fithian, president of quantities of sand down them sands of miles away. Drillers
1,854
the theater owners’ group, to unleash more fossil fuels. don’t use sand found on a
called the year a success, say- The biggest U.S. shale beach. They prefer fine white
DJ Basin
ing few Wall Street analysts ex- fields get fracked with about silica, much of it found in (Colorado)
pected the 2016 box office to 30% more sand every year, ac- northern Midwest states. Ship- 1,000 1,287
rise after “Star Wars: The Force cording to Phillip Dunning, a ping 5 million pounds of sand
Awakens” and “Jurassic World” technical adviser at Drilling- can require 100 railcars and
led 2015 to a record figure. But info, which tracks oil-field sup- 200,000 truck loads, according Williston Basin
any sign of trouble overseas ply use. to a 2013 study by the Univer- (North Dakota)
overshadows performance in Frack sand use in the Dela- sity of Wisconsin. 822
the U.S. and Canada, because ware, one of the hottest parts Fracking a West Texas well 500
years of rising ticket sales in of the Permian Basin in West in some sweet spots now
international markets have be- Texas, has more than tripled takes about twice that much
come a crutch for studios. since the start of 2012. By the sand, which requires two mile-
end of 2016, producers were long trains of 100 boxcars each
putting an average 1,919 filled with the stuff. 0
pounds per foot down wells David Adams, the head of
2012 ’13 ’14 ’15 ’16
that measured 5,500 feet, ac-
cording to Drillinginfo data.
In Louisiana, Chesapeake
Halliburton Co.’s well comple-
tion and production divi-
sion, said sand costs break
Source: Drillinginfo THE WALL STREET JOURNAL.
Energy Corp. recently pumped down into thirds, equally di- Many sand producers are strain costs for its clients by
a record 50.2 million pounds of vided into the cost of sand, the ramping back up, but expand- investing in its own train de-
Businesses For Sale. sand into a horizontal well cost of rail transport and the ing operations take time. U.S. pots and storage facilities in
Call (852) 2831-2553, roughly 1.8 miles long, piquing cost to truck the sand to the Silica Holdings Inc., which is major shale basins from Colo-
(65) 6415-4279 the interest of some rivals who well. He expects a short-term fetching 20% more for its sand rado to North Dakota. It also
are now weighing whether bottleneck because during the today than it did in October, signed a deal with U.S. Silica in
or (813) 6269-2701
they can do the same. protracted downturn, sand- plans to double its mining ca- January to use its Sandbox
A handful of oil producers, mining companies slowed pro- pacity to more than 20 million trucks, which use a forklift to
including Pioneer Natural Re- duction and some canceled tons in 2018. load and unload containers
sources Co., have purchased plans to open new mines. Halliburton is trying to re- from a customized chassis.
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. Friday - Sunday, March 24 - 26, 2017 | B3

BUSINESS NEWS

Daimler Faces Probe

Tied to Diesel Cars
BY WILLIAM BOSTON
BERLIN—German prosecu-
tors have launched an investi-
gation into allegations that an
undisclosed number of Daim-
ler AG employees may have
committed fraud linked to
sales of the company’s diesel-
powered cars, a spokesman for
the Stuttgart state’s attorney
German ministry of transport
confirmed this,” said Daimler
spokesman Jörg Howe, echo-
ing the auto maker’s previous
denials of wrongdoing.
The probe of Daimler em-
ployees comes on the heels of
the admission by rival Volks-
wagen AG that it manipulated
nearly 11 million diesel engines
world-wide to cheat on emis-
Daewoo Is Offered Bailout
BY IN-SOO NAM ship and a split-up, are under
study.”
SEOUL—Daewoo Ship- Korean shipbuilders’ profits
building & Marine Engineer- started sliding after the 2008
ing Co.’s state-run creditors on global economic crisis cut or-
Thursday unveiled a 2.9 tril- ders, while lower-cost Chinese
lion won ($2.6 billion) rescue rivals made inroads into the
package for the South Korean market. Shipbuilding is one of
shipbuilder, which has been South Korea’s flagship indus-
hurt by massive losses from its tries, accounting for 7% of the
offshore projects. nation’s exports and 5% of em-
The bailout is the latest ex- ployment.
ample of the global shipbuild- Daewoo, the world’s second-

KIM DONG-MIN/ASSOCIATED PRESS

said Thursday.
A spokesman for the prose-
cutor declined to detail the
specific allegations against the
Daimler employees. He would
say only that the individuals
are suspected of committing
fraud in connection with the
sale of diesel vehicles with
false emissions documenta-
tion. No one has been charged
with any wrongdoing.
The maker of Mercedes-
Benz cars dismissed the allega-
tion that it manipulated diesel
engines to cheat on emissions
tests. A Daimler spokesman
cited a German government in-
vestigation last year that
found no evidence of manipu-
lation of the company’s diesel
engines.
“Our engines have been cer-
tified according to current
laws, and the [Federal Motor
Transport Agency] and the
sions tests. Volkswagen
pleaded guilty to committing
fraud in the U.S., agreeing to
pay nearly $25 billion in fines,
penalties and compensation to
consumers. Six current and
former Volkswagen employees
have been indicted on conspir-
acy charges in the U.S. One has
pleaded guilty and another is
in detention pending trial.
In the Daimler investiga-
tion, it is unclear whether
prosecutors suspect any ma-
nipulation of diesel engines on
the scale of that proven at
Volkswagen.
The Daimler spokesman
said the company learned of
the probe from media reports.
It has since received confirma-
tion from the prosecutor, but
has otherwise received no de-
tails and management doesn't
know which employees are in-
volved, he said.
ing industry’s difficulties, as a
glut of vessels and low freight
rates put many shipyards in fi-
nancial trouble in recent years.
An economic slowdown in
China has made things worse
for the world’s three biggest
shipyards, which are all in
South Korea.
Korea Development Bank
and Export-Import Bank of
Korea said they would provide
funds to improve Daewoo’s
cash flow and convert its lia-
bilities into equity to cut debt.
The two state-run banks
had already provided a com-
bined 4.2 trillion won in aid to
the cash-strapped shipyard in
2015.
Severing the credit lines to
Daewoo would deliver yet an-
other shock to a nation reeling
from the impeachment and
ouster of South Korean Presi-
dent Park Geun-hye from her
Daewoo is planning to cut jobs and sell parts of its business.
post following an influence-
peddling scandal and the in-
dictment of Samsung Electron-
ics Co. Vice Chairman Jay Y.
Lee on graft charges.
“In return for this rescue
package, we’ll implement rig-
orous restructuring at the
shipbuilder, including deep job
cuts and sale of nonprofitable
businesses,” said KDB, Dae-
woo’s largest shareholder and
main creditor.
The Financial Services Com-
mission, Korea’s main financial
largest shipbuilder by revenue
after Hyundai Heavy Industries
Co., lost 2.7 trillion won in
2016, compared with a year-
earlier loss of 3.3 trillion won.
The industry crash has al-
ready brought down a fellow
Korean shipping company.
Hanjin Shipping Co. filed for
bankruptcy protection last
year, leaving $14 billion worth
regulator, said the bailout of cargo stranded at sea for
would hinge on the condition months.
that Daewoo’s other creditors, The state-run KDB, which
including commercial lenders owns nearly four fifths of Dae-
and private bondholders, woo through a series of debt-
would also agree to deep cuts equity swaps and rights offers
and accept a debt-to-equity in past years, said it aimed to
swap. eventually privatize the ship-
FSC Chairman Yim Jong- builder while pursuing a quick
yong told a parliamentary business recovery. The bank
committee earlier this week acquired Daewoo when the
that if there is no consensus government bailed it out with
among the creditors on a re- public funds around the time
structuring plan, “various op- of the Asian financial crisis in
tions, including court receiver- the late 1990s.

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CCB — Serving the Belt and Road Initiative

Becoming a First-class International Bank
T
he Belt and Road Initiative sets the
groundwork for a mutual, beneficial
cooperation that promotes common
development and prosperity. It
provides a broad strategic platform
for raising the level of China’s opening-up, and
also strengthens the development of economic
cooperation with countries along the Belt and
Road for China, to jointly build a community of
shared interests featuring mutual political trust,
economic integration and cultural inclusiveness.
Financial services are undoubtedly the key
component to fulfill the Belt and Road Initiative.
As a large state-owned commercial bank, CCB
is always committed to serving the national
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opportunities of development, apply its own
advantages, improve its service level, and fully
support the construction and development
of the Belt and Road through innovation and
transformation. CCB has become a pioneer and
economic leader of the Belt and Road initiative
through innovative financial services.
Integration and Internationalization
February 24, 2017 was a key date for CCB
with the launch of China Construction Bank
(Indonesia) Co. Limited in Jakarta, Indonesia.
CCB Chairman, Wang Hongzhang and guests
from government, business and finance sectors
of the two countries witnessed CCB’s latest
accomplishment of internationalization. The
grand launch of CCB Indonesia was a milestone
of the Bank’s increasing development
internationally, as well as promoting the Belt and
Road Initiative and“Go Global”national strategy.
In recent years, CCB has proactively promoted
the development strategy of internationalization
by steadily expanding its overseas business
and branch network, continuously broadening
service channels, enriching financial products
and improving its global service capabilities and
international competitiveness. Currently, CCB
has established over 240 overseas entities in 29
countries and regions around the world.
When CCB set up its overseas entities, it took
the strategic framework of the Belt and Road
Initiative into consideration. According to the
strategy of “being centered in Southeast Asia,
existing throughout Central and Western Asia,
deepening development in Europe, and giving
consideration to Africa on a selective basis,”
the Bank seeks to develop a business network
during the 13th Five-Year Plan period that will
sprawl across Asia, Europe and Africa and will
cover key areas along the Silk Road and Maritime
Silk Road, through selecting important strategic
locations that are vital for the Intiative’s success.
As of now, CCB has established branches in
Singapore, Vietnam, Russia, UAE, Malaysia and
Indonesia.
Support the Development of the Belt
and Road Initiative Strategically
The Belt and Road initiative is aligned with
the ethos of CCB’s leadership - paying close
attention to grand strategies concerning the
national economy and people’s livelihoods. The
Bank seized the major strategic opportunities
created by the Belt and Road Initiative, added
the financial services related to the Belt and
Road to the Transformation Development Plan
of China Construction Bank and established a
special group of decision makers to align with
the Initiative.
In 2014, CCB made a Comprehensive Plan
of Financial Services to Support the Silk Road
Economic Belt and the 21st Century Maritime
Silk Road based on in-depth analysis and
research of customers and their needs, before
the country unveiled official plans. The Plan
highlighted ten industry sectors which would
need financial support in the process of Belt
and Road construction, and confirmed seven
key areas that would be crucial to make the
Initiative a success, including infrastructure
construction, interconnection of transportation
network, and economic and trade cooperation.
After considering the needs of various clients
that provide these services, CCB leveraged its
resources to confirm six categories of financial
services it could administer to support the Belt
and Road Initiative.
Wang Hongzhang, Chairman, CCB, said that
the Belt and Road Initiative has become an
important engine to boost the development of
CCB’s international expansion and opened the
doors to a brand-new market for CCB in the areas
of comprehensive operation, multi-functional
service and intensive (customer) support. The
multi-level, high-density connectivity, economic
and trade exchange with the countries along
the Belt and Road have brought a remarkable
opportunity for CCB to present its achievements
of transformation to the international market
and to enhance its global financial service
capabilities.
Since the Belt and Road Initiative was first
proposed by China in 2013, CCB has attached
great importance and actively responded to
the initiative, by accelerating its expansion of its
overseas footprint, obtaining multi-functional
licenses, optimizing product innovation and
training of expat professionals. CCB has built a
multi-dimensionally and systematically global the loan reviewing process. Additionally, efforts
financial service network and provides the will be made to strengthen risk management,
Belt and Road Initiative with the concepts of enhance the Bank’s capacity to operate in
comprehensiveness, multi-functionality, digital compliance with relevant rules, and provide
innovation intensiveness, transforming it into a protection and support for companies “going
‘smart’ bank. out”.
Constructing capital raising platforms
Playing to CCB‘s Unique Advantages is an innovative measure that CCB took to
Asabankformerlyspecializingininfrastructure better serve The Belt and Road Initiative. In
loans, a leading bank with comprehensive April and September 2015, CCB held “Silk
capability in RMB business, a relatively complete Road Economic Belt Investment Promotion
set of licenses for domestic operation, a well- Conference” in Xi’an City, Shaanxi Province,
built global network of branches and with and“21st Century Maritime Silk Road (Guangxi)
first-mover advantages in transformation and Investment Forum” in Nanning City, Guangxi
development, CCB possesses unique strengths Province. Through the joint efforts of CCB and
in serving the Belt and Road strategy. local governments, numerous capital raising
CCB’s solid foundation has seen The Bank projects targeting The Belt and Road Initiative
immerse itself in Belt & Road projects. In late have been implemented.
2016, CCB accomplished the signing of the USD CCB’s future is set to be rosy as The Bank
1.3 billion syndicated loan agreement for the will continue to integrate its resources,
Laos Nam Ou River Hydropower Project Phase-II. build a marketing platform that connects
In September 2016, during the ASEAN summit, its headquarters, parent companies and
the Chinese Premier, Li Keqiang and Laotian subsidiaries, domestic and overseas markets,
Prime Minister, Thongloun Sisoulith witnessed accelerate R&D and application of international
the initialing of the agreement for this key project capital raising products, improve service
of the Belt and Road strategy. In recent years, efficiency, and enhance global financial service
CCB has provided financial support for 46 capabilities to provide stronger financial support
major projects scattered in 14 countries along for the projects and economic links of countries
the Belt and Road, including Russia, Pakistan, within the Belt and Road Initiative.
Singapore, United Arab Emirates, Vietnam,
Saudi Arabia, and Malaysia, among others. The
amount of loans issued added up to nearly USD
6 billion. Among these projects were 25 major
infrastructure construction plans. Currently,
the financing demand stands at around USD
90 billion and involves 40 countries and
regions with half of the projects concentrating
in infrastructure construction areas such as
railways, roads, shipping, and power stations.
Infrastructure construction plays a significant
role in the long-term success of the Belt and
Road. More importantly, it is an area where
CCB has traditional expertise. CCB has actively
played to its advantages to increase the credit
support for strategically important projects,
integrate resources at home and abroad, and
seek innovation in various types of products
such as M&A, global credit, as well as investment
banking, so as to meet the demand for financial
services related to the Belt and Road. On the
basis of improving the operational network and
increasing coverage for institutions, CCB will
further enhance innovation in financial services
that are closely linked to the Belt and Road.
CCB will also study and formulate
differentiated credit policies, deploy
special credit resources and optimize

China Construction Bank commissioned this content.

The Wall Street Journal news organization was not involved in the creation of this content.
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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
B4 | Friday - Sunday, March 24 - 26, 2017 THE WALL STREET JOURNAL.

TECHNOLOGY WSJ.com/Tech

India Gears Up for iPhone Production

Taiwanese contractor long an engine for Apple’s
growth, manufacturing
is poised to begin iPhones locally would help Ap-
within weeks; Apple ple address what analysts say
is its biggest problem in India:
seeks market foothold its smartphones are simply too
expensive for the vast majority
BY RAJESH ROY of people.
AND NEWLEY PURNELL Smartphone shipments in
India grew 18% last year, com-
NEW DELHI—Apple Inc. pared with 3% globally, accord-
will soon start assembling ing to Counterpoint Research,
iPhones in India, say govern- but the majority of phones
ment officials familiar with the sold here cost less than $150.
plan, aiding the company’s ef- The iPhone SE, which some
forts to gain a foothold in the online retailers now sell for as
manufacturers to India to
make parts and export finished
phones, said the state official
as well as a senior federal gov-
ernment official at the Trade
Ministry.
Apple had sought tax con-
cessions on the import of key
components but the Indian
government hasn’t yet “ac-
cepted most of the demands of
the iPhone manufacturer,”
Trade Minister Nirmala
Sitharaman told lawmakers in
a written submission to Parlia-
ment on Wednesday.

TSERING TOPGYAL/ASSOCIATED PRESS

fast-growing market.
Taiwanese contract manu-
facturer Wistron Corp. will
likely start making iPhone 6
and 6S models in the next four
to six weeks at its plant in
Bangalore, said an official of
the southern state of Karnat-
aka where the tech hub is lo-
cated.
The assembler will add Ap-
ple’s cheapest iPhone model,
the SE, to its production line
in about three months, the of-
ficial said.
“Almost all preparations
have been done for launching
Apple’s first-phase project in
Apple has been looking for new ways to build its brand throughout the South Asian nation.
Bangalore through Wistron,”
the official told The Wall
Street Journal.
“We’ve been working hard
to develop our operations in
India,” an Apple spokeswoman
little as $330, is still out of
reach of most Indian consum-
ers.
“Apple realizes that the
phones are priced way too
high for the Indian market,”
said Kiranjeet Kaur, an analyst
at research firm IDC.
Making the phones in India
would allow Apple to lower
prices by at least $100 as its
import tariff bill shrinks, said
said, declining to comment on our local operations.” Faisal Kawoosa, an analyst at
the company’s specific plans A Wistron spokeswoman research firm CMR.
for India. “We appreciate the said the company doesn’t com- Apple is also negotiating
constructive and open dia- ment on “rumor or specula- with New Delhi for its next
logue we’ve had with govern- tion.” level of production in India. It
ment about further expanding While sales cool in China, wants to bring its component
Apple, which is based in
Cupertino, Calif., has been
looking for new ways to build
its brand in the South Asian
nation, where it has less than
a 5% share of the smartphone
market.
Apple Chief Executive Tim
Cook in a call with analysts
last month said the company is
also “in discussions” to open
retail stores in India, and that
Apple intends to “invest sig-
nificantly in the country and
believe it’s a great place to
be.”
—Karan Deep Singh
contributed to this article.

Connected Lights Get Smarter with Alexa, Siri Tencent

On movie night, you could
peel yourself off the couch to
connection. Put a piece of
tape over it to remind people
home-operation software
HomeKit.
Bets on AI
turn off the lights. You could
also churn your own butter
for the popcorn. In 2017, I
not to touch, if you must.
(Tacky, I know.)
With the latest iOS up-
date, there’s a Home app you
can use to program lighting
With New
just say, “Alexa, turn off the Get Alexa and Siri scenes and set automated
Developer
F. MARTIN RAMIN/THE WALL STREET JOURNAL

lights in the living room.” involved programs, even with lights

OK, it’s a first-world solu-
tion to a first-world prob-
lem. But
take it from
a guy who
tests a lot of
gadgets: The
future in-
PERSONAL volves talk-
TECHNOLOGY ing to your
GEOFFREY A. tech, and
FOWLER the lights in
your home
are ready to
make the leap.
Internet-connected lights
have been tech for geeks.
Bulbs and outlets were con-
nected to apps, so you had
to fiddle with your phone
just to flip on a light.
Amazon changed that
with Alexa, the voice assis-
tant in its $180 Echo speaker
that is learning to operate a
house full of connected ap-
pliances. Last year, Google
got into the game with
Home, its $130 talking
speaker. Apple upped Siri’s
domestic competence in do-
mestic affairs with the Home
app in the latest iPhones and
iPads.
Connected lights can do
all kinds of things to make
your house more beautiful
and useful. Mine dim with a
warmer tone near bedtime,
and gently wake me up with
cooler light on dark winter
mornings. But there are
right ways and wrong ways
Amazon’s Echo with Alexa works well for turning on a connected light.
to attempt smart lighting,
and I’ve lived through both—
so I made a plan of attack.
Smart bulbs vs. dumb
switches
The low-effort, low-com-
mitment way to get started
is with smart bulbs. They are
mostly low-power LEDs but
come in different flavors—
the fanciest can change color
to make your house look like
the “Trolls” movie. I use
Philips Hue: The $15 white
variety is all you’ll need at
first, but many have become
inexpensive and dependable.
Here’s the appeal: It’s all
wireless. You screw these
bulbs into regular sockets on
regular lamps, and they con-
nect to a wireless hub (usu-
ally sold in a bundle) or di-
rectly to your home’s Wi-Fi,
so you can turn them on and
off using your phone.
You can have the same ef-
fect using regular bulbs by
plugging lamps into con-
In my house, nobody else and switches from different
would touch a smart light makers—a skill Alexa has yet BY LIZA LIN
until Alexa came along. to acquire.
Now,with an Echo speaker in Two caveats: Until Apple SHANGHAI—In a sign of its
the living room and Echo makes a home speaker of its ambition to compete more in
Dots in other rooms, Alexa is own, Siri lives on your artificial intelligence, Tencent
part of the daily routine: “Al- iPhone, iPad, Apple Watch Holdings Ltd. says it has hired
exa, turn on the lights in the and Apple TV; the Mac Siri Zhang Tong, a Stanford-
office.” can’t do this. HomeKit-com- trained researcher who for-
Amazon’s Alexa app can patible hardware is limited, merly led Baidu Inc.’s Big Data
automatically find and con- but growing. Lab, to oversee its fledgling AI
trol bulbs and connected What about Google Home? program.
plugs from Philips Hue, Lu- It works, too, but with even Dr. Zhang worked on artifi-
nected outlet adapters, like tron Caseta, Belkin Wemo less stuff. cial intelligence at Baidu, as
ones made by Lutron, Belkin and others. You can group My advice is to invest in part of his lab-director role
and Insteon. them and command Alexa to lights that work with as there. Baidu suffered a setback
Then, you put your lights turn them on and off, or dim many systems as possible, in its artificial-intelligence ef-
on schedules—on at sunset, them. especially in a mixed Ama- forts earlier this week when
off at midnight. It’s like the Alexa manages all of this zon, Apple and Google chief scientist Andrew Ng said
old clackety Christmas tree behind the scenes: You don’t household. he was leaving the company.
timer, only now the timers have to have an Echo in the At Tencent, Dr. Zhang will
are in apps, and it’s easier to same room with the lights Take the plunge with lead a team of 250 researchers
experiment. You can combine you want to control, though switches and engineers in a lab set up
lights and change the bright- it makes life easier. Ready to go all in? Re- in April last year to develop
ness, creating scenes. Alexa isn’t perfect. I could place your built-in light technologies for its gaming,
You don’t have to dive start a Twitter feed for all switches with smart content, social media and
into the deep end. Start with the hilarious ways she mis- switches that still look and cloud businesses. The team
accent lamps and ambient hears people, or thinks work like regular ones, such will also work closely with AI
lights on bookshelves and in you’re calling her name as Lutron’s $55 Caseta dim- researchers in Tencent’s prod-
corners. Hue even comes in when you aren’t. mers. It’s progress that uct groups, the Chinese inter-
light strips that can brighten Still, I find the Echo, won’t make any family mem- net firm said.
hidden spots. which has fancy far-field mi- bers grumpy. Tencent, led by Chairman
Your house will look big- crophones, to be the fastest I feared this would be a Pony Ma, is best known for its
ger and more beautiful. and most accurate way to major, costly operation, but I online games and WeChat so-
Don’t do this to frequently turn on a light when I’m was wrong. Using profes- cial messaging service.
used lights, or any you’re in stumbling to the bathroom sional-finder website The Shenzhen-based com-
the habit of turning on and in the middle of the night, Thumbtack, I found an elec- pany is expanding its invest-
off manually. for instance. trician who installed six dim- ments in facial recognition,
If you can help it, don’t Alexa is the most respon- mers in one hour. Now my speech recognition and ma-
put smart bulbs in lights op- sive, but not the most capa- chandelier, porch light, bath- chine translation as it seeks to
erated by a dumb wall ble of assistants. That would room fixtures and other better monetize its offerings
switch. If somebody flicks be the iPhone and iPad’s Siri, lights are in on the action, and explore new business ar-
the switch, the bulb loses its which connects to Apple’s and we use Alexa even more. eas.
During the company’s quar-

BUSINESS WATCH
terly earnings report Wednes-

MICROSOFT ing problems, a near debt

default and investigations by
Company Licenses Congress.
Patents to Toyota The drug-industry veteran
was tapped to take over the
Microsoft Corp. agreed on embattled Canadian company in
YUAN day, Tencent President Martin
Lau told investors that several
of their content and advertis-
ing products would benefit
Continued from page B1 from such software, and said
of whom have worked with the firm is exploring entering
big-data infrastructure at areas such as autonomous
companies such as Google driving.
and Facebook, a rare experi- WeChat, a social-messaging
QILAI SHEN/BLOOMBERG NEWS

Wednesday to license a batch of
patents to Toyota Motor Corp.
as part of the software giant’s
effort to leverage its vast intel-
lectual-property portfolio to be-
come a key provider of con-
nected-car technology.
Microsoft has been racing to
convince car makers to build
connected-car services on top of
its Azure cloud-computing ser-
vice. In a blog post and video
announcing the deal, Microsoft
highlighted the navigation, pre-
dictive maintenance, entertain-
ment, and voice recognition ca-
pabilities of Azure.
But Microsoft declined to say
if Toyota intends to use the pat-
ents for any of those services. A
Toyota spokesman declined to
comment.
The companies didn’t disclose
the specific patents that were li-
censed, or any fees Toyota is
paying to use the technology.
—Jay Greene
VALEANT
CEO Papa Was Paid
$62.7 Million in 2016
Valeant Pharmaceuticals In-
ternational Inc. Chief Executive
Joseph Papa took in $62.7 mil-
lion in pay last year as he navi-
gated the fallout from account-
May and sought to rebuild in-
vestor confidence and remake
the business after a series of
missteps.
The bulk of Mr. Papa’s pay—
$42 million—came from stock
awards, while $9.1 million came
from bonuses. His salary was
$980,769. Mr. Papa received an
$8 million signing bonus, and a
$1.1 million “individual perfor-
mance” bonus.
—Anne Steele
DISNEY
Media Firm Extends
Iger’s Contract Again
With no successor to take
the helm at the world’s largest
media company, Robert Iger will
stay on at least one additional
year as head of Walt Disney
Co., the company said Thursday.
Disney’s board has extended
Mr. Iger’s contract as chief exec-
utive and chairman through July
2, 2019. His deal had previously
been set to end on June 30,
2018. The change, disclosed
Monday, marked the third time
Mr. Iger’s tenure has been ex-
tended.
The new extension gives Dis-
ney’s board more time to find a
potential new CEO.
—Ben Fritz
ence in China. platform with more than 889
When Baidu hired Mr. Ng million users, uses voice-rec-
in 2014, it was struggling to ognition software to help
recruit AI talent in Silicon translate different languages
Valley after opening its into Mandarin text.
deep-learning research lab Chinese tech giants Ten-
there in 2013. cent, Alibaba Group Holding
“Having Andrew really and Baidu are in a land grab
helped,” said a Baidu execu- A Baidu autonomous car at the company’s Beijing headquarters. for artificial intelligence talent
tive. A Baidu engineer from as the technology is seen as
a Nordic country told me core decision makers and gressive tactics in hiring AI tal- having the potential to disrupt
last October that he joined product teams to contribute ent. Its packages for AI-related several traditional industries,
the company to learn from much. Baidu usually gives staff start around 800,000 said Cool Zhang, a research di-
Mr. Ng, even though his fam- 15% more in compensation to yuan ($116,000) in cash, plus rector at IDC China.
ily and friends had never AI staff willing to move back stock options, and can easily “This is the start of the AI
heard of Baidu. Mr. Ng, born to China, according to the ex- go over one million yuan in trend now,” the Beijing-based
in the U.K. to parents from ecutive there. cash, according to a person fa- Mr. Zhang said. “Everyone,
Hong Kong, split his time be- Baidu’s main competitors, miliar with the matter. from the big companies to the
tween Beijing and Baidu’s of- e-commerce company Ali- Besides money, Chinese startups, is jumping in this
fices in Silicon Valley. baba Group Holding Ltd. and companies have another year.” Still, Mr. Zhang warned
It remains unclear why he game and social-media com- edge against their U.S. com- that current AI technologies
left after less than three pany Tencent Holdings Ltd., petitors: the vast amount of have yet to prove themselves
years, and he didn’t say what are hiring aggressively from data they have to work as moneymakers.
his next step would be, except U.S. companies, too. Alibaba with—created by 731 million Baidu has made artificial
that it is AI-related. Baidu recently announced a long- online users. In China, peo- intelligence the strategic di-
said its efforts would con- term strategy to develop ple use their smartphones to rection for the company, while
tinue: “We have a deep bench technologies including AI a much greater degree than Alibaba has been investing in
of talent,” the company said. and vowed to hire top tech in the U.S., and that has cre- startups that work on autono-
Baidu was among dozens talent globally. ated a much richer trove of mous driving and facial recog-
of Chinese companies that Jinri Toutiao, an AI-driven data for researchers. nition.
opened up AI research labs in news feed with more than 63 This leads some observers Separately, Tencent an-
Silicon Valley or Seattle be- million daily active users, has to believe that despite the nounced Thursday that it led a
cause many of their hires, in- hired AI scientists and engi- loss of a big name like Mr. $350 million funding round
cluding those born in China, neers from Microsoft, Face- Ng, rising stars will still look into Chinese live-streaming
prefer to live in the U.S. But book and other Western com- to China to make their mark. startup Kuaishou, which has a
according to executives and panies, according to a person —Follow Li Yuan on Twitter large following with younger
investors, they are too far re- familiar with the matter. @LiYuan6 or write to users and people in China’s
moved from the company’s Toutiao is known for its ag- li.yuan@wsj.com. smaller cities.
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. Friday - Sunday, March 24 - 26, 2017 | B5

FINANCE & MARKETS

Senators Question SEC Nominee Lenders

Gulp ECB
Former Wall Street would succeed Mary Jo

lawyer Jay Clayton

says he favors cutting
White, who led the regulator
for nearly four years during
the Obama administration.
Loans as
back regulations
The agency is being managed
by an acting chairman, Re-
publican Michael Piwowar.
Program
BY DAVE MICHAELS
AND ANDREW ACKERMAN
Turning to his philosophy
on the SEC’s civil powers to
police markets, Mr. Clayton
Is Retired
WASHINGTON—Jay Clay- suggested that, as chairman, BY TOM FAIRLESS
ton, President Donald he could pare back the com-
Trump’s choice to lead the mission’s enforcement arm by FRANKFURT—Lenders in
Securities and Exchange Com- moderating the size of finan- the eurozone snapped up

CHIP SOMODEVILLA/GETTY IMAGES

mission, called for scaling
back regulations to encourage
more public companies and
expressed skepticism about
the usefulness of large corpo-
rate penalties.
At his confirmation hear-
ing before the Senate Banking
Committee on Thursday, Mr.
Clayton also said his past
work as a Wall Street lawyer
“is a strength,” and he prom-
ised any conflicts of interest
wouldn’t harm his ability to
be the nation’s top markets
regulator.
Probed about his potential
policy priorities, Mr. Clayton
said U.S. stock markets have
become a less attractive place
cial penalties that it seeks. €233.5 billion ($252 billion)
Mr. Clayton said regulators in four-year loans from the
could achieve more by suing European Central Bank on
individuals rather than pres- Thursday, seizing upon their
suring companies to cough up last chance to lock in cheap
more money for fines. funds as the lending pro-
“Shareholders do bear gram is retired.
those costs and we have to The borrowing by banks
keep that in mind,” he told was the highest since June
Mr. Clayton said regulators could help the economy by making it less costly for firms to go public. Sen. Catherine Cortez Masto of last year and roughly dou-
(D., Nev.). ble the amount economists
for companies to raise money. big investment funds have ing at 9,113 in 1997, according Though President Trump had anticipated.
Regulators could help spur showered private companies to the University of Chicago’s has called for dismantling the The expiration of the four-
economic growth by making with cash. Buyout firms and Center for Research in Secu- Dodd-Frank financial over- year loan offering underlines
it less costly for companies to consolidation have also re- rity Prices. haul, Mr. Clayton said he has the ECB’s rising confidence
go public, he said. In prepared duced the number of public “We have to reduce the “no specific plans for attack” in the region’s economic re-
testimony, Mr. Clayton la- firms. burdens of being a public against the law. covery.
mented the drop in the num- The number of U.S.-listed company so it’s more attrac- But he said he is willing to Inflation in the 19-nation
ber of initial public offerings companies has declined by tive,” Mr. Clayton said. review existing rules to deter- eurozone jumped to 2% last
in recent years, an era when more than 3,000 since peak- At the SEC, Mr. Clayton mine their effectiveness. month from about zero a
year ago, when the ECB an-
nounced the long-term loans

Hartford LNG Futures Contract Is Readied

as part of an aggressive
stimulus package.
In another sign of confi-

Ends Fight BY TIMOTHY PUKO

AND SARAH MCFARLANE
dence in the economy, the
ECB is set to reduce its
monthly bond purchases to

To Switch One of the major U.S. ex-

changes is moving forward
€60 billion a month from
€80 billion starting next
week.

Annuities with plans for derivatives that

BY LESLIE SCISM
AND SARAH KROUSE
Hartford Financial Ser-
vices Group Inc. is withdraw-
ing a request to replace doz-
ens of funds available to its
variable-annuity customers,
could revolutionize natural-
gas trading, making it a more
The borrowing from
international market like
crude. banks was roughly
By May, global gas will have
a futures contract based on
double the amount
liquefied exports coming out economists expected.
of the U.S., according to In-
tercontinental Ex-
change Inc. and S&P Global
DANIEL KRAMER FOR THE WALL STREET JOURNAL

ending a nearly $15 billion tus-
sle with a fund firm that stood
to lose assets.
The Connecticut insurer
previously sought permission
from federal securities regula-
tors to supplant 62 funds with
a slimmer lineup of 11, an ef-
fort that put it at odds with
money-management giant
American Funds.
Hartford had said the new
offerings would be cheaper for
clients. American Funds said
the replacement funds didn’t
offer the same potential up-
side as the products it man-
ages and that the insurer was
trying to take business in-
house for its own benefit.
Nearly $15 billion would have
shifted to the new Hartford
lineup. Of that total about half
would have been managed by
Hartford’s investment manage-
ment company and half would
be managed by BlackRock Inc.
In a new letter to the Secu-
rities and Exchange Commis-
sion on Wednesday, Hartford
said it was canceling the effort
even though the applicants
Platts. The two companies are Under the program, in
launching the effort, an ICE- which 474 banks participated
traded contract, as liquefied Thursday, banks can be paid
gas supplies are soaring, rais- to borrow if they meet cer-
ing interest from suppliers tain thresholds for lending
and traders eager to lock in or to private businesses and in-
bet on prices. dividuals.
The Wall Street Journal re- The ECB decided this
ported on ICE’s plans for the month not to extend the pro-
contract in December. CME gram.
Group Inc. was planning a “There was no discussion
similar contract. A company about having another [four-
spokesman declined to com- year loan operation], not at
ment Wednesday. ICE futures will be based on Platts’s spot-price assessment. Here, an LNG export facility in Louisiana. all,” central-bank President
ICE futures will be based on Mario Draghi told reporters.
Platts’s spot-price assessment Platts. said on his expectations for a with limited success, including He said that decision re-
for LNG coming from the Gulf LNG has long been sold growing futures market. Japan OTC Exchange and the flected policy makers’ rosier
Coast, where the U.S. is open- mainly through yearslong con- “Traders are licking their Singapore Exchange, better perception of the economic
ing its first wave of export ter- tracts priced off oil, gas that is chops over it.” known as SGX. outlook.
minals fed by the shale-gas piped, and price reporting The hope for ICE and Platts The market is growing, Still, the ECB left most of
boom. agencies’ data. But so much is that this contract helps in- with supply likely to rise by its stimulus intact this
The U.S. has long had a new supply is coming world- tegrate several regional gas 44% from 2015 to 2020 and month, and the bank’s top
heavily traded futures market wide from the U.S. to Australia markets and becomes an inter- outpace new demand through officials have stressed that
based on the region’s Henry that it is likely more than national benchmark like Brent the end of this decade, accord- they haven’t reached a turn-
Hub benchmark. But the LNG long-term consumers can take, and West Texas Intermediate ing to Moody’s Investors Ser- ing point in the policy cycle.
contract will incorporate costs forcing them to resell it. became for oil. vice. Gas is expected to make Crucially, underlying in-
for liquefying and shipping gas Spot-market activity has al- But many derivatives prod- up around one-quarter of the flation in the eurozone—ex-
to some of the world’s priciest ready surged and many trad- ucts get created, only to be world’s primary energy mix by cluding volatile energy and
markets, a better assessment ers are eager for derivatives to lightly if ever traded. Compa- 2040, up from around a fifth, food prices—has been stuck
for the gas’s value, said Chris deal gas globally. nies have already tried before according to the International at or below 1% for three
Pedersen, LNG analyst at “Big time,” Mr. Pedersen to create LNG benchmarks Energy Agency. years.

FINANCE WATCH
“strongly believe in the merits
of the proposed substitutions.”
The letter didn’t mention
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would likely delay the process. report on supervision, Mr. Draghi VP Classic-C Units AS EQ HKG 03/22 USD 16.13 11.6 20.3 0.8
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VP Classic-C Units NZD H
AS
AS
EQ HKG
EQ HKG
03/22 HKD
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10.95
13.47
11.2
11.7
19.2
21.2
NS
2.5
Data as shown is for information purposes only. No offer is being made by
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traordinary amounts of time Bank’s top supervisor said Thurs- —Todd Buell All performance figures are calculated using the most recent prices available. VP Multi-Asset Fund Cls A USD OT OT HKG 03/22 USD 10.21 4.5 6.8 NS
VP Taiwan Fund AS EQ CYM 03/22 USD 18.64 11.3 23.6 6.2
and resources” to the matter, day, in comments that also high- NAV —%RETURN—
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according to the letter. lighted earnings weakness faced MF GLOBAL For information about listing your funds,
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Variable annuities are tax- “Stronger rules help to prevent Settles Lawsuit
advantaged vehicles for invest- crises. And we have learnt that
ing in stock and bond funds, financial crises are costly to the MF Global Holdings Ltd. and
and insurers in past years of- economy, to taxpayers, and, ulti- accounting firm Pricewater-
fered an array of investing
choices from prominent fund
firms. The annuities often are
mately, to the banks themselves,”
said Danièle Nouy, chairman of
the ECB’s supervisory board, in
houseCoopers LLP said Thursday
they have settled a lawsuit in
which the brokerage contended
n Website: Https://Www.Valuepartners-Group.Com/ Tel: (852) 2143 0688
China A-Share Fund Cls A AUD H OT
China A-Share Fund Cls A AUD UnH OT
China A-Share Fund Cls A CAD H OT
OT HKG
OT HKG
OT HKG
03/22 AUD
03/21 AUD
03/22 CAD
12.53
11.11
11.58
6.3
1.6
6.0
12.9
5.7
11.1
0.0
-1.8
-0.9
LIST YOUR
China A-Share Fund Cls A EUR H OT OT HKG 03/22 EUR 12.16 5.8 10.0 -1.0
sold with guarantees of lifetime an introductory interview linked bad accounting advice from PwC China A-Share Fund Cls A EUR UnH OT OT HKG 03/22 EUR 12.23 6.1 12.6 NS

income that kick in if owners’

fund accounts are depleted.
to the supervisor’s annual report.
“Against that backdrop, it
was a factor in its 2011 collapse.
Terms of the settlement
China A-Share Fund Cls A GBP H OT
China A-Share Fund Cls A GBP UnH OT
China A-Share Fund Cls A HKD H OT
China A-Share Fund Cls A HKD UnH OT
OT HKG
OT HKG
OT HKG
OT HKG
03/22 GBP
03/22 GBP
03/22 HKD
03/21 HKD
12.19
14.33
12.37
12.13
5.8
6.9
6.0
8.8
14.0
24.0
11.5
6.2
-0.7
9.8
-0.8
-2.0
FUNDS
Hartford had filed its first would be most welcome if the weren’t disclosed. Both sides said China A-Share Fund Cls A NZD H OT
China A-Share Fund Cls A NZD UnH OT
OT HKG
OT HKG
03/22 NZD
03/22 NZD
12.36
10.82
6.6
8.6
13.3
5.0
0.2
NS
SEC application in the matter in global regulatory reform were to the case had been settled to “the China A-Share Fund Cls A RMB (CNH) OT OT HKG 03/22 CNH 13.51 7.7 15.4 2.5
China A-Share Fund Cls A USD OT OT HKG 03/21 USD 12.09 8.6 7.2 -1.8
April 2015. Last December, the be finalized as foreseen. Walking mutual satisfaction of the parties.” China A-Share Fund Cls A USD H OT OT HKG 03/22 USD 12.32 6.0 11.8 -0.6
China Greenchip-A Units AS EQ CYM 03/22 HKD 57.21 12.5 19.2 -4.8
SEC published a notice of its in- back on the global regulatory re- The bankruptcy administrator China Greenchip-A Units AUD H AS EQ CYM 03/22 AUD 9.66 12.5 19.9 -5.3
tention to grant the request. form is the last thing we should for MF Global had sought $3 bil- China Greenchip-A Units CAD H AS
China Greenchip-A Units NZD H AS
EQ CYM
EQ CYM
03/22 CAD
03/22 NZD
9.39
9.93
12.3
12.6
18.4
20.7
-6.6
-4.6
At that point American do,” she said. “The financial sec- lion in damages and interest China Greenchip-A Units USD AS EQ CYM 03/22 USD 9.46 12.4 19.1 -5.6
China Greenchip-A2 QDIs Units AS EQ CYM 03/22 HKD 10.43 12.5 19.3 -4.8
Funds, brokerage firm Ray- tor transcends national borders from PwC in the case, which GC Hi Yield Inc - Cls A MDIs GBP H OT OT CYM 03/22 GBP 9.92 5.7 20.0 NS
mond James Financial Inc. and so must the rules that gov- was in its third week of trial in GC Hi Yield Inc-Cls A MDIs AUD H OT
GC Hi Yield Inc-Cls A MDIs CAD H OT
OT CYM
OT CYM
03/22 AUD
03/22 CAD
9.48
9.55
6.1
6.0
22.1
20.7
14.5
13.0 In print & online. Contact:
and a pair of Hartford Finan- ern it—that is a major lesson federal court in New York. GC Hi Yield Inc-Cls A MDIs NZD H OT OT CYM 03/22 NZD 9.83 6.4 22.9 15.6
GC Hi Yield Inc-Cls P HKD Acc sh OT OT CYM 03/22 HKD 14.98 6.2 21.4 13.2
cial variable-annuity owners from the financial crisis.” MF Global contended that GC Hi Yield Inc-Cls P HKD MDIs sh OT OT CYM 03/22 HKD 9.44 6.2 21.4 13.2
GC Hi Yield Inc-Cls P MDIs SGD H OT OT CYM 03/22 SGD 10.36 6.0 21.0 13.5
wrote letters to the SEC chal- Hers is the latest interna- PwC had given it the wrong ad- GC Hi Yield Inc-Cls P USD Acc sh OT OT CYM 03/22 USD 15.07 6.1 21.0 13.2
lenging Hartford’s move and tional voice to stress the impor- vice on how to account for risky GC Hi Yield Inc-Cls P USD MDIs sh OT OT CYM 03/22 USD 9.48 6.1 21.1 13.1 wsja.advertising@dowjones.com
GC Hi Yield Inc-ClsA MDIs EUR H OT OT CYM 03/22 EUR 10.37 5.6 19.0 11.9
seeking a hearing. They ar- tance of global financial regula- European-debt trades that ulti- Hi-Div Stk Cls A RMB H Acc OT OT HKG 03/22 CNH 11.41 14.1 20.4 5.9
Hi-Div Stk Cls A RMB UnH Acc OT OT HKG 03/22 CNH 13.61 11.1 23.5 8.0
gued a big part of Hartford’s tion, after the administration of mately doomed the company, Hi-Div Stk Cls A1 OT OT HKG 03/22 USD 81.16 13.2 18.1 3.4
initial sales pitch was a large President Donald Trump ordered and that PwC’s advice had con- Hi-Div Stk Cls A2 AUD H MDIs OT
Hi-Div Stk Cls A2 CAD H MDIs OT
OT HKG
OT HKG
03/22 AUD
03/22 CAD
9.76
9.88
12.9
13.1
18.1
17.0
3.7
2.4
array of actively managed a review of American legislation tributed to confusion and concern Hi-Div Stk Cls A2 GBP H MDIs OT OT HKG 03/22 GBP 9.36 14.3 17.4 2.2
Hi-Div Stk Cls A2 HKD MDIs OT OT HKG 03/22 HKD 10.16 13.5 18.4 3.4
funds run by well-known designed to avoid the excesses that helped lead to the broker- Hi-Div Stk Cls A2 MDIs OT OT HKG 03/22 USD 11.11 13.0 17.9 3.3
Hi-Div Stk Cls A2 NZD H MDIs OT OT HKG 03/22 NZD 9.98 13.0 18.6 4.7
money managers. of the crisis from happening age’s failure. Hi-Div Stk Cls A2 RMB H MDIs OT OT HKG 03/22 CNH 9.67 14.6 20.7 5.8
Hartford had said it would again. Europeans worry that PwC maintained its advice Hi-Div Stk Cls A2 RMB UnH MDIs OT
Hi-Div Stk Cls A2 SGD H MDIs OT
OT HKG
OT HKG
03/22 CNH
03/22 SGD
10.10
10.73
11.5
NS
24.9
NS
8.4
NS
run the 11 funds, with five of weaker standards on the other was correct, and that MF Global’s Intel-China Converg Fund-A AUD H AS EQ CYM 03/22 AUD 10.05 14.2 14.6 NS
Intel-China Converg Fund-A CAD H AS EQ CYM 03/22 CAD 11.06 8.8 10.0 NS
them subadvised by Black- side of the Atlantic could both failure was caused by its own Intel-China Converg Fund-A NZD H AS EQ CYM 03/22 NZD 11.35 10.6 10.7 NS
Rock, the world’s biggest cause global instability and po- poor decisions and strategy. Intel-China Converg Fund-A Units AS
Intel-Chinese Mainland Foc Fund AS
EQ CYM
EQ CYM
03/22 USD
03/22 USD
150.20
43.13
12.6
16.4
14.1
20.1
-1.6
1.3
money manager by assets. tentially put European institutes —Michael Rappoport VP Classic-A Units AS EQ HKG 03/22 USD 284.16 11.6 20.7 1.3
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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B6 | Friday - Sunday, March 24 - 26, 2017 THE WALL STREET JOURNAL.

MARKETS DIGEST
Nikkei 225 Index STOXX 600 Index S&P 500 Index Data as of 12 p.m. New York time
Last Year ago
19085.31 s 43.93, or 0.23% Year-to-date t 0.15% 376.67 s 2.64, or 0.71% Year-to-date s 4.22% 2357.54 s 9.09, or 0.39% Trailing P/E ratio * 24.89 23.53
High, low, open and close for each 52-wk high/low 19633.75 14952.02 High, low, open and close for each 52-wk high/low 378.32 308.75 High, low, open and close for each P/E estimate * 18.35 17.55
trading day of the past three months. All-time high 38915.87 12/29/89 trading day of the past three months. All-time high 414.06 4/15/15 trading day of the past three months. Dividend yield 1.97 2.23
All-time high: 2395.96, 03/01/17

* P/E data based on as-reported earnings from Birinyi Associates Inc.

20000 385 2390

19500 375 2350

19000 365 2310

18500 355 2270

Session high
DOWN UP 65-day moving average
18000 345 2230
t

Session open Close

65-day moving average
Close Open
t

65-day moving average

17500 335 2190
Session low
Bars measure the point change from session's open
17000 325 2150
Dec. Jan. Feb. Mar. Dec. Jan. Feb. Mar. Dec. Jan. Feb. Mar.

International Stock Indexes Data as of 12 p.m. New York time Global government bonds
Latest 52-Week Range YTD Latest, month-ago and year-ago yields and spreads over or under U.S. Treasurys on benchmark two-year
Region/Country Index Close NetChg % chg Low Close High % chg and 10-year government bonds around the world. Data as of 12 p.m. ET
World The Global Dow 2688.30 8.93 0.33 2193.75 • 2720.47 6.3 Country/ Spread Over Treasurys, in basis points Yield
MSCI EAFE 1791.95 7.15 0.40 1471.88 • 1956.39 4.4 Coupon Maturity, in years Yield Latest Previous Month Ago Year ago Previous Month ago Year ago
MSCI EM USD 968.35 1.38 0.14 691.21 • 1044.05 21.9 5.250 Australia 2 1.777 50.9 53.6 65.0 115.0 1.788 1.835 2.015
4.750 10 2.754 33.5 36.4 41.9 78.4 2.772 2.794 2.662
Americas DJ Americas 567.65 2.33 0.41 480.90 • 577.65 5.0
3.000 Belgium 2 -176.4 -173.0 -175.3 -131.0 -0.478 -0.569 -0.446
-0.496
Brazil Sao Paulo Bovespa 63534.58 13.24 0.02 47873.65 • 69487.58 5.5
0.800 10 0.907 -151.2 -148.0 -161.8 -142.5 0.928 0.758 0.453
Canada S&P/TSX Comp 15430.88 82.42 0.54 13217.17 • 15943.09 0.9
0.000 France 2 -0.464 -173.2 -172.1 -169.6 -129.2 -0.469 -0.512 -0.428
Mexico IPC All-Share 48731.03 243.73 0.50 43902.25 • 49240.09 6.8
0.250 10 1.031 -138.8 -136.5 -139.7 -132.6 1.043 0.979 0.552
Chile Santiago IPSA 3632.20 8.11 0.22 2998.64 • 3633.95 12.7
0.000 Germany 2 -0.743 -201.1 -203.4 -209.8 -131.2 -0.783 -0.914 -0.448
U.S. DJIA 20738.16 76.86 0.37 17063.08 • 21169.11 4.9
0.250 10 0.420 -199.9 -200.2 -214.1 -168.3 0.406 0.235 0.195
Nasdaq Composite 5839.95 18.31 0.31 4574.25 • 5928.06 8.5
0.300 Italy 2 -0.054 -132.3 -128.9 -116.0 -86.1 -0.038 0.024 0.003
S&P 500 2357.54 9.09 0.39 1991.68 • 2400.98 5.3
1.250 10 2.254 -16.5 -14.7 -16.0 -58.6 2.261 2.215 1.292
CBOE Volatility 12.39 –0.42 –3.28 9.97 • 26.72 –11.8
0.100 Japan 2 -0.270 -153.9 -151.7 -144.5 -108.8 -0.266 -0.261 -0.224
EMEA Stoxx Europe 600 376.67 2.64 0.71 308.75 • 378.32 4.2 0.100 10 0.057 -236.2 -234.6 -229.6 -198.3 0.062 0.080 -0.105
Stoxx Europe 50 3132.33 20.62 0.66 2626.52 • 3151.89 4.0 4.000 Netherlands 2 -0.742 -201.0 -199.0 -200.7 -136.5 -0.738 -0.822 -0.501
France CAC 40 5026.32 31.62 0.63 3955.98 • 5054.91 3.4 0.750 10 0.655 -176.4 -175.5 -183.6 -159.2 0.653 0.540 0.286
Germany DAX 12018.72 114.60 0.96 9214.10 • 12156.44 4.7 4.450 Portugal 2 -0.046 -131.5 -133.1 -122.7 -62.6 -0.079 -0.043 0.238
Israel Tel Aviv 1415.99 –0.02 –0.001 1372.23 • 1504.42 –3.7 2.875 10 3.847 142.9 142.9 157.3 87.7 3.837 3.948 2.754
Italy FTSE MIB 20088.65 135.21 0.68 15017.42 • 20253.65 4.4 2.750 Spain 2 -0.207 -147.5 -145.6 -145.1 -85.4 -0.204 -0.267 0.011
Netherlands AEX 511.89 2.37 0.47 409.23 • 518.88 5.9 1.500 10 1.710 -70.9 -68.0 -69.3 -41.9 1.728 1.683 1.459
Russia RTS Index 1124.35 1.18 0.11 835.75 • 1196.99 –2.4 4.250 Sweden 2 -0.551 -182.0 -181.1 -183.5 -151.8 -0.559 -0.651 -0.654
Spain IBEX 35 10297.80 68.50 0.67 7579.80 • 10334.70 10.1 1.000 10 0.689 -173.0 -171.3 -176.9 -136.3 0.695 0.607 0.515
Switzerland Swiss Market 8612.55 44.67 0.52 7475.54 • 8704.11 4.8 1.750 U.K. 2 0.145 -112.4 -114.6 -108.8 -40.0 0.106 0.096 0.465
South Africa Johannesburg All Share 52027.98 –68.73 –0.13 48935.90 • 54704.22 2.7 4.250 10 1.217 -120.2 -123.2 -113.7 -42.6 1.176 1.239 1.452
Turkey BIST 100 89764.11 –44.98 –0.05 70426.16 • 91497.00 14.9 1.125 U.S. 2 1.268 ... ... ... ... 1.252 1.184 0.864
U.K. FTSE 100 7339.36 14.64 0.20 5788.74 • 7447.00 2.8 2.250 10 2.419 ... ... ... ... 2.408 2.376 1.878
Asia-Pacific DJ Asia-Pacific TSM 1553.44 2.51 0.16 1308.52 • 1570.38 9.2
Australia S&P/ASX 200 5708.00 23.50 0.41 4924.40 • 5816.30 0.7 Commodities Prices of futures contracts with the most open interest 12 p.m. New York time
China Shanghai Composite 3248.55 3.33 0.10 2806.91 • 3282.92 4.7 EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; ICE-US: ICE Futures U.S.; MDEX: Bursa Malaysia
Hong Kong Hang Seng 24327.70 7.29 0.03 19694.33 • 24593.12 10.6 Derivatives Berhad; TCE: Tokyo Commodity Exchange; COMEX: Commodity Exchange; LME: London Metal Exchange;
NYMEX: New York Mercantile Exchange; ICE-EU: ICE Futures Europe. *Data as of 3/22/2017
India S&P BSE Sensex 29332.16 164.48 0.56 24673.84 • 29648.99 10.2 One-Day Change Year Year
Indonesia Jakarta Composite 5563.76 29.67 0.54 4704.22 • 5563.76 5.0 Commodity Exchange Last price Net Percentage high low
358.00 -0.75 -0.21% 387.25 357.25
Japan Nikkei Stock Avg 19085.31 43.93 0.23 14952.02 • 19633.75 –0.2 Corn (cents/bu.) CBOT
Soybeans (cents/bu.) 995.50 -4.25 -0.43 1,088.25 992.00
Malaysia Kuala Lumpur Composite 1747.00 –1.30 –0.07 1614.90 • 1754.67 6.4
Wheat (cents/bu.)
CBOT
CBOT 422.75 0.50 0.12% 477.00 416.25
New Zealand S&P/NZX 50 7062.56 1.73 0.02 6662.55 • 7571.11 2.6
Live cattle (cents/lb.) CME 113.450 -0.325 -0.29 114.200 103.150
Pakistan KSE 100 49016.79 … Closed 32801.88 • 50192.36 2.5
Cocoa ($/ton) ICE-US 2,159 -6 -0.28 2,273 1,869
Philippines PSEi 7301.03 46.10 0.64 6563.67 • 8102.30 6.7
Coffee (cents/lb.) ICE-US 141.10 -0.60 -0.42 159.30 136.70
Singapore Straits Times 3126.93 8.74 0.28 2729.85 • 3169.38 8.5
Sugar (cents/lb.) ICE-US 17.42 0.12 0.69 21.21 17.02
South Korea Kospi 2172.72 4.42 0.20 1925.24 • 2178.38 7.2
Cotton (cents/lb.) ICE-US 77.53 0.19 0.25 79.46 71.55
Taiwan Weighted 9930.74 8.08 0.08 8053.69 • 9972.49 7.3 Robusta coffee ($/ton) ICE-EU 2160.00 -4.00 -0.18 2,279.00 2,093.00
Thailand SET 1568.72 2.06 0.13 1356.69 • 1591.00 1.7
Copper ($/lb.) COMEX 2.6360 0.0055 0.21 2.8360 2.4800
Source: SIX Financial Information;WSJ Market Data Group Gold ($/troy oz.) COMEX 1247.90 -4.90 -0.39 1,268.10 1,152.20
Silver ($/troy oz.) COMEX 17.590 0.012 0.07 18.540 16.000
Currencies London close on March 23 Aluminum ($/mt)* LME 1,921.50 -8.50 -0.44 1,939.00 1,688.50
Tin ($/mt)* LME 20,375.00 -100.00 -0.49 21,225.00 18,760.00
Yen, euro vs. dollar; dollar vs. major U.S. trading partners US$vs,
Thu YTDchg Copper ($/mt)* LME 5,741.00 -53.00 -0.91 6,156.00 5,518.00
Country/currency in US$ per US$ (%) Lead ($/mt)* LME 2,324.00 33.00 1.44 2,445.00 2,022.00
20%
s Europe Zinc ($/mt)* LME 2,838.50 -38.50 -1.34 2,958.50 2,555.00
Yen Bulgaria lev 0.5515 1.8134 –2.4 Nickel ($/mt)* LME 9,985.00 -175.00 -1.72 11,095.00 9,430.00
10 WSJ Dollar index
s Croatia kuna 0.1454 6.877 –4.1 Rubber (Y.01/ton) TCE 250.00 1.00 0.40 n.a. n.a.
Euro zone euro 1.0783 0.9274 –2.4
0 Palm oil (MYR/mt) MDEX 2771.00 -58.00 -2.05 3,068.00 2,642.00
Czech Rep. koruna-b 0.0399 25.059 –2.4
s Euro Denmark krone 0.1450 6.8962 –2.4 Crude oil ($/bbl.) NYMEX 47.76 -0.28 -0.58 57.50 47.01
–10 0.003486 286.89 –2.5
Hungary forint NY Harbor ULSD ($/gal.) NYMEX 1.5044 0.0002 0.01 1.7770 1.4825
Iceland krona 0.008994 111.18 –1.6 RBOB gasoline ($/gal.) NYMEX 1.6011 -0.0114 -0.71 1.9065 1.5824
–20 Norway krone 0.1178 8.4866 –1.8
0.2529 3.9539 –5.6
Natural gas ($/mmBtu) NYMEX 3.108 0.035 1.14 3.5070 2.7370
2016 2017 Poland zloty
Russia ruble-d 0.01742 57.408 –6.3 Brent crude ($/bbl.) ICE-EU 50.71 -0.16 -0.31 59.89 50.00
US$vs, US$vs,
YTDchg YTDchg Sweden krona 0.1134 8.8189 –3.2 Gas oil ($/ton) ICE-EU 450.25 3.25 0.73 523.50 444.00
Thu Thu
Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%) Switzerland franc 1.0073 0.9928 –2.6
Turkey lira 0.2759 3.6243 2.9 Sources: SIX Financial Information; WSJ Market Data Group
Americas Hong Kong dollar 0.1287 7.7672 0.2
Ukraine hryvnia 0.0369 27.1100 0.1
Argentina peso-a 0.0640 15.6199 –1.6
India rupee
Indonesia rupiah
0.0153
0.0000751
65.4320
13319
–3.7
–1.5
U.K. pound 1.2518 0.7988 –1.4 Cross rates London close on Mar 23
Brazil real 0.3190 3.1349 –3.7 Middle East/Africa
Japan yen 0.008990 111.23 –4.9
Canada dollar 0.7500 1.3333 –0.8 USD GBP CHF JPY HKD EUR CDN AUD
Kazakhstan tenge 0.003166 315.81 –5.4 Bahrain dinar 2.6526 0.3770 –0.05
Chile peso 0.001510 662.40 –1.1 Australia 1.3089 1.6386 1.3182 0.0118 0.1685 1.4113 0.9815 ...
Macau pataca 0.1249 8.0056 1.1 Egypt pound-a 0.0549 18.2033 0.4
Colombia peso 0.0003427 2918.00 –2.8 Canada 1.3333 1.6690 1.3428 0.0120 0.1717 1.4376 ... 1.0187
Malaysia ringgit-c 0.2258 4.4283 –1.3 Israel shekel 0.2741 3.6488 –5.2
Ecuador US dollar-f 1 1 unch
New Zealand dollar 0.7040 1.4205 –1.6 Kuwait dinar 3.2823 0.3047 –0.3 Euro 0.9274 1.1609 0.9340 0.0083 0.1194 ... 0.6955 0.7086
Mexico peso-a 0.0527 18.9849 –8.4
Pakistan rupee 0.0096 104.700 0.3 Oman sul rial 2.5974 0.3850 0.01 Hong Kong 7.7672 9.7214 7.8219 0.0698 ... 8.3742 5.8243 5.9341
Peru sol 0.3079 3.2476 –3.1
Philippines peso 0.0199 50.366 1.5 Qatar rial 0.2746 3.642 0.04 Japan 111.2330 139.2800 112.0600 ... 14.3260 119.9800 83.4600 85.0200
Uruguay peso-e 0.0355 28.160 –4.1
Singapore dollar 0.7144 1.3998 –3.3 Saudi Arabia riyal 0.2666 3.7505 –0.01 0.9928 1.2429 ... 0.0089 0.1278 1.0707 0.7447 0.7586
Venezuela bolivar 0.100150 9.99 –0.1 Switzerland
South Korea won 0.0008938 1118.86 –7.4 South Africa rand 0.0801 12.4894 –8.8
U.K. 0.7988 ... 0.8046 0.0072 0.1029 0.8615 0.5991 0.6104
Asia-Pacific Sri Lanka rupee 0.0065815 151.94 2.4 Close Net Chg % Chg YTD % Chg
0.7640 1.3089 –5.7 Taiwan dollar 0.03284 30.453 U.S. ... 1.2518 1.0073 0.0090 0.1287 1.0783 0.7500 0.7640
Australia dollar –6.2 WSJ Dollar Index 90.05 0.06 0.06 –3.11
China yuan 0.1452 6.8862 –0.8 Thailand baht 0.02889 34.610 –3.4 Sources: Tullett Prebon, WSJ Market Data Group Source: Tullett Prebon

Key Rates Top Stock Listings 12 p.m. New York time

Latest 52 wks ago % YTD% % YTD% % YTD%
Libor Cur Stock Sym Last Chg Chg Cur Stock Sym Last Chg Chg Cur Stock Sym Last Chg Chg Asia Titans 50
One month 0.98167% 0.43500% ¥ TakedaPharm 4502 5239.00 0.33 8.36 £ RoyDtchShell A RDSA 2098.00 -0.31 -6.44 Last: 153.13 t 0.44, or 0.29% YTD s 8.6%
Three month 1.15289 0.62860 Asia Titans HK$ TencentHoldings 0700 223.00 -0.98 17.55 € SAP SAP 90.98 0.53 9.87
Six month 1.42794 0.91090 HK$ AIAGroup 1299 50.20 0.60 14.74 ¥ TokioMarineHldg 8766 4835.00 0.46 0.81 € Sanofi SAN 83.69 1.11 8.83 High 155
One year 1.80372 1.23115 ¥ AstellasPharma 4503 1505.50 0.10 -7.27 ¥ ToyotaMtr 7203 6160.00 -0.02 -10.44 € SchneiderElectric SU 66.88 0.72 1.16 Close 150
Euro Libor AU$ AustNZBk ANZ 30.77 0.03 1.15 AU$ Wesfarmers WES 43.40 0.25 2.99 € Siemens SIE 123.40 1.15 5.65 Low t 145
One month -0.39786% -0.32986% AU$ BHP BHP 24.19 1.13 -3.47 AU$ WestpacBanking WBC 33.44 -0.15 2.58 CHF Syngenta SYNN 434.50 0.28 7.95
Three month -0.35571 -0.24886 HK$ BankofChina 3988 3.94 0.25 14.53 AU$ Woolworths WOW 25.61 0.71 6.27 € Telefonica TEF 10.49 0.53 18.93 50–day 140
Six month -0.24729 -0.13929 HK$ CKHutchison 0001 97.80 1.40 11.26 € Total FP 46.38 0.29 -3.86 moving average 135
One year -0.11000 -0.01714 HK$ CNOOC 0883 8.89 -0.45 -8.35 Stoxx 50 CHF UBSGroup UBSG 15.51 -0.13 -2.76
130
Euribor AU$ CSL CSL 122.37 -0.17 21.87 € Unilever UNA 46.77 0.52 19.56
CHF ABB ABBN 23.22 1.13 8.10
One month -0.37300% -0.33100% ¥ Canon 7751 3483.00 -0.06 5.71 £ Unilever ULVR 4017.50 -0.20 22.02 30 6 13 20 27 3 10 17 24 3 10 17
€ ASMLHolding ASML 120.05 0.80 12.56
Three month -0.33000 -0.24200 ¥ CentralJapanRwy 9022 18440 0.82 -4.11 € Vinci DG 73.63 1.99 13.80 Jan. Feb. Mar.
€ AXA CS 23.59 0.45 -1.65
Six month -0.24200 -0.13400 HK$ ChinaConstructnBk 0939 6.40 0.63 7.20 £ VodafoneGroup VOD 211.50 1.85 5.83
€ AirLiquide AI 106.20 0.19 0.52
One year -0.10700 -0.00500 HK$ ChinaLifeInsurance 2628 24.30 ... 20.30 CHF ZurichInsurance ZURN 285.00 0.21 1.64
171.15
Yen Libor HK$ ChinaMobile 0941 87.25 -3.43 6.14
€
€
Allianz
AB InBev
ALV
ABI 103.20
1.33
0.39
9.01
2.64 DJIA Stoxx 50
One month 0.00729% -0.07514% HK$ ChinaPetro&Chem 0386 6.13 0.49 11.45
4961.00
Three month 0.04150 -0.00557 AU$ CmwlthBkAust CBA 82.95 0.29 0.66
£ AstraZeneca AZN 2.24 11.80
$ AmericanExpress AXP 78.24 0.73 5.62
Last: 3132.33 s 20.62, or 0.66% YTD s 4.0%
€ BASF BAS 89.53 0.94 1.38
Six month 0.04750 0.02343 ¥ EastJapanRailway 9020 9726.00 -0.27 -3.70
€ BNP Paribas BNP 61.03 1.23 0.79
$ Apple AAPL 141.28 -0.10 21.98 3175
One year 0.14971 0.11229 ¥ Fanuc 6954 22680 0.29 14.46
£ BT Group BT.A 331.10 0.17 -9.76
$ Boeing BA 177.54 0.32 14.04
¥ Hitachi 6501 614.00 0.39 -2.85 $ Caterpillar CAT 92.67 0.26 -0.08 3100
Offer Bid € BancoBilVizAr BBVA 7.19 0.57 12.11
TW$ Hon Hai Precisn 2317 91.30 -0.22 8.43 $ Chevron CVX 108.45 0.06 -7.86 3025
Eurodollars € BancoSantander SAN 5.70 0.35 14.96
¥ HondaMotor 7267 3434.00 0.62 0.56 $ CiscoSystems CSCO 34.15 0.13 12.99
One month 1.1000% 1.0000% £ Barclays BARC 224.10 -0.20 0.29 2950
KRW HyundaiMtr 005380 165000 -2.94 13.01 $ Coca-Cola KO 42.30 -0.20 2.01
Three month 1.3000 1.2000 € Bayer BAYN 107.00 1.86 7.94
2875
HK$ Ind&Comml 1398 5.17 0.58 11.18 $ Disney DIS 112.66 0.52 8.10
Six month 1.4000 1.3000 £ BP BP. 455.50 0.16 -10.62
79.66 0.61 8.53
¥ JapanTobacco 2914 3753.00 0.03 -2.37 $ DuPont DD 2800
One year 1.7500 1.6500 £ BritishAmTob BATS 5177.78 -0.04 12.04
82.13 0.45 -9.01
¥ KDDI 9433 2972.00 -1.16 0.42 $ ExxonMobil XOM
Latest 52 wks ago € Daimler DAI 70.54 0.92 -0.25 $
29.69 0.54 -6.04 30 6 13 20 27 3 10 17 24 3 10 17
¥ Mitsubishi 8058 2430.00 0.10 -2.41 GeneralElec GE
Prime rates € DeutscheTelekom DTE 16.11 1.00 -1.47 $
233.87 1.21 -2.33 Jan. Feb. Mar.
¥ MitsubishiElectric 6503 1638.00 -0.49 0.52 GoldmanSachs GS
U.S. 4.00% 3.50% £ Diageo DGE 2306.66 -0.14 9.32 $ HomeDepot HD 147.94 0.39 10.34
¥ MitsubishiUFJFin 8306 708.30 -0.76 -1.65
Canada 2.70 2.70 € ENI ENI 15.01 0.81 -2.97 $ Intel INTC 35.15 -0.64 -3.10
¥ Mitsui 8031 1614.50 -1.40 0.47
1676.00
Japan
Hong Kong
1.475
5.00
1.475
5.00
¥ Mizuho Fin 8411 206.80 0.15 -1.43
£
£
GlaxoSmithKline
HSBC Hldgs
GSK
HSBA 646.70
0.33 7.30 $
-0.12 -1.55 $
IBM
JPMorganChase
IBM
JPM
175.31
88.20
0.30
0.77
5.61
2.22
Dow Jones Industrial Average P/E: 21
¥ NTTDoCoMo 9437 2661.50 -0.43 -0.06
€ INGGroep INGA 13.89 0.54 3.93 $ J&J JNJ 126.66 0.32 9.94 Last: 20738.16 s 76.86, or 0.37% YTD s 4.9%
Policy rates AU$ NatAustBnk NAB 31.76 0.16 3.55
£ ImperialBrands IMB 3805.50 -0.56 7.42 $ McDonalds MCD 129.30 0.15 6.23
ECB 0.00% 0.00% ¥ NipponTeleg 9432 4946.00 0.47 0.69
€ IntesaSanpaolo ISP 2.53 1.04 4.37 $ Merck MRK 63.50 0.01 7.87 21000
Britain 0.25 0.50 ¥ NissanMotor 7201 1116.50 0.13 -5.02
€ LVMHMoetHennessy MC 201.05 0.73 10.83 $ Microsoft MSFT 65.03 ... 4.65
Switzerland 0.50 0.50 ¥ Panasonic 6752 1200.00 -0.41 0.88 20450
£ LloydsBankingGroup LLOY 68.47 1.24 9.53 $ Nike NKE 55.33 2.61 8.85
Australia 1.50 2.00 HK$ PingAnInsofChina 2318 43.65 0.92 12.50
€ LOreal OR 178.75 0.25 3.09 $ Pfizer PFE 34.52 0.16 6.30 19900
U.S. discount 1.50 1.00 $ RelianceIndsGDR RIGD 38.70 1.44 22.66
£ NationalGrid NG. 1006.11 0.46 5.73 $ Procter&Gamble PG 91.31 0.35 8.60
Fed-funds target 0.75-1.00 0.25-0.50 KRW SamsungElectronics 005930 2090000 -1.55 15.98
CHF Nestle NESN 77.35 0.52 5.89 $ 3M MMM 192.66 0.23 7.89 19350
Call money 2.75 2.25 ¥ Seven&I Hldgs 3382 4385.00 0.76 -1.53
CHF Novartis NOVN 74.20 1.09 0.13 $ Travelers TRV 122.00 -0.02 -0.34
Overnight repurchase rates ¥ SoftBankGroup 9984 8049.00 -0.05 3.66 18800
DKK NovoNordiskB NOVO-B 234.50 0.43 -7.93 $ UnitedTech UTX 112.30 0.33 2.44
U.S. 0.80% 0.37% ¥ Sony 6758 3540.00 -0.37 8.09
£ Prudential PRU 1716.00 -0.61 5.44 $ UnitedHealth UNH 166.66 -0.22 4.14 30 6 13 20 27 3 10 17 24 3 10 17
Euro zone n.a. n.a. ¥ Sumitomo Mitsui 8316 4145.00 -0.12 -7.06
£ ReckittBenckiser RB. 7372.22 -0.78 7.06 $ Visa V 89.25 0.82 14.39 Jan. Feb. Mar.
HK$ SunHngKaiPrp 0016 114.90 ... 17.24
Sources: WSJ Market Data Group, SIX £ RioTinto RIO 3260.00 -1.50 3.21 $ Verizon VZ 49.82 0.21 -6.68 Note: Price-to-earnings ratios are for trailing 12 months
TW$ TaiwanSemiMfg 2330 193.50 ... 6.61
Financial Information, Tullett CHF RocheHldgctf ROG 252.80 1.04 8.68 $ Wal-Mart WMT 70.20 -0.07 1.56 Sources: WSJ Market Data Group; Birinyi Associates
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL. Friday - Sunday, March 24 - 26, 2017 | B7

FINANCE & MARKETS

Gains Slow in Trendy Private-Equity Play

Returns for funds
raised to lend to
smaller companies
drop to single digits
BY GREGORY ZUCKERMAN
Returns are cooling in one
of the hottest pockets of pri-
vate equity.
Private-equity funds raised
in 2008, 2010 and 2011 to lend
money to small and midsize
companies have scored annual
returns of 14%, 10% and 12%,
respectively, according to data
tracker Preqin. The impressive
results are part of the reason
many pension funds, endow-
ments and other institutions
have increased allocations to
private equity in recent years,
as they shifted away from
hedge funds. (Too little infor-
mation exists on funds raised
in 2009 to make results rele-
vant, Preqin said.)
But profit from direct lend-
ing, as the business is called,
is declining, partly because
more funds are chasing the
strategy, industry executives
said. Funds launched in 2012,
2013 and 2014 have seen an-
all the money raised.
Trickling Down Big-name private-equity
Funds that do direct lending to funds have focused on the cor-
businesses have posted solid, but porate-lending market in the
declining, returns. years following the credit cri-
sis, when newly cautious
Median net IRR* of direct lending funds
banks pulled back from some
by year, based on first investment
lending. Over $117 billion was
16%
raised for these lending funds
in the four years ended in
14 2016, up from $22 billion in
the previous four years, ac-
12 cording to Preqin.
This year alone, $11.9 bil-
10 lion has been raised for these
funds. Some of these funds
8 borrow money to amplify the
size of their funds, suggesting
6 that the pool of available cash
’08 ’09 ’10 ’11 ’12 ’13 ’14 likely is even greater.
Last year, Bain Capital LP,
*A measure of private-equity performance
Note: Too few funds were raised in 2009 to
Angelo Gordon & Co. and Neu-
make results relevant. berger Berman Group LLC
Source: Preqin raised funds to do this kind of
THE WALL STREET JOURNAL. direct lending. KKR & Co., Car-
lyle Group LP, Apollo Global
nual returns of 9.9%, 7.8% and Management LLC and Black-
8.2%, respectively. While the stone Group LP’s GSO credit
performance remains respect- unit are also in the business.
able, the slowdown raises Although commercial loans in-
questions about future re- creased at double-digit-per-
turns, some investors said. centage annual rates after the
It is too soon to judge re- crisis, according to the Federal
sults from funds raised more Reserve, many banks became
recently, analysts said, be- more reluctant to lend to some
cause it takes time to invest midsize and smaller compa-
Mounting Interest
Aggregate capital raised in
direct-lending funds
$40 billion
30
20
10
0 “Rates have come down as
2007 ’10
*Data through March 22
Source: Preqin
THE WALL STREET JOURNAL.
nies, partly as regulators pres-
sured them to reduce riskier
kinds of lending. That created
an opening for private lenders.
U.S. banks made 6.2% of
larger middle-market loans
sold to investors last year by
dollar volume, down from 25%
in 2009, while institutional in-
vestors made 59.4% of these
loans, up from 30.3% in 2009,
according to S&P/LCD.
Now, though, some firms
are adjusting to deal with
mounting competition. One is
MB Global Partners. In the
years following the financial
crisis, the now-$600 million
New York-based private-equity
firm lent money to companies
at rates of more than 15%,
while demanding collateral
and strict covenants, or lender
protections.
Now, borrowers can get
“covenant-lite” financing at
rates below 10%, or financing
without those safeguards, said
Maria Boyazny, the firm’s
founder.
the space becomes overheated
’17*
so we’re turning away” from
this kind of lending, said Ms.
Boyazny.
Lately, companies with
about $25 million in earnings
before interest, taxes, depreci-
ation and amortization, or
Ebitda, are getting loans at
rates equivalent to about 5
percentage points above the
London interbank offered rate,
down from 7 points a few
years ago, bankers said.
Bain Capital is increasingly
active in lending to middle-
market companies in Europe
and Australia and has opened
an office in Dublin, where ex-
ecutives see more limited new
lending from banks and rival
funds, a spokesman said.
Trevor Clark, co-managing
partner of TwinBrook Capital
Partners, a finance company
owned by Angelo Gordon, said
recent pricing pressures have
been fiercer for midsize and
larger companies looking to
borrow money, so the firm has
focused on lending to smaller
companies with less than $20
million in annual Ebitda.
Fans of these loans said the
economy seems to be getting
better, reducing the chances of
defaults. They also argue the
market is big enough to han-
dle the influx of new lenders.
Drew Schardt, a managing
director at Hamilton Lane Ad-
visors LLC, which invests in
direct lending and other pri-
vate-equity funds for clients,
estimates the market for a
typical borrower—a company
with between $25 million and
$100 million in Ebidta—is
about $1 trillion in size.
“The outperformance [com-
pared with other public debt
investments] has been there,
and we think it will continue,”
Mr. Schardt said.

Stocks Recover Ground in Australia, Japan

BY DAVID WINNING and fiscal stimulus. yen, which makes Japanese also each added 0.2%.
AND KOSAKU NARIOKA Australia’s resources exports less competitive. Stocks, the dollar and gov-
stocks signaled the more-up- Thursday, companies reli- ernment bond yields pulled
Australian shares rose on beat mood, with diversified ant on domestic demand, back earlier this week as Re-
Thursday, as investors miners—seen as beneficiaries such as those in the food and publicans struggled to gather
showed signs of regaining of increased commodity de- utility sectors, supported the votes to push forward a
confidence after a selloff ear- mand—mostly on the rise. market. Beverage maker health-care plan.

lier in the week driven by
doubt about U.S. President
Donald Trump’s legislative
agenda.
THURSDAY’S The S&P/
MARKETS ASX 200 in-
dex closed up
0.4%, or 23.5
points at 5708 ahead of a vote
in the U.S. House of Represen-
tatives on dismantling the Af-
fordable Care Act that is seen
as a test of Mr. Trump’s ability
to enact corporate-friendly
policies such as tax reform
Many producers of gold, of-
ten used as a haven in times
of market stress, weakened.
BHP Billiton rose 1.1% as a
tropical low passed the Pil-
bara region, a center for
iron-ore mining, without inci-
dent.
Gains were more muted in
Tokyo, where the Nikkei
Stock Average rose 43.93
points, or 0.2%, to 19085.31,
following a 2.1% drop
Wednesday. The decline was
sparked by strength in the
Asahi Group Holdings rose
2.6% and Kansai Electric
Power gained 1.25%.
The Shanghai Composite
ended 0.1% higher, while
Hong Kong’s Hang Seng index
eked out a marginal gain.
In the U.S., shares were
higher near midday in New
York as investors anticipated
the health-care vote.
The Dow Jones Industrial
Average gained 30 points, or
0.2%, to 20692. The S&P 500
and the Nasdaq Composite
“The most important issue
for financial markets is for
Congress to be finished with
this bill one way or another
so that it can move forward
with tax reform, which is
likely to have a greater effect
on corporate earnings and
the real economy,” said Alec
Phillips, U.S. political econo-
mist at Goldman Sachs.
Stocks that were among
the biggest decliners in the
selloff earlier this week led
gains.
BHP rose as a storm passed a key mining area without incident.
Shares of financial compa-
nies in the S&P 500 jumped
1%, with Bank of America up
1.8% and Morgan Stanley up
1.6%. Industrial stocks, which
investors have bet would
benefit from Mr. Trump’s
plans to boost infrastructure
DAVID GRAY/REUTERS
spending, added 0.2%.
Stocks of small companies,
which many investors thought
would benefit most from Mr.
Trump’s potential policies,
rose The Russell 2000 index of
small-capitalization companies
added 0.9%.

AustCham
Commonwealth Bank
Rugby Sevens Lunch

12-3pm 6 April 2017

Grand Hyatt Hong Kong

LOOKING TO BUILD YOUR BUSINESS NETWORK?

CONNECT with AUSTCHAM, your link to the Australian
business community in Hong Kong and Macau.

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+852 2522 5054 for more details.

Kick-off Cocktail from 12nn, sponsored by:

2017 Dow Jones & Company, Inc. All rights reserved.

For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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B8 | Friday - Sunday, March 24 - 26, 2017
Retailers Pinched on 0% Financing Treasurys
Retreat as
Shoppers have come
to expect free loans,
but rising rates mean
higher cost for sellers
BY SERENA NG
AND VIPAL MONGA
The Federal Reserve is
pushing interest rates higher.
Don’t tell that to people who
have become accustomed to
buying everything at 0%.
Years of rock-bottom inter-
est rates have led to a prolifer-
ation of no-interest financing
offers for people looking to
buy everything from cars to
lawn mowers, jewelry and fur-
niture. Manufacturers and re-
tailers have come to lean
heavily on these deals, which
are an inducement for shop-
pers considering large or dis-
cretionary purchases.
Now, with interest rates
climbing, the cost of these ar-
rangements will rise, pinching
profits at companies that de-
rive a large chunk of their
sales from shoppers who pre-
fer to pay in bite-size pieces.
Most retailers will likely ab-
sorb the higher costs to stay
competitive because custom-
ers may turn elsewhere if they
are asked to pony up interest
charges.
The cost of providing 0% fi-
nancing varies from company
to company, but generally re-
tailers pay a middleman—usu-
ally a bank or finance com-
pany—a few percentage points
of a product’s purchase price
upfront. The practice is known
as “buying down the rate to
zero” because retailers are in
effect footing the financing
costs for their customers.
For a shopper buying a
$10,000 hot tub with 0% fi-
nancing over three years, that
may translate into the retailer
paying a bank or finance com-
pany around $1,000 upfront,
or around 10% of the purchase
price. The consumer then
makes monthly payments to
the finance company.
Email: heard@wsj.com
A Rare Value in the Biotech World
Biotech and value invest-
ing don’t traditionally go to-
gether. Enanta Pharmaceu-
ticals is an exception to that
rule.
Enanta is a development-
stage biotech focused on
treatments for liver disease.
The company’s first com-
pound to hit the market is a
key ingredient in AbbVie’s
hepatitis C treatment,
Viekira Pak. Enanta’s princi-
pal source of current revenue
is royalty payments based on
Viekira sales.
Companies focused on
hepatitis C, once the darling
of the biotech sector, have
fallen out of favor as compe-
tition and pricing pressure
pull revenue lower industry-
wide. Enanta hasn’t been im-
mune to this; its shares are
down by more than 40%
from a peak hit in 2015.
Gilead Sciences, the market
leader in hepatitis C, has ex-
perienced a similar decline.
However, that gloomy
backdrop presents an oppor-
tunity. Thanks to those roy-
alty payments, Enanta is able
to fund its own development
operations with cash on
hand. That is a rarity for a
The Pork Giant Who May Win From Brazilian Beef Ban
A major meat scandal in
Brazil could open up oppor-
tunities for U.S. producers to
feed China, the world’s most
populous country. But it is
China’s biggest pork pro-
ducer who may do best.
The Brazilian meat indus-
try, which is the globe’s big-
gest exporter of beef and
poultry, has ground to a halt
following a police investiga-
tion dubbed “Weak Flesh”
into allegations that meat-
packers bribed inspectors to
give health certificates to
rotten meat.
The meat producers and
the government deny the
charge, but the damage is
done.
General Motors has long provided 0% financing on many new models, and expects to keep doing so.
The upfront fees retailers
pay are often tied to a short-
term London interbank offered
rate, which tends to rise in
tandem with the Fed-guided
federal-funds rate. As interest
rates climb, banks are likely to
increase these fees. The six-
month Libor has risen to 1.43%
from 0.9% a year ago, accord-
ing to Bankrate.com, as the
fed-funds rate has risen by
half a percentage point.
The 0% deals will get more
expensive, says Mike Rittler,
head of retail card services at
TD Bank, which provides no-
interest financing to custom-
ers of 25 U.S. retailers, includ-
ing sellers of furniture and
tractors. Retailers could limit
their costs by providing no-in-
terest financing for shorter
terms, he notes.
Companies in many cases
say they don’t plan to ditch
HEARD ON THE STREET
Rough Treatment
Gilead Sciences and
Enanta Pharmaceuticals
share-price performance
30%
20
10
0 hepatitis. Enanta owns the
–10
–20
–30
–40
–50
–60
2015 ’16
Source: WSJ Market Data Group
THE WALL STREET JOURNAL.
biotech of this size. The com-
pany had more than $200
million in cash on the bal-
ance sheet as of last Decem-
ber.
And while Viekira sales
have slowed, the picture is
brighter for AbbVie’s coming
hepatitis C drug. It also uses
a compound developed by
Enanta, and the drug may be
approved by the Food and
Drug Administration as soon
as this summer. Enanta is set
to earn up to $80 million in
milestone payments as vari-
Brazil’s meat exports were
worth a mere $74,000 on
Tuesday, compared with
$60.5 million on Monday, as
17 countries have imposed
restrictions on Brazilian
meat imports. These coun-
tries include China, which
together with the semiauton-
omous territory of Hong
Kong is the biggest buyer of
Brazilian meat.
That could be good news
for U.S. meat producers Ty-
son Foods and Cargill. The
companies are waiting to sell
more meat to China, which
lifted a 13-year ban on U.S.
beef in 2016, imposed due to
fears over mad-cow disease.
The beef trade has yet to re-
MARKETS
the offers, which have become
a cornerstone of their market-
ing efforts since the financial
crisis. But if profit margins
get compressed, analysts say
companies may be forced to
act.
“Cash has been free for so
long that everyone has been
able to offer these no-interest
deals,” says David Bassuk, a
managing director and co-
head of the retail practice at
consulting firm AlixPartners.
“As it becomes more expensive
for companies, the game is go-
ing to change.”
In general, the longer the
no-interest payment term, the
higher the cost to the seller.
“The offers that were the most
generous will become harder
to find, because retailers will
have to give up more income
to provide them,” says Bill Mc-
Cracken, CEO of Phoenix Syn-
FINANCIAL ANALYSIS & COMMENTARY
Gilead
Enanta
Associated Press
’17
Gilead Sciences headquarters
in Foster City, Calif.
ous countries approve this
drug. Enanta also is entitled
to sales royalties on it.
Those royalty payments
are likely to be substantial,
despite falling sales of hepa-
titis C drugs, as the sickest
patients from wealthy coun-
tries get cured. Gilead said in
February that it expects be-
tween 150,000 and 175,000
patients to start treatment
this year in the U.S. Last
year, 231,000 Americans
started treatment. However,
millions of patients have yet
sume, due to administrative
issues, but the Brazilian inci-
dent could speed things up.
Though a big chunk of
U.S. beef has likely already
crossed the border through
gray channels into China
from Hong Kong, which is
the fifth-biggest importer of
U.S. beef, the establishment
of an official channel would
likely boost demand.
But there is an easy alter-
native for China’s carnivores:
Eat more pork, which is way
more popular than beef in
the country anyway.
Brazil also exports pork,
though not as much as it
does beef and poultry.
Meanwhile, China’s WH
ergistics, a consumer research
firm.
So far, there are few signs
that offers are fading—after
all, interest rates, and most
companies’ funding costs, re-
main relatively low. Several
retailers say shoppers also
have come to expect the deals.
General Motors Co., which
has long provided 0% financ-
ing for up to 72 months on
many new car and truck mod-
els, expects to continue the
deals. “The beauty of 0% is
that it’s pretty easy to under-
stand.” says Jim Cain, a GM
spokesman.
In 2002, GM and other auto
makers did away with 0% fi-
nancing deals and moved to
other types of sales incentives
to woo customers. Roughly a
year later, they brought back
the deals to counter sluggish
sales.
to be treated world-wide.
That means sales should bot-
tom out at some point.
The upside is significant.
Enanta has five product can-
didates in development for
liver maladies like hepatitis
B and nonalcoholic steato-
full rights—and the upside—
to these compounds.
Granted, failure is an in-
herent risk in drug develop-
ment. The vast majority of
candidates never make it to
the market, and it will take
years for any of Enanta’s
pipeline candidates to gener-
ate sales in the rosiest sce-
nario. However, Enanta can
point to a record of develop-
ing drugs that work.
What is more, expecta-
tions are low, a value-stock
hallmark. “The current price
bakes in worst-case realistic
outcomes for existing prod-
ucts and total failure in the
pipeline,” said Dan McMurt-
rie, principal of Tyro Part-
ners, a hedge fund that owns
Enanta shares.
All this suggests Enanta is
a risk investors should be
comfortable taking.
—Charley Grant
Pigs Can Fly
U.S. pork exports to China and
Hong Kong
$1.0 billion
0.8
0.6
0.4
0.2
0
2008 ’10 ’12 ’14
Source: U.S. Meat Export Federation
THE WALL STREET JOURNAL.
Group, which bought Amer-
ica’s Smithfield Foods in
2013, stands to benefit.
The whole rationale of the
Smithfield purchase was to
THE WALL STREET JOURNAL.
Television shopping net-
work QVC last year started
selling a $399 Dyson high-
speed hair dryer that many
people purchased using a six-
month, no-interest installment
plan. “The product is a want
and a desire, and not a need,
and being able to pay in
smaller amounts” makes the
items more affordable for cus-
tomers, says Peter Goodnough,
QVC’s vice president of Cus-
tomer Insights & Analytics.
The retailer has no plans to
change its offers for no-inter-
est financing.
At electronics and furniture
chain P.C. Richard & Son, close
to a third of shoppers’ pur-
chases are made with store-
branded credit cards that au-
tomatically let customers pay
in interest-free installments,
DAVID PAUL MORRIS/BLOOMBERG NEWS
says Chief Financial Officer
Tom Pohmer. Shoppers can get
12 to 60 months’ financing on
expensive items such as
$2,000 mattresses. “The pro-
motions are very important
for our customers, and we will
offer them when interest rates
are high or low,” Mr. Pohmer
adds.
Although they acknowl-
edge that rising interest rates
will increase their costs,
many retailers are hoping the
Fed’s rate increase is a sign
of an improving economy,
which should help their sales
grow.
Consumers, meanwhile, can
be very sensitive to changes in
interest rates. Patrick Wil-
liams, senior director of mar-
keting at Jacuzzi Group
Worldwide, a Chino Hills, Ca-
lif., maker of hot tubs and
other bath products, says his
company has in the past ex-
perimented with 1.99% and
2.99% financing offers, with
mixed results. “Consumers
have become conditioned to
seek out 0% financing,” he
says.
In recent years, credit-card
issuers also have aggressively
used 0% offers to persuade
people to transfer their card
balances over from rivals.
OVERHEARD
Whether or not it is one in
the White House’s good
graces, owning a cable-news
network is good business
these days.
Major U.S. cable-news net-
works finished 2016 at record
viewership levels, despite
pay-TV subscriber losses. Av-
erage nightly prime-time
viewership at CNN, Fox News
and MSNBC rose 56% year
over year in the fourth quar-
ter versus a 3% decline for
cable networks overall, ac-
cording to Evercore ISI.
Cable news has taken
share, helped by a conten-
tious election. The three net-
works accounted for about
10% of prime-time cable
viewership in the fourth quar-
ter, up from 6.9% during the
fourth quarter of 2012.
Using a multiple of nine
times estimates for 2017
earnings before interest,
taxes, depreciation and amor-
tization, CNN and MSNBC
would be valued at $9.7 bil-
lion and $7.5 billion, respec-
tively, Evercore ISI says. Fox
News would be valued at
$10.3 billion. Fake news or
not, that is real money.
take advantage of lower hog
prices in the U.S. and higher
pork prices in China. Prog-
ress since the deal has been
slow, but seems to have
picked up.
WH reported better-than-
expected earnings on
Wednesday for 2016, as op-
erating profit for its U.S.
fresh pork business nearly
tripled, partly due to more
’16 exports. Its Hong Kong-listed
stock rose 10% Thursday—in
a reaction to the results
rather than the news out of
Brazil.
It is time for the competi-
tion to feast on Brazil’s
“weak flesh.”
—Jacky Wong
Investors
Take Profit
BY MIN ZENG
The U.S. government bond
market pulled back Thursday,
driven by some profit-taking
following the biggest four-day
price gains since June ahead
of a planned House vote on
the health-care bill.
A strong housing report
Thursday also weighed on
bond prices.
CREDIT New-home sales
MARKETS rose 6.1% last
month compared
with a 1.4% gain
forecast by economists, a posi-
tive sign for the U.S. economy.
In midday trading, the yield
on the 10-year Treasury note
was 2.409%, according to
Tradeweb. The yield was
2.398% Wednesday, the lowest
close since the end of Febru-
ary. Yields rise as bond prices
fall.
Uncertainty over the pas-
sage of the health-care bill rat-
tled the Trump trade earlier
this week, causing investors to
dial back exposure to riskier
assets and embrace haven
bonds.
The Dow Jones Industrial
Average on Tuesday logged
the biggest one-day selloff
since September while Trea-
sury yields sank.
Since President Donald
Trump’s election win in No-
vember, buying stocks and the
dollar while selling Treasurys
have been the popular trades
for investors to bet that fiscal
stimulus via tax cuts and large
infrastructure spending would
boost growth and inflation.
“The fear is if this doesn’t
pass, then getting tax reform
and infrastructure spending
done will be very difficult,’’
said Thomas Roth, executive
director in the rates trading
group at MUFG Securities
Americas Inc.
WSJ.com/Heard
Nike’s Best
Defense Is a
Good Offense
Nike wants to maintain its
status as most valuable
player. Investors shouldn’t
underestimate the impor-
tance of its size in that feat.
The sportswear company’s
fiscal third-quarter sales fell
short of analysts’ expecta-
tions when it reported
late Tuesday. Nike said fu-
tures orders, which many in-
vestors consider an indicator
of coming sales results, were
down 4% year over year or
1% after adjusting for cur-
rency fluctuations. The com-
pany said it is limiting sup-
ply amid surprisingly
strong promotional activity
from competitors and that it
is expecting gross margins to
contract in the fourth quar-
ter. The cautionary note sent
shares down on Wednesday.
But Nike hasn’t stopped
playing offense, and its in-
vestment should allow it to
win back market share.
Its sales growth has suf-
fered amid a comeback by
competitor Adidas in North
America, but Nike has the
advantage of scale. That al-
lows it to outspend competi-
tors on marketing and re-
search and development, two
of the biggest factors driving
sales.
Given that, to believe Nike
can’t retake the share lost to
Adidas is to believe its long-
term competitive advantage
has disappeared.
Investors may continue to
point to negative futures as
a sign that things have
changed, but futures have
become less reliable.
Actual results have been
closer to management’s guid-
ance than to reported fu-
tures in all but two quarters
since the beginning of fis-
cal 2015, according to Insti-
net.
Nike rarely misses a re-
bound.
—Miriam Gottfried
 Transforming a
cookie-cutter
apartment into
a unique nest
W4
EATING | DRINKING | STYLE | FASHION | DESIGN | DECORATING | ADVENTURE | TRAVEL
© 2017 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Friday - Sunday, March 24 - 26, 2017 | W1
Cruises for the
BY CHRISTIAN L. WRIGHT
MY FATHER AND I weren’t due
aboard our ship until the next after-
noon, so we settled in at a table on
Anti-Cruise Crowd our Venice hotel’s terrace, overlook-
ing the Grand Canal, to watch the
pageant of waterborne traffic: the
commuter vaporetti, the gondolas
and the water taxis with young Ital-
ian cowboys at the helm. Then,
from behind Santa Maria della Sa-
lute, the bow of a mega-cruise ship
pierced the painterly scene and
Those who think the high seas are only filled with megaships haven’t slowly cast its enormous shadow
over the lagoon.
plumbed the depths: Small, idiosyncratic pleasure boats are the new ticket In the great ports, such rude ar-
rivals surprise no one anymore.
Chrysler’s
Pacifica Hybrid—
a plug-in that
goes the
distance W6
| GEAR | GADGETS
RYO TAKEMASA
More than 25 million people will
take a cruise in 2017, and ships just
keep bloating to accommodate
them. Royal Caribbean’s Oasis-class
ships, for instance, each carry more
than 5,400 passengers and weigh
some 225,200 tons. At this size, the
ship’s the destination; where it’s go-
ing matters less. While many tour-
ists relish these floating cities—
crammed with restaurants and
waterslides—others prefer their ves-
sels more modestly proportioned.
Though my father, a retired U.S.
Navy officer, has made many
Please turn to page W2
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
W2 | Friday - Sunday, March 24 - 26, 2017
IN SEARCH OF FRIENDLIER SHIPS
Continued from page W1
cruises in watercraft of vary-
ing shapes and sizes, he’s
now among the anti-me-
gaship contingent. So last
spring, he booked a nine-day
cruise from Venice to Athens
aboard a smallish ship (6
decks, 10,700 tons) and an-
nounced that I’d have to go
with him. The itinerary, “Od-
yssey of Ancient Civiliza-
tions,” was organized by Na-
tional Trust Tours, a division
of the National Trust for His-
toric Preservation.
A bit cruisephobic myself,
I gritted my teeth as we
donned our nametags and
ascended the gangplank. But
I soon found Le Lyrial, the
newest ship of the French
cruise line Ponant, a pleas-
ant surprise: With just 122
staterooms, the ship felt like
an elegant family hotel in,
say, Biarritz. There were no
hordes, no mad dash to
claim a deck chair, no sharp
elbows in the queue for crab
cakes, no boozy pool parties.
The only time I stood in line
was to wait for the oysters
on the half shell at the buf-
fet. Instead of Broadway
medleys and napkin-folding
classes, the onboard diver-
sions were mostly limited to
daily lectures and evening
piano serenades. My father
and I agreed that the star of
our cruise was retired four-
star U.S. Navy Admiral
James Stavridis—the 16th
Supreme Allied Commander
of NATO, now the dean of
the Fletcher School of Law
and Diplomacy at Tufts—
who enlightened the passen-
gers on 21st-century secu-
rity challenges. He got the
kind of applause that even
Yo-Yo Ma or LeBron James
might envy.
Though our cruise was
atypical, it’s hardly the only
such sea excursion these
days. Travelers have an
ocean of choices starting
with themed cruises for ev-
ery hobbyist (from ancient
history to zumba). You can
also ply the Amazon in a
posh riverboat or the Aegean
in a traditional Turkish sail-
boat, island-hop in the Ca-
ribbean on a catamaran or
venture into the Arctic
aboard expedition ships
stocked with French wine.
“It’s a massive trend,” said
Carolyn Spencer Brown, edi-
tor in chief of the website
Cruise Critic, of the demand
for iconoclastic voyages
aboard smaller vessels. “A
whole new generation of trav-
elers, sophisticated and ad-
venturous, are coming to
cruise. They like the comfort
and convenience of an inti-
mately sized ship.”
Viking Cruises, marking
its 20th anniversary this
year, was the game-changer,
said Ms. Spencer Brown. The
largest purveyor of European
river cruises launched its
first ocean cruise in 2015.
While its seafaring vessels
are much bigger than its riv-
erboats, carrying some 930
passengers as opposed to
190, the voyages reflect the
same restrained approach
and focus on destinations.
Viking is “the cruise line of
No,” according to CEO Tor-
stein Hagen. “On our ocean
ships,” he said, “we have no
casino, no children under 18,
no umbrella drinks.” Guests,
he added, are never chased
to buy jewelry or photos. Vi-
king’s ships also tend to
spend more time in port than
those of many bigger cruise
lines, so passengers can take
advantage of local culture,
and shore programs—say, tea
at home with a family in
Santorini—emphasize inti-
macy over hype.
Expedition cruises, where
passengers sail off to far-
flung corners to kayak
around icebergs and gawk at
blue-footed boobies, are
gaining favor too. Even a few
luxury lines, such as Crystal
Cruises and Silversea
Cruises, are getting in on the
action. Expedition-style
cruises “will explode in ’18
and ’19,” said Sven Lindblad,
CEO and founder of Lindblad
Expeditions, whose father,
Lars-Eric Lindblad, more or
less invented the idea in the
THE WALL STREET JOURNAL.
OFF DUTY
A VESSEL FOR
EVERY VOYAGER
Eight of the most intriguingly
alternative cruise options
FLOE BOAT
You needn’t invest
much time or money
in a voyage on the
icebreaker Sampo—
the four-hour trip
through Finland’s Gulf
of Bothnia costs less
than $400—but it
does give hearty
souls a chance to
swim (or perhaps flail
about) in the frigid
Baltic Sea, after the
7-million pound beast
of steel has broken
ice. Consider the
bragging rights! From
about $350 per per- Clockwise from top
son, visitkemi.fi/en/ left: The sailboat
sampo. For the fainter used for the
of heart (and deeper Adventure Flow
of wallet), there’s cruises in Alaska;
M/Y Legend, a 1974 Alila Purnama in
Cold War icebreaker Indonesia’s Raja
that’s been retrofitted Ampat; a cabin on
into a 26-passenger Alilia Purnama; the
superyacht available MV Parry tugboat.
for charter—and the
thrill of blasting of the Lewis & Clark- to surprising (Mada- Adventure Flow,
through frozen wa- themed cruises, the gascar and Haiti) offers similarly inti-
ters to get to the un- crew may turn up in and crew use local mate and laid-back
touched reaches of historic costume. intel to plan land ex- sailing trips. On six-
Norway and Antarc- Wine-themed jour- cursions, like hikes to to eight-day itinerar-
tica. From $491,000 SUPERIOR SAIL for a 6-night trip, ul- spoiled landscapes neys include stops at hot springs and an- ies Captain Louis
for a week charter, Several gussied-up timate-indonesian- where horses roam Washington and Ore- cient fortresses. Hoock (real name)
yachtcharterfleet.com. phinisis, traditional yachts.com. wild and Paul Gau- gon wineries and Wallflowers be shows passengers
sailboats, glide guin is buried. From plenty of tastings on warned: Thanks to the nooks and cran-
SNUG TUG around Indonesia’s POLYNESIAN $6,827 per person for land and water. From the family-style nies of Glacial Bay
The MV Parry is a thousands of islands PASSAGE a 14-day trip, $3,695 per person for meals and sunset National Park aboard
1941 wooden tug- but few rival Alila Launched in 2015, freightercruises.com/ weeklong wine Dark ‘n’ Stormys, a 54-foot sailboat.
boat that travels Purnama, a luxury the Aranui 5 is a cruise_aranui.php. cruises, uncruise.com. you’re likely to get Excursions might in-
with up to 14 pas- version of the Bugis working freighter very chummy with clude stand-up pad-
sengers along the ships that sailed that delivers cargo to PLYING THE MAST APPEAL your fellow passen- dle boarding past
Inside Passage into those waters in the the remote, rarely PAST The Brooklyn-based gers. From $370 per glaciers, kayaking
the wilds of British 17th century. The visited Marquesas Is- Sailing the Columbia Sailing Collective person per night, sail- tidal bores and hik-
Columbia. Accom- 150-foot vessel has lands, north of Tahiti. and Snake rivers in brings an urban ingcollective.com. A ing to waterfalls.
modations are mod- five deluxe cabins, a It also contains the the Pacific North- boho vibe to the sea. new Alaska outfitter, Your guides, who
est and space is staff of 16, including trappings of a leisure west, S.S. Legacy is Cabins tend to be double as chefs, can
tight, but in spring- the chef, a maximum cruiser for 256 pas- an 88-passenger simple and passen- arrange onboard ac-
time, you might see cruising speed of 10 sengers, including vessel with the feel gers might be asked tivities like yoga on
pods of humpback knots (which is to handsome state- of an old coastal to help trim the sail the bow or a late-
whales or a grizzly say, quite leisurely), rooms, a (small) steamer. You’ll find or crank a winch. night dance party
bear with cubs, and and routes that fo- pool, gym and four early American pe- Weeklong group and below deck, complete
the onboard chef will cus on snorkeling bars. After watching riod details in the private charters ac- with costumes. From
prep the fish you and diving in the the crew unload ev- public rooms (an commodate up to $2,000 per person
catch along the way. sealife-rich waters of erything from food antler chandelier in eight passengers per for a six-day trip, ad-
From $5,795 per per- the Raja Ampat ar- to appliances on the Pesky Barnacle sailboat. Destinations ventureflow.us.
son for a week’s trip, chipelago. From land, passengers can Saloon, for starters) range from classic A Sailing Collective —Christian L. Wright
tugboatcruise.com. $14,500 per person set off to explore un- and, if you’re on one (Maine and Greece) trip in Maine. and Jen Murphy
1960s, when he took tourists
to the Galapagos and Antarc-
tica, where only scientists
had gone before. With the
competition heating up,
Lindblad is launching its
CLOCKWISE FROM TOP LEFT: ADVENTURE FLOW; ULTIMATE INDONESIAN YACHTS (2); SAILING COLLECTIVE; UNCRUISE ADVENTURE; OLIVIER BLAUD/PONANT; WINDSTAR CRUISES; WESTWIND TUGBOAT ADVENTURES
first newly built ship in 50
years, the relatively swanky
100-passenger National Geo-
graphic Quest, in June.
To some degree, “uncon-
ventional” means expensive
and can also mean exclusive.
Windstar Cruises’ fleet of
just six ships—three sail-
boats and three yachts—sail
the globe from New England
to Tahiti. The fleet’s newest,
Star Legend, carries only 212 Clockwise from above: Windstar’s 310-passenger Wind Surf
guests and can dexterously sailing off Capri; the 88-passenger S.S. Legacy, a replica of a
navigate remote harbors and coastal steamer, on Oregon’s Columbia River; Ponant’s Le Lyrial
tiny islands off limits to big- ship in Antarctica.
ger vessels. But that kind of
access comes at a price—an
11-day cruise to Alaska runs
about $9,000 per person, as
opposed to about $1,500 on
some of the larger ships.
The French line Ponant is
growing, but staying small
as it expands, adding four
new ships by 2019, each one
carrying no more than 184
passengers. Like Windstar’s
fleet, all of Ponant’s vessels
are nimble enough to veer
off the beaten path.
At the end of the cruise I
took with my father, a tug-
boat flying a Greek flag ar-
rived to take Le Lyrial
through the Corinth Canal, a
short cut from the Adriatic
to the Aegean Sea through a
breathtakingly narrow gorge.
The canal is just 70-feet
wide at its narrowest point,
precluding the passage of
megaships and most other
tourist boats. When all of us
gathered on the port side
started snapping pictures of
a herder and his goats as he
stood at the edge of the
gorge, he opened his flip
phone and snapped back.
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. Friday - Sunday, March 24 - 26, 2017 | W3

OFF DUTY
ON WINE LETTIE TEAGUE

Portuguese Wine: Ready to Come Out of Hiding

THE DOURO VALLEY in Portugal is Post Scriptum, are a bit easier to
home to one of the most famous find in the U.S.—especially the lat-
wines in the world: Port. And while ter, which Mr. Symington said was
this great fortified wine has put the “probably our most successful dry
region on the map, its vintners also red in the United States because
turn out first-rate dry reds and of the Prats connection.”
whites—to the seeming indifference “Outside San Francisco and New

ILLUSTRATION BY VICTORIA TENTLER-KRYLOV; F. MARTIN RAMIN/THE WALL STREET JOURNAL (BOTTLES)

of the wine-drinking world.
At least that was my impression
when I returned to New York after
spending time in the Douro last
month. I had tasted some very
good wines during my trip and
was looking forward to drinking
them at home. Yet in every wine
shop I visited, even in the heavily
Portuguese Ironbound section of
Newark, N.J., I found only a few of
the bottles I had tasted. Why are
the region’s well-made, well-priced
wines so hard to track down?
One reason may be that Portu-
guese wines and grapes are little
known to drinkers in the U.S. The
low profile of the country’s food
stateside hinders awareness, too,
with few Americans familiar with
any Portuguese dish beyond salted
cod (bacalhau). “The food is
not helping us,” said Manuel Lobo
de Vasconcellos, winemaker at
Quinta do Crasto. “The Italians
have pizza and pasta and the
Spanish have tapas.”
Another reason may be that the
best Douro dry reds and whites
have only been around for a short
time. While Port has a long, illus-
trious history dating back centu-
ries, quality dry wines in the
Douro are a much more recent en-
deavor. In fact, it was only a cou-
ple of decades ago that a sizable
number of producers began mak-
ing dry wines alongside their
Ports. These wines didn’t even
have an official government desig-
nation until 1982. By contrast,
Douro received its official classifi-
cation for Port in 1756.
The first dry Douro wine to win
wide acclaim was Fernando Nicolau
de Almeida’s 1952 Casa Ferreirinha
Barca Velha. His son, the visionary
João Nicolau de Almeida, followed
in his footsteps, creating Duas Quin-
tas in 1990 at Ramos Pinto. Today,
Barca Velha is as elusive as it is ex-
pensive (the 2008 costs $400); it
has been produced fewer than 20
times since that inaugural vintage.
While I didn’t get to taste the
mythical wine during my visit, I
did sample quite a few other
(much more affordable) dry wines
from notable producers, including
Quinta do Crasto. The estate,
which has one of the most spec-
tacular settings in Douro, debuted
its first dry red in 1994—the work
Why are the Douro’s well-
made, well-priced wines
so hard to track down?
of João Nicolau de Almeida. Two
decades later, winemaker Mr. Lobo
de Vasconcellos produces both red
and white wines.
His 2015 whites were fresh and
vibrant, made from a blend of sev-
eral varieties. The vast majority of
Douro wines are field blends of
different grapes, often from vine-
yards so old no one knows which
varieties were originally planted.
“We have vineyards where we
don’t even know what we have. We
are still studying them,” said Mr.
Lobo de Vasconcellos.
The Quinta do Crasto reds ranged
from fresh and fruity (the 2015
Crasto, an entry-level wine that Mr.
Lobo de Vasconcellos compared to
Gamay) to rich and complex (the
2011 Vinhas Velhas, made from 41
plots of old vines, and the sumptu-
ous, single-vineyard Vinha Maria Te-
resa). The 2013 Xisto, produced in
“exceptional years” in conjunction
with Château Lynch-Bages of Bor-
deaux, was perhaps my least favor-
ite. It tasted less Portuguese than
French. But, according to Mr. Lobo
de Vasconcellos, it has been a great
success. “The French know how to
sell wine,” he said.
Rupert Symington, joint manag-
ing director of Symington Family
Estates, has a Bordeaux connection
of his own. He teamed up with
Bruno Prats, the former owner of
Château Cos d’Estournel in Bor-
York, Americans probably don’t
know that Portugal is any different
from Spain,” added Mr. Symington.
He said he thought his best oppor-
tunity to expand the market was in
the $15-$20 range. Bottles at these
prices aren’t considered value
wines, he said, but rather “inter-
esting” ones.
Even Jorge Rosas, general man-
ager of the famed Ramos Pinto es-
tate, talked about the difficulty of
selling Douro wines in the States. “I
remember I was with a Chicago re-
tailer, and he said ‘I’m not inter-
ested in obscure regions’ to me. It
was a shock. I did not know Douro
was an obscure region,” he recalled
with a laugh, as we tasted Duas
Quintas wines with his winemaker
Teresa Ameztoy in the dining room
of the estate. “We were on the
shelf with ‘Others,’ ” he said.
For our tasting, Mr. Rosas in-
cluded current vintages of Ramos
Pinto reds and whites, as well as
deaux, to produce Chryseia, a sup- bottles of the 1994 and 1997
ple, elegant (and expensive) red. Reserva. While the 1994 was show-
The wine, which costs $85 a bottle, ing its age, the 1997 was still im-
is one of many dry Douro reds pro- pressively youthful and vibrant.
duced by the Symington family, Mr. Rosas even brought out a bar-
which has some of the largest Port rel sample of the 2015 wine. Beau-
holdings in the region, including tifully concentrated and vibrant,
Warre’s, Cockburn’s, Graham’s and the wine would be bottled in the
Dow’s. Their dry wines are produced spring, said Ms. Ameztoy. The cur-
under the labels Altano, Quinta do rent vintage, the opulent 2014
Vesuvio and Prats & Symington. Duas Quintas Reserva, was truly
Although Mr. Symington had impressive—and, at $30 a bottle, a
only a few hours to spare before remarkable buy. “People are telling
leaving for vacation, he offered us it is too cheap,” he said.
me an extensive tasting of his On a more recent trip to the U.S.,
wines, including those from his Mr. Rosas said he found Portuguese
newest estate, Quinta do Ataíde. and Spanish wines grouped to-
The wines were something of a gether in a store, which he re-
microcosm of the valley, from the garded as a positive development.
attractive 2014 Dow’s Vale do “It makes sense geographically,” he
Bomfim, which Mr. Symington said. But he has even bigger hopes
compared with an entry-level for the future: “My dream is that in
Port, to the impressive 2014 10 years we will have a Portuguese
Quinta do Ataíde Touriga Nacional shelf.” And hopefully that shelf will
to the lush, deeply colored 2015 contain the full gamut of treasures
Pombal de Vesuvio (available in to be found in the Douro right now.
the States in June). Both the Chry-
seia top label and second label,  Email Lettie at wine@wsj.com

OENOFILE // FIVE HARD-TO-FIND DOURO VALLEY WINES THAT ARE WORTH THE SEARCH

2014 Quinta do Crasto
Crasto $13 Winemaker
Manuel Lobo de Vascon-
cellos compares this, his
most basic red, to wines
made with Gamay (the
Beaujolais grape). It’s
similarly refreshing and
light-to-medium-bodied
with good acidity and
pretty red-fruit aromas.
2014 Ramos Pinto ’Duas
Quintas’ $13 One of the
first notable wines pro-
duced in the Douro, Duas
Quintas is a fresh, ap-
proachable, medium-bodied
red blend of several native
varieties, most notably
Touriga Nacional. It’s aged
in both oak barrels and
steel vats.
2013 Prats & Symington
Post Scriptum de Chry-
seia $22 A Bordeaux-
Douro vinous brain trust
produced this supple, lush
and elegant red aged in a
mix of new and second-
year oak barrels. Styled to
be drunk fairly young, it’s
produced at the Quinta de
Roriz estate in the Douro.
2013 Quinta Vale D. Ma- 2015 Niepoort Redoma
ria Douro Red $55 Branco $21 Dirk
An impressively well-struc- Niepoort was one of
tured red with firm tannins Douro’s dry wine pioneers
and compelling aromas of and the first to produce a
red and dark fruit, this notable dry white. The
blend from longtime wine- 2015, made from a blend
maker Cristiano van Zeller of indigenous varieties, is
would benefit from a couple a medium-to-full-bodied
hours’ decanting or a few wine with a lush texture
more years in the bottle. and a firm mineral note.

SLOW FOOD FAST SATISFYING AND SEASONAL FOOD IN ABOUT 30 MINUTES

Spiced Meatballs With Polenta and Parmesan Brodo

CREAMY POLENTA, succulent meatballs, a tle’s dining renaissance. By the time he opened
splash of Parmesan broth. A no-brainer dish, Salare in Seattle, almost two years ago, he’d
CHRISTOPHER TESTANI FOR THE WALL STREET JOURNAL, FOOD STYLING BY JAMIE KIMM, PROP STYLING BY CARLA GONZALEZ-HART

comforting, indulgent. Who could say no? been plotting the menu for years. “I knew our
Look closer at the recipe, the first Slow Food food would be Italian, driven by French tech-
Fast contribution from Edouardo Jordan, and nique, and reflect my Southern roots,” he said.
you’ll see traces of the chef’s impressive re- This dish debuted on the regular menu, but
sumé. Stints at the French Laundry in Napa with so many children snatching bites from
Valley and Per Se and Lincoln in New York their parents’ plates, it soon found its way onto
schooled the Florida native in classical French the kids’ menu, too. “Serve it in a bowl,” Mr.
technique and high-end Italian cooking. At Bar Jordan advised. “Break open the meatballs and
The Chef Sajor he found his way to the epicenter of Seat- get messy with it.” —Kitty Greenwald
Edouardo Jordan
TOTAL TIME: 30 minutes SERVES: 4
His Restaurant
Salare, in 2 large Parmesan rinds plus extra to garnish parsley
Seattle, Wash. 2 cups grated Parmesan, Salt and freshly ground black 1 whole egg, beaten
plus extra to garnish pepper 3/
4 tablespoon Berbere spice

What He Is 2 bay leaves 2 pounds ground beef, mix, or 1/2 tablespoon

Known For 1 shallot, peeled and halved preferably chuck ground cayenne plus 1
Big-hearted Italian 8 cups water 2 tablespoons soy sauce teaspoon ground cardamom
cooking, classical 5 tablespoons olive oil, 2 tablespoons finely chopped 1 cup quick-cooking polenta
French rigor
and Southern 1. Preheat oven to 425 degrees. Make brodo: In a sheet and roast on center rack until just rosy, or 125
hospitality medium pot, combine Parmesan rinds, 1 cup grated degrees, at center, about 10 minutes. Let rest at
Parmesan, bay leaves, shallot halves, 2 cups water, least 5 minutes before serving.
2 tablespoons oil and a pinch each of salt and pep- 3. Meanwhile make polenta: In a medium pot heat
per. Set pot over high heat and bring to a boil. Re- remaining oil. Add polenta and stir to coat. Pour in 6
duce heat to medium and simmer until reduced by cups water and bring to a simmer. Cook polenta,
half, about 15 minutes. Strain, discard all solids and stirring often, until tender and creamy, about 10 min-
return brodo to pot. Set pot over a low flame and utes. If necessary, add splashes of water to keep po-
keep brodo at a low simmer until ready to serve. lenta pourable. Stir in 4 tablespoons butter, remain-
2. Meanwhile, in a large bowl mix ground beef with ing grated Parmesan and season to taste with salt.
soy sauce, chopped parsley, egg and spices until well 4. Distribute polenta among 4 bowls. Top with
combined. Using wet hands, roll beef into golf-ball- meatballs and pour ¼ cup brodo over top. Drizzle WASTE NOT Cooking Parmesan rinds along with the grated cheese
size meatballs. Arrange meatballs on a large baking with olive oil and sprinkle with grated Parmesan. gives the rich broth poured over this dish a deep umami flavor.
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
W4 | Friday - Sunday, March 24 - 26, 2017
Balance with Pallor
“If the picture were full
of powerful colors, it
would be all that you
see,” Mr. Campbell said
of photographer Karin
Apollonia Müller’s shot,
in washed-out tones, of
a truck fire on L.A.’s 101
Freeway. By the same
artist (above): Chro-
mogenic print, “Lyon”
(2007), 40 inches by 50
inches, $7,000, Julie Saul
Gallery, 212-627-2410
Add Bold Holders
Antique Corinthian-col-
umn candlesticks act as
mini monoliths, echoing
the ceiling-scraping
cabinets but adding a
touch of classicism.
Like the brass tables,
their weathered silver
combines shine with
the tarnish of time. Pair
of Silver Neoclassical
Revival Candlesticks
from High Style Deco,
$1,245, 1stdibs.com
Play with the Palette
“Color-wise, I like mixing
in a tiny bit of a surprise
in a room like this,”
Mr. Campbell said of the
embroidered-cashmere
and wool throw pillows.
A limited palette of blues
and gold-tones with a rare
shot of hot hues,
like those found in this
Corrigan Studio Aurelius
pillow, holds the pizazz
just this side of excess.
$473, wayfair.com
FRESH PICKS
Stare-worthy Blankets
THE WALL STREET JOURNAL.
OFF DUTY
ANATOMY LESSON
From Nothing to Special
On Manhattan’s Lower East Side, a designer invests a previously
unremarkable apartment with quiet panache. His strategy, dissected
Erect Towers
“Proportion in interior design, as in fashion, As in fashion, scale
BY TIM GAVAN
can convey a sense of power,” Mr. Campbell said. and bold lines create a
The towering, noble pair of cabinets allows the strong, self-assured al-
WHEN TIM CAMPBELL, principal of his epony- living room to look taller and bigger than it is, lure. Here, two cornflower
mous residential-design firm in New York and Los he said, much as a purposefully tailored suit al- blue custom cabinets
Angeles, began decorating his Manhattan home, ters the perception of the wearer’s body. with crisscross wire
he saw past the inauspicious Lower East Side Indeed, like a beautifully cut tux, the décor screens stand on long-
edifice that housed the apartment and created exudes handsome glamour, using white walls and legged brass frames,
an opulent oasis inside. “I was in this very anony- pale, contemplative artwork to ground a palette of completely at ease. Res-
mous, generic building with no pedigree, but moody blues, warm gold tones and sparks of red; toration Hardware’s will
I wanted the space to feel very rich, like being substituting imposing scale for excess ornamenta- also add soaring storage:
transported to another time and place.” He added tion; and adding authoritatively aged finishes to Graydon Shagreen
panel molding to the walls to dress the space temper showiness with substance. Double-Door Cabinet,
up and suggest some history, then appointed the Here, a few of the elements that create a dra- from $2,995, rh.com
home with quietly colorful and stately pieces. matic living room minus the flash.
RYAN MESINA/THE WALL STREET JOURNAL (INTERIOR); COURTESY JULIE SAUL GALLERY, NEW YORK (PRINT); F. MARTIN RAMIN/THE WALL STREET JOURNAL, STYLING BY ANNE CARDENAS (PILLOW, FABRIC)
Call in the Hounds
The two chairs combine
imposing scale and re-
laxed attitude. Mr. Camp-
bell reupholstered a re-
clined 1960s armchair in
a smart blue houndstooth
wool blend. “The fabric
reminded me of the Cha-
nel suits from the ’60s,”
he said. Holland & Sherry
Mad Hatter Fabric, price
upon request, Decoration
& Design Building,
212-759-5408 x204
De-Lux the Sofa Tone Down Strike a Discord
“I started with the sofa, the Gold An angular Grasshopper Confound the
but if I’d stopped there Unlacquered floor lamp adds eclecti- Ground
the room would still feel brass cubes, cism to the mix. “It’s a The 300-year-old Oushak
perfectly full,” said Mr. which Mr. Camp- midcentury piece, a bit carpet almost blends in
Campbell of the capa- bell designed discordant with the with the chevron oak
cious Chesterfield sofa himself because room,” Mr. Campbell said. floor, noted Mr. Campbell.
by Soane Britain, whose of an aversion “There aren’t really any Its deep-blue figuring
stuffy tufted-leather op- to traditional cof- other midcentury pieces picks up on those hues in
ulence is knocked back fee tables, have a here, but I love putting in the rest of the room, and
by its plucky sapphire mutable patina. They change color depend- a few things that give a its gold connects with the
color. Simplified Bear ing on how the sunlight strikes them over space a bit of a twist, vi- brass finishes. For simi-
Sofa, from about $9,612, time. “The tables take on a memory of sually and historically.” larly subdued elegance,
soane.com the space,”said Mr. Campbell. Stand-ins Greta Grossman Grass- try: Vintage Turkish
that provide a similarly unprecious finish: hopper Floor Lamp by Oushak, about 6 feet by
Gold Cube Side Table, $299, cb2.com Gubi, $899, dwr.com 9 feet, $6,750, woven.is
THE THROW
The persistent chilliness of March
meets its match with artist-designed
throws from Los Angeles’s Slowdown
Studio. Graphic designer Marc Hen-
drick, who helms the year-old home
wares company, teams up with con-
temporary artists from all over the
world—including French illustrators
Atelier Bingo and Berlin-based illus-
trator Milena Bucholz (her Otis Throw
is shown left), but his penchant for
playfulness unifies the line. Mr. Hen-
drick prudently executes the “quirky,
weird designs that you never see
on a blanket” in a palette restrained
enough to suit a range of décor
schemes. At 54 by 70 inches of
F. MARTIN RAMIN/THE WALL STREET JOURNAL, STYLING BY ANNE CARDENAS (BLANKETS)
100% cotton, the woven throws give
a satisfyingly non-scratchy cover for
legs bared by anticipatory shorts, not
to mention providing a punchy pat- THE VESSEL
tern for the arm of a sofa. Throws, Oh, to Be a Potted Plant
$230 each, slowdownstudio.com
Los Angeles artist Bari Ziperstein has gained a following as well as public
commissions for her fairly far-out conceptual sculptures (think human-
scale totems of ceramic, rope and indigo cloth). A show of her fine-art
work runs until April 30 at the University of California, Santa Barbara’s
Art, Design & Architecture Museum, but her practical pieces, specifically
a series of indoor-outdoor planters, have us envisioning crocuses or cac-
tuses sprouting out of them. Ms. Ziperstein cuts out slabs of sun-dried
clay to meticulously assemble the vessels, which rise to 15 to 21 inches
tall. “It’s like putting together a prefab house,” she said. Post-firing effects
include a silvery finish (shown), for which she applies a blue-tinted white
glaze to a red terra cotta body. Famously choosy designer Kelly Wearstler
recently bought a number of gray iterations with deliberate drips for the
new Hollywood Proper Residences rooftop lounge. Glazed Terracotta Small
Hex Planter, $1,200, bzippyandcompany.com —Mimi Faucett
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. Friday - Sunday, March 24 - 26, 2017 | W5

OFF DUTY

20 ODD QUESTIONS

India Mahdavi
The Paris-based designer talks color timidity,
celebrating your bad taste and her favorite
place to eat like an Egyptian pharaoh

JULIANA SOHN FOR THE WALL STREET JOURNAL (PORTRAIT); F. MARTIN RAMIN/THE WALL STREET JOURNAL (PAINT, LINOLEUM, PENCILS); EVERETT COLLECTION (POSTER); TOUFIC ARAMAN (HOTEL)
“MY WORK IS about a modern comfort, which is also visual and sen-
sual,” said India Mahdavi of her unapologetically colorful interiors.
“We’ve come to a world that can be quite harsh, spending a lot of time
in front of a screen. You have to compensate in some way with your
surroundings.” By this, the Tehran-born, Paris-based architect and de-
signer means tactile textiles and materials, like velvet upholstery and
silk wallpaper; organically-shaped seating; and a color palette that
knows no limit to compensate for the unrelieved bluish grays of the
personal-tech bubble.
The prolific designer—who recently opened a Marie Antoinette-
meets Hollywood version of the popular Parisian macaron shop Ladu-
rée, in Beverly Hills—is wasting no time this year, with a forthcoming
redesign of London’s tony Connaught hotel bar and the launch of a
round leather coffee table that folds up like a book for Louis Vuitton at
the Milan furniture fair. We caught up with Ms. Mahdavi, who shared
her wisdom on diversifying your dining room, why cork isn’t just a ’70s SHADY LADY Clockwise from
relic, and the biggest error you can make when decorating with color. left: India Mahdavi in New
York’s Ralph Pucci showroom;
her Jelly Pea Sofa; sketching
The most common mistake peo- One of the most feel. Sometimes you and reminds me not to forget to tools; linoleum squares; Adrère
ple make when designing with underappreciated come into a room draw. That’s what I’m supposed Amellal hotel; ‘purple rain’
color is: they don’t dare. I think the materials is: rattan. and see the back of to do, create. Not necessarily paint; Fellini movie poster.
minimum palette of colors should be It’s associated with a rectangular sofa. answer emails.
three, but four or five is great. What inexpensive furniture, It’s pretty harsh, no?
bothers me is when people do two but it has a very A strange tip that really works taking photos of the screen.
colors, like orange and white. It’s a warm texture. Also A space that’s is to: reflect both your good and
bit boring and very static. overlooked are lino- hard to decorate bad taste when you decorate. In- One of the most beautiful ho-
leum floors—espe- is: the dining room. corporate kitsch elements or some- tels is: Adrère Amellal, an eco-
To find three colors that work cially when you use Entertaining today is thing that has tons of strong col- lodge in the Egyptian desert. Ev-
well together: take two that are different color tiles to very different. To ors. You don’t want things to be erything is constructed with salt
quite close to each other, like a me- make designs—and deal with it, I make perfect. and mud. There’s no electricity.
dium blue and a medium green, or cork. Cork brings a dining rooms versa- The food is a modern version of
a fuchsia and a red, or a dark brown certain warmth and tile. I might include Right now, I like to use fabrics: old Egyptian cuisine, the cuisine of
and a dark blue. Then you can break texture, and you can a bookshelf, so it on the walls, like a wallpaper. I think the pharaohs. Everything is cooked
them up with a black or white, get it in several tints can be turned into it tailors a room very nicely. Silk, feu de bois, with fire and wood. Ev-
which are both very graphic and of brown now. an office. With [laptop] computers, linens and natural coverings, like erything is organic because the food
bring depth. you can work anywhere. natural fiber coverings—to add tex- is grown in the oasis. You have syca-
My design pet peeve is: anything ture to walls. more fruit and mangoes. You have
Colors that make people joyful in- too matchy-matchy. I like things that Colors I’m gravitating toward basil that has a bit of a lemon taste.
clude: yellow, blues and, most re- are slightly off. Some colors when now include: terra-cotta and what Films that inspire my work are:
cently, pink. you put them together, they swear at I call a purple rain (between a purple ones by Fellini and Stanley Kubrick. When decorating a room, I start
each other. I like putting colors in and fuchsia), Bordeaux red, mint Also, “The Party” with Peter Sellers. with: my intuition. I listen to my
To make a room more masculine: danger. and lilac. It’s a crazy house. There’s so much body. I think about where I would
use more wood, hard materials, humor, but I also like the colors in like to sit, what I would like to look
square shapes, grays and browns. One of my signature design tricks When I fly, I always carry: a Le that movie, including the way Peter at, where I want to be placed in
Then soften it a little. If you have a is: using sofas with a certain round- Papier Fait de la Résistance sketch- Sellers is dressed, in a pink beigey the room.
very square sofa, you might soften it ness. They are more versatile and book and a case with my Caran suit with a red tie and a pair of white —Edited from an interview by
by pairing it with a round side table. give a room a different, less static d’Ache pencils. It gives me pleasure shoes. Last time I watched, I was Kelly Michèle Guerotto

ONLY IN…

Oakland
From its radical pig roasts to its urban forest,
this Bay Area boomtown is a real original
SAN FRANCISCO MAY INSPIRE more pop songs, but Oakland, its less
showy neighbor across the bay, has plenty to croon about too. Oakland
has long pioneered movements—whether political or culinary—that influ-
ence the rest of the country and lately, as creative types get priced out of
San Francisco, they’re establishing themselves in Oakland in growing
numbers, spawning comparisons to hipper-than-thou Brooklyn. Yet Oak-
land offers unique charms; here, five ways to sample them.

Hike through a redwood forest in the middle of the city

Redwoods crowded Oakland until settlers, swarming in during the Gold Rush, logged all the giants. Parts of the forest
have since grown back and are now protected as Redwood Regional Park, just 6 miles west of downtown. Locals hike
along 36 miles of trails looking for golden eagles, hawks and thrushes, and in winter, you might spot rainbow trout mak-
Immerse yourself in hipster-dom ing their way upstream in Redwood Creek. Make sure to look out for the enormous clusters of ladybugs that hibernate in
Would-be hipsters (or amateur anthropologists) should visit Temescal Alley, a bright pulsating groups along the side of the trail. 7867 Redwood Rd; ebparks.org
pedestrian-only lane that’s a favorite haunt of nouveau Oakland’s tattooed and
bearded creative class. There, you’ll find an artisanal ice-cream maker with a
menu of vegan flavors like roasted banana walnut (Curbside Creamery), an old- Get schooled in Go whole hog
timey barber shop (Temescal Alley Barber Shop), a jeweler selling handmade West Coast jazz When chef Russell Moore, an
bronze and leather necklaces (Marisa Mason Jewelry) and a flower shop that In the 1940s, Oak- alumnus of Chez Panisse in
specializes in “horticultural rarities” (Crimson). At Homestead Apothecary, snap land’s Seventh Street nearby Berkeley, and Allison
up a Saturn Return tincture to help you through life changes or, time and mood gave rise to West Hopelain opened Camino, in
permitting, sign up for a workshop on manifesting your creativity. 49th St be- Coast blues and served 2008, they implemented some
tween Telegraph Ave. and Clark St.; temescalalleys.com as the center of the radical ideas. For starters, they
city’s exuberant jazz used every scrap of food they
scene. The legacy of those pioneering bought, from pig ears to fig
Visit a 1950s theme park musicians lives on in clubs like the leaves, and they cooked every-
Fairyland, the nation’s first storybook- Sound Room. The nonprofit venue, thing over an open fire. There
themed amusement park, inspired many which started in the 1990s as a series was no front-of-the-house hier-
ALLIE FORAKER FOR THE WALL STREET JOURNAL

imitators; Walt Disney himself came to of salons in the founders’ living room archy, so servers were also bus-
study it while designing Disneyland. But before moving to a 72-seat space ers and hosts. All ingredients
nothing since has matched the whimsy or downtown, often features jazz and and even the alcohol were local
kitsch of Fairyland’s old-school attractions blues musicians with roots in Oakland. and organic, which meant they
such as the Jolly Trolley, a train based on Performers range from well-established went without staples (such as
a 1940s comic strip, a mini merry-go- bandleader and bassist Marcus Shelby, Campari). They also only dealt directly with farmers, and offered a shockingly
round with figures that riff on the original who’s backing vocalist Tiffany Austin short menu that changed nightly. Over the years, this hyperlocal, no-waste ap-
illustrations for the Mad Hatter and a on April 8, to rising stars like Terrie proach has become trendy in the Bay Area and well beyond, in large part due
playing-card maze (pictured). The park Odabi, a blues singer who’s been com- to Camino’s influence. But Camino’s dishes—from a pork soup made with the
hosts adults-only events too, like a NSFW pared with Etta James, appearing April entire animal to a sauerkraut salad—are still some of the most inspiring in
Forbidden Puppet Cabaret. fairyland.org 9. 2147 Broadway; soundroom.org town. 3917 Grand Ave; caminorestaurant.com — Georgia Freedman
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
W6 | Friday - Sunday, March 24 - 26, 2017 THE WALL STREET JOURNAL.

GEAR & GADGETS

RUMBLE SEAT DAN NEIL

Chrysler Pacifica Hybrid: The Strong, Silent Type

THE TRUMP administration’s effort
to soften future fuel-economy regu-
lations is a fairly straight-up ex-
change of regulatory relief for the
promise of job repatriation in the
domestic automotive sector. I get
that. And whether or not those jobs
ever show up, it’s sort of thrilling
to watch the United States embrace
Beijing-style central planning.
As for the auto makers’ cries that
the rule slow-down is necessary to
avoid major losses in the industry,
with all respect: wolf. They always
claim new technology will drive
prices up and jobs out—catalytic
converters, airbags, anti-lock
brakes, stability control. History has
invariably shown the opposite.
But the Alliance of Automobile
Manufacturers, the industry’s lobby-
ing arm, wants more. The ultimate
deliverable is what the Auto Alli-
ance calls the One National Stan-
dard. Which is to say, they want the
Environmental Protection Agency to
end California’s power to regulate
vehicle emissions within its borders.
Particularly irksome to the
auto makers is the California Air
Resources Board’s zero-emissions
mandate, which requires manufac-
turers to build and sell a rising
number of advanced-technology
vehicles every year, either plug-in
hybrid electric vehicles (PHEVs),
like the Chevrolet Bolt; battery-elec-
tric vehicles (BEVs), like the Tesla
Model S and X; or fuel-cell vehicles,
like the Honda Clarity.
It’s the selling that’s been
hard, the auto makers say. (Only
158,614 plug-in vehicles sold in the
U.S. in 2016.) But such is the in-
tent of the rule: It is the auto mak-
ers’ job to make advanced-technol-
ogy vehicles desirable.
And so they have. Somebody
should really tell them.
The Chrysler Pacifica Hybrid
minivan gets science-fiction fuel
economy of 84 MPG-e (gasoline-
gallon equivalent of combined
fuel and battery energy); delivers
30-plus miles of all-electric range
before it resorts to gasoline; and
costs the same as its comparably
equipped gas-powered twin, the
Pacifica Premium ($44,995). Our
tester totaled $47,885.
These figures do not include the
on-paper fuel-cost savings of $2,500
over five years nor even the avail-
able $7,500 federal tax credit, which
is quite a thumb on the scales.
Mind you, this is an electric-en-
hanced premium-content minivan
with a V6 engine, tipping the scales
at 2.5 tons, with five-star every-
thing, that hits mileage and emis-
sion standards as yet undreamt—far
beyond what I consider the useless
incrementalism of the current fed-
eral Corporate Average Fuel Econ-
omy (CAFE) requirements.
The Pacifica Hybrid reminds
me of what General Patton said
after he overran Trier, exceeding
his orders from Eisenhower. “Do
you want me to give it back?”
The Pacifica Hybrid is a PHEV,
like Chevrolet’s landmark Volt se-
dan. A PHEV has two power sources
aboard: one electric, with a re-
chargeable battery (thus the “plug”
part of the name); and the other
internal-combustion engine. These
vehicles are engineered to run in EV
mode first and foremost, as long as
the battery charge holds out; then
if needed, transparently to the occu-
pants, switch over to gasoline
power for extended-range driving.
Just to nail this down: The Pacifica
Hybrid cannot leave you walking for
want of battery charge. It has a gas
engine, a big one, too—a naturally
aspirated 3.6-liter V6 (260 hp) with
stepless variable transmission. But it
also has two high-torque electric mo-
tors (198 hp combined) sandwiched
in the transmission; and a 16-kWh
lithium-ion battery pack in the floor,
under the mid-row passengers’ feet.
This Pacifica glides around
town, delivering luxury
levels of cabin quiet.
The small charger port, located
under a flap by the left A pillar, and
some graphic flourish in the vehi-
cle’s grille, are the only indications
that the Pacifica Hybrid is a plug-in
vehicle. A full charge takes two
hours at a typical 240-volt wall
charger, says Chrysler.
So equipped, the Pacifica Hybrid
posts one game-changing number:
a nominal 33 miles of zero-emis-
sion, all-electric range. That range
is significant because it exceeds
the average American’s daily driv-
ing miles, Chrysler says. For many
consumers the Pacifica Hybrid
could virtually zero out the house-
hold gas allowance.
The Pacifica Hybrid’s long elec-
tric legs are big step forward. As a
group, the first-gen PHEV’s scant EV
range was hardly worth the added
mass, cost and technical lift. The
BMW X5 xDrive40e: 13 miles; Mer-
cedes-Benz GLE550e and Porsche
Cayenne S E-Hybrid: 16 miles.
The other challenge for PHEVs is
that once the battery is depleted,
the vehicle’s overall efficiency plum-
mets due to the dead weight of the
idle electrics. With the first 100
miles of a charge, the Pacifica Hy-
brid gets the equivalent of 84 mpg.
But even if the battery is depleted,
the Pacifica still gets a remarkable
32 mpg combined, operating very
much like a gigantic Toyota Prius.
I’m not seeing a downside. The
Pacifica Hybrid Platinum is the sub-
urban service animal you would ex-
pect: three-row seating with nappa-
leather trim; smart brakes and air
bags; hands-free sliding doors and
liftgate; navigation and keyless en-
try…. A parent’s fondest wish.
Fun fact: The Pacifica Hybrid
has a top speed in EV mode of
75 mph. Don’t wake the kids.
Our test vehicle was optioned
with the company’s latest suite of
driver aids (parking assistance, 360-
degree cameras, active collision-
avoidance braking and lane-keep-
ing), plus the dual-screen rear-
entertainment system, panoramic
sunroof and up to six USB ports.
Tell me a parent didn’t design this.
Moreover, within its magic 33
miles, the Pacifica Hybrid interacts
like an all-electric vehicle, enjoying
in full an EV’s advantages in per-
formance and refinement, a Tesla
Model X with side doors that aren’t
crazy. Press the Start button. The
high-res instrument graphics swirl
into view, but you don’t hear any-
thing except the climate fans, if
they are on. Foot on the brake, ro-
tate the gear selector to D and step
on the go pedal. The characteristic
surge of electric torque is all there.
For a bus, this thing hustles: 0-60
mph in about 8 seconds.
What’s not there is a lot of high-
frequency electrical noises, the howl
and hum from motors and power
electronics. Chrysler’s tech notes
invoke “active noise cancellation”
in the cabin as one of the features,
and while I had assumed this was
to deal with road noise, it certainly
seems to have put an extra-thick
sock in the electrics. Quietly, fluidly,
the Pacifica glides around town, al-
most incidentally delivering luxury-
premium levels of cabin quiet. The
nature of the beast, you know.
I suppose it was the wind shear
2017 CHRYSLER PACIFICA HYBRID
Base price: $44,995
Price, as tested: $47,885
Powertrain: Plug-in gas-electric
hybrid vehicle with naturally aspi-
rated Atkinson-cycle 3.6-liter DOHC
V6 with variable cam phasing (248
hp/230 lb-ft); dual-traction motors
integrated in an electrically variable
transmission; 16-kWh lithium-ion
A MORE VIRTUOUS VAN The
Chrysler Pacifica Hybrid, the
first plug-in hybrid electric
minivan, can actually cost less
than its gas-powered twin.
of events. In the same month
the auto makers were asserting,
in effect, it couldn’t be done,
I was driving a vehicle that dem-
onstrated it already had.
The Pacifica Hybrid is through
and through a California clean-air
baby. Fiat Chrysler Automobiles
would certainly not have built it had
they not first been obliged to by the
state of California. But having been
obliged, the engineers and designers
have built something remarkable,
which is usually what happens when
you give engineers a challenge.
Funny, I feel like I’m the only
one who is celebrating.
battery pack; front-wheel drive.
Maximum system output: 260 hp
Length/weight: 203.8
inches/4,987 pounds
Wheelbase: 121.6 inches
0-60 mph: 8 seconds
Battery recharge: two hours at
240 volts
EPA fuel economy: 84 MPG-e

GEEK CHIC


Rag & Bone Howson
blazer SMART POCKETS
Is fear of bulge denying you your inalienable right to elegantly carry
an iPhone? These clever women’s jackets can be liberating
IF YOU’RE looking for true mize the risk that the device’s also get an interior breast
disruption in the workplace, weight will compromise the pocket that’s positioned a few
look no further than the way the blazer hangs. A semi- inches higher than usual (not
smartphone’s disastrous effect transparent touch-screen- shown) so any phone bulge
F. MARTIN RAMIN/THE WALL STREET JOURNAL, STYLING BY ANNE CARDENAS

on the otherwise trim and tai-
lored look of women’s profes-
sional attire. Flush, tight pock-
ets magnify the bulge of your
phone. Worse, these shallow
pockets can easily allow ever
thinner and slicker devices to
slip out, sending them crash-
ing to the floor.
Thankfully, a few designers
 are adapting their garments to
Argent Double- the new reality.
Breasted blazer The Argent Double-Breasted
blazer ($328, argentwork.com)
has a zipped compartment
on the inside for stashing a
phone. This pocket is placed
low on the garment to mini-
friendly mesh lets you quickly
see who’s calling and swipe
away notifications, while a
small slit just above provides
a handy route for your head-
phone cable.
Traditional tailoring tech-
niques can ensure equally ef-
fective camouflage. The exte-
rior pockets of Rag & Bone’s
Howson Blazer ($650, rag-
bone.com) are pleated to give
them more volume—so nobody
will notice the iPhone or small
tablet you’ve slipped inside.
The bold, British-inspired
striped pattern further blinds
the eye to the tech inside. You
will be masked by the jacket’s
more generous cut up top.
You can even see these
smarts in fast fashion brands.
Uniqlo’s lightweight-down
quilted bomber jacket ($70,
uniqlo.com) is equipped with
two interior pockets large
enough to accommodate an
iPad Mini. To prevent the
hard edges of the tablet
from showing through, the
borders of these tech-friendly
pockets sit right along the
jacket’s zipper and lower hem,
smartly masking two edges
of the tablet.
—Lauren Ingram
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

BORJA BONAQUE
HOMES | MARKETS | PEOPLE | UPKEEP | VALUES | NEIGHBORHOODS | REDOS | SALES | FIXTURES | BROKERS

© 2017 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Friday - Sunday, March 24 - 26, 2017 | W7

HIGH-RISE LIVING

New York’s Towers of Power

Some of the world’s richest people live in these four buildings, but the high life doesn’t
always mean staying above the fray: lawsuits, paparazzi, the occasional house arrest.

KERRY HYNDMAN

BY NANCY KEATES
A FINANCIER UNDER house arrest. Beyoncé
swarmed by paparazzi. Accusations of a stolen
Warhol self-portrait. On a 20-block stretch just
off Manhattan’s Central Park, where some of the
world’s richest industry titans, business scions
and hedge-fund moguls live, paying millions for
one of the world’s most expensive homes
doesn’t always ensure security and quiet.
Four buildings along this corridor have home-
owners whose collective net worth could finance
a NASA shuttle mission. These high rises fall
into two categories: grand, prewar, cooperative
apartments that were once the domiciles of
Rockefellers and Vanderbilts; and glassy, glitzy
condos loaded with amenities like screening
rooms and room service from Le Cirque.
Even the ritziest buildings aren’t immune to
market forces. Some have seen record-breaking
sales, while others have seen prices cut by mil-
lions of dollars in hopes of a sale. Last year, the
number of signed contracts on apartments
priced above $4 million fell 20% compared with
2015, according to a report by Olshan Realty. But
January and February sales show signs of a re-
bound. Signed contracts on properties priced at
$4 million and above are up 41% so far this year,
Olshan Realty reports.
Here is a snapshot of four of Manhattan’s
most exclusive addresses. Many of the pur-
chases were made under limited-liability compa-
nies, which mask the identity of the owners.
Owners cited here declined to comment, so de-
tails have been collected from public records
and interviews with real-estate agents and
building residents.
Please turn to page W8

HOUSE
YOUR RIDE TO THE TOP OF THE WORLD OF THE DAY
wsj.com/houseoftheday
Lighter components, motion monitors and other technological advances in elevators ensure a faster trip
to greater heights with a smoother ride. What’s next? Elevator cars that move sideways.

BY EMILY NONKO

AS SKYSCRAPERS push the

SAVILLS

boundaries of height, one cru-

cial building component has
risen to the challenge: the ele- United Kingdom
vator. Technological advances A restored 18th-century
in the industry are providing townhouse in London
faster, smoother rides to
building residents—and add-
ing a little glitz to their trip.
Elevators are of top con-
FARYL AMADEUS/RISE MEDIA

cern to architects, engineers

and developers in the early
stages of building design.
“We consider them almost
immediately,” said Ken Lewis,
managing partner of the in-
ternational architecture firm
SOM. The elevator and stairs United States
make up the core of the A celebrity cake-maker’s
building, which Mr. Lewis Manhattan home
called “the backbone of a su-
per-tall building.” This core
essentially decides how the
KONE CORPORATION

building will be constructed

and the floorplans of the sur-
rounding apartments.
For a faster trip, high-rise
residential towers have re-
cently taken cues from eleva- SCENIC RIDE Kone Corp. elevators in Dubai’s Al Fattan Marine Towers have glass fronts that offer panoramic views.
ARC STUDIOS

tor technology pioneered in

office towers. With “destina-
tion dispatch” systems, resi-
dents at a bank of elevators
first select their desired
floor, and are then directed
to the elevator that will get
them to there in the shortest
time. Such elevators can also
reach speeds upward of
1,600 feet per minute, ac-
cording to Steve Gonzalez,
director of the major proj-
ects unit, Americas, for Finn-
ish elevator-manufacturer
Kone Corp. United Technolo-
gies Corp.’s Otis unit and
Switzerland’s Schindler
Group have also deployed
destination dispatch.
Super-tall towers are de-
signed to safely sway in
strong winds, but this can
cause unintended movement Australia
for the elevator cars. Newer A spacious home
Please turn to page W10 in a Melbourne suburb
W8 | Friday - Sunday, March 24 - 26, 2017 THE WALL STREET JOURNAL.

HIGH-RISE LIVING

NEW YORK’S TOWERS OF POWER

Lewis A. Sanders Jack Welch

ANDREW LAMBERSON FOR THE WALL STREET JOURNAL (432 PARK); BLOOMBERG NEWS (IMMELT, COHEN); GETTY IMAGES (LORBER, WELCH); PMC (LEBOW); BFA (SANDERS)
Bennett LeBow Jeff Immelt

Howard Lorber Steven A. Cohen

WHO LIVES HERE Business moguls in 432 Park Avenue include Lewis Sanders, founder of a global-investment firm, Bennett LeBow, chairman of Vector Group, a holding company, and Howard Lorber,
chairman Douglas Elliman, a Vector Group subsidiary that is handling sales and marketing of the building. At 151 E. 58th St., One Beacon Court residents include Jack Welch and Jeffrey Immelt, the former
and current chief executives of General Electric, as well as hedge-fund manager Steven A. Cohen.

Continued from page W7 ecutives. Since 2014, 10 units have

740 PARK AVENUE sold at One Beacon Court with a
Many in Manhattan see owning median price of $7.1 million, ac-
a duplex in this 1930 co-op build- cording to PropertyShark.
ANDREW LAMBERSON FOR THE WALL STREET JOURNAL (2, BUILDING EXTERIORS)

ing as the pinnacle of success, says

Michael Gross, author of “740 834 FIFTH AVENUE
Park: The Story of the World’s David Koch Home to securities-brokerage
Richest Apartment Building.” founder Charles Schwab and busi-
Stephen Schwarzman paid over ness scion Robert Bass, 834 Fifth
$30 million in 2000 for a 20,000- Avenue has generated few scan-
square-foot, 34-room apartment dals. One exception was in 2015,
at 740 Park—a record for a Man- when Tracey Hejailan-Amon ac-
hattan apartment at the time. Ac- cused her ex-husband, Maurice
cording to public records, Mr. Alain Amon, of taking artwork, in-
Schwarzman, CEO of private-eq- Vera Wang cluding Andy Warhol’s 1966 “Self-
uity firm Blackstone Group, pur- Portrait,” out of the apartment
chased the unit from insurance while she was away. The lawsuit
mogul Saul Steinberg, who bought was dismissed in Manhattan Su-
the unit for $285,000 in 1971 from preme Court. Mr. Amon had no
the estate of John D. Rockefeller comment.
Jr.’s second wife, Mary. The 1931 building currently
Since then, the building has set holds the record for Manhattan’s
other Manhattan sales records. In Israel Englander priciest co-op sale. In 2015, billion-
2012, Howard Marks co-founder 740 PARK AVENUE Philanthropist and political activist David Koch has an apartment here, as aire investor Leonard Blavatnik
of global asset-management firm well as fashion designer Vera Wang and hedge-fund manager Israel Englander. paid $77.5 million for the apart-
Oaktree Capital, paid $52 million ment owned by New York Jets
for a 22,000-square-foot duplex. owner Woody Johnson.
Two years later, billionaire hedge- Currently on the market is a 20-
fund manager Israel Englander set room, 12,000-square-foot duplex
BLOOMBERG NEWS (3); GETTY IMAGES (BLAVATNIK, KOCH); ASSOCIATED PRESS (WANG)

another record when he paid asking $96 million. The seller is

$71.3 million for an apartment Susan Gutfreund, widow of finan-
there, records show. cier John Gutfreund. Since 2014,
Only three of the building’s 31 10 units in the building have sold
units have sold since 2014, with a Charles Schwab with a median price of $30.5 mil-
median price of $44.6 million, ac- lion, according to PropertyShark.
cording to the real-estate research
website PropertyShark. Currently 432 PARK AVENUE
on the market is a 14-room duplex At 1,396 feet tall, 432 Park is
listed for $29.5 million. Once the currently the tallest residential
childhood home of Jacqueline Ken- building in the world. It opened
nedy Onassis, it’s owned by hedge- just last year, and the sale of an
fund manager David Ganek, whose Leonard Blavatnik $87.7 million penthouse holds the
Level Global Investors was raided record for the most expensive
in 2010 by the Federal Bureau of condo sale in 2016. According to
Investigation looking into allega- real-estate website the Real Deal,
tions of insider trading. Mr. Ganek Saudi retail magnate Fawaz Al
was never charged with any crime, Hokair, bought the 8,255-square-
and he is currently suing the U.S. foot full-floor penthouse.
attorney’s office and FBI agents in- Of its 104 units, 81 sold in 2016,
volved in the investigation. Robert Bass with a median sale price of $18.4
Separately, four incidents of 834 FIFTH AVENUE Residents here include securities-brokerage founder Charles Schwab, bil- million, according to Property-
jewelry theft took place in 2013 lionaire investor Leonard Blavatnik and business scion Robert Bass. Shark. Currently there are 18
that, according a spokesman with apartments for sale, ranging from
the New York Police Department, early 2012 and was supposed to Bloomberg Tower because its Warren Buffett’s successor at $6.5 million to $82 million.
resulted in over $200,000 in have been finished by September first 25 floors are taken up by the Berkshire Hathaway, for $8.3 mil- It’s this building where owners
losses. A spokeswoman for Brown 2014 but was still going strong as media company. Condo residents lion in 2009, according to public might feel the greatest impact of a
Harris Stevens, which manages the of June 2016, causing “irreplace- in this renovated department records. Former attorney Scott new law that took effect in Man-
building, declined to comment. able artwork” to fall off the walls store get valet parking and a sep- Rothstein lived there in 2009 hattan last year. It requires pur-
In April, a fire that started in and Mrs. Tang to be “abruptly wo- arate menu for en suite dining when he was charged with run- chases of $3 million or more made
the sauna of the sixth-floor apart- ken almost every morning before 9 from Le Cirque. ning a Ponzi scheme. He was later through limited-liability compa-
ment owned by hedge-fund man- a.m. by the sound of heavy machin- The building has seen its share of convicted. nies to disclose the identity of the
ager J. Ezra Merkin caused exten- ery banging crashing, hammering drama. It has a private motor court According to real-estate broker buyer to government regulators.
sive water damage in the unit and drilling,” the lawsuit contends. and an underground elevator from Victoria Shtainer, who lives in the Many of the priciest sales here
below, owned by philanthropist The Tangs declined to comment, the garage, but neither of these building, one tenant was arrested have come from foreign buyers,
and political activist David Koch, but their attorney, Adam Leitman kept the paparazzi from surround- and escorted out of the building; and many of the transactions have
according to news reports. Bailey, says the suit is “90% set- ing the property in 2008 when Be- he was found guilty of selling taken place under LLCs. Still, 432
In June, semiconductor billion- tled.” The judge ordered that work yoncé, a resident at the time, an- faulty bulletproof vests to the Park has attracted some wealthy
aire Hamburg Tang and his wife, must comply with “structural alter- nounced her marriage to Jay Z. military. Americans, including Bob Prince of
Miranda, sued the building’s co-op ations” rules. Mr. Marks and the One Beacon Court is where Currently the building is home investment-management firm
board and Mr. Marks, their up- co-op board declined to comment. Marc Dreier, an attorney found to both former General Electric Bridgewater Associates and real-
stairs neighbor, who was renovat- guilty of securities fraud, lived CEO Jack Welch and current CEO estate mogul Howard Lorber, who
ing his apartment, according to a 151 E. 58TH ST. briefly in 2009 under house ar- Jeff Immelt, according to public owns Douglas Elliman, which is
lawsuit filed in New York Supreme One Beacon Court, a 2005 de- rest. Mr. Dreier’s apartment sold records, as well as several Renais- handling marketing and sales for
Court. Construction started in velopment, is also known as to Ajit Jain, often referred to as sance Technologies hedge-fund ex- the building.
 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. Friday - Sunday, March 24 - 26, 2017 | W9

HIGH-RISE LIVING
FROM LEFT: BRÜCKNER ARCHITEKTEN; AGENCE FRANCE-PRESSE/GETTY IMAGES

THE ELBPHILHARMONIE The new

concert hall, above. A rendering, left,
of a unit’s prefabricated interior,
planned by Brückner Architekten.

FOREIGN CORRESPONDENT

Building a Concert-Hall Penthouse, Quietly

Interiors are built off-site, with help from robots, for a unit atop Hamburg’s new landmark

over budget and six years behind as was its 244-room hotel. Hansen, based in Peiting in Bavaria give all surfaces a homogenous ap-
BY FRIEDRICH GEIGER
schedule. Now, at least one concert The buyer, who wishes to re- state, to make the interior from pearance.
is performed on most days, de- main anonymous, commissioned lightweight, aerated concrete. The Mr. Brückner said he doesn’t
WHEN AN UNFINISHED penthouse manding a certain level of respect- architects Susanne and Laurent pieces are being cut in their work- know the owner’s plans for the in-
at the top of Hamburg’s striking ful silence. Brückner of Munich-based Brück- shops with the help of robots. terior’s final color scheme or fur-
new concert hall was sold last Situated in the upper reaches of ner Architekten to design a cave- Schotten & Hansen Co-Chief Ex- niture.
year, the buyer faced a thorny the 335-foot-tall Elbphilharmonie, like room, avoiding straight edges ecutive Torben Hansen said tech- Despite its long gestation,
challenge: extensive construction the penthouse is Hamburg’s high- or sharp corners. nological advances in robotics and largely caused by disputes between
work was banned on the site, now est apartment. Its floor-to-ceiling “The buyer asked us to evoke laser scanning allow him to pre- the city administration and con-
dedicated to more harmonious walls offer a panoramic view of the instinctive cocooning of child- fabricate custom interiors with struction company Hochtief over
sounds. Europe’s third-busiest commercial hood for which there is no place in great complexity, yet with preci- costs, the concert hall has received
The solution: Build the interior port and the Elbe river. our optimized, pragmatic world,” sion down to the millimeter. overwhelmingly positive reviews,
off-site and assemble it afterward When completed—sometime in said Mr. Brückner. “I’ve been dreaming of handling for its acoustics and for the aes-
in the apartment’s shell. autumn—the 2,475-square-foot One large room, a bright amor- a project like this for the last de- thetics of its ethereal crystal top
The construction ban was meant unit also will be one of the city’s phous space, will fill most of the cade,” he said. on the rugged brick pedestal.
to prevent noise, as well as any most expensive. The shell alone penthouse. Its rounded shapes will In all, some 1,000 separate mod- The building is located at the
dust and debris, from entering the was marketed for about $8.5 mil- create a continuum of ceilings and ules—all white—will be cut small western tip of HafenCity, a modern
Elbphilharmonie, a landmark lion, or $3,457 per square foot, an walls without seams or edges. A enough to travel up the Elbphilhar- development on the grounds of
building by Swiss architects Her- unusually high price in the market staircase will lead to the sleeping monie’s elevators, to be fitted in Hamburg’s former city-center har-
zog & de Meuron, built on the even for a turnkey property. area on the gallery and to the the penthouse over a wooden sub- bor. Many historic warehouses
remnants of a 1960s redbrick The building’s other three pent- bathroom, which also features structure with completed utilities. have been preserved and now sit
warehouse. houses and its 41 other residences, curved forms. Once they are assembled in the alongside buildings designed by lu-
The hall officially opened in most on lower floors, were mostly The Brückner firm teamed up penthouse, the pieces will be minaries such as David Chipper-
January—more than $500 million completed before the hall opened, with interior architects Schotten & coated in a fine-grain plaster to field and Hadi Teherani.

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Distinctive Properties & Estates

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For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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W10 | Friday - Sunday, March 24 - 26, 2017 THE WALL STREET JOURNAL.

HIGH-RISE LIVING

A RIDE TO THE TOP OF THE WORLD

CLOCKWISE FROM TOP: WILLIAMS NEW YORK; ILLUSTRATION BY PAUL DOTEY; THYSSENKRUPP
Continued from page W7
elevators have built-in mecha-
nisms to monitor the build-
ing’s movement so that in
high winds, the elevator speed
is automatically reduced.
At Trump International Ho-
tel & Tower Chicago, for ex-
ample, Kone set up a so-called
sway detector to constantly
monitor the steel cables, also
called ropes, that carry eleva-
tor cars up and down the
1,388-foot tall building.
“We’ve got technology to
monitor the sway, change
the speed of the elevator in
really high-wind conditions,
and even stop the elevator to
allow users to get off at a
safe place until the sway
subsides,” Mr. Gonzalez, of
Kone, said.
The company has also de-
veloped what it calls “ultra-
rope” with a higher tensile
strength than conventional PRIVATE RIDE When it opens next year, the Four Seasons Residences One Dalton Street, Boston, shown in a rendering, will have no A Tall Order
steel cables. Ultrarope has a more than six apartments per floor, and residents will never have more than two units sharing an elevator bank.
super-light carbon-fiber For Elevators
core, allowing the elevators “If your arms are full of building’s developer.
to move faster, using less en- groceries, you won’t have to The Four Seasons Resi- When completed, World One in
ergy than those with steel push any buttons,” Mr. Gon- dences One Dalton Street, Mumbai is designed to reach
cables, the company said. zalez said. “And from a peo- Boston, a tower that will rise 1,450 feet. That is the equiva-
When the Dubai tower ple-flow perspective, the 742 feet when it opens next lent of 4.754 Statues of Liberty
Burj Khalifa opened in 2010, technology ensures that it’s a year, will have three elevator (as measured from the base to
it boasted the tallest eleva- smooth, fast ride for every- banks, with two elevators per the torch at 305 feet).
tor in the world, reaching one throughout the building.” bank and no more than six
1,600 feet on a conventional Elevators at 56 Leonard, apartments per floor, to “en-
steel rope system. Using ul- an 821-foot-tall luxury sky- sure that residents will never “Buildings are going
trarope, Saudi Arabia’s Jed- scraper in Manhattan, will have more than one unit shar- higher and higher,” said
dah Tower will hold double- deliver residents on the top ing your elevator bank,” said Karl-Otto Schöllkopf, the
deck elevators that reach a 15 floors directly to their Darren Messina, the executive global high-rise product
record height of 2,165 feet apartment using Schindler’s vice president of Carpenter & manager of Thyssenkrupp.
when the building is com- destination-dispatch system. Co., the building developer. “But the elevator has been
pleted in 2018. Lower floors will have no German elevator manu- clearly the bottleneck of the
Also on the horizon is more than three apartments facturer Thyssenkrupp is high-rise building.”
Mumbai’s World One tower, per elevator bank, so cars banking on increasing global In a typical elevator sys-
which is scheduled to open will open into hallways that demand for taller buildings tem, the ropes limit the num-
this year. At 1,450 feet, World are “exclusive and private,” LATERAL MOVE A rendering of the Thyssenkrupp ropeless ele- and more efficient elevator ber of cars that can operate
One will have 25 elevators said Izak Senbahar, the vator system, in which cars would travel vertically and horizontally. systems. in an elevator shaft. Thyssen-
made by Switzerland’s Schin- krupp is developing a rope-
dler Group that will lift resi- less elevator system driven
dents to their floors at speeds by motors, allowing cars to
up to 1,560 feet per minute. travel both vertically and hor-
Elevators are getting izontally. With the ability to
smarter, too. Newer models move up, down and sideways,
now have technology that 30 or more elevator cars can
uses mobile-phone networks service a building in a loop,
to connect a resident’s phone Mr. Schöllkopf said. The com-
NICK MERRICK FOR HEDRICH BLESSING (2)

to the elevators’ operating pany expects to begin install-

system. When a resident en-
ters the building, the technol-
ogy alerts the elevator sys-
tem, sending an elevator to
pick residents up and deliver
them to their desired floor.
Two buildings currently un-
der construction—Grand
Tower in Frankfurt and One
Palm in Dubai—will have
Kone’s phone-alert system.
ing the system in 2020.
Eliminating rope systems
could open up new possibili-
ties for the height and shape
of buildings in the future,
Mr. Schöllkopf said. “We ex-
pect more mixed-use build-
ings in cities, and [the eleva-
tors] could create a system
NEW HEIGHTS When the Dubai tower Burj Khalifa opened in 2010, it boasted the tallest elevator in the world, reaching 1,600 feet on for 50,000 people living and
a conventional steel rope system. working in one building.”

PRIVATE PROPERTIES | CANDACE TAYLOR

Ellen DeGeneres Asks $45 Million

At one point, television talk

show host and serial home flip-
per Ellen DeGeneres said her
Tuscan-style villa in Montecito,
Calif., might prove the excep-
tion to her history of buying,
fixing up and selling high-end
properties. “I really do hope we
live here forever,” she wrote in
her 2015 interior-design book
“Home.”
Apparently that is not to be.
The 59-year-old host of “The
Ellen DeGeneres Show” and her
wife, actress Portia de Rossi,
are putting their Montecito
home on the market for $45
million, according to listing
FROM LEFT: BILL ABRANOWICZ; JIM BARTSCH

agent Suzanne Perkins of So-

theby’s International Realty.
Located on a hilltop with
views of the ocean, the nearly
17-acre property contains a
roughly 10,500-square-foot,
six-bedroom stone house the
couple renovated. With a bar-
rel-tiled roof and 18th-century
Italian tiles, the 1930s two-
story house has nine wood-
burning fireplaces, a media
room, and multiple libraries and ing room and an outdoor olive trees, gardens and foun- current size by buying two ad- Ms. Perkins said she isn’t neres and Ms. de Rossi directed
reading areas. kitchen with a pizza oven. tains. jacent properties, Ms. Perkins sure why the couple is selling, inquiries to a Sotheby’s spokes-
The couple used stone exca- The grounds also include The couple bought the prop- said, noting that they live pri- but she noted their history of person, who said the couple is
vated on the property to build two swimming pools, a sunken erty in 2013 for $26.5 million, marily in Los Angeles and used lucrative home flips. selling because they don’t
an indoor-outdoor entertaining tennis court and badminton according to public records. this property as a weekend When asked for comment, a spend as much time in Santa
pavilion with a sun room, a din- court, as well as eucalyptus and They expanded the estate to its home. spokesperson for Ms. DeGe- Barbara as they would like.
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THE WALL STREET JOURNAL. Friday - Sunday, March 24 - 26, 2017 | W11

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