Google Courts China Partners Currency Collapse

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Last week: DJIA 25313.14 g 149.44 0.6% NASDAQ 7839.11 À 0.3% STOXX 600 385.86 g 0.8% 10-YR. TREASURY À 26/32 , yield 2.859% OIL $67.63 g $0.86 EURO $1.1412 YEN 110.90 What’s White-Nationalist Rally, Dwarfed by Protesters, Fizzles Investors News Focus on Turkish Business&Finance Lira’s Fall lphabet’s Google is Awooing partners in Higher U.S. tariffs China for a potential expansion there even as its on steel and aluminum search engine and Gmail increase uncertainty remain officially blocked. A1 in currency markets Private-equity firms are increasingly lending to BY JACOB M. SCHLESINGER midsize companies, fueled AND MICHAEL WURSTHORN by an influx of cash from yield-hungry investors. A1 Emerging-market investors U.S. oil companies, are preparing for an unsteady primed to reap the bene- start to the week after a week- fits of rising prices after end marked by heightened years of wringing more from rhetoric, renewed trade ten- wells for less, are seeing prof- sions and a deeper slide in the its erode as costs rise. B1 Turkish lira. The lira sank to a record Digital currency Tether low on Sunday evening after hasn’t produced an audit collapsing last week. The cur- showing it has the dollar rency is now down more than reserves to back its ap- 40% this year, while bond proximately $2.5 billion of

JIM LO SCALZO/EPA/SHUTTERSTOCK yields have skyrocketed, push- coins in circulation. B1 SPARSE RANKS: A year after a violent gathering of white nationalists in Charlottesville, Va., Jason Kessler, center, led a march billed ing Turkey onto the edge of a Bridgepoint is selling a as a ‘white civil-rights rally’ in Washington. Fewer than 20 people joined Sunday as thousands turned out to protest the rally. A3 financial crisis. Turkey’s vul- minority stake in itself to nerabilities include high levels Neuberger Berman unit of foreign-currency debt, a Dyal to help finance the current-account deficit and firm’s expansion plans. B3 rising borrowing costs. President Trump on Friday Qualcomm reached a doubled steel tariffs on Turkey settlement with Taiwan as its government battled the over patent licensing that Google Courts China Partners currency collapse. The deci- revokes a previous finding Google has been building a government to allow such a searcher Marbridge Consult- sion marked a departure for against the chip maker. B4 network of Chinese app devel- By Douglas MacMillan move, Google can point to its ing. “Chinese authorities want the U.S., which has generally Online mattress seller opers, manufacturers and ad- in San Francisco, local partners as examples of to support domestic champi- tried to calm global markets Casper plans to open 200 vertisers as it presses Beijing Shan Li in Beijing how the company contributes ons as much as possible,” Mr. during times of financial tur- of its own stores in the next to let the internet behemoth and Liza Lin in to economic growth. That is Natkin said. moil in emerging markets, es- three years to parry competi- introduce censor-friendly ver- Shanghai a contrast to its U.S. rival Even after Google retreated pecially when investors are tion from internet copycats. B3 sions of its now-banned web Facebook Inc., which also from China in 2010 in protest gripped by fear of contagion. services. Those partners will likely covets the China market but of government hacking and Mr. Trump raised tariffs on World-Wide As part of a charm offen- prove crucial to a secretive has had less success getting censorship, the company kept PleaseturntopageA8 sive under Chief Executive project, dubbed “Dragonfly,” in traction. most of its staff in place and Sundar Pichai, Google has pro- which Google is testing a mo- By working with local play- continued to operate busi- Erdogan blames U.S. for Emerging-market in- vided tools and support to a bile version of its search en- ers, Google is building the nesses other than search. It dispute...... A8 vestors are preparing for growing number of partners in gine that would adhere to case that it is boosting the now has more than 700 em- Emerging markets can an unsteady start to the the country that rely on the China’s strict censors, people country’s economy, said Mark ployees—roughly split be- withstand shock...... B10 week after days of height- unit of Alphabet Inc. to reach familiar with the matter said. Natkin, managing director at tween salespeople and engi- Heard on the Street: Trouble ened rhetoric, renewed trade global customers. To convince the Chinese Beijing-based industry re- PleaseturntopageA2 unlikely to go global...... B10 tensions and another slide in the Turkish lira. A1, A8 The theft and pilot-di- Drillers’ Costs Rise With Oil Prices rected crash of a plane in Out of Syria’s Chaos, Washington state has The median crude-oil price at which producers can turn a proﬁt highlighted continued weak- drilling a new shale well fell rapidly during the commodities slump. nesses in airport security. A3 A Tycoon Builds a Fortune It has since leveled off. B1 White nationalists and $120 a barrel counterprotesters rallied in Washington, D.C., on the first anniversary of violent clashes 100 in Charlottesville, Va. A3 Samer Foz has managed to get rich without getting sanctioned Ex-West Wing aide 80 Omarosa Manigault-New- BY SUNE ENGEL RASMUSSEN AND NAZIH OSSEIRAN Syria’s wartime economy of getting rich man secretly recorded a without getting sanctioned. As a result, he Selected top conversation with White HOMS, Syria—Fighting has reduced whole has become the Assad regime’s most impor- 60 U.S. oil ﬁelds House chief of staff Kelly. A4 neighborhoods of Syria’s third-largest city to tant conduit for business deals. ruins. The acres of scrap metal left behind Mr. Foz plans to build skyscrapers on land Eagle Ford Trump’s lawyers be- are now being melted into rebar by a steel in Damascus the regime forcibly acquired 40 Permian–Midland lieve they can weather a plant to rebuild demolished homes. from opposition members. Earlier this year, Bakken negative report by Mueller Permian–Delaware The plant is owned by Samer Foz, a ty- he became the majority shareholder, along- 20 and are prepared to rebut any coon who built a fortune out of a war that side the government, in the capital’s luxury conclusions, Giuliani said. A4 shattered his country. Four Seasons hotel, where foreign officials 2012 ’15 ’18 Leaders of five Caspian In a country many businessmen fled as stay as they try to provide humanitarian aid Source: Rystad Energy ShaleWellCube THE WALL STREET JOURNAL. Sea nations signed an ac- fighting raged, Mr. Foz stayed. He dealt with and uphold a diplomatic presence. cord on resource owner- many sides in the conflict, distributing Along the way, the 45-year-old Mr. Foz ship on the inland sea. A8 wheat to Islamic State-held territory and to has run afoul of the authorities in Turkey, Kurdish-controlled land. Running businesses and his relations with the regime have led A battle between gov- that ranged from pharmaceuticals to cement, some diplomats in the region to question ernment and Taliban he stayed close to the government as well, why he is able to remain free of Western Private-Equity Firms forces for an important Af- and has lately has been doing business with sanctions. ghan city intensified. A7 it. For the next stage of his career, Mr. Foz Push Into Lending Died: V.S. Naipaul, 85, No- Mr. Foz has managed the rare feat in PleaseturntopageA10 bel laureate in literature. A7 BY MIRIAM GOTTFRIED of credit terms. For smaller AND RACHEL LOUISE ENSIGN loans, “I don’t think it could The Latest Fad for Whiter Teeth Is to Turn Them Black become any more borrower JOURNAL REPORT Private-equity firms have friendly than it is today,” said iii long been some of the biggest Kent Brown, who advises mid- The View owners of companies. Now size companies on debt at in- From the Top Beauty bloggers love testing charcoal toothpaste; ‘goes with tattoos’ they are vying to become vestment bank Capstone some of their biggest lenders. Headwaters. C-Suite Strategies Fueled by an influx of cash The market is poised to R1-6 BY ANNE MARIE CHAKER smiles before a rinse reveals from yield-hungry investors, grow as behemoths and what they say are more- buyout firms are now financ- smaller outfits angle for more Rachel Funchess has a se- pearly whites. ing deals banks won’t. In all, action. In December, KKR & CONTENTS Markets...... B9-10 cret weapon to get her teeth “It goes with tattoos and nonbanks—many private-eq- Co. struck a partnership to Business & Finance B2 Opinion...... A15-17 Business News... B3,6 Sports...... A14 really white. First she turns edginess and a feeling of ‘I’m uity firms—held more than create the largest business-de- Crossword...... A14 Technology...... B4 them black. using this because I’m in the half a trillion dollars worth of velopment company, an in- Heard on Street... B10 U.S. News...... A2-4,6 “I literally just got black know,’ ” says Lu Ann Williams, loans to midsize companies at vestment vehicle dedicated to Journal Report... R1-6 Weather...... A14 goo everywhere,” says the 19- director of innovation for In- the end of 2017, up from about making business loans. Life & Arts...... A11-13 World News...... A7-9 year-old blogger from Green- Black gold nova Market Insights, which $300 billion in 2012, accord- Blackstone Group LP and ville, S.C., as she demonstrates tracks new food and consumer ing to estimates by private- Carlyle Group LP plan to raise > brushing with charcoal pow- ite cleanser among white- products. There were 131 food, equity firm Ares Management billions of dollars more dedi- der, black ooze seeping down teeth fanatics. Social media is beverage and personal-care LP. cated to business lending. her chin, in her YouTube jammed with videos of You- products containing charcoal The influx of money has led Apollo Global Management video. “Things I thought I’d be Tubers spreading charcoal introduced last year, up 39% to intense competition for LLC and entities affiliated posting on the Internet? Not powders and pastes on tooth- from two years earlier, she borrowers. On bigger loans, with it, already sizable play- s 2018 Dow Jones & Company, Inc. All Rights Reserved this.” brushes, and laughing about says. that has driven rates closer to ers, have been buying and ex- Charcoal is the new favor- the resulting messy black PleaseturntopageA10 banks’ and led to a loosening PleaseturntopageA4 A2 | Monday, August 13, 2018 THE WALL STREET JOURNAL. U.S. NEWS

THE OUTLOOK | Paul Hannon ECONOMIC CALENDAR

Worries Weigh on Eurozone Growth Tuesday: China will release its monthly business-activities data. Europe’s Commission. For now, U.S. tariffs im- In addition to worries Investors will look for signs that economy has They were operating at Losing Steam posed on European exports of about the impact on confi- rising trade tensions between slowed, and 84.5% of capacity, a level ex- Eurozone manufacturing aluminum and steel in May af- dence and investment of a China and the U.S. have hurt busi- seems un- ceeded in only a handful of conﬁdence has declined this year. fect a tiny slice of the econ- trade spat initiated by the ness and consumer sentiment. likely to quarters since businesses European Manufacturing omy. But even before those hit, U.S., policy makers worry Germany’s economy slowed bounce back werefirstsurveyedin1985. Conﬁdence Index demand from the U.S., China, whether Italy’s new coalition sharply in the first three months, strongly in what remains of Policy makers expected them Japan and other parts of Asia will press ahead with plans to thanks in large part to unusually a year that began with high to respond by expanding. 10 for European exports had cut taxes and raise spending. cold weather, an outbreak of in- hopes and then hit a series Eight months into 2018, 8 eased, in part reflecting the Turkey is a new uncertainty. fluenza and a series of strikes. of setbacks. the optimism looks less jus- euro’s appreciation in 2017. It is the European Union’s Economists don’t expect growth With the eurozone econ- tified. The eurozone has re- 6 While exports to China were fifth-largest market, a destina- figures for the second quarter to omy facing capacity con- corded two successive quar- 4 up 20% in the first five months tion for nearly €100 billion be much better. straintsas2017drewtoa ters of slowing growth and of 2017 compared with the ($114 billion) in goods and ser- close, policy makers had the number of people with- 2 same period a year earlier, vice exports in 2017, including Wednesday: The Commerce hoped that optimistic busi- out jobs rose slightly in 0 they were up just 2.5% in the machinery and transportation Department releases July retail- nesses would go on an in- June. Exports have faltered, first five months of this year. equipment, according to the sales data. Americans boosted vestment splurge. and higher energy prices are -2 European Commission. their spending at retailers in But as confidence ebbs in offsetting a modest pickup in -4 he eurozone’s slow- European confidence may June, capping a strong quarter the face of global trade ten- wages, leaving households down initially appeared rebound if the truce on At- of consumption that is expected -6 T sions and other uncertain- with little extra to spend on to be due to temporary lantic trade negotiated by to help ramp up growth. Econo- ties—most recently Europe’s goods and services. 2014 ’15 ’16 ’17 ’18 factors, including unusually President Trump and Euro- mists will watch for continued exposure to a brewing eco- Between March and July, Source: The European Commission cold weather in the early pean Commission President strength in consumer spending, nomic crisis in Turkey—the the 29 institutions monitored THE WALL STREET JOURNAL. months of the year, coupled Jean-Claude Juncker holds, an engine of the economy. currency area risks getting by Consensus Economics with a series of labor strikes and if Italy’s government The Federal Reserve releases stuck in a low-growth groove. have cut their forecasts for 2018 slowdown. A July mea- and an outbreak of influenza settles on a less expansive data on industrial production for “The euro growth cycle is growth in 2018 to 2.2% from sure of activity derived from that hit construction and budget or Turkey stabilizes. July. In June, this measure of out- in a phase when it needs 2.4%. That would be down data firm IHS Markit’s sur- manufacturing activity. But damage has already put rose a seasonally adjusted 0.6% more [capital expenditures],” from 2.6% growth in 2016 vey of 3,000 businesses was The slowdown now ap- been done. “The preliminary from the prior month. July’s report said Shweta Singh, a manag- and contrasts with U.S. close to the 18-month low pears to reflect more persis- EU-U.S. trade negotiations will shed light on whether manu- ing director at economics growth projections, which reached the previous month. tent headwinds. The annual- are unlikely to be concluded facturing sector growth continues. consultancy TS Lombard. private economists have Export orders and confi- ized growth rate of 1.4% before the fourth quarter “That’s why the impact of lifted to near 3% for this year. dence have weakened. recorded in the three months and they could easily fail,” Friday: Brazil’s political tension the trade wars on sentiment “The survey responses in- through June wasn’t far off said Oliver Rakau, chief Ger- goes up a notch, as presidential is so worrying.” ndicators of how the dicate that the slowdown the 1.9% average since the man economist at Oxford candidates will be allowed to In January, Europe’s man- I economy has performed likely reflects worries about eurozone returned to growth Economics. “The increase in start campaigning for the Octo- ufacturers were more confi- since June suggest it trade wars, tariffs and rising five years earlier. And that is uncertainty is already con- ber election. Markets are watch- dent about their prospects won’t quickly regain lost mo- prices, as well as general un- in line with official estimates straining investment.” ing for hints on how poll leaders than at any time during the mentum. That has been most certainty about the economic of the currency area’s “speed Should that continue, Eu- would handle a fiscal crisis near 40 years over which evident in the manufacturing outlook,” said Chris William- limit,” or the rate of growth rope will have missed a threatening the nation’s solvency, their sentiments had been sector, which led both the son, IHS Markit’s chief busi- it can sustain without gener- chance to raise its economic potentially leading to volatility in recorded by the European 2017 acceleration and the ness economist. ating too much inflation. speed limit. currency and stock markets. U.S. WATCH As Californians Sift Through the Rubble, Crews Make Some Progress

CONGRESS trailed his most well-known, well-funded challenger, U.S. Rep. GOP Rep. Collins Colleen Hanabusa, by 20 points, Suspends Campaign according to a March poll. Mr. Ige is likely to recapture Republican Rep. Chris Collins of the governorship in November, New York said he is suspending given the state’s overwhelmingly his re-election campaign amid in- Democratic electorate. sider-trading allegations that have He will face state Rep. Andria derailed what had been viewed as Tupola, who won the Republican a clear path to another term. primary Saturday. Mr. Collins said on his official —Alejandro Lazo campaign Twitter page that he plans to fill out the remaining PENTAGON few months of his term to ensure his district maintains its Defense Secretary vote in the House. Backs Space Force Mr. Collins was arrested on Wednesday and charged with il- Defense Secretary Jim Mattis legally sharing inside tips about said Sunday he is satisfied that an Australian biotech company, creating a space force as a sepa- Innate Immunotherapeutics Ltd. rate military service is the right Attorneys for the congressman way to reorganize the Pentagon. said he would be exonerated. Mr. Mattis, who last year op- Mr. Collins said the charges posed moves in Congress to cre- against him are “meritless.” ate a separate space service, —Vivian Salama and said his emphasis then was on Kristina Peterson establishing a consensus about what the Pentagon’s space prob- HAWAII lem is before recommending a way to fix it. Governor Prevails in “I was not against setting up Democratic Primary a space force,” he told reporters flying with him to Brazil to begin Hawaii Gov. David Ige pre- his first tour of South America vailed in Saturday’s Democratic as defense secretary. “What I

JOHN LOCHER/ASSOCIATED PRESS Party primary, according to pre- was against was rushing to do TALLYING THE DESTRUCTION: Kim Burns sat in the rubble of her home burned in the Carr Fire in Redding, Calif., on Sunday, as crews liminary results from the Associ- that before we could define the elsewhere made some progress battling the Holy Fire, aided by cooler temperatures. That blaze was 41% contained as of Sunday. ated Press. problem” that needed solving. At one point, Mr. Ige had —Associated Press

the talks, which were earlier lies on Google’s open-source sales team targets users out- specifically, but reported sales virtual private network to Google reported by Bloomberg, software to power its line of side of mainland China by of $5.1 billion in its Asia Pa- skirt China’s censors. couldn’t be determined. watches and smart speakers. buying Google ads. cific region in the three It would be impossible to A spokesman for Google de- Its engineers build apps using “It’s not just software, it’s months ended June 30. That replace those tools with ones Plots China clined to comment on the TensorFlow, Google’s free set an ecosystem,” Zhifei Li, Mob- amount grew 36% from the available in China, Mr. Niu company’s talks with Chinese of development tools for arti- voi’s chief executive, said of same period a year earlier, said. “You have to put yourself partners. Tencent didn’t re- ficial intelligence. Mobvoi’s Google—also a minority inves- compared with 26% growth in in a client’s shoes—you have Relaunch spond to requests for com- tor in his startup. Google’s total revenue over to use what they use.” ment. Xiaomi and other Chinese the same period. —Yang Jie in Beijing ContinuedfromPageOne Launching a search engine Looking East phone makers don’t pay Google ads have become es- contributed to this article. neers—across offices in in China is far from certain Google's ad business in Asia is Google to sell Android-based sential for Chinese businesses Beijing, Shanghai and Shen- and hinges on the approval of phones to customers in China. like Yamibuy.com, an e-com- expanding and growing faster THE WALL STREET JOURNAL zhen. That is up from about China’s authorities, who fre- But increasingly, they do rely merce store that sells most of than other regions combined. (USPS 664-880) 500 since 2015, the year Mr. quently wield their power to on Google services to help sell its goods to customers outside (Eastern Edition ISSN 0099-9660) Pichai became CEO. block U.S. tech giants from en- Asia-Paciﬁc quarterly revenue their phones to customers out- of the mainland, said Hans (Central Edition ISSN 1092-0935) (Western Edition ISSN 0193-2241) Mr. Pichai has been a fre- tering the market and compet- $6 billion side of China. Chinese manu- Tung, a partner at GGV Capital quent visitor to the region, ing with homegrown rivals. facturers sell about 450 mil- and investor in the startup. Editorial and publication headquarters: meeting with top Chinese offi- The plan also faces certain lion phones to customers Neo Niu, the founder of 1211 Avenue of the Americas, 5 New York, N.Y. 10036 cials and encouraging busi- backlash from critics back outside of China every year Chinese marketing company Published daily except Sundays and general nesses to use Google’s free home; six U.S. senators have 4 that are preinstalled with GrowthHash, said he relies on legal holidays. Periodicals postage paid at open-source tools like Tensor- called the effort “deeply trou- Google’s standard suite of mo- Gmail, Google Docs and Google New York, N.Y., and other mailing offices. Flow and Android—the mobile bling” and said it risks “mak- 3 bile apps, such as search, Drive as his primary way of Postmaster: operating system that powers ing Google complicit in human maps and email, according to communicating with clients, Send address changes to The Wall Street 2 Journal, 200 Burnett Rd., Chicopee, MA 01020. three-quarters of all Chinese rights abuses related to Counterpoint Research. half of which are outside of All Advertising published in The Wall Street smartphones. China’s rigorous censorship 1 By showing mobile ads and China. He pays for the busi- Journal is subject to the applicable rate card, Google’s investments in regime.” taking a cut of app store sales ness version of Google’s apps copies of which are available from the Advertising Services Department, Dow Jones China this year have included During an appearance at 0 on these devices, Google may and accesses them through a & Co. Inc., 1211 Avenue of the Americas, New $550 million for a 1% stake in the Chinese government’s an- 2016 ’17 ’18 generate up to $10 billion an- York, N.Y. 10036. The Journal reserves the right local online retailer JD.com, nual cyberspace conference nually on phones made by Chi- not to accept an advertiser’s order. Only along with investments in last December, Mr. Pichai said Revenue, change from nese partners, Counterpoint CORRECTIONS publication of an advertisement shall constitute previous year final acceptance of the advertiser’s order. Chushou, a live video-stream- open-source software plat- estimates. Letters to the Editor: ing site and Manbang Group, a forms like Google’s Android 40% With no search engine, AMPLIFICATIONS Fax: 212-416-2891; email: [email protected] mobile operating system are truck-hailing company. Asia-Paciﬁc Google has fewer opportuni- Google has held talks for helping to spur innovation ties to show ads to Chinese NEED ASSISTANCE WITH 35 more than a year with local from companies like Chinese users and lags far behind Chi- The documentary “Dionne YOUR SUBSCRIPTION? partners, including Tencent phone maker Xiaomi Corp. nese internet giants Alibaba Warwick: Then Came You (My By web: customercenter.wsj.com; By email: Holdings Ltd., about offering “That’s part of our goal 30 Group Holding Ltd. and Ten- Music)” airs on PBS starting [email protected] By phone: 1-800-JOURNAL (1-800-568-7625); cloud-hosting services in when we develop these open- cent in the sale of ads shown Aug. 18. A Mansion article on Or by live chat at wsj.com/livechat China, said a person who was sourced platforms,” Mr. Pichai Other regions within the country. But as Friday about the singer’s briefed on those talks. Under said. “Anyone and everyone 25 more Chinese businesses use childhood incorrectly said the REPRINTS & LICENSING the scenarios that have been can take it and develop things advertising to reach customers documentary would air start- By email: [email protected] proposed, Google would sell at scale.” around the world, they are ing Aug. 4. By phone: 1-800-843-0008 software and hosting services Google’s recent efforts in 20 buying ads on Google and that would run on a data cen- the region are exemplified by 2017 ’18 Facebook. Readers can alert The Wall Street Journal to any errors in news articles GOT A TIP FOR US? ter owned by a local company, Beijing-based smartwatch Source: S&P Capital iQ Google doesn’t break out by emailing [email protected] or SUBMIT IT AT WSJ.COM/TIPS the person said. The status of startup Mobvoi Inc., which re- THE WALL STREET JOURNAL. results from its China business by calling 888-410-2667. THE WALL STREET JOURNAL. ***** Monday, August 13, 2018 | A3 U.S. NEWS Counterrally Drowns Out The FarRight

White nationalists p.m., when Mr. Kessler and others were escorted away in draw few to a march vans by police. in Washington, D.C., The event had been planned for months and designed to to mark Charlottesville mark the anniversary of last year’s mayhem in Charlottes- A heavily promoted “white ville, Va., in which white na- civil-rights rally” near the tionalists and their supporters White House on Sunday ap- clashed violently with counter- peared to be a bust, with protesters. One counterpro- tester, Heather Heyer, was By Andrew Duehren killed when a far-right pro- in Washington and tester drove a car into their Cameron McWhirter group. Many others were in- in Charlottesville, Va. jured, and two Virginia state troopers died when their heli- fewer than 20 attendees who copter accidentally crashed.

were largely drowned out by For Sunday’s rally, held in WIN MCNAMEE/GETTY IMAGES thousands of counterprotest- Lafayette Square, District of People in Charlottesville gathered Sunday to mourn Heather Heyer, killed a year ago when a far-right protester drove a car into her group. ers gathering nearby. Columbia police took no Jason Kessler, the white na- chances. Some officers were in in 2017 as well as Sunday’s eral other attendees, their could have opportunities,” flowers on a pole for her tionalist who organized the riot gear, others on horseback. event. He added later, “I don’t faces covered by bandanas, de- said Washington, D.C., resident daughter and for the two offi- rally, told the National Park Metal barriers, dozens of po- care about the turnout.” clined to give their real names Jamica McGill, 27. cers. Federal prosecutors Service he expected 100 to lice officers, and several yards During his remarks, Mr. when interviewed. Sunday in Charlottesville, charged a far-right sympa- 400 attendees in an event separated the two groups. Kessler complained about im- Counterprotesters held sev- marches and ceremonies were thizer with a hate-crime act scheduled to run from 5:30 “There were a lot of people migration and members of mi- eral rallies nearby. held in the morning and early and numerous other charges. until 7:30 p.m. EDT. But the who were at last year’s rally nority groups. “If you bring in “It’s important for me to afternoon. Susan Bro, Heather The man pleaded not guilty. white nationalists began their who are very scared this year,” too many people at once, it’s stand up for what’s right be- Heyer’s mother, visited the “I don’t want other mothers rally some two hours early said Mr. Kessler, who orga- not the same country any- cause there were people be- spot where her daughter was to go through this,” she said, and ended abruptly around 5 nized the Charlottesville rally more,” he said of the U.S. Sev- fore me who stood up so I struck by the car. She put crying. Plane’s Thief Had No Training but on Videogames SEATAC, Wash.—At first, air-traffic controllers didn’t Incident, Crash seem alarmed when Richard Russell climbed into the cock- Expose Gaps pit of a small airliner here Fri- In Airport Security day evening, spooled up its twin turboprop engines and Friday’s theft of a Horizon By Andrew Tangel, Air passenger plane from Se- Alison Sider, Andy attle-Tacoma International Pasztor and Jay Airport exposed the aviation Greene vulnerabilities that persist even after efforts to enhance trundled from its parking spot security following the Sept. near a cargo area. 11, 2001, terrorist attacks.

Ground-services workers like AGENCE FRANCE-PRESSE/GETTY IMAGES Many questions about the Mr. Russell sometimes shuttle incident—in which airline em- planes between locations at the Richard Russell stole a small ployee Richard Russell took Seattle-Tacoma International airliner and flew toward Tacoma off with the plane and then Airport and other fields without over Puget Sound, before crashed on an island in the promptly checking in with the crashing on an island, left. Puget Sound—remain unan- tower as required. swered. But experts say it This time, though, the 29- Pastor said the plane crashed on will prompt a rethink of how year-old, untrained as a pilot but a small, sparsely populated is- to secure aircraft at airports. with a penchant for airplane vid- land off the coast in south Puget Alaska Air Group Inc., Ho- eogames, headed for the runway, Sound. On Saturday at 1:38 p.m. rizon Air’s parent company, opened up the throttle and local time. Mr. Russell was pro- will examine what if anything

roared into the air without clear- TED S. WARREN/ASSOCIATED PRESS nounced dead. needs to be changed, Alaska ance or a flight plan. It wasn’t Some who knew Mr. Russell Chief Executive Brad Tilden clear whether the theft was a joy were shocked by his actions. said at a news conference ride, a hijacking, a terrorist at- ‘I don’t need that much help. I’ve played some videogames before.’ “It may seem difficult for Saturday: “It’s far too early to tack or a suicide mission. those watching at home to be- say what additional proce- Mr. Russell flew for about an Richard Russell, to air-traffic controllers lieve, but Beebo was a warm, dures we might implement.” hour toward Tacoma over Puget compassionate man,” family Airliners generally don’t Sound, a meandering trip punc- friend Mike Mathews said in a have locks on their doors or tuated by moves that included a statement on behalf of Mr. Rus- require keys to start. While roll and a flip and a soundtrack The Q400 version of the dinary quality to the tragic and system that regulates cabin sell’s friends and family and there are procedures to se- of calm, sometimes wistful radio Dash-8 lifted off around 7:32 frightening episode. pressure. using a nickname for Mr. Rus- cure aircraft, Mr. Tilden said exchanges with controllers try- p.m. PDT. Also startling was the way he At other times Mr. Russell sell. “We are devastated by the U.S. aviation industry ing to determine just what his The military was quickly indicated he had learned to fly seemed in over his head. “That’s these events.” generally focuses on securing motives were before he finally alerted. Less than 10 minutes from computer simulations. all mumbo jumbo, I have no idea Horizon said Mr. Russell was airfields and then authorizes plunged to his death. later, two F-15 jet fighters “I don’t need that much help. what all that means. I wouldn’t hired in February 2015 as a employees with proper cre- In Mr. Russell’s more than scrambled from Portland, Ore., I’ve played some videogames know how to punch it in,” he ground-service agent and went dentials to work there. three years at Alaska Air Group and began dogging the plane, before,” Mr. Russell told air-traf- told controllers at one point. through criminal background “This is an airline, internal- Inc.’s commuter arm, Horizon ready to shoot it down if neces- fic controllers. Such computer- The drama played out in checks every few years. He security issue,” said Jeff Price, Air, his job at times required sary, according to a senior mili- ized flight-simulator software skies over Puget Sound, south wasn’t known to have a crimi- a consultant on aviation secu- him to know how to operate an tary commander familiar with could have depicted the same and west of Seattle, as people nal record. rity. “We need to get out of airplane’s controls, to use its the timeline. workhorse turboprop model he on the ground watched him loop The former Horizon supervi- the traditional aviation-secu- brakes, start its electric genera- Though Mr. Russell didn’t stole on Friday, said government and dive, at times afraid he sor described Mr. Russell as a rity mind-set, where we think tor and use its radios to commu- have a pilot’s license, according and industry air-safety experts. would crash into them, accord- friendly co-worker with a can- that more screening and nicate with air-traffic control, to his employer, he deftly per- It is widely available for pur- ing to accounts on social media. do attitude. “He was very good,” more surveillance and more according to a former supervi- formed a series of aerobatic chase and can be run on normal Controllers tried to instruct the former supervisor said. “He cops will solve this problem.” sor. But it didn’t include starting rolls and steep dives with the home computers. Mr. Russell, to stay low, avoid was always out there. You never Mr. Russell was part of a a plane’s engines. On Friday, he 76-seat turboprop airliner that At another point, he said, “I populated areas and try to land had to go looking for him.” team whose duties include did just that. left experts and onlookers in know how to put the landing the aircraft, according to unoffi- Mr. Russell told the control- towing aircraft and was au- An air-traffic controller radi- awe, moves that would have gear down.” Then, apparently cial air-traffic control audio. ler he wanted to apologize for thorized to be in the area oed the plane as it moved from been daunting for an experi- revealing suicidal intent, he They brought in an airline cap- what he did to the people he where the plane was parked. a cargo area toward the runway enced Q400 pilot. added: “I really wasn’t planning tain to help talk Mr. Russell cares about. “The doors to airplanes without authorization. Horizon Chief Executive Gary on landing it.” through the flight commands. “I would like to apologize to are not keyed like a car,” Mr. “The Dash-8 on 16C, say your Beck called the moves “incredi- He also indicated familiarity By 8:47 p.m. local time, air- each and every one of them,” he Tilden said. “There’s not an call sign,” the controller said, ble maneuvers by the aircraft...I with at least some of the con- traffic control had lost contact said. “I am just a broken guy, ignition key like there would according to independently re- don’t know how he achieved the trols and more than a cursory with him, according to Alaska got a few screws loose, I guess, be on a car.” corded air-traffic control radio experience he did.” Mr. Russell’s understanding of cockpit layout Air CEO Brad Tilden. Horizon is never really knew it till now.” —Andrew Tangel communications. There was no unlikely talent was one of many and aircraft operations, includ- an Alaska affiliate. —Jim Oberman and Robert Wall reply as the plane kept rolling. elements that added an extraor- ing a specific reference to the Pierce County Sheriff Paul contributed to this article. States Jump Into the Race for Commercial Spaceports

BY ARIAN CAMPO-FLORES in a space gold rush. The rado, in Adams County, Colo. mated last year. The U.S. space launch site, said Chief Execu- Trump administration has em- Despite the enthusiasm, the industry reached $158 billion tive Peter Beck. The company Taking Off Camden County, Ga., played phasized a growing role for commercial sector is still na- in 2016, the Federal Aviation expects to announce its deci- Commerical spacecraft launches a bit part in aerospace history the private sector in space ex- scent. Some facilities have Administration reported. sion later this month. in the three most active states as home to a 1960s plant that ploration and last week pre- hosted only a few launches, or Private investment in com- Florida’s top contender, Cape built and tested NASA rocket sented a plan for a sixth mili- none at all. mercial space companies has Canaveral Spaceport—which Florida California Texas motors. Now, county leaders tary branch dedicated to “I would caution against ir- swelled in the past decade, encompasses the Kennedy 15 launches want to revive that heritage space. rational exuberance,” said reaching a record $3.9 billion Space Center and Cape Canav- with a new commercial space- Local and state officials Frank Slazer, vice president of world-wide in 2017, according to eral Air Force Station—is one port. across the U.S. are trying to space systems at the Aero- investment firm Space Angels. of the busiest existing facilities. 10 “We can be part of the new getinontheaction. space Industries Association, a One expanding area: the cre- SpaceX, which has created space race in the 21st cen- There are now 10 licensed trade group. ation of small rockets that can about 630 jobs in the area, 5 tury,” said Steve Howard, proj- commercial spaceports in the The global space industry, lift miniature satellites to low- launches rockets from Cape Ca- ect leader and the Camden U.S., from Alaska to Florida, including government and earth orbit to provide internet naveral and has outlined plans 0 County administrator. double the number in 2004. commercial activities, reached coverage and other services. to build a booster-processing Companies like Jeff Bezos’s Some of them grew out of ex- $384 billion in 2017, compared Rocket Lab, a Huntington facility and launch-control cen- 2005 ’18 Blue Origin LLC and Elon isting government launch with $207 billion in 2007, ac- Beach, Calif., startup focused ter there. Blue Origin is building Note: 2018 ﬁgures through Aug. 7. Musk’s Space Exploration sites. At least two other pro- cording to Space Foundation, a on such launches, is consider- a $200 million rocket-manufac- Launches include ones licensed and permitted by the FAA's Ofﬁce of Technologies Corp., or SpaceX, posed spaceports are under nonprofit advocacy group. It ing contracting with space- turing plant that is projected to Commercial Space Transportation. are investing millions of dol- federal review: Spaceport could top $1.1 trillion by 2040, ports in Alaska, California, create 330 jobs and plans to Source: Federal Aviation Administration lars and trying to lead the way Camden and Spaceport Colo- Morgan Stanley Research esti- Florida or Virginia for a U.S. add a new testing facility. THE WALL STREET JOURNAL. A4 | Monday, August 13, 2018 PWLC101112HTGKBFAM123456789OIXX ***** THE WALL STREET JOURNAL. U.S. NEWS Trump Poses Wild Card in Farm-BillTalks

BY KRISTINA PETERSON countries have imposed in retaliation. RUGBY, N.D.—With tariffs “I’m terrified of this trade and an escalating trade war thing. I lose sleep over it,” creating deep anxiety among Andy Fedje, a farmer in Rugby, farmers, both Democrats and N.D., who devotes about a Republicans from rural states third of his land to growing are eager to pass a new farm soybeans, said at a meeting bill before the current legisla- convened by Sen. Heitkamp to tion expires at the end of Sep- discuss the farm bill. tember. Others in the state are split But a divide between the over whether food-stamp re- House and Senate bills over cipients should face more whether to tighten work re- stringent work requirements. quirements for food-stamp re- “We know what it’s like to cipients could trip up negotia- work hard,” said Tim Ostrem, tors now trying to work out a a grain farmer and construc- compromise. One of the big- tion worker from Rugby. “As gest question marks is cheap as our grain is, there’s whether President Trump will no reason anybody should go insist that it include the more hungry,” said Mr. Ostrem. conservative provision from Justin Lommen, a welder the House bill. from Devils Lake, N.D., and a “I’d like to see the president Republican, said Mr. Trump be just like an old Missouri should insist on the tighter mule, just plop down and say, work requirements. “There’s a ‘I’m not budging,’ ” said Sen. lot of people taking advantage John Kennedy (R., La.), who of it that could be working— supports the House’s stricter they choose not to,” Mr. Lom- work requirements. men said. Passage of the five-year For Ms. Heitkamp, crossing program would deliver a cru- Mr. Trump carries political

cial legislative accomplish- JOSHUA LOTT/REUTERS peril. The president carried ment before November’s mid- The farm bill couples federal support for farmers, including crop insurance, with food-stamp benefits for the poor, elderly and disabled. North Dakota by 36 percentage term elections. That is points in the 2016 election. particularly sought-after by payments to farmers when children to work at least 20 but hasn’t indicated how far STAMPS PROVISION that the She defended the Senate Democrats running for re-elec- commodity prices or revenues hours a week. Those who he is prepared to go for a pro- House approved,” Mr. Trump farm bill and its approach to tion in conservative-leaning drop below set levels, with aren’t working would be revision that many believe can’t tweeted earlier this month. food stamp work requirements states, such as Sen. Heidi Heit- food-stamp benefits for the quired to take a minimum of pass the Senate. The farm bill “Senate should go to 51 votes!” at the farm-bill forum Friday kamp in North Dakota. poor, elderly and disabled. 20 hours a week of new job- will need Democratic support Mr. Trump at one point was morning. “The one thing we don’t The food-stamp program training classes, increasing to in the Senate, where it needs expected to threaten to veto a Ms. Heitkamp’s opponent in have right now in farm country currently has work require- 25 hours in 2026. 60 votes to clear procedural bill without the tighter work the Senate race, GOP Rep. is certainty on public policy,” ments for those between the The bipartisan Senate bill, hurdles and Republicans hold requirements, but lawmakers Kevin Cramer, said he sup- said Ms. Heitkamp, who gath- ages of 18 and 49, although which passed in an 86-11 vote only 51 seats. said he has yet to deliver such ports the House work require- ered with her rural constituents states can seek waivers. in June, proposes less dra- “When the House and Sen- a warning. ments but expected the final at an event here Friday. “It’s The House bill, written by matic changes, mostly adjust- ate meet on the very impor- For some farmers, the de- bill to find some middle critical that we get a farm bill.” Republicans, would raise the ments to streamline the pro- tant Farm Bill—we love our bate over food stamps feels less ground. The farm bill couples fed- upper age, requiring most gram and stamp out fraud. farmers—hopefully they will pressing than new difficulties “At the end of the day, the eral support for farmers, in- able-bodied adults from the Mr. Trump has made clear be able to leave the WORK RE- posed by the tariffs Mr. Trump most important thing is passing cluding crop insurance and ages of 18 to 59 without young he prefers the House version QUIREMENTS FOR FOOD has levied, and those that other the farm bill,” Mr. Cramer said. Former White House Aide Recorded Kelly Giuliani BY ANDREW DUEHREN secure facility designed to allow for sensitive national-se- Digs In Omarosa Manigault-New- curity discussions. man, a former West Wing aide Ms. Manigault-Newman la- and reality-television star, se- beled Mr. Trump a racist who On Probe cretly recorded a conversation has “mentally declined.” BY PETER NICHOLAS she had with White House “I was complicit with this Chief of Staff John Kelly in the White House in deceiving this President Trump’s lawyers Situation Room, she said Sun- nation,” she said on the news believe they can weather a day on NBC. show. “They continue to de- “negative” report from special In the television interview, ceive this nation by how men- counsel Robert Mueller and Ms. Manigault-Newman dis- tally declined he is, about how are prepared to rebut the con- cussed her departure from the difficult it is for him to pro- clusions, Rudy Giuliani, one of White House, saying she felt cess complex information, how Mr. Trump’s attorneys, said in threatened by Mr. Kelly’s ap- he is not engaged in some of an interview. proach to her while learning the most important decisions Mr. Giuliani said the presi- she was being removed her that impacts our country.” dent is open to talking to Mr. job. Ms. Manigault-Newman Mueller under limited condi- “It’s very obvious a threat,” didn’t comment when asked tions but, in a new develop- she said. “The chief of staff whether she recorded other ment, said Mr. Trump under the direction the presi- conversations in the White wouldn’t sit for an interview dent of the United States House. after Sept. 1 because that threatening me on damage to During the interview with could interfere with the mid- my reputation and things get- NBC’s Chuck Todd, she also term elections. ting ugly for me. That’s down- said she had listened to a tape Last week, the president’s right criminal.” in which Mr. Trump uses a ra- lawyers sent Mr. Mueller a NBC played the recording of cial epithet. proposal indicating that Mr.

Ms. Manigault-Newman’s con- MICHAEL REYNOLDS/PRESS POOL “When he talks that way, Trump would take questions versation with Mr. Kelly. Omarosa Manigault-Newman with President Trump in February 2017, when she was working for him. the way he did on this tape, it about collusion with Russia in “I think it’s important to confirmed that he is truly a the 2016 elections but not understand that if we make the recording. device into the White House President Trump on Satur- racist,” said Ms. Manigault- about obstruction of justice this a friendly departure, we Attempts to reach Mr. Kelly Situation Room shows a bla- day called Ms. Manigault-New- Newman, who is African- after he took office. Obstruc- can all be, you know, you can weren’t successful. tant disregard for our national man a “lowlife” when asked American. tion questions, his lawyers look at your time here in the White House press secre- security—and then to brag about her new book, for which She said she had been worry, could become a trap for White House as a year of ser- tary Sarah Sanders denounced about it on national television she is making media appear- asked to sign a nondisclosure perjury accusations. “I think vice to the nation. And then Ms. Manigault-Newman’s com- further proves the lack of ances. agreement barring her from we made the offer we can live you can go on without any ments in a statement Sunday character and integrity of this Staff members aren’t usu- making negative comments with,” Mr. Giuliani said. type of difficulty in the future evening. disgruntled former White ally permitted to carry cell- about Mr. Trump and White Mr. Mueller’s office declined relative to your reputation,” “The very idea a staff mem- House employee,” Ms. Sanders phones or recording devices in House officials. She said she to comment. Should he reject Mr. Kelly said, according to ber would sneak a recording said. the Situation Room, which is a didn’t sign the agreement. the offer, Mr. Mueller could subpoena the president, setting in motion a legal showdown. serve data. rect lenders because they markets adviser Cliffwater “We certainly won’t do [an Private Loaning money to compa- Open Pockets don’t meet banks’ strict crite- LLC to gauge the performance interview] after Sept. 1, be- nies with the lenders keeping Global annual direct-lending ria. A borrower may have a of middle-market loans before cause we’re not going to be the loans on the books, known fundraising one-time blip in its cash fees has returned 9.3% over the ones to interfere with the as direct lending, is the latest flows, have a lot of debt or the past five years. election,” Mr. Giuliani said. $60 billion Equity Now way private-equity firms are operate in an out-of-favor sec- Direct loans are typically Should Mr. Mueller issue a encroaching on banks’ turf. tor. floating-rate, meaning they report on the president’s ac- Banks shed many of their risk- 45 Sometimes borrowers use earn more in a rising-rate en- tions, even a critical one, Mr. Lending ier businesses after the finan- the money to expand. More vironment. But borrowers ac- Giuliani said, “I’d take that.” ContinuedfromPageOne cial crisis due to new regula- 30 often, they’re being bought by “A negative report gets it panding lenders to get access tions and a desire to avoid the private-equity firms and are over with. We can answer it to a broad array of deals. mistakes of the past. 15 using the loans to finance with, I think, a better report Ares raised a record $10 Opportunistic and lightly their own buyouts. The lend- Companies often turn from us, and then we get to billion for middle-market regulated, private-equity firms 0 ing arms of private-equity to direct lenders wait and see what happens in lending in the second quarter have taken their place in parts 2008 ’10 ’15 ’18 firms regularly finance com- Congress.” alone. Overall, firms com- of the middle-market lending petitors’ deals. Some fund because they don’t Part of the report being *2018 is year-to-date through pleted fundraising on 322 market, shifting the risk—and the ﬁrst quarter their own buyouts, setting up meet banks’ criteria. prepared by Mr. Trump’s attor- funds dedicated to this type of the reward—of those loans Source: Preqin the potential for conflicts. neys rebuts accusations from lending between 2013 and out of the banking system. THE WALL STREET JOURNAL. Buyout firm Thoma Bravo James Comey, the Federal Bu- 2017, with 71 from firms that Durham, N.C.-based Eco- needed $230 million in debt reau of Investigation director had never raised one before, Site wanted a loan earlier this mined the company was grow- to finance the acquisition and customed to low rates may be fired by Mr. Trump in May according to data-provider year to build hundreds of new ing quickly enough, according merger of two mileage-track- unprepared for a jump in in- 2017, according to Mr. Giuliani. Preqin. That compares with 85 cellphone towers. Wells Fargo to the lender. ing software companies it an- terest costs on what is often a One disagreement involves funds, including 19 first-tim- & Co., the bank that kept Eco- Eager to diversify, private- nounced in January. It didn’t big pile of debt. That risk, Mr. Trump’s former national- ers, in the previous five years. Site’s checking account, equity firms have moved into approach banks in part be- combined with increasingly security adviser, Michael Flynn. “This is a seismic change in turned it down, saying it was real estate and hedge funds. cause the transaction was too lenient terms and the relative Mr. Comey has said Mr. Trump the marketplace,” said Richard too small and not profitable As low interest rates have complicated to get a good inexperience of some direct asked him not to pursue Mr. Farley, chairman of the lever- enough, Chief Executive Dale driven institutional investors rate, according to people fa- lenders, could become a big- Flynn over contacts Mr. Flynn aged-finance group at Kramer Carey said. to seek better yields than tra- miliar with the matter. ger issue in a downturn. had with the Russian ambassa- Levin Naftalis & Frankel LLP. The private-equity-backed ditional bonds and Treasurys, Instead, it turned to TPG Regulators like that banks dor to the U.S. Mr. Giuliani said The boom in nonbank lend- cell-tower operator instead direct lending is among pri- Sixth Street Partners, the are wary of lending to compa- the president denies speaking ing may help explain why borrowed $50 million from vate equity’s fastest-growing credit arm of private-equity nies that don’t meet strict cri- to Mr. Comey about that. business-loan growth at banks Varagon Capital Partners, a businesses. firm TPG, and Owl Rock Capi- teria. But they are concerned The legal danger for the has been sluggish despite a direct lender founded in 2014 Direct lenders typically fo- tal Partners, a direct lender about what is happening out- president, Mr. Giuliani said, is strong economy. Nonbank with backing from affiliates of cus on borrowers with less founded in 2016 by alumni of side their dominion. that if he testifies that he had commercial loans grew 7.5% in private-equity firm Oak Hill than $50 million in annual Blackstone, KKR and Goldman Joseph Otting, U.S. Comp- no such conversation with Mr. the first quarter from a year Capital Partners and insurer earnings before interest, Sachs Group Inc. troller of the Currency, said Comey, the prosecutors could earlier, while bank loans in American International Group taxes, depreciation and amor- For institutional investors earlier this year: “A lot of that write a report alleging he lied the sector were up 3.6%, ac- Inc. tization, although borrowers such as pension funds, direct risk didn’t go away, it was just under oath based on Mr. cording to an Autonomous Re- Varagon looked at Eco- canbelarger. lending has been a good bet. displaced outside of the bank- Comey’s assertion that the search analysis of Federal Re- Site’s projections and deter- Companies often turn to di- An index created by private- ing industry.” discussion took place. A6 | Monday, August 13, 2018 ** THE WALL STREET JOURNAL. U.S. NEWS States Seek to Counter Fake Voting Instructions

BY ALEXA CORSE sian interference in the 2016 material produced by Hillary AND DUSTIN VOLZ campaign. Clinton’s campaign, including Officials said in interviews a “Paid for by Hillary for Pres- State officials say they have that the latter threat—disin- ident 2016” advisory. solid plans to guard election formation—is harder to iden- News reports flagged the systems across the country tify and block, and could un- fake material, and Twitter from potential cyberattacks by dermine the electoral process worked to remove it. The com- foreign adversaries during this in intangible ways by eroding pany later said those tweets year’s midterms. They are less voters’ faith in the system. didn’t have “obvious Russian sure how to counter another “It doesn’t actually have to origin.” threat: online disinformation change a vote, but it sows A Twitter spokesman said abouthowtocastavote. chaos and misinformation,” that the company has multiple

Election administrators are said Vermont Secretary of Twitter accounts it can use to JOE RAEDLE/GETTY IMAGES increasingly grappling with State Jim Condos, a Democrat debunk disinformation about Disinformation could undermine the electoral process by eroding voters’ faith in the system, officials say. two kinds of threats. On one and president of the National voting, citing tweets from hand, they need to ward off Association of Secretaries of 2016 and 2017 in which the telligence officials. ogy companies. howtovote. cyberattacks on targets such State. company reminded users that The Department of Home- Officials also said states Alabama Secretary of State as voting machines or regis- Such efforts can come from they “cannot vote via text or land Security, with support and social-media companies John Merrill, a Republican, tration databases. domestic actors as well as for- tweet.” from the Election Assistance sometimes must take the lead. had to do damage control last U.S. intelligence officials eign operatives, experts say, FBI Director Christopher Commission, has taken the lead Representatives for Twitter year after a rumor spread on say there is no evidence votes and it can be difficult to iden- Wray recently cited “criminal in helping states improve the and Facebook Inc. said they social media accusing Demo- were altered during the 2016 tify who is responsible. efforts to suppress voting” security of their voting sys- have taken steps against the cratic Senate candidate Doug election cycle. In 2016, for example, some and “spreading disinforma- tems, while the FBI is charged deliberate distribution of false Jones’s campaign of voter Officials also want to pre- Twitter Inc. accounts pushed tion” as examples of foreign with countering foreign influ- information. fraud in a special election. vent voters from becoming messages instructing Demo- influence the Federal Bureau ence. Mr. Wray said the FBI is Both said they have trained Mr. Merrill’s office investi- confused by deliberately false crats to vote by text, which of Investigation has seen and investigating foreign-influence state election officials and gated and concluded that the information—such as fake in- isn’t allowed in any state. The is working to counter. Mr. efforts across the country and candidates about best prac- claim was unsubstantiated but structions on how to vote— accounts shared photo- Wray was speaking at a White is increasingly exchanging in- tices to secure their accounts, wasn’t able to identify who distributed on the internet, shopped images that resem- House briefing on election se- telligence with state and local and that they are distributing was responsible, an aide to Mr. particularly after alleged Rus- bled genuine get-out-the-vote curity attended by senior in- law enforcement and technol- accurate information about Merrill said. Tensions Flare as Hackers Find Flaws in Election Machines

BY ROBERT MCMILLAN been left working, and uncover measures that are in place in equipment available to “poten- AND DUSTIN VOLZ other ways for unauthorized an actual voting situation.” tial bad actors, foreign or oth- actors to manipulate the vote. In the letter, ES&S also erwise,” could harm national LAS VEGAS—Hackers at the These hacks can root out warned election officials ahead security, Ms. Tesi said, adding Defcon computer security con- weaknesses in voting ma- of the conference that unau- that Defcon has no security or ference believe they can help chines so that vendors will be thorized use of its software vi- identity requirements and that prevent manipulation of U.S. pressured to patch flaws and olated the company’s licensing anyone who pays the $280 elections. Some election offi- states will upgrade to more se- agreements, according to a registration fee can enter. cials and makers of voting ma- cure systems, organizers say. copy of the letter viewed by Dominion Voting, another chines aren’t so sure. Yet some manufacturers The Wall Street Journal. Vot- voting machine maker, de- That tension was front and and security experts believe ing Village organizer Jake clined to comment and center at Defcon’s second-an- the hack-a-thon is unlikely to Braun disagreed with this in- wouldn’t say whether it had nual Voting Village, where uncover the type of real-world terpretation of the agreements. employees present at the computer hackers are invited issues that would come up in The states and vendors are hacking conference. to test the security of com- an election. making a mistake by not par- Mr. Braun disputed the as-

monly used election machines. “Anybody could break into ROBERT MCMILLAN/THEticipating WALL STREET JOURNAL in the voting village, sertion that the Voting Village Organizers see the event as an anything if you put it in the Hacker Robert Ou tries to access a voting machine at Defcon. which amounts to a thorough hacking could threaten na- early test of U.S. election secu- middle of a floor and gave security test for any machine tional security, saying it would rity and a counterpunch to po- them unlimited access and un- turer of voting equipment, was some voting systems internal involved, Mr. Braun said. be naive to assume that Russia tential outside interference. limited time,” said Leslie reluctant to have its systems components because they will ES&S had two employees wasn’t already looking for vot- On the first day of the event, Reynolds, executive director of tested at the conference. The have full and unfettered access attend Defcon to “learn about ing system flaws. Representa- which ran through Sunday, the National Association of company played down the ex- to a unit without the advan- any ideas for enhancements to tives for Defcon didn’t re- hackers were able to swap out Secretaries of State. pected findings from the event tage of trained poll workers, voting security,” Monica Tesi, spond on Sunday when asked software, uncover network Election Systems & Soft- in a letter to customers. Hack- locks, tamper-evident seals, a spokeswoman for the com- to comment on ES&S’s criti- plug-ins that shouldn’t have ware LLC, a leading manufac- ers “will absolutely access passwords, and other security pany, said. Making voting cism of its security policies.

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Join fellow senior executives and industry leaders to discover how you can prepare for increasing cybersecurity threats. © 2018 Dow Jones & Co., Inc. All rights reserved. 6DJ6472 THE WALL STREET JOURNAL. Monday, August 13, 2018 | A7 WORLD NEWS Battle for a Key Afghan City Intensifies

Conditions worsen as to avoid civilian casualties and prevent damage to public government forces, in property. big test, fight Taliban The U.S.-led international military coalition in Afghani- for control of Ghazni stan was equally positive. “The Afghan National De- KABUL—The battle for a fense and Security Forces con- strategically important eastern tinue to hold their ground and Afghan capital deepened into a maintain control of all govern- full-blown siege, as a third day ment centers,” said U.S. Army of fighting between government Lt. Col. Martin O’Donnell, forces and Taliban insurgents spokesman for the U.S.-led in- closed all roads to and from the ternational coalition in Af- city, supplies of food and medi- ghanistan. cine began running low, and The Afghan army chief also corpses littered the streets. accused the Taliban of commit- ting war crimes, saying their By Craig Nelson, Habib fighters had stopped cars on Khan Totakhil and the Kabul-Kandahar highway, Ehsanullah Amiri hauled out their passengers and shot them. As with most With hundreds of Taliban allegations involving the fight- fighters arriving from neigh- ing in Ghazni, this one couldn’t boring provinces to join the be independently confirmed. fight, the military confronta- Recriminations flew as the tion in Ghazni was becoming a fighting raged on Sunday. crucial test of the progress of Local politicians and resi-

the U.S.-funded, armed and JAWAD JALALI/EPA/SHUTTERSTOCK dents and members of Afghan- trained Afghan security forces, An Afghan national army officer stood guard on the highway in Ghazni province on Sunday. when heavy fighting closed the thoroughfare. istan’s parliament represent- the main pillar of U.S. strategy ing Ghazni and the to force the Taliban to the ne- stroying television transmit- Increasing the isolation of launched their assault early before the roads became too surrounding province accused gotiating table and end the 17- ters, Taliban fighters, rein- the city’s 143,000 people, elec- Friday. But Zahir Faiez, a doc- perilous to traverse were holed the government of ignoring year war, America’s longest. forced by the arrival of 800 trical power in much of Ghazni tor who fled to Kabul from up in their homes, growing months of warnings about de- In a sign of the battle’s ris- more militants from nearby was cut off, telephone service Ghazni early Sunday, said there hungry and thirsty. teriorating security. ing stakes, the U.S. deployed a provinces, were battling gov- was limited and Taliban fight- were 114 dead civilians, police “This is savagery,” he said. Shah Gul Rezay, one of B-1 heavy bomber on Sunday ernment forces late Sunday af- ers continued to block traffic and soldiers and another 142 Earlier Sunday in Kabul, the Ghazni’s representatives in as part of stepped-up air at- ternoon near the city’s police along the crucial highway that wounded in one hospital alone. Afghan army’s chief of staff, parliament, said she and other tacks in support of Afghan headquarters and the provin- runs through Ghazni and links As the casualty toll ap- Maj. Gen. Mohammad Sharif lawmakers from the area had ground forces in and around cial governor’s residence, said Kabul with Kandahar, the peared to soar on Sunday, hos- Yaftali, said all of Ghazni’s key met senior security officials, the city, located 80 miles Amanulah Kamrani, deputy country’s second-largest city. pitals were spilling over with landmarks, including the gov- Chief Executive Abdullah Ab- southeast of the capital Kabul. head of the provincial council, There was no official confir- dead bodies, corpses lay in ernor’s office, police head- dullah and Vice President Mo- By late afternoon, it had car- and other local officials. mation of casualties. A senior Ghazni’s streets and gunfire quarters and army bases, were hammad Sarwar Danish 27 ried out 10 airstrikes against By nightfall, all but the east Health Ministry official in Ka- and shelling were preventing under government control. times in the past five months Taliban targets, the U.S. mili- of the city was under Taliban bul said at least 100 people— relatives from reaching ceme- “We’ll retake all areas of to express their concern about tary said. control, including the enclave of civilians as well as members of teries to bury their dead, the Ghazni in two days and stabi- the Taliban threat to Ghazni. After overrunning police Pakhtunabad, where the homes the security forces—had been ministry official and local au- lize the city,” he said, attribut- “They refused to heed our stations and neighborhood of most government officials killed and hundreds of others thorities said. Mr. Kamrani ing the security forces’ mea- warnings, and now you see the government offices and de- are located, Mr. Kamrani said. wounded since the Taliban said residents unable to flee sured movements to the need consequences,” she said. U.S. Reviews Tariff Breaks Given to Poorer Nations

The White House push to $2.2 trillion in imports. confront rivals over trade has Thai Pig Farmers the U.S. concerns in an open Indonesia has been accused spread beyond the world’s big- letter to President Trump, urg- of implementing an array gest economies such as China Fear a ‘Disaster’ ing his administration to stop of trade and investment barri- and Europe to include poorer pressing Thailand to accept ers that had “serious negative countries that also see the U.S. The U.S. government said U.S. pork while the country’s effects” on U.S. business, USTR as a key market for their goods. in May that it would review domestic market was over- said in April. About $2 billion of Thailand’s eligibility for duty- flowing with supply. Indonesia’s $20 billion in ex- By Lucy Craymer free privileges under the U.S. “This will bring unimagina- ports came in under the pro- in Hong Kong Generalized System of Prefer- ble disaster to Thai pig farm- gram in 2017, including machin- and Josh Zumbrun ences following a petition from ers,” they said in the letter. ery and chemicals. in Washington the U.S. National Pork Produc- In 2017, Thailand exported In late July, a team of senior ers Council, which had com- about $4.2 billion of goods un- Indonesian government officials Since President Trump took plained that Thailand rarely der the GSP program, around including Trade Minister Eng- office 18 months ago, the grants licenses for American 13% of its total exports, to the gartiasto Lukita traveled to U.S. Trade Representative has pork imports. U.S. Washington to plead the coun-

launched reviews of the eligibil- Swine federations from six A decision on Thailand’s DANIEL ACKER/BLOOMBERG NEWS try’s case for remaining within ity of less-developed countries Thai provinces responded to GSP status is pending. U.S. pork producers petitioned to have Thailand’s eligibility for a the program. A decision is for a federal government pro- tariff-reduction program reviewed. Above, a farm in Iowa. pending. The Indone- gram that lowers tariffs for sian Trade Ministry didn’t re- thousands of products they ex- The tool the U.S. has used is try’s eligibility. In recent de- ward achieving “a level playing Deborah Elms, executive di- spond to requests to comment. port to the U.S. a program known as the Gener- cades its reviews almost always field for American businesses,” rector at the Asian Trade Center India’s eligibility in the Most recently the Trump ad- alized System of Preferences, or involved petitions from outside the USTR said last year. in Singapore, said the U.S. is us- program is also being re- ministration targeted Turkey for GSP, initiated in 1976 to aid de- groups and tended to focus on The first round focused on ing the reviews to cajole coun- viewed because of market-ac- revocation of tariff-free exports velopment of poor countries by issues like child labor or human 25 Asian and Pacific countries. tries into negotiating bilat- cess concerns. The U.S. dairy to the U.S., part of a dispute be- granting them duty-free treat- rights. Assessments of Eastern Europe, eral trade agreements or industry and the U.S. medical tween the two nations. Thai- ment on thousands of goods. It Beginning in October the ad- the Middle East and Africa will making other concessions. device industry say they land, Indonesia and India have provides favorable treatment to ministration began a new “pro- begin this autumn. Less than 1% of all U.S. im- face trade barriers. About $5.6 also been put on notice that 121 countries. active process,” in the words of So far no countries have had ports came in under the pro- billion of India’s $49 billion in they could lose some duty-free The USTR has always had le- U.S. Trade Representative Rob- their eligibility revoked under gram’s favorable treatment in exports come to the U.S. privileges. gal authority to review a coun- ert Lighthizer, with an eye to- the new program. 2016: about $19 billion of a total through the program. Novelist Dissected Colonial Experience

BY BRENDA CRONIN book, “for the first time I felt I was a writer,” he said in an in- Home Security. V.S. Naipaul chronicled the terview with the Swedish Acad- colonial experience in haunting emy when receiving his Nobel. prose that combined a writer’s The novel, published before the Done Right. lyricism with an anthropolo- author had turned 30, gave Mr. gist’s scrutiny. Naipaul “confidence in the han- A relentless and cool ob- dling of language,” he said. Introducing the all new SimpliSafe. server, Mr. Naipaul watched For the book’s hapless pro- and detailed both violent revo- tagonist, Mr. Mohun Biswas, It’s smaller. Faster. Stronger than ever. lutions in the Mr. Naipaul drew on his fa- Engineered with a single focus: to protect. OBITUARY streets and ther’s life and largely unreal- V.S. the subtler ized literary aspirations. Mr. More than easy to use: NAIPAUL warfare in- Biswas is plagued by every It’s downright delightful. 1932-2018 doors ignited imaginable setback in his quest by class dis- to secure a dignified dwelling All at prices that are fair and honest. tinctions and in Trinidad. immigration. The author’s con- The title character sees a templative craft contrasted home representing far more with his occasionally operatic than a roof over his head. Mr. personal life, which included Naipaul wrote in the novel: two marriages and a number of “And there was his hope that prickly standoffs with other living in a new house in the writers. new year might bring about a Mr. Naipaul, author of the new state of mind. He would 1961 novel “A House for Mr. not have moved if he had been

Biswas” and other works, died CHRIS ISON/PA WIRE/ZUMAalone, PRESS for he feared solitude on Saturday at his home in V.S. Naipaul won the Nobel Prize in Literature and the Booker Prize. more than people.” London, his family said. He was Mr. Naipaul’s writing often 85 years old. His fiction and Salman Rushdie tweeted, “We getic maverick who resisted blends menace and dark wit, a nonfiction earned the most ex- disagreed all our lives, about sentimentality yet prized his- literary cocktail that he discov- alted laurels in letters, includ- politics, about literature, and I tory. Although withering when ered while a teenager in the ing the 2001 Nobel Prize in Lit- feel as sad as if I just lost a be- recalling the Trinidad where he work of Evelyn Waugh, the au- erature, the 1971 Booker Prize loved older brother. RIP Vidia.” grew up, he mined the region thor of “Decline and Fall,” “A and a knighthood. Born into a family of Indian and his parents’ experiences Handful of Dust” and other Within hours of Mr. Nai- immigrants in Trinidad, Vidiad- for some of his most celebrated novels. Although hopelessness paul’s death, tributes flowed in har Surajprasad Naipaul left works. His 1975 novel, “Guerril- pervades Mr. Biswas’s exis- from around the world, remem- the West Indies as a young las,” contains savage descrip- tence, Mr. Naipaul also exposes bering a towering figure in let- man to be educated at Oxford. tions of life in a Caribbean na- the humor in his character’s ters as well as something of a He adopted England as his tion convulsed by political and misfortune. Right now get free shipping t lightning rod. Prime Minister home but moved around the moral mayhem. In addition to writing novels SimpliSfe.com/WS Narendra Modi of India on world for months at a time, With “A House for Mr. such as “A Bend in the River” Twitter called the author’s plumbing questions of identity Biswas,” Mr. Naipaul cemented and “The Enigma of Arrival,” death “a major loss to the and immigration. his name as a novelist for the Mr. Naipaul delved into jour- world of literature.” Author Mr. Naipaul was an unapolo- ages. While working on the nalism and essays. A8 | Monday, August 13, 2018 **** THE WALL STREET JOURNAL. WORLD NEWS WORLD WATCH

ROMANIA Erdogan Blames U.S. for Dispute Thousands March Against Corruption Confrontation with in full independence after Mr. Tens of thousands of Roma- Erdogan gave himself the sole nians took to the streets of the Trump administration power to appoint the governor capital over the weekend in anti- takes financial toll as and other key officials. corruption protests, as opposi- The president has repeat- tion politicians warned the Turkish leader digs in edly voiced his opposition to health of the country’s young high interest rates, saying they democracy was at risk. BY DAVID GAUTHIER-VILLARS stifle investment and growth Police fired tear gas and wa- while rejecting mainstream ter cannons to disperse demon- ISTANBUL—Turkish Presi- economic views that they can strators on Friday, saying they dent Recep Tayyip Erdogan’s help tame inflation. acted to protect public safety. rejection of U.S. demands to Any further collapse in the More than 450 people were in- immediately free an American lira could knock down the jured. pastor has burnished his repu- Turkish economy, analysts say, “We want to stop seeing tation at home as a strong- because large banks and big thievery, stupidity. We want nor- willed leader, but the financial businesses, which have bor- mality,” said Elena Enescu, a costs are already proving to be rowed heavily in dollars or eu- physics professor who joined steep. ros, often collect the bulk of protests on Saturday. The dispute with the U.S. their revenue in local cur- Leading figures in the govern- and concerns over Turkey’s rency, and would struggle to ing Social Democratic Party have ability to access vital foreign meet repayment deadlines. been indicted and, in some funding at a time when inves- Several large Turkish con- cases, convicted on corruption tors have grown more cautious glomerates have already run allegations. The party says the on emerging markets have into difficulties. In May, Yildiz charges are politically motivated. snowballed, causing panic on Holding, a food-and-retail Opposition politicians have currency markets on Friday, company, rescheduled an esti- called on the European Union to when the lira plunged to its mated $5.5 billion in debt, intervene after the government

lowest level. MURAT KULA/TURKISH PRESIDENCY/REUTERS pledging some of its assets as in July dismissed the country’s The financial cost, including Turkish President Recep Tayyip Erdogan said Turkey was prepared to shun the U.S. currency. collateral. On Wednesday, pri- chief anticorruption prosecutor, a 40% drop in the lira’s value vately held Dogus Group, who had filed thousands of cor- against the dollar so far this but, in the end, he does come “missile” launched as part of line under the lira’s fall and which operates in construc- ruption-related charges against year, could force Mr. Erdogan back to a more pragmatic an economic attack on Turkey, prevent a chaotic reopening of tion, finance, tourism and me- officials. to seek compromise. In recent place. The question is how adding that Ankara was pre- markets on Monday, Finance dia, said it was in advanced —Drew Hinshaw years, Mr. Erdogan has had se- much damage there will be un- paring to shun the U.S. cur- Minister Berat Albayrak—Mr. talks to refinance an estimated and Liana Fermesanu rious run-ins with the leaders til that moment comes.” rency when trading with coun- Erdogan’s son-in-law—said the $6 billion in debt. of Germany and Russia before In a series of speeches over tries such as China and Russia. government had prepared a The government has relied WEST AFRICA normalizing relations. Last the weekend, Mr. Erdogan “Mr. Erdogan is trying to plan to restore calm. on a guarantee fund to con- month, Turkey and the Neth- blamed the U.S. for stoking improve his bargaining posi- “All measures and action vince banks to keep lending, Mali Holds Runoff erlands turned the page on a confrontational relations. He tion with Washington,” plans are ready,” he told Turk- especially to small businesses, Vote for President yearlong diplomatic row that said President Trump’s deci- said Suat Kiniklioglu, an ana- ish newspaper Hurriyet late a core constituency among the had led both countries to sion to impose sanctions and lyst at Sweden’s Institute for Sunday. “Our institutions will Turkish voters who powered Malians voted in a second- withdraw their ambassadors. tariffs on Turkey after months Security & Development Policy take the necessary actions as Mr. Erdogan to a new five-year round election between incum- “That’s typically been the of negotiations failed to free and a former executive mem- of Monday morning.” mandate in June. bent President Ibrahim Boubacar pattern with Mr. Erdogan,” the American pastor, Andrew ber of Mr. Erdogan’s ruling Mr. Albayrak’s comments But the fund is nearly ex- Keita and opposition leader Sou- said Asli Aydintasbas, a senior Brunson, risked jeopardizing party. “If he sees an accept- pointed to a possible decision hausted, and analysts warned maila Cissewill. Sunday’s polls in fellow with the European decades of partnership be- able deal, he is capable of by the central bank to increase that even if the government this sprawling West African na- Council on Foreign Relations. tween the two allies. making a U-turn.” interest rates. Analysts have raised its ceiling, banks would tion had low turnout amid threats “He does tend to be very dar- The Turkish leader said the In a sign that Turkish au- questioned how much leeway strain to raise the funds to is- of violence by Islamist extremists. ing and pushes the envelope dollar was tantamount to a thorities may try to draw a the central bank had left to act sue more new loans. The chairman of Arkodia village in the north Niafunke commune in Timbuktu region was White House and Treasury Over three decades of peri- killed, four election workers were Lira’s Fall officials declined to comment Feeling the Pain odic currency storms, “the mar- physically harassed and the poll- about the administration’s Worst 52-week declines in G-20 currencies in the past decade. ket’s underlying assumption ing station there was burned, broader strategy toward Dates are when each currency hit its trough. was that the U.S. would try to according to the Citizen Obser- Increases global currency-market insta- be helpful” during periods of vation Pool of Mali, which had bility, or about the economic Russian ruble Dec. 16, ’14 –51.8% extreme foreign-exchange vola- more than 2,000 observers. The considerations behind the in- tility, said Shahab Jalinoos, organization reported several in- Concerns creased tariffs. Turkish lira Aug. 10, ’18 –45.0% head of global currency strat- cidents on Sunday. As a new trading week be- Argentine peso Feb. 29, ’16 –44.9% egy at Credit Suisse Group. Two polling stations were ContinuedfromPageOne gins, investors are watching “Now the market can no longer burned in Keltamba and election Turkish steel imports to 50% how emerging-market curren- Brazilian real Sep. 23, ’15 –42.9% assume that.” officials were harmed by gun- and aluminum to 20%. The de- cies react, as well as foreign Oct. 22, ’08 Foreign-exchange collapses men in Ngouma commune in cision deepened the lira’s drop government debt for signs of South African rand –42.9% can be perilous for emerging central Mali, observers said. and worsened market fears contagion. Turkey represents South Korean won March 2, ’09 –39.8% markets, particularly when In north and central Mali, more that the weaker currency about 1.5% of global gross do- they have borrowed heavily in than 50 polling stations had could exacerbate fragilities in mestic product, so ripples from Australian dollar Oct. 27, ’08 –34.7% dollars and thus find it harder closed before noon because of the the economy, making it harder the country aren’t expected to to repay those debts as their threats by extremists in those re- Pound sterling March 11, ’09 –31.6% for the heavily indebted corpo- be severe, Mr. Sløk said. own currencies fall. gions, the organization said. rate sector to pay back domes- The dollar climbed to as Mexican peso March 2, ’09 –30.8% Under his America First Mr. Keita, 73 years old, re- tic and foreign loans, putting high as 7.131 to the lira in Asia platform, Mr. Trump has bro- ceived 41.7% of the vote in the Oct. 27, ’08 strains on the country’s banks. Pacific trading hours, rising by Canadian dollar –26.4% ken with a longstanding bipar- first round from a field of 24. Countries like Turkey that as much as 10%. Note: As of Aug. 10 tisan consensus that Washing- —Associated Press are experiencing economic tur- In the event of conta- Source: Thomson Reuters THE WALL STREET JOURNAL. ton’s mission was to take the moil usually get sympathy from gion, Turkey’s economic mislead in expanding, strengthen- UNITED KINGDOM the rest of the world, said Tor- fortune would likely hit its in Turkey, Mr. Erdogan said much as the administration ing and stabilizing commercial sten Sløk, chief international closest neighbors who are Mr. Trump’s decision to im- had desired to boost domestic and financial ties across coun- Shooter at Carnival economist for Deutsche Bank. most fragile first, some mar- pose sanctions risked jeopar- production of steel and alumi- tries—and that such globaliza- Leaves 10 Injured “It is rather unique with an ket analysts said. The impact dizing decades of partnership num. The statement didn’t ex- tion was broadly in the U.S.’s emerging market which not has been felt in Argentina and between the two military allies plain why Turkey alone was self-interest. Ten people, including two chil- only faces a domestic macroeco- Brazil, as well as Russia, in the North Atlantic Treaty hit with the higher tariffs. The tariffs Mr. Trump said dren, were injured when shots nomic crisis but also an external added Brad McMillan, chief in- Organization. He dismissed Administration officials said he was increasing were imposed were fired after a Caribbean car- political conflict with the main vestment officer for Common- the lira’s plunge as not reflect- the higher tariffs were unre- this year, not just on Turkey but nival in the northern English city shareholder of the [Interna- wealth Financial Network, in a ing Turkey’s economic reality. lated to Mr. Brunson’s situa- also on virtually every metals of Manchester. tional Monetary Fund],” he said. recent note to investors. “What is the reason for all tion. However, in his tweet an- exporter. The administration Greater Manchester police White House officials said the Finance Minister Berat Al- this storm in a tea cup? nouncing the move, Mr. Trump imposed tariffs of 25% on steel said one man is in stable but se- tariffs were intended to boost bayrak—Mr. Erdogan’s son-in- There is no economic reason for seemed to link the tariffs to and 10% on aluminum by invok- rious condition at a local hospital the domestic steel and alumi- law—said on Sunday the gov- this.…This is called carrying out soured ties between the two ing a little-used Cold War-era with injuries to his legs. The num industry. The moves fol- ernment had a plan to restore an operation against Turkey,” nations, suggesting a willing- law that allows presidents to other nine people are being lowed a series of actions the ad- calm. “All measures and action Reuters quoted him as saying. ness to impose trade sanctions block imports he deems a threat treated for pellet-type wounds ministration has taken in recent plans are ready,” he told Turk- In a formal proclamation of as a lever in pursuit of unre- to U.S. national security. suffered in the shooting, which weeks to step up economic pres- ish newspaper Hurriyet. “Our the tariffs issued Friday lated U.S. diplomatic goals. Many countries retaliated was reported at about 2:30 a.m. sure on President Recep Tayyip institutions will take the nec- night—nearly 12 hours after “President Trump’s refusal with their own tariffs on U.S. Sunday. Erdogan of Turkey to release essary actions as of Monday the president first announced to accommodate Turkey is a re- exports. Among them was Tur- Chief Superintendent Wasim U.S. evangelical pastor Andrew morning.” it on Twitter—the White markable departure from previ- key, which in June put import Chaudhry said authorities’ hy- Brunson, who has been detained Mr. Erdogan lashed out at House said the action was ous policy practices,” said Jack taxes on $1.8 billion of U.S. pothesis is that the pellets came in Turkey on espionage charges the U.S. over the weekend. taken because the original Ablin, chief investment officer coal, paper, walnuts, tobacco from a shotgun discharge. since October 2016. Delivering several speeches global tariffs hadn’t done as at Cresset Wealth Advisors. and other products. —Associated Press Russia, Iran, Three Others Sign Deal to Divide Caspian Sea Rights

Leaders of five Caspian Sea by the U.K.’s BP PLC. nations signed an agreement Russian President Vladimir that aims to settle a longstand- Putin, whose nation has helped ing dispute over ownership of push forward work on the oil and gas reserves on the agreement since 1996, landlocked body of water. praised the teamwork involved in Sunday’s accord and called By Ann M. Simmons the agreement “a very big, im- in Moscow and Benoit portant, significant event,” the Faucon in London Kremlin press service reported. “The signing of the [agree- Caspian reserves as of ment] opens a new stage in the 2012 were estimated at 48 relations between the Caspian billion barrels of oil and 292 states, [and] allows us to- trillion cubic feet of natural gether to ensure the prosperity gas, said the Energy Informa- and dynamic development of tion Administration, a branch our common region,” he of the U.S. government, indi- added. cating that Sunday’s deal President Hassan Rouhani could trigger a surge in explo- of Iran, which has the shortest ration and the construction of length of Caspian shoreline, new pipelines. was quoted as saying the Specific details of Sun- drawing of boundaries of the

day’s deal—which the presi- ALEXEI NIKOLSKY/SPUTNIK/PRESS POOL seabed would still require fur- dents of Russia, Kazakhstan, Five Caspian leaders, including Iran’s Hassan Rouhani, second left, and Russian President Vladimir Putin, second right, in Aktau, Kazakhstan. ther agreements, al- Iran, Azerbaijan and Turkmeni- though Sunday’s convention stan signed at a summit in the regulating “the rights and obli- ceed 15 nautical miles in width, oil companies have made mas- cluding Italy’s Eni SpA, provided a good foundation. Kazakh port city of Aktau on gations of each of the coun- sets up a fishing zone with a sive investments in the world’s France’s Total SA, Anglo-Dutch Tehran has challenged the Sunday—weren’t revealed, but tries with respect to the use of width of 10 nautical miles, next largest enclosed inland body of company Royal Dutch Shell Caspian Sea ownership issue details from an early draft of the Caspian Sea waters, bot- to the territorial waters, and water by area. The sea holds PLC and Exxon Mobil Corp. of since the demise of the Soviet the agreement published in tom, subsoil, natural resources allows each party to “lay sub- Kazakhstan’s giant Kashagan the U.S., it started producing in Union, when former Soviet re- June by the official Russian and airspace over the body of marine cables and pipelines oil field, the world’s most ex- 2016 after 16 years of develop- publics Turkmenistan and news agency, Tass, outlined water,” the agency reported. along the bottom of the Cas- pensive oil project with costs ment. It also contains Azerbai- Azerbaijan that border Iran be- certain key provisions. The agreement also establishes pian Sea,” Tass reported. of more than $50 billion since jan’s largest natural-gas field, came independent states open They include defining and that territorial waters not ex- Over the past decade, major 2000. With shareholders in- Shah Deniz gas field, operated to new negotiations. THE WALL STREET JOURNAL. ***** Monday, August 13, 2018 | A9 WORLD NEWS Window Closing On Abe’s Bid to Embrace Military

BY BYRON TAU sage about Japan’s readiness to defend itself as the U.S. is re- TOKYO—Prime Minister evaluating its defense commit- Shinzo Abe is running into the ments and China is flexing its political realities of a resistant muscles in the South China Sea. public and a rapidly closing The political calendar is window of opportunity as he crowded and doesn’t offer the embarks on a push to amend LDP much time to take on a Japan’s pacifist constitution. divisive public campaign. A The ruling Liberal Demo- new emperor is set to take the cratic Party is expected in the throne on May 1, 2019, and To- fall to begin drafting language kyo is hosting the Summer that would formally recognize Olympics in 2020—moments the Self-Defense Forces in the of national unity that the LDP constitution, as Mr. Abe has is unlikely to want to upstage. proposed. Article 9 states that On Sunday, Mr. Abe urged “land, sea, and air forces, as his party to move swiftly on well as other war potential, constitutional revision, saying will never be maintained.” it should submit its plan to par-

Amending the constitution liament this year. “We can’t just KEITH MINCHIN/THE CANADIAN PRESS/ASSOCIATED PRESS requires two-thirds support in keep discussing this forever,” The scene of a shooting on Friday in the eastern Canadian city of Fredericton that left two police officers and two civilians dead. both houses of Parliament, fol- he said. He has said he wants to lowed by a referendum in enact the change by 2020. which a bare majority would The constitution, which took Canada Shootings Spur Gun Debate suffice. The LDP controls par- effect in 1947, was written by liament with support from a the U.S. during its postwar oc- smaller coalition ally, but it is cupation and was never modi- BY VIPAL MONGA a prior conservative govern- laws that do not prevent inci- Her 5-year-old daughter was unclear if Mr. Abe’s partners fied. The LDP has tried to ment has led to a surge in gun dents like these,” said Blair shot in the stomach and her would back the proposal. change it since the 1950s, when TORONTO—A spate of gun ownership and more shoot- Hagen, an executive for Can- 9-year-old in the leg. A bigger challenge would be Mr. Abe’s grandfather, No- violence in Canada, including ings. Many advocates are call- ada’s National Firearms Asso- “It’s the first time this ever the referendum, and the LDP busuke Kishi, was premier. a shooting last week that left ing for a return to the rules of ciation, a lobby group. happened in my neighbor- wants to build more public —Peter Landers four dead, is fueling calls to the past, along with more ag- Gun crime in Canada has hood,” Ms. King said. “This support for the proposal be- contributed to this article. strengthen gun laws in a gressive restrictions. jumped. In 2017, firearms needs to be stopped.” fore moving ahead. Many in country that has been largely The government, led by were used in more than 2,700 Toronto’s shootings have this conservative country— free of the mass shootings Liberal Prime Minister Justin violent offenses, an 85% in- claimed 328 victims, a frac- where World War II memories that afflict the U.S. Trudeau, said last month it crease from 2008, according tion of the 1,785 victims in run deep—are wedded to the Two police officers were would consider banning hand- Chicago this year, according to country’s pacifist ways, and killed in the shooting in east- guns. Meanwhile, his govern- a count kept by the Chicago polls suggest a majority aren’t ern Canada on Friday, three ment is shepherding a bill Tribune. ready for Article 9 to change. weeks after a mass shooting through Parliament that In one poll, almost Unlike the U.S., Canada’s “There is still a very strong in Toronto killed two people would toughen gun-license 70% of Canadians constitution doesn’t guarantee sentiment among the Japanese and injured 13 others. background checks and de- a right to bear arms. But the population who are against “These are warning signs, mand that vendors keep de- supported a ban on country has a long tradition of any form of military expan- and you need to nip it in the tailed records of all sales for guns in cities. rifle ownership, particularly in sion,” said Hiroyuki Hosoda, bud,” said Toronto Mayor 20 years. There is now no re- rural areas. who leads the ruling party’s John Tory, who has called for quirement for gun sellers to Any gun owner in Canada amendment effort. Nonethe- a handgun ban in the city. track sales. needs a firearms license that less, he says, “the world has There have been 241 shoot- Almost 70% of Canadians to Statistics Canada. can take several months to changed. Japan is an advanced ings in Toronto this year as of supported a ban on guns in Along with the high-profile process, even after authorities nation. There is no merit Aug. 5. That is more than dou- cities in a poll conducted by mass shootings, there has also complete background checks. whatsoever in starting a war.” ble the 110 shootings during a Ekos Politics late last year, up been an increase in gang-re- Canada had a federal gun Japan has had a de facto mil- similar period in 2014, accord- from 64% in 2009. lated shootings. registry, established after a itary since the 1950s known as ing to police But gun rights activists say In June, Stacey King’s 1989 massacre in Montreal in the Self-Defense Forces, and the Though Canada’s laws are proposed measures are an daughters were playing in a which 15 died. The country’s

changes sought would explicitly BEHROUZ MEHRI/AGENCE FRANCE-PRESSE/GETTY IMAGES more restrictive than in the overreaction. park in their Toronto neigh- former government, under authorize those forces. Backers Shinzo Abe wants to amend U.S., gun control proponents “We have very, very strin- borhood when a man got out then-Prime Minister Stephen say change would send a mes- the pacifist constitution. say a loosening of rules under gent and patently unfair gun of a car and started shooting. Harper, repealed it in 2012.

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“Everyone wants to try cleaner,” she says. cient Greece. fueled beauty trends from uni- Charcoal Is something new, but it has to Dentists are grinding their “Activated” charcoal, which corn-inspired makeup and hair be something that looks cool. teeth at the use of the abra- has been treated to become colors to facial masks made of It has to be more than just sive product. “It may whiten more porous, has long been glitter and gold. Hot for white,” says Susan Trump- teeth in the short run, but will used as a remedy in poisoning Ms. Funchess says her char- bour, a product development eventually wear into the den- cases, since it binds to in- coal toothbrushing video consultant for beauty and per- tin,” the next layer below the gested toxins before they are quickly rose to become her Teeth Care sonal-care companies in Bed- enamel, which is yellow, says absorbed by the body. third-most popular from over ford, N.Y. Matthew Messina, a dentist in That reputation as a detoxi- 60 videos she has posted in ContinuedfromPageOne Lauren Chouinard, a 27- Columbus, Ohio, and a con- fier has given rise to many the past two years, behind a Hello Products asks con- year-old digital marketing sumer adviser for the Ameri- consumer products. Procter & clothing review and a tutorial sumers to “take a brush on the manager in Capitola, Calif., can Dental Association. Gamble last month launched on do-it-yourself vanity mir- wild side” with its $5 acti- has been brushing twice a day A 2017 review in the Jour- charcoal-based shampoos and rors. vated charcoal toothpaste. A for three months with a char- nal of the American Dental As- conditioners across hair-care Beth Manos Brickey, a 38- My Magic Mud ad featuring a coal toothpaste she bought on- sociation says there is insuffi- lines including Pantene, Head year-old food and wellness tattooed singer says to “rock line for $15. “It does make a cient evidence to show dental & Shoulders and Herbal Es- blogger in Long Beach, Calif., that smile” with its charcoal- mess,” she says. The black res- products with charcoal are sences. Shiseido’s BareMiner- says that on days when she is

infused dental floss, tooth- idue rinses from lips and safe or effective for your RACHEL FUNCHESS als makeup line launched a in “selfie mode,” she uses her brushes and mouthwash. gums, but it adds an extra step teeth. A big concern is that Rachel Funchess demonstrated $28 makeup brush with “acti- charcoal toothpaste and posts Procter & Gamble says it is to morning routines to clean there aren’t any well-con- acharcoal tooth powder. vated charcoal infused into the pictures and videos on her In- launching a charcoal tooth- the sink. trolled human studies to show fibers of the brush.” A black stagram account. Those im- paste next February as part of Even so, she thinks her their safety, says John K. the paper, although he says tube of Lavanila underarm de- ages “are going to get more its Crest 3D White brand. teeth seem whiter. “It’s coun- Brooks, a professor at the Uni- the first recorded use of char- tox mask features charcoal. attention with the black Charcoal products often use terintuitive, that you are going versity of Maryland School of coal in oral hygiene has been Charcoal is getting a boost mouth,” she says. “It encour- black packaging to stand out. to get dirtier before you get Dentistry and lead author on credited to Hippocrates in an- from social media, which has ages dialogue.” Tycoon Builds In Syria

ContinuedfromPageOne wants the furnaces of his Homs steel plant to be a cornerstone of Syrian reconstruction even before a political settlement. He is seeking to enlist foreign investors and donors who generally shun Syria so long as President Bashar al-Assad holds power. While U.S. entities are barred from making new investments in Syria as a whole, European companies are allowed to do business with Syr- ian individuals who aren’t members of the government, the armed forces, the Assad family or otherwise desig- nated for sanctions. Last year Mr. Foz’s umbrella company, Aman Group, sponsored an international trade fair in Da-

mascus. YOUSSEF BADAWI/EPA FOR THE WALL STREET JOURNAL Sipping tea around mid- Workers at a steel plant in Homs, Syria. Its owner, Syrian businessman Samer Foz, hopes to use it to help reconstruct thebatteredcity. night at a Beirut restaurant with his bodyguards keeping in the early 1990s and says he bassadors that Mr. Foz should mats describe as having been watch, Mr. Foz, who rarely also took courses at Boston be sanctioned for his closeness Economy on the Rocks expropriated from people who gives interviews, said he was and San Diego universities. to the regime, according to Syria’s seven-year war has hammered the economy. opposed the regime at the be- motivated by national inter- Though France gave him “the Western diplomats. No EU ginning of the uprising. ests, not just his own. From best years of my life,” he said, member has formally sug- Annual change in GDP Currency exchange rate The previous homeowners sugar production to car as- it was the U.S. that stirred his gested his name, the first step were paid, but too little to af- sembly and real estate, he ambitions. “In the U.S., you in the sanctions process. Mr. 10% 0 Syrian pounds to $1 ford units in the towers that said, he aims to draw refugees cangoverybig.InFranceyou Foz said he has properly been 0 will be built, said Western of- 100 back to Syria by creating thou- can’t,” he said. “Everything is spared sanctions because he –10 ficials working on Syrian af- sands of jobs. petit, petit, petit.” invests in industries unrelated 200 fairs. Mr. Foz defended his in- “Once you have made Returning to Syria, Mr. Foz to the regime’s military af- –20 volvement in the development enough money, you begin to expanded the family business fairs, and when he distributed –30 300 —formally called Marota City think about what you can do by importing agricultural ma- food commodities it was as but often called Project 66, af- –40 for your country,” Mr. Foz chinery and cement. Lacking humanitarian assistance. 400 ter a presidential decree—say- said, glancing at text messages connections, it didn’t grow “If I am sanctioned, the 2010 ’11 ’12 ’13 ’14 ’15 ’16 ing the demolished houses had brought by an associate with a much. “We were second-rate, U.N. should be sanctioned,” he 500 been built without permission cellphone. “If I don’t think third-rate businessmen,” he said. Gross public debt as a Scale inverted to and it wasn’t he who expropri- 600 about reconstructing my coun- said. Mr. Foz once bought old, percentage of GDP show weakening ated them. try, who will?” The outbreak of Syria’s po- vermin-infested wheat from Syrian pound The government didn’t re- 700 It isn’t possible to estimate litical strife in 2011 changed Islamic State, stored it in Tur- 160% spond to questions about the ’122011’13 ’14 ’15 ’16 ’17 Mr. Foz’s net worth, and he that. Fighting drove out busi- key, changed the manifest to 120 project. won’t disclose it, but Syrians nesses and left a chaotic land- pass the wheat off as Russian, Last year, the regime de- say he has become one of the scape that favored nimble en- and sold it back to areas in 80 Private and public investment nounced a prominent Syrian country’s wealthiest men, with trepreneurs who could stay on northern Syria, according to a as a percentage of GDP businessman named Imad interests that include—in ad- the good side of the regime man in Latakia with a close 40 Ghreiwati after he moved to dition to steel, hotels and and assorted rebel groups. knowledge of Mr. Foz’s busi- 25% Dubai. Pro-regime militiamen 0 housing—the manufacture of More than 500 businessmen ness. occupied a cable manufactur- 2011 ’12 ’13 ’14 ’15 pharmaceuticals, sugar refin- were kidnapped for ransom by Mr. Foz said the story was 20 ing plant Mr. Ghreiwati owned ing, auto assembly, water bot- rebel fighters in the first half false, concocted by rivals to and began looting machinery, Public tling and gold mining. of 2012, according to Fares harm his reputation. “This is Exports and imports after which Mr. Ghreiwati It is an empire he built up Shehabi, chairman of the Syr- pure hatred among business- 15 Private asked Mr. Foz to intervene, ac- after returning from study ian Federation of Industry. As men,” he said. $20 billion cording to a person familiar Mr. Foz moved his wife and abroad to a family business his 15 10 with the events. Mr. Foz father had started. Mr. Foz’s children to Turkey five years bought the factory at a deep steel plant employs more than Mr. Foz is the Assad ago to shield them from the 10 discount. 1,000 Syrians, about 100 Indi- Syrian rebellion. He gained Imports 5 Mr. Foz recently landed his ans and a handful of Russian regime’s most citizenship in Turkey by in- 5 first contract with a European- experts. vesting there. Exports linked company, a deal his em- 0 Jihad Yazigi, an analyst important conduit for In late 2013, the body of an 0 ployees valued at $250 mil- who has followed Mr. Foz’s ca- business deals. Egyptian-Ukrainian business- 2011 ’12 ’13 ’14 ’15 2010 ’11 ’12 ’13 ’14 ’15 lion. The partner company, reer closely as editor of the man who had failed to deliver Sources: World Bank (GDP, investment, exports, imports); IMF (debt, currency); Tunisian-based Biomass Indus- Syria Report, a Beirut-based a $14 million wheat shipment Syrian Central Bank (currency); traders (currency) THE WALL STREET JOURNAL. tries Associates, will purchase business site, is among those to Mr. Foz surfaced in Turkey. machinery from German sugar who charge that his business business executives fled Syria, Turkish authorities arrested $500,000 bail. media reports at the time. Mr. producer BMA Group and ship empire offers a financial life- gone were the upholders of Mr. Foz on suspicion of having The official said about six Foz denied he faced such a it to a Syrian sugar producer line to the Assad regime. Aleppo’s centuries-old soap- ordered the murder of the months after Mr. Foz’s release, sentence. owned by Mr. Foz. “If Western governments making tradition, its legendary businessman, Ramzi Matta, an Istanbul court sentenced According to the Turkish Biomass didn’t reply to re- and companies start dealing chocolatier families and thou- and tampering with evidence. him to four years and two official, Mr. Foz still faces quests for a comment. BMA with Foz, they will have taken sands of textile businesses that Mr. Foz was freed in May months for evidence tamper- charges related to suspicion of Group confirmed it had a con- advanced steps toward nor- produced goods such as expen- 2014. He said he was cleared ing. The sentence has been ordering the murder, and he tract to supply the Tunisian malization of the regime,” he sive silks and Christian and after the second of two hear- suspended pending appeal, ac- comes regularly to Turkey to company with equipment and said. Jewish liturgical garments. ings. A senior Turkish official cording to the official, whose attend court proceedings. was aware the machinery Mr. Foz said he needs to The flight of so many busi- said Mr. Foz had put up account squared with Turkish Mr. Foz said he travels reg- would be shipped to Syria. work with the bureaucracy to ness leaders opened opportu- ularly to Turkey for business. Through deals such as this some extent to do business in nities Mr. Foz exploited by He said he has moved his fam- one, Mr. Foz hopes to bring Syria but denied he was closer dealing with various sides in ily to Dubai. foreign investment to Syria to Mr. Assad than other busi- the Syrian conflict. “I worked The Syrian conflict’s eco- without running afoul of the nessmen in the country. The for four years with no compe- nomic destruction, estimated international sanctions that government didn’t respond to tition at all,” Mr. Foz said. by the World Bank to total constrain reconstruction. questions about Mr. Foz. Western governments sanc- $226 billion through 2016, cre- In Homs, which became a The businessman, compact tioned some businessmen who ated a climate hostile to busi- rebel stronghold and was in stature with blue eyes and stayed in Syria, barring com- nessmen other than those who smashed into submission by a slicked-back hair, said he tries panies and citizens from deal- spent the war years inside the three-year regime bombing to stay away from the public ing with them and freezing country nurturing contacts in campaign, posters next to the eye. “The less you appear,” he their overseas assets. They in- the regime. Mr. Foz signaled charred remains of housing said, “the fewer mistakes you cluded one of Syria’s most his ascension into the Syrian portray Mr. Assad waving and make.” prominent businessmen, Rami commercial elite by acquiring proclaiming: “Together we re- Born in 1973 in the Medi- Makhlouf, a telecommunica- the upscale Orient Club in Da- build.” terranean coastal city of Lata- tions magnate and Assad mascus and a majority stake in At the Homs steel plant, kia, the son of a pharmacist, cousin, who the EU said the capital’s Four Seasons ho- which was out of commission he grew up during a time “bankrolls the regime.” Mr. tel, bought from Saudi billion- when Mr. Foz acquired it last when the ruling Assad family Makhlouf has unsuccessfully aire Prince al-Waleed bin Ta- year, three of the five furnaces introduced policies to stimu- appealed his inclusion on the lal. now are operating. late the economy, spawning an sanctions list. Other business- Last year, in Mr. Foz’s most “Reconstruction,” said Mr. urban business elite. In 1988 men have been sanctioned for explicit partnership with the Foz, is “about bringing back his father, Zuheir, established facilitating Islamic State oil regime, he entered a high-pro- people and giving them jobs. a business called Foz for Trad- sales or financing pro-govern- file venture with the govern- It’s about getting the wheels ing, which evolved into the ment militias. ment of the administrative turning.” Aman Group that is now the As Mr. Foz’s public profile district around Damascus. He —Nour Al Akraa in Berlin center of the family operation. has grown, several European acquired the right to construct and David Gauthier-Villars in

Samer Foz studied at the embassies in Beirut have sug- W PRODUCTION, DUBAI three towers and five smaller Istanbul contributed American University of Paris gested in meetings among am- Samer Foz has done business with many sides in the Syrian conflict. units on land foreign diplo- to this article. THE WALL STREET JOURNAL. ** NY Monday, August 13, 2018 | A10A GREATER NEW YORK Candidates Make Pitches Before Primary

Two Democrats and the front-runner. He faces gressive agenda, such as in- The GOP candidates have Mr. Stefanowski said resi- $2.87 million on the race so far, Bridgeport Mayor Joe Ganim, a creasing spending on educa- made lowering taxes and trim- dents want someone commit- mostly his own money. Mr. Ste- five Republicans are popular six-term mayor who tion. Mr. Ganim, however, has ming state spending the focus ted to scrapping the state in- merman has been the biggest vying in Connecticut’s was convicted in 2003 for ex- painted Mr. Lamont as an out- of their campaigns. come tax. “Voters want an spender in the primary, at $6.2 tortion and taking bribes. of-touch millionaire who wants The Republican Party en- outsider,” he said. million. He has said he would gubernatorial race The eventual party nomi- to buy the election, while the dorsed Mark Boughton, the spend at least $12.8 million of nees are expected to face a mayor claims he has the sup- longtime mayor of Danbury. his own money on the race. BY JOSEPH DE AVILA tough general election. Repub- port of grass-roots Democrats. The other candidate who has “This race is exactly where licans have a good chance to “My focus is winning on held elected office is former The eventual party we need it to be,” said Patrick Connecticut’s gubernatorial pick up a governor’s seat in Tuesday, but more importantly Trumbull First Selectman Tim nominees are expected Sweeney, Mr. Stemerman’s candidates are crisscrossing the Connecticut after eight years getting this state moving Herbst. Both received grants campaign manager. “This state state and hitting the senior cen- of Democratic rule, thanks in again,” Mr. Lamont said in an of $1.35 million through the to face a tough faces enormous challenges, ters, parades and ice-cream so- part to the low popularity of interview. He has spent $2.57 state’s public-finance program. general election. and voters know David is the cials to glad-hand voters as they current Gov. Dannel Malloy. million on the primary, much Former hedge-fund man- one who can handle them with gear up for Tuesday’s primary. But Connecticut Democrats of it his own money. ager David Stemerman, former honesty, toughness and an On the Republican side, the are banking on a strong turn- Mr. Ganim has raised executive Bob Stefanowski and outsider’s perspective.” race is wide open for the pack out in November from voters $779,500 and has $173,000 left tech entrepreneur Steve Obsit- Mr. Obsitnik, who also re- Mr. Herbst is spending the of five candidates. eager to voice their displea- in his campaign coffers, which nik come to the race from the ceived public financing, said he final days before the primary Among Democrats, Green- sure with President Trump. he said is enough. “We have business world. has an extensive ground cam- campaigning in eastern Con- wich businessman Ned Lamont, Mr. Lamont has presented $3 million in commitments While Messrs. Boughton paign. “We are starting to see necticut, courting voters in who made a name for himself himself as a political outsider from existing donors and and Stefanowski want to elim- hockey-stick results in terms towns like Plainfield, Mystic when he beat then-Sen. Joe who will turn around the other supporters who say they inate the state sales tax, the of name ID and commitment to and Griswold. “I know we have Lieberman in the 2006 Demo- state’s economy and finances will repeat their donations for other Republican candidates the campaign,” he said. the momentum on our side,” cratic primary for Senate, is while still supporting a pro- the general election,” he said. want to lower it. Mr. Stefanowski has spent he said. Nixon, Mayor Traded Requests

BY KATIE HONAN

If you’re a celebrity in New York City with any issue, there’s someone you reach out to for an in with Mayor Bill de Blasio: Cynthia Nixon. Ms. Nixon, a fellow Demo- crat who is running for gover- nor, forwarded requests from actors and others for several years, emails show. And the mayor’s office relied on Ms. Nixon for connections to celebrities to seek their support for agenda items such as

SARAH BLESENER FOR THE WALL STREET JOURNAL its universal prekindergarten Owner Juan Diaz said there has been increased traffic since his Brooklyn market, with the help of the pilot program, got new signage, windows and a colorful awning. initiative and mayoral control of schools, according to the emails, which were released Friday through a Freedom of Old-Time Bodegas Get Makeovers Information request and are dated from 2014 through 2018. Ms. Nixon, best known for BY MELANIE GRAYCE WEST rate and private donors, aims Hills Local Development Corp., her role as Miranda on TV’s to strengthen and study com- which is working with mer- “Sex and the City,” is a longtime Brooklyn bodega owner mercial areas in rapidly chang- chants. education activist, and her wife, Manny Valdez knows there is a ing neighborhoods. East New York residents Christine Marinoni, worked as a change in the customers visit- Mr. Valdez is using it as a spend $1.65 billion each year senior adviser for community ing his East New York store. chance to make changes to on goods and services in their partnership under former Dep- The Spanish brands of food, merchandise and other aspects neighborhood, but spend $591 uty Mayor Richard Buery in the flour and canned goods aren’t of the store. His Cleveland Deli million elsewhere, according to selling as well anymore, and has a new name: Cleveland a recent report from the New some customers are asking for Deli and Organic, adding what York City Department of Small Actress Sarah fresh juices, organic vegeta- he said is a nod to his new, Business Services, which has Jessica Parker bles and fancier beers. younger, health-conscious cus- provided funding to the pro- asked Cynthia So to keep up with the tomers. gram. Along Fulton Street, 11% Nixon to lobby shifting demographic and draw “That’s what’s coming to of storefronts are vacant, ac- Mr. de Blasio in more foot traffic from the the neighborhood,” Mr. Valdez cording to the city, and 25% of on behalf of a

nearby Cleveland Street sub- said.“Youhavetogetready.” STEVEN WHITE/LISC merchants own their building. cafe owner. way stop, Mr. Valdez, 45 years The revitalization program, Mr. Diaz’s market before the storefront upgrades were made. Mr. Valdez and another bo- old, is rolling out a new iden- which is also being imple- dega owner, Juan Diaz, 62, are tity for his 17-year-old store. mented in parts of Staten Is- In rapidly changing neigh- neighborhood institutions, both longtime residents and de Blasio administration. Out will go the bulletproof- land and the Bronx, is mod- borhoods, commercial corri- people who have been in- own their buildings, which sit Ms. Nixon did a little lobby- glass windows cluttered with eled on research of dors have been struggling, vested in the community for a on opposite high-traffic cor- ing for her friend and co-star stickers and signs. Half the Philadelphia’s commercial cor- said Eva Neubauer Alligood, long time, are able to pivot.” ners along Fulton Street. Sarah Jessica Parker, who sent dry-goods shelving will go, ridors. The premise is that a deputy director of LISC NYC, Fulton Street—which runs One recent morning, Mr. along an email from the owner too. In will come new lighting few improved storefronts the nonprofit leading the pro- partly beneath the elevated J Diaz watched as new signage of her Manhattan neighborhood and floors, a vegetable stand, along a strip can encourage gram. Merchants “need to line—is part of the East New and a colorful awning were in- West Village restaurant Tea & a fresh juice machine and a other merchants to tidy up, benefit from change, not be York rezoning plan that was stalled at J&F Mini Market. Sympathy in September 2014. deli that can churn out bacon, which will in turn increase kind of quashed over,” she approved in 2016. The neigh- The cost of the storefront The cafe was struggling egg and cheese sandwiches. perceptions of street safety said. borhood has some of the high- beautification was around with rising rents, Nicky Perry A new pilot program in the and drive foot traffic. “Change is coming,” said est poverty and unemploy- $20,000, with Mr. Diaz chip- said in the email. Ms. Perry area, the Commercial Corridor Merchants apply for the Gregory Schiefelbein, who ment rates in the city, and the ping in some money—which is sought out Ms. Parker for help. Challenge, is helping stores storefront grants, which can leads the New York tri-state rezoning is intended to bring required—and the rest funded “Some are issues related to like Mr. Valdez’s adjust to the amount to tens of thousands region for Citigroup Inc.’s Citi more density and housing. by the program. He put new the very things our Mayor was evolving neighborhood by sub- per store. Only a handful of Community Development, But as rents rise, there is a windows in recently and criticising [sic] [former Mayor sidizing new signs, windows businesses are a part of the which provided funding and concern that small-business “there was more traffic be- Michael] Bloomberg for,” Ms. and awnings. The program, program so far while it is in helped develop the program. owners will be driven out, said cause of the appearance of the Parker wrote to Ms. Nixon and funded by the city and corpo- its pilot stage. “We want to make sure that Raquel Olivares of Cypress store,” he said. her wife about Ms. Perry’s email, which she forwarded. Ms. Nixon sent it to Mr. de Blasio. The issue wasn’t resolved, Ms. Perry told The Wall Street Texts Show Last-Minute Dealing With Schools Pick Journal on Friday. “What I’ve learned in life and the years BY LESLIE BRODY that discussions tied to com- The text messages showed I’ve lived in New York is you pensation were never a prior- City Hall’s confidence that better call your politicians, On the day New York City’s ity and readily settled. She mayoral control of the schools and you better know how to mayor announced the appoint- said he has stated unequivo- would continue. Legislators of- call them and have them do ment of his first choice to lead cally that his decision to de- ten use debate over renewing things for you,” she said. the nation’s largest school dis- cline the opportunity in New it as a negotiating tool for re- A spokeswoman for Ms. trict, City Hall was still texting York, “after tentatively accept- lated education issues. The Parker didn’t respond to a re- with this hire over pay issues. ing” the offer, came as a result mayor’s two-year extension of quest for comment. Text messages released Fri- of the Miami “community’s mayoral control expires this A spokesman for the mayor day through a public-records overwhelming support and in- summer, and it is up to law- said Mr. de Blasio didn’t give request show Alberto Car- sistence that he remain super- makers in Albany to renew it. special treatment to celebri- valho, superintendent of Mi- intendent.” The deputy first mayor tex- ties. “We take complaints from ami-Dade County Public The mayor’s press secre- ted: “Mayoral control has been people the mayor runs into on Schools, still had a lot of un- tary, Eric Phillips, declined to renewed 4 times since 2002 the subway and sidewalk much answered questions. A day af- comment on the emails. and effectively no one wants more frequently than we do

ter Mayor Bill de Blasio an- JOE RAEDLE/GETTY IMAGES Mr. Carvalho sought on Feb. to go back to the earlier sys- from celebrities,” he said. nounced him as the new Alberto Carvalho announced March 1 he was staying in Miami. 28 to confirm that he could tem. Mayoral control will con- A spokeswoman for Ms. schools chancellor, Mr. Car- still be paid honoraria for tinue.” Nixon said she has been focused valho shocked and embar- 28, the day Mr. de Blasio un- payment, and it wasn’t part of speaking engagements, as long The day Mr. Carvalho re- on larger issues in the city. “It’s rassed City Hall by rejecting veiled him as his choice. On a package that matched the as he didn’t accept them from jected the chancellor’s job, Mr. no secret Cynthia fought very the job in a televised board Feb. 27, Mr. Carvalho asked superintendent’s base pay of vendors or others that would de Blasio said he was disap- hard to elect Mayor de Blasio meeting in Miami. City Hall to confirm the city roughly $353,000. pose a conflict of interest. pointed. City Hall had asked and to get his education initia- New York hired Richard would make a tax-deferred an- “This one has caught totally Texts show the mayor’s office Mr. Carvalho earlier for photos tives like universal pre-K Carranza from Houston to fill nuity contribution for him. off guard [sic],” Mr. Carvalho was looking into that request. of him as a child and young passed,” the spokeswoman said. the job a few days later. Dean Fuleihan, first deputy said by text. Mr. Carvalho also coordi- adult for a video introduction. “Naturally, as people who work Mr. Carvalho had questions mayor, said over text message A spokeswoman for Mr. nated a press rollout with the “I am excited and honored,” together do, they sometimes about his pay on Feb. 27 and the city couldn’t make that Carvalho said by email Friday mayor’s office. Mr. Carvalho wrote by text. spoke about other things.” A10B | Monday, August 13, 2018 NY ** THE WALL STREET JOURNAL. GREATER NEW YORK

GREATERNEWYORKWATCH

ROOSEVELT ISLAND tigators look for another. It happened shortly after Pact Lets Complex midnight Sunday on an E train Tenants Buy Homes at or near the Lexington Ave- nue/53rd Street station. Police A New York City housing say the 29-year-old victim was complex will stay affordable but wounded in the torso and is ex- allow tenants the new option of pected to survive. ownership under an agreement A 21-year-old Queens man announced by Gov. Andrew has been arrested on assault Cuomo. The Democrat unveiled and other charges. A second the arrangement Sunday for suspect is at large. Westview, a 361-apartment —Associated Press complex on Roosevelt Island in the East River. LONG ISLAND Westview could have with- drawn from a state program Street Is Renamed that gave landlords tax and For Parkland Victim other breaks in exchange for lim- iting rents. However, the owners, A Long Island street has been the state and tenants have been named for a teacher killed after negotiating a pullout that would helping shield students from the keep apartments affordable. gunman in last winter’s school Mr. Cuomo says the new 30- shooting in Parkland, Fla.

year deal will let qualified West- The street where Scott Beigel MARK CHALLENDER/BARCROFT MEDIA/GETTY IMAGES view tenants buy their apart- grew up in Dix Hills was dedi- A raccoon navigated Central Park in 2017. This summer, raccoons in the park have been hit by an outbreak of canine distemper. ments at below-market prices, cated as “Scott J. Beigel Way.” with limits on resales. Other resi- Its original name was Hart Place. dents can continue renting at reg- Mr. Beigel was a 35-year-old ulated rates. The owners will get geography teacher and cross- New Scourge Prowls Park tax, mortgage and other benefits. country coach at Marjory Stone- A message left at the own- man Douglas High School. He ers’ office wasn’t immediately helped students enter a locked BY CORINNE RAMEY by coming into contact with One morning last week, a New Yorker. returned. classroom to avoid the gunman. infected feces, urine or saliva. Tracy Wargo’s beagles, Butters “They’re wild animals,” he —Associated Press NewYorkLt.Gov.Kathy The zombies have taken “The raccoons might have and Pixel, went after a rac- said. “If they’re hanging out in Hochul, a Democrat, was among Central Park. runny eyes or runny noses,” coon in Central Park. When the city, they probably just MANHATTAN about 50 people who attended Nathan Gamble saw one said Ann Hohenhaus, a veteri- she intervened, the raccoon have a ‘f--- you’ attitude.” Saturday’s ceremony. Linda Bei- cross a Manhattan street in narian at Animal Medical Cen- latched on to her foot and One recent afternoon, Jim Man Is Stabbed gel Shulman, the slain teacher’s broad daylight, brazenly cut- ter in Manhattan. “But you took a bite. Mills and his wife strolled On Subway Train mother, was touched to see his ting off tourists and horse car- shouldn’t be close enough to “It didn’t appear sick,” said through Central Park with name on the street where she riages. Then it walked along a assess that.” Ms. Wargo, 51. “It was defend- their Shih Tzu mix, Logan. Mr. Police say a man was still lives. “He lived life and path. Unvaccinated dogs can ing itself pretty fervently.” Mills had read on the internet stabbed on a subway train under treated people the way he “This one looked like he catch the virus from raccoons, Still, she has changed her that zombie raccoons had Midtown Manhattan, and one wanted to be treated,” she said. was moving with purpose,” a fact New York City officials usual route and now scans for come to New York. suspect is under arrest as inves- —Associated Press Mr. Gamble, 45 years old, said began issuing warnings about raccoons during walks. Her “They act very strange, of the creature. “It wasn’t last week. Vaccinated dogs foot is still bandaged—“and a kind of like you don’t want well.” typically aren’t at risk of little gross”—from the inci- your spouse to act when It was a raccoon. Central catching the disease, Dr. Ho- dent, but she is otherwise OK. they’ve had too much to Park is in the midst of an out- henhaus said. Howie Doing the Wonder- drink,” said Mr. Mills, 67, of break of so-called zombie rac- The health and parks de- dog, a 15-year-old “sort of a Bridgeport, W.Va. coons, with rangers capturing partments advised pet owners dachshund-something,” saw a His wife glared at him, then 97 animals that have become to keep their dogs on leashes. raccoon lumbering along a walked ahead, pushing Logan sick or died since late June. “The two agencies are specifi- path earlier this month. in a teal stroller. The virus, called canine dis- cally concerned about dogs in Howie appeared uncon- Paul Crichton, who lives in temper, causes raccoons to the park during dusk and cerned. But his owner, Denis Washington Crossing, Pa., was leave their traditional habi- dawn, off-leash hours, after Woychuk, was worried. in Central Park walking tats—trees, garbage cans, two incidents where dogs had “It was looking dazed and Tommy, his 7-year-old Coton nighttime—and venture into encounters with raccoons,” of- confused,” said Mr. Woychuk, de Tulear. That afternoon, he the human domain, often in a ficials said. who owns KGB Bar, a Soviet- had allowed Tommy to walk crazed, disoriented or wobbly Parks department officials themed establishment in Man- across a field without a leash. state. are also posting signs and dis- hattan’s East Village neighbor- “I was breaking the rules,” The disease is contagious to tributing fliers in Central hood. “I hear there are a he said. “Then I thought of the other animals. Raccoons, dogs, Park. The health department bunch of them.” raccoons.”

ALEXANDER COHN/THE WALL STREET JOURNAL pandas, ferrets, seals, coyotes, said it can’t determine what He did note the fearless He quickly scooped up his Marchers danced on Sixth Avenue in the Dominican Day Parade. skunks and wolves can catch it led to the outbreak. raccoon may simply have been dog. LUCY VIEIRA keeps the world moving

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#keeptheworldmoving THE WALL STREET JOURNAL. Monday, August 13, 2018 | A11 LIFE&ARTS

HEALTH A Sisterhood of Nurses

In 1977, six nurses from the Philippines came to work in America; the field of medicine has changed dramatically since then, but their friendship has not

BY LUCETTE LAGNADO ICUs and witnessed the introduction of life-saving technologies. But the women also saw medicine lose a measure of the human touch, they say, as s a girl in Manila in the late ’60s, Te- more machines moved into the field. Hospitals resa Santos set her heart on becoming trimmed costs and focused on efficiency. Patients a nurse because she was dazzled by the went home sooner and their shorter stays left A starched white uniforms and jaunty nurses little time to bond with them. caps nursing students wore. “One of At a time when doctors and nurses are feeling these days,” she promised herself, “I will be in that burned out, the women remain passionate about group.” She trained in her native Philippines and in their work. “The fundamentals of nursing haven’t 1979, was hired by Cedars-Sinai in Los Angeles. changed,” Joyette said. “We care as we did 40 Five classmates from the same nursing college years ago.” When they began their careers, there joined her at Cedars-Sinai: Connie Arostegui, Patri- was a nursing shortage in America. Hospitals were cia “Peachy” Hain, Joyette Jagolino, Nora Levid turning to the Philippines for recruits because of and Gertrudes Tan. Over the past 40 years, the six the country’s rigorous nursing programs. In turn, women have been not just friends and colleagues the new hires looked to escape political and eco- but family. What carried them through personal nomic turmoil at home through work in America. and professional crises in their adopted country A recent milestone—Nora’s 65th-birthday and back home were the bonds they formed with party—has the women reckoning with age. Peachy one another through their work. won’t even consider leaving Cedars-Sinai. Now a Left to right, top row: Nora Together, they weathered the dramatic changes senior nursing executive, she wants to teach the Levid, Gertrudes Tan; middle: that have swept health care. Joyette, now an asso- next generation. After all, she said, “they are the Joyette Jagolino, Patricia ciate director of the Comprehensive Transplant ones who will be taking care of me when I am old ‘Peachy’ Hain; bottom: Connie Center at Cedars-Sinai, has worked in transplant and gray and sick.” Joyette, Connie, Peachy, Nora, Arostegui, Teresa Santos. units and seen the development of anti-rejection Teresa and Gertrudes are still looking after one an- drugs which improved survival. Others labored in other. This is their story. ST. PAUL COLLEGE YEARBOOK, 1976

One day they went to see “Saturday Night Fever.” When 1970s they returned to their dorm, they played the Bee Gees and danced St. Paul College of Nursing in in the hall, copying John Tra- Manila was an all-girls’ private volta’s moves and pointing to- Catholic institution when five of ward the sky. the six women joined it as sec- In late 1978, Gertrudes, who ond-year transfer students in had recently married, went to 1972. Classes included anatomy, Los Angeles and landed a job at chemistry, microbiology and pub- Cedars-Sinai. Peachy and Joyette lic health. followed in 1979 and Peachy The school, which later be- asked Cedars-Sinai to hire the came co-ed, was run by nuns, rest. “There was such a shortage and faith infused the training. that hospitals were willing to Student nurses, who wore crisp promise the sun, moon and uniforms and white stockings, re- stars,” she said. The five began ceived their first nursing caps working at Cedars-Sinai, making with a special mass. Senior stu- between $7 and $8 an hour; Con- dents worked the night shift at nie joined them in 1980. local hospitals but were expected to be in class the next morning. Come Friday, the women would kick up their heels at Ma- 1980s nila’s discos. Gertrudes loved dancing to the Bee Gees and do- Early in the decade, each ing the Hustle. Nora, her friend woman found her professional Patricia ‘Peachy’ Hain, now an executive director of nursing at Cedars-Sinai, spent time with a patient, Francesca Fasce. since kindergarten, often joined niche, from pediatrics to inten- her. “All of us, we loved to dance, sive care. Except for Peachy, they go out,” Nora recalled. Her fam- also were getting married and group. “If I needed someone to Streisand both contributed to ily expected her to be an accoun- some were starting families. speak with, if I felt like crying, I and raised millions of dollars for tant but she balked. Her dad sug- They became godmothers to each 1990s would call any one of them,” she a women’s heart center. gested nursing and she enrolled other’s children. recalled. Cedars-Sinai hired her Life on the wards also was at St. Paul’s. Nora, newly married to a Ce- By the early- to mid-1990s, back and eventually even re- changing. With efficiency the Connie dreamed of going to dars-Sinai colleague, was as- there was upheaval in the work- stored her seniority. It was as if watchword, patient care became America. She planned to be an ac- signed to the ICU. On her first place that the women once con- she had never left. heavily dependent on new tech- countant like her mother but her day in the unit, she fainted: She sidered their immutable home in During the late 1990s, Peachy nologies. As insurers and Medi- father convinced her that nursing was pregnant with a “honey- America. Like hospitals across helped start an effort to improve care pushed for rapid discharges, would be her ticket to the U.S. moon baby” and didn’t know it. the country, Cedars-Sinai was doctor-nurse relations, and per- doctors and nurses felt frus- After the six graduated in 1976, After maternity leave, she squeezed by managed care, and suade physicians that nurses trated by the swifter pace. Pa- they asked a U.S. hospital re- worked the night shift to be with patient rolls plunged. Peachy re- “weren’t only there to take or- tients were discharged so soon, cruiter to be hired as a group. her baby during the day. members that hospital rooms ders” and instead were “integral it was hard to form meaningful There was no point staying in the Practices and mores at the hos- were turned into offices. There parts of the care team.” ties with them. “When I began as Philippines, where a nurse’s salary pital were different then. Smoking were layoffs and hundreds of po- a nurse, I was able to spend “wouldn’t buy you a pair of was allowed in the wards and “ev- sitions were eliminated, accord- more time with patients,” Peachy shoes,” Peachy said. Filipino erybody smoked,” Peachy said. ing to reports at the time. But said. “I got to know their fami- nurses were in high demand in When physicians approached the the women hung together and all 2000s lies, their pets. We were not only America and the women were nurses’ station, at times, “they ex- six held on to their jobs. rushing, rushing, rushing.” placed with a Missouri institution pected us to stand and give them The decade was particularly The women’s parents, many Today, almost half the nurses then known as the Kansas City our seat,” Peachy said. If doctors tough on Gertrudes. In 1991, she still in the Philippines, had at Cedars-Sinai are Asian, many College of Osteopathic Medicine. were unhappy, “some would yell resigned from Cedars-Sinai, took grown old. In 2001, Connie of them Filipinos, the hospital Adjusting to their new country at us.” During rounds, Nora had to her three young children and learned that her mother was des- said. Peachy, an executive direc- wasn’t easy. Kansas City was a walk behind doctors, carrying pa- went to Manila to be with her perately ill. After her death, Con- tor of nursing, oversees 900 sleepy contrast with crackling Ma- tients’ charts. husband, who had left the house- nie was despondent and leaned nurses and aides while Joyette nila and the women, who were liv- That hierarchy eased in the hold. She returned about a year on her husband and the group to has become an associate director ing in a converted floor of the ICU, where nurses and doctors later: The marriage had ended. get through her grief, she says. of the hospital’s Comprehensive hospital, were homesick. “The were on a closer footing. Nora Devastated, she turned to the The women rallied around her, as Transplant Center. Teresa’s first three months were horrible,” loved the work, though it was they did with any daughter studied nursing and Gertrudes recalled. “We were cry- physically demanding. “We were member in distress. A works in her mom’s old unit, ing together. We missed home. We there at the bedside to clean the couple of years later, where everyone calls her “Little missed our families.” patient, give them a bath, tend at 53, Connie suffered Teresa.” Gertrudes and Nora to their wounds,” she said. It was a stroke and became a work in the anesthesia pre-op an opportunity to get to know patient at Cedars-Si- evaluation center. Gertrudes’s the person. Later, when those nai. She learned to twin boys became nurses. tasks became the purview of speak and walk again Gertrudes said the women aides and assistants, Nora wor- but no longer was should buy a condo where they ried that patient care would suf- able to work. She took can live and care for each other fer. Would the lesser-trained early retirement from when they are elderly. Her aides catch early signs of infec- the hospital. friends are considering it. Teresa tions or bed sores? By then, Cedars-Si- loves the idea, saying such a The intensity of the job took a nai was past its 1990s setup would be “like the Golden toll. Nora’s marriage became retrenchment and in Girls.” Last month, they gath- strained during a period when she expansion mode. The ered at Gertrudes’s home to cel- and her husband were working hospital’s transplant ebrate Nora’s 65th birthday. different shifts. program was flourish- When 1970s hits started playing, In 1985 the hospital banned ing and it performed the women got up to dance. smoking. Other changes followed record numbers of Forty years after training to- as the feminist movement of the heart transplants. gether, they could all still do the ’70s took hold and nurses de- Hollywood donors Hustle. Connie, cane in hand, manded fair treatment. Over At Cedars-Sinai recently, clockwise from bottom such as Steven Spiel- held onto Peachy as they

CLOCKWISE FROM TOP: DAVID WALTER BANKS FOR THE WALL STREET JOURNAL (2); ST. PAUL COLLEGE OF NURSING time, white uniforms gave way to right: Nora Levid, Connie Arostegui, Teresa berg helped fund a brought out their best John Gertrudes Tan received her nursing scrubs, which were seen as more Santos, Joyette Jagolino, Gertrudes Tan and pediatric research Travolta, moving to the music cap at a school ceremony in 1973. egalitarian. Patricia ‘Peachy’ Hain. center, while Barbra and pointing to the sky. A12 | Monday, August 13, 2018 THE WALL STREET JOURNAL. LIFE & ARTS ABIGAIL SAXTON FOR THE WALL STREET JOURNAL

WHAT’S YOUR WORKOUT? | By Jen Murphy All the Way Down on One Wheel

RYAN KREMSATER hears a lot of mountain unicycling. newed determination. “You need a balanced. Because there’s no sus- When he’s working on a new trash talk for someone brave Based in Abbotsford, British Co- certain level of pain tolerance and pension or added stability from a skill, he’ll practice it up to 30 min- enough to fly down a mountain lumbia, Mr. Kremsater is an envi- patience to get it,” he says. “It’s second wheel, the rider feels every utes a day. He’s been practicing bike trail while balancing on one ronmental geologist, a job that pro- not like riding a bike. No one gets root, rock or slope change and must hopping up steps with his right foot wheel. “It’s hard to get acceptance vides constant inspiration. “I assess it on their first try.” adjust their balance accordingly. forward to gain better control with from other sports because unicy- terrain stability and am always not- He started riding in his base- Mountain unicycling requires all his non-dominant riding stance. cling looks weird,” he says. “I’ve ing interesting features I could ride, ment, using the walls for balance, of the stabilizing muscles a person gotten used to the ‘You’re missing like logs or cliff drops,” he says. then graduated to pavement. doesn’t normally notice or use, Mr. The Gear & Cost a wheel’ jokes.” His introduction to one-wheel “Even a short distance, like 200 Kremsater says. “A lot of these He is sponsored by Kris Holm Unicycling is more commonly riding began at age 10, when his meters, is exhausting,” he says. muscles are in the core, but the Unicycles. He has eight unicycles associated with circus or street daredevil uncle bought himself a “Unlike a bike, you can’t coast. legs, hips and shoulders are signif- with varying wheel sizes designed performers. But, Mr. Kremsater, unicycle to ride while recovering You’re constantly pedaling and you icantly involved as well,” he says. for everything from street riding to 26, is an athlete pushing the from a broken collarbone. Mr. don’t have a brake.” In the spring “When I am trying to train and all-mountain terrain ($575 to boundaries of the niche sport of Kremsater then asked for his own. of 2004, one month after he fine-tune my balance, I really no- $1,700). A helmet, elbow and knee Despite practicing learned to ride, he hit the trails tice which muscles I have control pads, and gloves with wrist guards every day for weeks, with the Vancouver Unicycle Club. over and which I don’t.” are essentials. He also owns a 2018 he couldn’t complete After competing for years, he He says strength, long-distance Kona Process 165 mountain bike a single revolution. now eschews competitions to pur- stamina and a good range of mo- ($4,000). He likes the extra padding Two years later, sue freeriding, which he considers tion allow him to ride more varied and grip on Adidas Five Ten Impact “One Tired Guy,” an the “more artistic” side of the terrain. He maintains his fitness Pro mountain bike shoes ($160). He extreme film star- sport. That could mean landing 13- with a mix of trail running, rock rides in clothing by sponsor Red- ring Canadian off- foot drops or cycling knife-edge climbing, volleyball, tennis and Al- Bear Apparel. road unicycling pio- ridges. “My goal is to ride terrain pine skiing. He practices yoga neer Kris Holm, that no one’s ever ridden,” he says. twice a week. The Playlist inspired him to start He tries to go for a trail ride on “From a safety perspective, practicing with re- The Workout his mountain bike or mountain when I’m in nature, I want to be Much like mountain bikers, unicycle up to three times a week able to hear a bear coming or a mountain unicyclists spend a lot of and occasionally does some urban mountain biker behind me,” he Mountain unicyclist time out of the saddle. When land- riding. He says his skill level has says. “From a mental standpoint, Ryan Kremsater rides ing a drop or riding steep, bumpy advanced to a point where he of- listening to my breathing and the the trails in North terrain, they hold a handle that atten rides alone on steep, technical tire scrape or slide gives me im- Vancouver, British taches beneath the seat with one terrain. He rides year-round, in portant feedback I’d miss out on if Columbia. hand and use the other to help stay rain and snow. I had music on.”

INFLUENCERS

Misplaced anger is very funny, FROM ‘THE SIMPSONS’ TO Mr. Groening says, and is ‘at the heart of A HARD-PARTYING PRINCESS everything I do.’

BY JOHN JURGENSEN ing, 64, about his shifting style of work TV series with frequent com- satire and how he finds humor in mercial breaks, you’re servicing misplaced anger. Edited excerpts: the story at 90 miles per hour to “THE SIMPSONS” and “Futur- keep people on track, so it’s really ama” creator Matt Groening’s new Why dive into fantasy? nice to be able to slow it down cast of characters has a familiar It started when I was a kid, just here and there. I also love what look—goggly eyes and overbites— reading fairy tales and watching has been happening in television but his first animated series in al- classic Disney movies. The first comedy in general, where there most 20 years takes a leap in tone movie I remember seeing was doesn’t have to be a punchline ev- and setting. “Bambi.” I was delighted by the ery other line, and you can be Instead of satirizing contempo- talking animals but my older sister even more amusing in a way when rary culture, “Disenchantment,” had to carry me out of the theater you withhold the punchline. launching Aug. 17 on Netflix, takes screaming during the forest fire place in a fantasy world of elves, scene. Genre comedy is hard. I Audiences know the Simpsons as ogres and sorcery. well as they know some real people ROBBY KLEIN/CONTOUR/GETTY IMAGES Main character Princess Bean is in their lives. Where do you begin in a hard-partying fairy-tale princess ‘I have a rule that the inventing new characters from The Serial Satirist (voiced by “Broad City” star Abbi scratch? Jacobson) who goes on a quest main characters are I think character design is really Name: Matt Groening His Big Break: In 1987, TV producer with two sidekicks, Elfo (Nat easily identifiable even important. It’s got to be a charac- What He Does: Cartoonist and a James L. Brooks asked Mr. Groening Faxon), who flees the relentless as a silhouette.’ ter you can stand to look at. I have creator of ‘The Simpsons,’ ‘Futur- to make animated shorts for ‘The cheer of his fellow elves, and Luci a rule that the main characters are ama’ and the new Netflix series Tracey Ullman Show.’ The characters (Eric Andre), a diminutive demon easily identifiable even as a silhou- ‘Disenchantment.’ he created, with names borrowed sent to shadow Bean. ette. That came from an article I from own family members, debuted While “The Simpsons” mirrored read as a kid that talked about the How He Got There: While strug- in their own half-hour series, ‘The traditional family sitcoms that learned that on “Futurama.” Just brilliance of the design of Mickey gling in Los Angeles in the late Simpsons,’ in 1989. started fresh each week with a parodying the genre itself gets old Mouse. Even if he’s facing side- 1970s, the Oregon native developed new plot, “Disenchantment” gave pretty fast. Our goal was to make ways, you see the silhouette of the ‘Life in Hell’ comic strip, using His Obsession: A series of ‘really Mr. Groening and his collaborators this a real world. [Executive pro- those two big ears. As for writing bug-eyed bunnies and other charac- funny Chinese vampire films that the chance to spin an ongoing ducer] Josh Weinstein and I plot- the character, when Abbi Jacobson ters to explore feelings of alienation started in the 1980s called “Mr. story. As Princess Bean skips out ted it like a drama then added did the voice of Bean in audition, and angst. Published in alternative Vampire.” They featured hopping on a royal marriage arranged by jokes. We were very worried that suddenly we had clarity. weekly newspapers and books, the vampires that can only detect you if her loutish dad, the first episode this might be a completely wrong strip ran until 2012. you’re breathing.’ ends on a literal cliffhanger. Net- way to go at first. How has your point of view changed flix has ordered two seasons of 10 since your angry young days writing episodes each. In addition to being a serial story, the “Life in Hell” strip? idiot who got his own comeup- much for network television. It Mr. Groening’s influences what made the rhythm of this show When I first did “Life in Hell” pance, people started liking it. You has some nudity in it, though it’s ranged from “Dying Earth,” a fu- different? [starting in 1977] I made the main need to have a point of view, but people who you don’t want to see turistic book series started by Jack We don’t have to reset after character, a rabbit named Binky, you have to realize that one of the naked. Our original concept was a Vance in 1950, to the surrealist ac- each episode, and we have more very angry and his rants coincided funniest things in the world is little coarser and a little more ris- tion movies of filmmaker Stephen time than I’ve ever been used to in with my own feelings about the misplaced anger. That’s at the qué. We went in that direction Chow, including “Shaolin Soccer.” the last 30 years—25 to 30 min- world. People really didn’t care for heart of everything I do. and it didn’t feel right. It felt too Mr. Groening’s weekly “Life in utes per episode as opposed to a it. I did it for six months that way, easy. There are words you can use Hell” cartoon strip led to “The little over 20 minutes on “The with this goofy rabbit shaking his If this show were premiering on a that will automatically get a Simpsons,” now the longest run- Simpsons” and “Futurama.” Those fist at the world. Then I turned it broadcast network, like your others laugh. But it’s more fun to skirt ning prime-time scripted series in extra several minutes are where around and made him the victim, did, what would they probably want the edge, more fun to walk in the TV history. The Wall Street Jour- the best stuff comes from, the free made bad things happen to him. you change? footsteps of Ernst Lubitsch than nal recently spoke with Mr. Groen- jokes. When you’re doing a net- The second I turned him into an Some of the language is a little Russ Meyer. THE WALL STREET JOURNAL. Monday, August 13, 2018 | A13 LIFE & ARTS

ART REVIEW Dazzling Art With a City Connection

BY JUDITH H. DOBRZYNSKI

Chicago DURING HIS 69 years, John Singer Sargent visited Chicago just twice: in 1876, when at age 20 he came with his family, and then in 1916 when he stopped briefly on his way to a painting expedition in the Rocky Mountains. His paintings came much more frequently, appearing in nearly two dozen exhibitions during his lifetime, starting in 1888 at the Inter- State Industrial Exposition and ending at the Art Insti- tute of Chicago’s “Thirty- Seventh Annual Exhibition of American Paintings and Sculpture” in 1924, a few months before he died. Lo- cal collectors, from Martin A. Ryerson, Annie Swan Co- burn and Charles Deering to the McCormick and Marshall Field families, became his patrons. Three years before Sargent sold his most famous painting, “Madame X,” to the Metropolitan Mu- seum, Chicagoans tried to buy it for the Art Institute. No records indicate why they failed, but civic leaders remained intent on building a cultural reputation to match the industrial might of the nation’s “Second City.” “John Singer Sargent and Chicago’s Gilded Age” at the Clockwise from above: John Singer Sargent’s ‘La Carmencita’ Art Institute aims to present (1890), ‘The Fountain, Villa Torlonia, Frascati, Italy’ (1907) and

all aspects of his work—so- ‘Mrs. George Swinton (Elizabeth Ebsworth)’ (1897) CLOCKWISE FROM LEFT: MUSEE D’ORSAY, PARIS; THE ART INSTITUTE OF CHICAGO (2) ciety portraits, genre scenes, landscapes, watercolors and charcoal sketches—with that time, in the Met’s collec- length female portraits that the paintings on view—they full of visual pleasures (in- local twist. Every item here tion—it captured her in ac- wrongly cemented that re- often serve the Chicago-ris- cluding some rarely seen John Singer Sargent and has a Chicago connection tion, but looks conventional, pute. “Mrs. Hugh Hammers- ing narrative, but seem like works from private collec- Chicago’s Gilded Age via ownership, subject or ex- stodgy by comparison. ley” (1892) perches on the interlopers. The “Sargen- tions). Talented from a very Art Institute of Chicago, hibition history, starting “La Carmencita” drives edge of a sofa, gorgeously tesque” ones can be confus- young age and, in the words through Sept. 30 with “Street in Venice” home a point many Sargent attired in a lace-trimmed, ing. Less—or none—might of Bunker, “busy all the (1882), a grim little light- exhibitions make nowa- magenta velvet dress that have been more. time—at white heat always,” Ms. Dobrzynski writes about and-shadow study of work- days—that far from being stresses her tiny waist. “Sargent and Chicago’s Sargent was always a daz- the arts for many ing-class life, whose appear- old-fashioned and superfi- Poised, young American Gilded Age” is nevertheless zler, and still is. publications. ance at the 1888 Exposition cial, merely a maker of flat- “Daisy Leiter” (1898), marked the U.S. debut of dressed in a white silk gown Sargent’s work beyond the and billowing shawl, seems East Coast. Paintings linked to ready to marry a British He got much more atten- aristocrat, which she did. tion two years later, when Chicago via And “Mrs. George Swinton the Art Institute put his ownership, subject (Elizabeth Ebsworth)” enormous, daring portrait of (1897), a swirl of white a Spanish dancer, “La Car- or exhibition history satin, stands regally beside mencita” (1890), in its Third a chair of light pink that is Annual. Not everyone liked echoed in the folds of her it, but no one missed it. dress, the color of her lips There she stands in a bright tering society portraits, Sar- and her manicured nails. gold costume, arms akimbo, gent used free, showy They are stunning. haughtily meeting the brushwork; experimented But even in portraiture, viewer’s eyes; it is both a with spatial relations and, Sargent had more range throwback to Old Masters occasionally, near-abstrac- than that. A standout here, like Velázquez and a flashy, tion; tried unorthodox van- “Portrait of a Boy” (1890)— contemporary (notice the tage points; chose bold a naturalistic view of Augus- sketchy, Impressionistic de- lighting and seductive col- tus Saint-Gaudens’s 10-year- tails of her dress) work. If it ors; and was far more spon- old son—bears Sargent does not register that way taneous than is credited in trademarks, like the bril- now, just look at William his reputation. liantly painted whites and Merritt Chase’s “Carmen- The exhibition displays pinks of the boy’s face, cita,” painted at the same three of the grand, full- hands and neck bow, but also conveys the tension between his restless boredom and privileged life. “Joseph Jefferson” (1890) is an ex- pressive oil sketch, probably made in a single sitting. Three charcoal sketches— made for patrons after Sar- gent, feeling confined and underestimated, gave up commissioned oil portraiture in 1907—are lovely. By far the most glorious late works here are watercolors he created between 1908 and 1917, particularly those—like “Terrace, Viz- caya” (1917) and “The Log- gia, Vizcaya” (1917)—painted when he visited the Florida home of James Deering, Classic Beauty Charles’s half-brother. They are all sunshine, shadow, Diamond Cross Pendant space and texture, as fresh as they were a century ago. Exceptional stones. Timeless design. Incomparable beauty. With this exhibition ar- SiximpeccablymatchedAsscher-cutdiamondsgracethisunique ranged thematically rather cross pendant. These eye-catching gems weigh a brilliant 6.33 than chronologically, visitors total carats, and each is certified by the Gemological Institute see Sargent in the round, of America as possessing exceptional clarity and I-J color. Three one facet at a time. The need for a Chicago connec- are graded as internally flawless, meaning their natural beauty tion, however, prevents it is completely unmarred by any internal imperfections. Set in 1 from being a true retrospec- 18K white gold. 16 /2” length. #30-7931 tive, as many of his best paintings, like “Carnation, Lily, Lily, Rose” (1885-86), have no such link and are thus absent. Moreover, curator Annel- ise K. Madsen decided to situate Sargent in the artistic firmament with works by friends and rivals—Claude Monet, Giovanni Boldini, 630 Royal Street, New Orleans, Louisiana • 877-677-2801 • [email protected] • rauantiques.com James McNeill Whistler, An- ders Zorn, Dennis Miller Since 1912, M.S. Rau Antiques has specialized in the world’s finest art, antiques and jewelry. Bunker and Walter Gay, Backed by our unprecedented 125% Guarantee, we stand behind each and every piece. among them. Hung both in- terspersed with Sargents and in a gallery of their own—constituting a third of A14 | Monday, August 13, 2018 ** THE WALL STREET JOURNAL. SPORTS

THE COUNT WHEN SIZE DOESN’T MATTER

One of the biggest puzzles for fantasy football players is how to evaluate running backs. Take the Tennessee Titans: When you look at Derrick Henry and Dion Lewis, it’s hard to believe they both play the same position. Henry is 6-foot-3 with a listed weight of 247 pounds, while Lewis is 5-foot-8, 195 pounds. Yet the Titans plan to use both backs this season as “1A and 1B,” according to Titans offensive coordi- nator Matt LaFleur. While the last time two backs of such disparate size shared at least 100 carries each was 2010, there have been eight of these tandems this century, according to Pro-Football-Reference, of one back weighing 200 pounds or less and the other 240 pounds or more. While the bigger back in these pairings would figure to be the more durable ball carrier, it turns out the small back has been much more productive on teams packing a 1-2 punch. So history says the odds strongly favor the 27-year-old Lewis

TANNEN MAURY/EPA/SHUTTERSTOCK being the “1A” in this backfield. Ten- Brooks Koepka joins Tiger Woods, Jack Nicklaus, Ben Hogan and Gene Sarazen as the only players to capture the PGA and the U.S. Open in the same season. nessee did give him a four-year, $20 million contract (plus incentives) af- PGA CHAMPIONSHIP ter three seasons in New England. If the pattern holds, despite appearances to the contrary, it’s likely going to be the 24-year-old Henry Koepka Wins the PGA who ends up being the change-of- pace back. Henry though, seems determined to throw his weight around, telling Titans.com: “I definitely want The 28-year-old American took his third career major, holding off a charge by Tiger Woods to be dominant this year.” —Michael Salfino BY BRIAN COSTA Koepka shot a 4-under-par 66 to fist emphatically after draining a depth of the competition Woods finish at 16 under, two shots ahead 19-foot birdie putt on the 18th hole will need to beat if he is to ever of Woods and three shots ahead of to finish with a 64. By then, he winagain.Heisbuiltlikealine- ST. LOUIS—All day, Tiger Woods Adam Scott. It was his third career knew he had little chance of win- backer, lifting weights with at was reminded of the number. “Fif- major title, coming off victories at ning. But this was as much of a least as much devotion as he hits teen, Tiger!” fans yelled at him as the 2017 and 2018 U.S. Opens. And win as Woods could have had, golf balls. The morning of the final he walked by. “Number 15, you got it established beyond any dispute short of actually winning. round of this year’s U.S. Open, he this!” the case he had been building for a A year ago, after four back sur- said he did 14 reps bench-pressing By his early 30s, that’s what while: Koepka is among the pre- geries, he wondered with good 225 pounds. “Not that impressive,” major championships had become mier players of his generation. reason if he would ever play again. he said, “but I can get to 315.” for him: just one more in a run- Koepka is only the fifth player His last procedure, which fused It isn’t surprising that he hits ning tally, an exercise in historical to win the U.S. Open and the PGA discs in his lower back, was more the ball the length of three foot- accounting. But even on a day Championship in the same season, about his quality of life, with win- ball fields. On a simple course that when Woods was good enough to joining Woods, Jack Nicklaus, Ben ning majors having been reduced favored brute force off the tee, contend for another, he received a Hogan and Gene Sarazen. to a pipe dream. Koepka was an ideal fit. But he has Big & Small reminder of why No. 15 will be in- Though seldom mentioned This summer, he contended at also become a more complete How some “big and small” running finitely harder than the first 14. among the likes of Jordan Spieth two majors and put himself in po- player in recent years with his back tandems have fared, since 2000: It came in the form of a 28- and Rory McIlroy, he now has as sition to play for the U.S. at the touch around the greens. He RB (Total Scrimmage Yards) Team year-old golf cyborg named Brooks many major titles as Spieth and is Ryder Cup in September. “I never ranked 23rd for the tournament in NYG Koepka, who methodically and just one shy of McIlroy’s total. would have foreseen that a year strokes gained putting. Ron Dayne (2,015 yards), Tiki Barber (5,151 yards) (2000- with scant evidence of human He’s two short of tying Phil Mick- ago,” Woods said. Koepka’s 72-hole total score of 2002) emotion held on to his lead and elson. Somehow, he has done all Bellerive may be a forgettable 264 set a PGA Championship re- Mike Alstott (1,469 yards), TB (2000- won the PGA Championship on this while winning only one regu- course as major hosts go, but the cord. It came just months after a Warrick Dunn (2,559 yards) 2001) ATL Sunday at Bellerive Country Club. lar PGA Tour event in his life. crowds were as large and ener- wrist injury forced him to miss the T.J. Duckett (2,408 yards), (2002- And it highlighted the competitive On the 18th green, Koepka re- getic as most golfers will ever see. Masters. Warrick Dunn (5,348 yards) 2005) reality Woods faces as he contin- acted with his characteristic jubi- “There were no negative com- “When I look at what I’ve done Le’Ron McClain (1,025 yards), BAL ues a career renaissance at the age lation, which is to say he removed ments, no one was jeering, no one in the past two months, it’s incred- Ray Rice (727 yards) (2008) of 42. his ball from the hole, briefly was making snide remarks, every- ible,” he said. “Looking where I LenDale White (789 yards), TEN There are simply many more tipped his cap and walked away. one was just very positive,” Woods was, sitting on my couch watching Chris Johnson (1,488 yards) (2008) players capable of beating him To clear up any possible confusion, said. “They’re excited, yeah. They NYG the Masters, to think I would do Brandon Jacobs (2,600 yards), (2009- nowthantherewere10yearsago, Koepka said later, “It was enjoy- sometimes pick sides, yes. But this? I would have laughed at you Ahmad Bradshaw (3,460 yards) 2011) when he last won a major. In a able.” they were respectful.” and told you there was no way, no Source: Pro-Football-Reference MARK HUMPHREY/ASSOCIATED PRESS field of 156, all it takes is one. Woods, meanwhile, pumped his Koepka is the latest proof of the chance.”

Weather TheWSJDailyCrossword| Edited by Mike Shenk Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day. Edmontondt 50s <0 1234 56789 10111213 3 Part of A.D. 33 Smokes, slangily

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The five theme answers each come from a different language: Minneapolis 92 71 s 84 66 t Brussels 70 60 t 74 59 pc Tokyo 88 79 t 87 79 pc initially TV camera 2 Sudden seizure Nashville 91 66 pc 93 69 pc Buenos Aires 65 49 pc 60 39 s Toronto 8266pc8568pc French (ROMAN À CLEF), Afrikaans (ROOIBOS), New Orleans 92 75 sh 92 75 pc Dubai 103 91 s 105 92 s Vancouver 79 62 s 81 64 s 25 Hands over 51 ___ vous plaît of power Russian (PERESTROIKA), Sanskrit (MANDALA)

New York City 81 73 t 83 70 pc Dublin 69 55 c 69 59 sh Warsaw 85 65 s 79 60 t s and Italian (TERRA COTTA). The first letters of Oklahoma City 76 68 r 82 70 r Edinburgh 63 53 sh 66 56 sh Zurich 77 57 r 75 55 pc Solve this puzzle online and discuss it at WSJ.com/Puzzles. these languages spell the contest answer. THE WALL STREET JOURNAL. Monday, August 13, 2018 | A15 OPINION

Warner’s Plan to Ruin the Internet BOOKSHELF |BY Philip Delves Broughton The March Virginia Sen. ing the safety and security of Communications Decency Act platforms to determine origins Mark Warner at-risk individuals), and dan- provides immunity to the Fa- of posts, requiring disclosure of made millions gerous power grabs (updating cebooks, Googles and Twitters political ads, and onerous infor- in the murky Section 230 of the Communi- of the world with one simple mation fiduciary rules would all Of Macron world of gov- cations Decency Act). If even a sentence: “No provider or create a new internet paradigm. ernment-is- handful of these proposals be- user of an interactive com- Get ready for universal ID and INSIDE sued cellular come law, faceless bureaucrats puter service shall be treated real identities for all online VIEW licensing. He would control the internet in- as the publisher or speaker of clicks. User trust for media Revolution Française By Andy parlayed his stead of energetic entrepre- any information provided by platforms is fought for and By Sophie Pedder Kessler riches into a neurs. No one would win under another information content earned over years. Americans governorship this new internet. And compli- provider.” This allows plat- don’t want politicians’ blessings (Bloomsbury, 297 pages, $28) and U.S. Sen- ance costs would be so mas- forms to host almost any- to determine trusted content, ate seat. Today, from his perch sive that no new startups thing, as well as block content lest the U.S. end up with the he presidency of France’s Fifth Republic was tailored as vice chairman of the Senate would emerge. based on community stan- BBC—or worse, Pravda. T for Charles de Gaulle. Subsequent presidents have Intelligence Committee, Mr. Mr. Warner appears to have dards, without being sued. Mr. Warner has flexed his tried to alter it to their own personalities, with varying Warner has produced a 20- a John Kerry-like admiration congressional muscles and degrees of success—the jacket billows out, the pants sag point plan to take on Face- for the power of European made a point. Now he can go around the knees. But when Emmanuel Macron burst from book, Google and other tech Union regulators. Europe’s The senator has 20 away. China’s industrial pol- political obscurity and into office in 2017, he seemed to giants with “potentially insu- stringent General Data Protec- points. Even Woodrow icy and Europe’s GDPR are throw out de Gaulle’s old threads and replace them with his perable competitive advan- tion Regulation was one of the recipes for failure against our own slim-cut navy suit, the uniform of France’s young tages over new entrants.” Insu- biggest power grabs in recent Wilson didn’t need relatively unfettered free- professional class. perable! Of course most of his history and has lighted a fire more than 14. market approach. Facebook’s In the span of one astonishing year, from 2016 to 2017, Mr. proposals would end up lock- under U.S. legislators hoping dropping $120 billion within a Macron created his own political party, La République en ing the big guys in place while to emulate it. It would be a week of Apple’s hitting $1 Marche, and took out his rivals on the left and the right. He freezing innovation. huge mistake. GDPR almost as- trillion in market value show out-campaigned and raised more money than the stagnant No matter. The shallow- sures that no new innovations Mr. Warner proposes to the power of markets to major parties. He canvassed voters door to door, a technique analysis pundit class jubilated. will come out of Europe. change all that and “make squeeze failure and invigorate that may be standard in many countries but is an act of Mr. Warner and Democrats And the Continent is already platforms liable for state-law innovation. scandalous populism in could “crack down on Big feeble—of the top 100 global torts.” Specifically, “a revision New ideas come from new France. And he used digital Tech,” “tame social media,” technology companies, only 13 to Section 230 could provide insurgents. Google didn’t spin databases to identify potential and “knock Silicon Valley into are in Europe. Bet you can’t the ability for users who have out of CBS. Amazon didn’t voters, something Paris’s shape.” Woo-hoo. The cheer- name three. Heck, half are local successfully proved that shar- simmer inside Sears. iPhones political barons considered too leaders’ only complaint is the consulting companies that ing of particular content by weren’t incubated at IBM. Why outrageously modern. On the lack of a 21st proposal: break- shouldn’t even count. Why set another user constitutes a dig- handicap ingenuity? Warner- night of his election, Mr. ing up the tech giants. Still, up a company in Europe when nitary tort.” I can imagine like policies only stagnate in- Macron was 39 years old. Mr. Warner wants to show that the rules are so bent toward campaign contribution manna novation while the future hap- Sophie Pedder, the Economist’s techland has gotten too big for excess expense and certain fail- and long lines to file class-ac- pens elsewhere, like China. Paris bureau chief, has followed its breeches and that the cen- ure? An American GDPR would tion suits in the plaintiff para- That’s dangerous. Mr. Macron since 2012, when he ter of power radiates from the turn the U.S. into Europe, mak- dise known as the Eastern Dis- Mr. Warner’s bashing of was appointed economic adviser to Hill—not the Valley. But he for- ing America’s technology in- trict of Texas. But no one technology may seem populist, then-President François Hollande. gets that there’s one market to dustry french toast. But that’s would ever create an online but unlike hating the phone Ms. Pedder tracked Mr. Macron rule them all. one of Mr. Warner’s goals. platform again. company—one ringy dingy, two through his time as minister of Good luck getting through Consider the sop to law- Then there’s the loss of ano- ringy dingy—the posting ma- economy and finance all the way to the Mr. Warner’s 23-page report. yers. One of the magical char- nymity. About half of Mr. War- jority are happy using Face- Élysée Palace, watching him apply his rare It’s filled with impossible-to- acteristics of the online world ner’s proposals could end book and Twitter, warts and all. intellect and enormous energy to the challenge of implement mandates (identify is that anyone can post any- namelessness on the internet as Politicians beware: You break achieving power and now modernizing France. He emerges bots), silly bromides (address- thing. Section 230 of the it’s understood today. Forcing the internet, you own it. from her account as a most unusual character, but perhaps the man his country needs. Mr. Macron shares many political parallels with Donald Trump, who was elected the year before, though the two Canada Backtracks on a Carbon Tax men are wildly different. Mr. Macron is highly educated and cultured. He quotes Molière and Hegel in his speeches, and Canadian Canada’s ability to attract Canada president and CEO depressed prices for Canadian plays Chopin to relax. At summits, he takes his own notes in Prime Minis- capital suffered a setback Dave McKay described the heavy crude, creating a drag blue felt-tip pen. He is a devotee of the philosopher Paul ter Justin when oil prices fell hard in competitiveness problem be- on growth, the authors show. Ricœur and embraces political and intellectual contradiction, Trudeau’s Lib- 2015. Under Mr. Trudeau, who hind what he called “signifi- Energy company Kinder Mor- peppering his conversations with the phrase en même temps eral govern- took office in November of cant” capital flight and called gan recently sold its assets in (“at the same time”) as he flicks between counterarguments. ment an- that year, it hasn’t caught up. on the government to address the Trans Mountain pipeline But the problems he inherited will resonate with anyone who AMERICAS nounced last In an April 13 blog post, Jason it. “If we don’t keep the capi- to the Canadian government has studied Mr. Trump’s ascent: the gulf between the By Mary month it will Clemens and Niels Veldhuis of tal here, we can’t keep the because of continuing opposi- country’s modern, progressive cities and the smaller towns Anastasia reduce a car- the Vancouver-based Fraser people here—and these tion to its completion by Brit- and countryside left behind; the social and economic O’Grady bon tax on in- Institute noted that Canadian changes are important to ish Columbia and others. abandonment of the misère blanche—the poor whites. dustry that is foreign direct investment bring human capital and fi- Elsewhere in Canada there Postwar France experienced les trente glorieuses—three settogointo amounted to C$31.5 billion in nancial capital together in one has been aggressive pushback decades of glorious growth. But that was a long time ago, effect next year. The reason 2017, down 56% from C$71.5 place,” he said. against the federal carbon tax. and France has been hobbling along ever since. “In 2002 for the backtrack has to do billion in 2013. The authors Ontario, under new political France and Germany shared comparable levels of GDP per with climate change, but not added: “Since peaking in the management since June, and head and unemployment,” Ms. Pedder writes. “Fifteen years the kind associated with fourth quarter of 2014, total Justin Trudeau’s Saskatchewan have gone to later, Germans were 17 per cent richer on average and their global warming. business investment adjusted Liberals try to stop a court to challenge the federal jobless rate was less than half that in France. The last time a Mr. Trudeau is reacting to for inflation—excluding resi- government’s authority to im- French government balanced its budget was in 1974.” shifting political winds stirred dential housing—is down al- stampede of capital pose the tax. Prince Edward by Canada’s investment cli- most 17.0 percent. Private-sec- out of the country. Island, New Brunswick and mate, which has turned stone tor investment in factories Manitoba have their own pro- In the span of one year, Macron created his own cold. He faces an election in and other structures is down posals to price carbon and are political party, took out his rivals on the left October 2019, and Liberals will 23.3 percent. And investment all on record against a federal have trouble winning unless in intellectual property is The new carbon tax is only take. and the right, and became president of France. investors warm to Canada as a down 13.3 percent.” one of the green policies hurt- In Alberta, where the econ- destination for capital again. The causes of this capital ing Canada’s competitiveness. omy depends heavily on The question is whether the strike seem to be taxes and Ontario has long been the na- pumping oil, the United Con- Sylvain Fort, Mr. Macron’s speechwriter, tells Ms. Pedder scaling back of the carbon tax regulation, as more than one tion’s manufacturing hub. But servative Party’s Jason Ken- that “the history of France is one of rupture. France is a is too little, too late. business leader has noted. in 2005 the province began ney is the favorite to win next revolutionary country and only advances by breaking with The initial carbon-tax pro- Suncor Energy CEO Steve Wil- phasing out the use of coal for year’s election for provincial the past.” Mr. Macron sees his mission as forcing a new posal, which takes effect next liams said in February that his electricity generation, and in premier. He has promised to political rupture to follow the economic break caused by year, promised to levy compa- company is “having to look at 2009 it passed the Green En- oppose the Trudeau tax. He technology. In 2015 he told Ms. Pedder that France needed to nies on 30% of their emis- Canada quite hard. The cumu- ergy Act, designed to force in- says he will keep a provincial “build a form of neo-progressivism, structured around the sions at 10 Canadian dollars lative impact of regulation and dustry and consumers into re- carbon tax but limit it to “ma- idea of individual progress for all, in a way that combines (US$7.66) a metric ton, rising higher taxation than other ju- newable energy. The net effect jor emitters.” agility with security....Wehavetorethink the framework, to C$50 a metric ton in 2022. risdictions is making Canada a has been skyrocketing elec- Canadian Environment Min- and undertake an ideological renovation. It will happen. We The revision now sets the tax- more difficult jurisdiction to tricity prices in the province ister Catherine McKenna said need to show the way.” able emissions at 20%. The allocate capital in.” and declining manufacturing last week that the Trudeau The existing political parties and their leaders, Mr. Macron Journal’s Paul Vieira reported For prospective investors, output. government wants “to have felt, hadn’t a clue. They were still fighting the ideological from Ottawa on Aug. 1 that the business climate in Can- A May 8 paper by Fraser the most energy efficient, battles of the 1970s and ’80s as the economy around them “government officials are pre- ada is naturally compared analysts Elmira Aliakbari and smart industries here that cre- crumbled. Mr. Macron had watched as the approval ratings of pared to tinker further with with that of the U.S. Recent Ashley Stedman titled “The ate good jobs, at the same his erstwhile patron, Mr. Hollande, fell into the low single the carbon-pricing regime U.S. tax cuts, including accel- Cost of Pipeline Constraints in time do what we need to do to digits. So Mr. Macron decided to form his own party, should domestic industrial erated depreciation, and Pres- Canada” blames “environmen- tackle emissions.” But Liberals assembling a young team, working in secret out in the sectors bring evidence dem- ident Trump’s deregulation tal and regulatory impedi- may soon find out that as one Parisian suburbs. They came up with the name “En Marche,” onstrating ‘[heightened] com- push, are increasing the pres- ments as well as political op- of the world’s foremost energy which reflected the candidate’s initials and the most rousing petitiveness risks’ due to de- sure on Canada to step up. In position” for delays in the producers, Canada can’t have line of “La Marseillaise”: “Marchons, marchons.” velopments in the global an April interview with the expansion of the nation’s pipe- it both ways. “The decision to launch En Marche set Macron on a marketplace.” Canadian Press, Royal Bank of line infrastructure. This has Write to O’[email protected]. collision course with the Socialist barons, marginalized him from all the power networks on the left, and deprived him of any party funds,” Ms. Pedder writes. At the time Mr. Macron was “an unconvincing public speaker . . . and seemed to lack Consequences for Unethical Prosecutors the common touch. His chances of mounting a presidential campaign seemed utterly remote.” By John Grisham What happens when a pros- 381 cases because prosecu- irreparable damage to the in- Yet as he ramped up his operations, voters responded. ecutor is caught? Rarely any- tors either presented false nocent and their loved ones, They didn’t seem to mind that he had graduated from the he vast majority of pros- thing. Civil lawsuits by the evidence or concealed excul- diminish public trust in the École Nationale d’Administration, the famed finishing school T ecutors are honest, ethi- wrongly convicted are next to patory information. Sixty- system, and cost taxpayers for France’s political and business elite, or that he had been cal professionals who impossible because the Su- seven of those defendants had millions of dollars. a banker at Rothschild & Cie. He was different and credible play by the rules. During my preme Court ruled in Imbler v. been sentenced to death—yet New York state is on the as a politician who might actually change France. He won as 10-year career as a criminal- Pachtman (1976) that prosecu- not even one state’s disciplin- precipice of becoming the na- much support from public-sector workers as his opponent on defense lawyer, I dealt with tors are immune from suit in ary agency penalized any of tional leader in holding prose- the hard left. prosecutors daily and never virtually all cases, no matter the prosecutors. A more re- cutors accountable by estab- France’s natural leftists were convinced when he said knew one to step out of how egregious their actions. cent survey conducted by the lishing a Commission on France had to act. “What our country needs,” Mr. Macron bounds. Innocence Project looked at Prosecutorial Conduct, which said in a 2015 speech, “is to rediscover a taste for the future, But the great flood of exon- five diverse states over a would have the power to in- rather than a morbid fascination for an uncertain past.” erations have revealed the They can’t be sued. five-year period (2004-08) vestigate allegations and rec- The president has had a tumultuous first year in office. glaring truth that some prose- New York lawmakers and identified 660 cases in ommend or issue sanctions Though elected to change France, he has faced enormous cutors cheat and even break which courts found prosecu- against prosecutors who break obstacles. There have been rolling public-sector strikes that the law. It has been proved, re- try a new approach torial error or misconduct— the law. Republicans and Dem- brought France’s transportation system to a halt. High- peatedly, that prosecutors to a vexing problem. and only one prosecutor who ocrats in the state Legislature school students opposed to selective admission by across the U.S. have (1) con- was disciplined. came together on this issue universities blocked access to the universities during final cealed evidence that would It is sadly ironic that those because truth and fairness exams. Street protests against Mr. Macron have been smaller benefit the accused; (2) fabri- we trust to put away criminals transcend partisanship. They than demonstrations against past administrations, but they cated evidence that would con- Trial judges can impose sanc- are thoroughly unaccountable passed Senate Bill 2412, which have also become more violent and tinged with anarchy. vict the accused; (3) made tions for misconduct in some when their own unethical be- is now on Gov. Andrew There are candidates on the political extremes hoping to false statements to judges, ju- cases, but they almost never havior is discovered. Only a Cuomo’s desk. take advantage as Mr. Macron stumbles. But as Pascal Lamy, ries and defense attorneys; (4) do, and state disciplinary handful of prosecutors have Governor, this bill is a criti- the French former head of the World Trade Organization, offered perjured testimony; (5) schemes for prosecutors are faced meaningful sanctions for cal starting point for New York tells Ms. Pedder, the president’s “method is motion.” He cut sleazy deals with jailhouse generally ineffective. deliberate misconduct that led and the states that will follow seems to grasp the challenge of modern politics with a informants who will testify to A Chicago Tribune series, to the incarceration of inno- its lead. Justice requires your sophistication unmatched by most of his peers. Ms. Pedder anything in return for leni- for instance, analyzed more cent people. signature. has written a terrific first draft of a history with significance ency; (6) employed junk-sci- than 11,000 U.S. homicide The failure to regulate far beyond the borders of France. ence “experts” who mislead ju- cases involving prosecutorial prosecutorial conduct enables Mr. Grisham is a novelist rors; and (7) intimidated misconduct between 1963 and more misconduct and wrong- and a member of the Innocence Mr. Delves Broughton is the author of “The Art of the Sale: witnesses. 1999 and found reversals in ful convictions, which cause Project’s board of directors. Learning From the Masters About the Business of Life.” A16 | Monday, August 13, 2018 THE WALL STREET JOURNAL. OPINION

REVIEW & OUTLOOK LETTERS TO THE EDITOR A Lifeline for Turkey Don’t Fiddle With Minimum Wage; Dump It ike King Lear raging on the heath, Tur- to come begging to the International Monetary Rep. Terri Sewell and Jim Kessler own labor services and should have key’s Recep Tayyan Erdogan is lashing Fund (IMF). propose “A Better Minimum Wage” the right to sell them for whatever L (op-ed, Aug. 8) policy that would ad- price I agree to with a prospective out at Donald Trump, financial markets, Enter Mr. Hanke, who nearby offers the mon- just the federal minimum wage to re- employer. the almighty U.S. dollar and etary rescue known as a cur- Erdogan needs to give flect regional cost-of-living differ- If I choose to sell my labor services anyone else he can find to as- rency board. The idea is to re- ences. If cost-of-living is folded into for $2 an hour, that’s my choice. What sign blame for his country’s up a discretionary store confidence in the lira by the federal minimum wage, why not gives a legislator the right to say that currency and debt crisis. fixing the currency to a for- do the same with all federal benefit I may not? Someone should introduce monetary policy. eign-currency anchor. A coun- programs and income-tax rates? The I can volunteer to work for nothing him to economist Steve try that adopts a currency cost of living in Washington, D.C., and and won’t violate the law, but I may Hanke, who is offering the board essentially abandons surrounding suburbs is 40% to 50% not legally decide for myself to agree Turkish strongman the best lifeline available to control of discretionary monetary policy. It higher than in the Carolinas, Georgia to a rate that satisfies both me and stop the panic. adopts an exchange-rate policy by linking to a and Florida. Should a low-income my employer. This is plain wrong. DAVE GARTHOFF Turkey is confronting a run on the lira of the hard currency with more credibility. For Turkey family in Jacksonville, Fla., get as kind the world has seen many times in emerg- at the current moment, that would mean linking much federal assistance as one in Al- Stow, Ohio exandria, Va.? Should a household ing markets. A country borrows too much to to either the euro or the dollar. with $70,000 of income in the latter Suppose I am living in Manhattan spur growth in an era of low interest rates and This would be humbling for a proud man like have to pay the same federal tax rate and work remotely for a company in easily available credit. Much of that debt is in Mr. Erdogan to accept, but the irony is that link- as one in the former? Democrats are Alabama. Am I to be paid the Ala- U.S. dollars, but the cash flow to finance it is ing to the dollar would be his best protection well aware that Americans in high- bama minimum wage or that for Man- earned by local companies in local currency. By against the unpredictable policies of Mr. Trump. cost, high-tax progressive states and hattan? some estimates about half of all Turkish debt As long as Turkey has a fiat currency, Mr. cities are voting with their feet and ANNE LOWERY is owed in hard currencies. Trump can use tariffs and sanctions to fuel the moving to red states, but blue states Northport, Ala. That debt becomes much harder to finance panic. But the U.S. President doesn’t control and cities still can jack up taxes and when the local currency falls against the dollar. U.S. monetary policy. minimum wages as much as their pro- Setting a minimum wage at all de- Investors flee the local currency, inflation accel- Once confidence in Turkey’s monetary policy gressive hearts desire. termines which jobs will be available and which will not. A $15 minimum erates, and still more investors flee. Unless the is restored with a dollar or euro link, the lira A better alternative to making a bad policy a little better may be to wage eliminates job opportunities country can stop the run on its currency, a full- won’t move. Mr. Erdogan and his advisers can leave it alone and let it wither into forever—firms can’t pay people more blown debt crisis and economic contraction be- focus on fixing their other economic problems, oblivion. Blue states and cities can than the value they bring to the come likely. such as overborrowing and spending. This solu- and have picked up the slack and can firm. This varies with the strength of Mr. Erdogan is blaming Donald Trump’s tion certainly beats going to the IMF, which will prove that their way is undeniably the economy. When demand is sanctions and tariffs for the lira crisis, but the offer its patent medicine of fiscal contraction, best. strong and there are lots of custom- U.S. President was lighting a match on already and perhaps capital controls. SCOTT PIERCE ers, a restaurant worker can gener- dry tinder. The core problem is years of mone- Mr. Trump might not realize it, but a Turkish Hendersonville, N.C. ate more revenue per hour than tary mismanagement and overborrowing. The currency board would also work best for the when the economy is weak or in re- Turkish strongman wanted to win an election U.S. The President seems to be enjoying Mr. Er- The true minimum wage is zero. cession. Compensation rises and to change the constitution and consolidate his dogan’s pain so he can win the return of Ameri- And that is what someone will earn if falls, but having a fixed floor (a min- his or her labor services aren’t worth imum wage) insures that if we aren’t power, and he leaned on the central bank to can pastor Andrew Brunson, who has been un- whatever a so-called minimum-wage in the best of times, workers who keep interest rates low. He won his election but justly held in Turkey. law arbitrarily says it should be. might be hired at a lower wage like most authoritarians he thinks he can bully But Mr. Trump has a larger interest in avoid- Thus, every such law keeps some peo- won’t be hired at all, making them markets the way he does the military. ing financial contagion to other countries from ple from getting a job or earning any- rely on welfare for support and de- Mr. Erdogan is floundering for a solution. the Turkish crisis. The U.S. isn’t an economic thing. nying them the “on the job” training He wants Turks to buy lira with their gold and island and needs the world to prosper if he What’s possibly worse is that mini- that a first job provides. hard currency, but that would make more wants to maintain the 4% U.S. growth of the mum-wage laws take away individual BILL DUNKELBERG Turks poorer as the lira keeps falling. He second quarter. The world is awash in dollar liberty, freedom and rights. I own my Cape Coral, Fla. claims he won’t let interest rates rise, but the debt after a decade of quantitative easing that central bank will have little choice other than has kept interest rates artificially low, and a to raise rates to stop the panic. He also says currency crisis could quickly become America’s he won’t accept an international bailout, problem. The U.S. Treasury should also get Mr. How Best to Keep Those Wolves From the Door though unless he stops the panic he will have Hanke on the phone. Regarding Cori Petersen’s “Wolves houndsmen killed almost 1,500 Attack Wisconsin With Washington’s wolves in Minnesota, Michigan and Help” (Cross Country, July 28): The Wisconsin. Saving New Jersey, if That’s Possible Wisconsin Department of Natural Re- A 2014 Wisconsin DNR survey of sources’ (DNR) own statistics show nearly 9,000 residents, heavily f the first step to recovering from an ad- pension plans that include a modest pension that even with the continuing recov- weighted to rural areas, found that diction is admitting you have a problem, as well as a defined-contribution component. ery of the state’s wolf population, the vast majority value their wolves I the confirmed instances of wolves and don’t want to see them trophy- at least a few Democrats in New Jersey are State employees and retirees currently receive sobering up. Behold recommendations last platinum-plated health benefits with a 97% ac- preying on livestock decreased 29% hunted or trapped. The rest of us in 2016-17 from 2015-16, and devalue wolves too, according to stud- week by a bipartisan legislative commission to tuarial value. The commission recommends creased again in 2017-18. Nonlethal ies and demonstrated by the expo- scale back public-employee benefits. shifting all employees and retirees to “gold” prevention is more effective, and sci- nential growth of wildlife-watching Democratic Senate President Steve Sweeney plans with an actuarial value of 80% that are entific studies overwhelmingly dem- tourism in America. convened the legislators and economists in comparable to what the most generous private onstrate that randomly killing wolves Wisconsin’s wolves are a prime ex- February to examine changes to state spending employers offer. increases conflicts with livestock. ample of how a strong ESA is critical and taxes. Mr. Sweeney worried that the new This change alone would save taxpayers The USDA adds that wolves and all to ensuring that rare species aren’t federal limit on the deductibility of state and $587 million annually—about $140 million other native carnivores combined ac- subjected to irresponsible killing, local taxes will make it harder for Democrats more than this year’s tax increase is expected count for less than 1% of the live- threatening them with extinction. to soak the wealthy to pay for unsustainable to raise. Other recommendations include cap- stock inventory losses in the Great KITTY BLOCK promises to workers. ping unused sick and vacation leave at $7,500 Lakes region. Health problems, birth- Acting President and CEO Lo, the state’s pension and retirement at retirement and encouraging towns to share ing complications and weather are Humane Society of the United States the real culprits. Washington health benefit liability is four times the size public services. When wolves in the Great Lakes of its annual budget, and pension payments are The legislature will probably junk the rec- region lost Endangered Species Act The Fish and Wildlife Service forecast to double over the next four years. ommendations as it did those of a 2005 bene- (ESA) protections between 2012 and should consider relocating the “We want to make sure that government fits review task force chaired by none other 2014, trophy hunters, trappers and wolves to areas where they could be spending is efficient and effective,” Mr. than current Governor Phil Murphy, who at the most useful. Examples are Florida Sweeney said. time had recently retired from Goldman Sachs. and Texas where feral hogs are out Democrats recently raised corporate and in- Mr. Murphy, who has since become a de facto Balancing Gourmet Ecstasy of control, damaging property and dividual income taxes—again—so it’s no sur- spokesman for the state’s public unions, sniffed With Humankind’s Needs the environment, polluting streams prise that the commission punted on serious at Mr. Sweeney’s report this week. and ponds and causing erosion. tax reforms. But the commission’s recommen- But Mr. Sweeney is spoiling for a debate, and I was struck by the juxtaposition of There are at least 500,000 pigs that dations on pension and health benefits could the Assembly majority leader and budget chair- the story about Paul Grinberg’s quest would be a challenge to the wolves. to eat at the world’s top 100 restau- In Texas, they even hunt feral hogs save taxpayers money, though still not com- woman signed onto the report. “We’re in a cri- rants, “A Gourmet’s Quest: 99 Restau- by helicopter. In most states it is mensurate to the problem. sis right now, it’s here, it’s now,” Mr. Sweeney rants Down, One to Go” (page one, open season on them, and the wolves One idea is to shift new workers to hybrid declared. Alas, Mr. Murphy is still in denial. July 31), which was followed on the would help. next page by Clare Ansberry’s article PETER J. BROCK about survivors coping with cata- Sun City Center, Fla. strophic loss, “After Tragedy, How The Repression of the Uighurs Survivors Cope” (Life & Arts). hina’s ethnic Uighurs are disappear- monitoring software on their phones. A region- There is nothing wrong with en- Electric-Vehicle Owners Get ing. Over the last two years and with wide DNA database is under construction using joying a fine meal at a top-notch Unfair Pass on Road Taxes C restaurant. But it strikes me that little world attention, the authorities blood samples taken during mandatory “health there is something morally askew “Big Oil Reinvents Engines to Sur- have detained hundreds of screening.” China’s mistreatment when we extol the difficulties and vive” (Business & Finance, July 16) thousands of the Muslim mi- The authorities say they challenges, and the all-consuming mentions that some utilities are nority in the country’s north- of the Muslim minority are cracking down on Islamic obsession in the hunt for an out- pushing regulators for approval to west, leaving family mem- fundamentalism. Some small- standing dining experience. The ex- charge all electricity customers for bers to wonder where they deserves world notice. scale terrorist attacks may traordinary efforts and utter self-ab- the cost of installing car-charging are and why they were tar- have been inspired by Islamic sorption required to satisfy one’s stations, instead of just station users geted. A network of intern- State or al Qaeda, and the Syr- own base desires stands in stark themselves. An even bigger electric- ment camps could hold hundreds of thou- ian government claimed that 5,000 Uighurs contrast to the selflessness and de- car subsidy goes unmentioned. When sands, according to Adrian Zenz, a scholar fought with Islamic State. votion required to help those suffer- are electric-car drivers going to be who has studied the campaign, but officials But Uighurs in general adhere to a moderate ing from the devastating human asked or forced to help pay for the deny the camps exist. form of Islam and have long resisted radicaliza- grief and tragedy described in Ms. cost of the roads they drive on? Ansberry’s piece. I wonder what im- Funds from state gas taxes are static Information is now trickling out. A handful tion. If that is changing, it is due in large part pact on society we could see if those or declining, giving us more and of prisoners released from the camps have fled to the government’s punishment of any expres- with the means would focus more on more potholes. Why do electric cars abroad and described the mistreatment. Guards sion of Islamic faith. In recent years the author- the needs of others. get a pass? subject the detainees to re-education sessions ities have forbidden Uighurs to fast during MANNY SCHNAIDMAN WAYNE SELTZER urging them to renounce Islam and love the Ramadan, grow beards or give their children Is- Teaneck, N.J. Las Vegas Communist Party. Resisters are abused or held lamic names. Officials search their homes for in solitary confinement. religious materials, and many mosques have Many of the detained had been abroad or been demolished. Grandchildren as a Reward Pepper ... have relatives who are. Others seem to be Florida Senator Marco Rubio, who wrote For Having Patiently Served And Salt picked at random. Some are released after a few about the crackdown on these pages Friday, is weeks, while others are held indefinitely. The one of several lawmakers calling for the U.S. to Regarding Allan Ripp’s “The Singu- THE WALL STREET JOURNAL lar Joy of Grandchildren” (op-ed, arbitrary nature of the detention increases the sanction the officials responsible. Vice Presi- Aug. 1): As a 55-year-old grandfather terror. The prominent Uighur ethnographer Ra- dent Mike Pence has condemned China’s treat- of six (with another on the way), I am hile Dawut, who preaches tolerance and isn’t in- ment of Muslims. On Friday a United Nations reminded of the wisdom of my late volved in politics, disappeared last December panel on racial discrimination reviewed evi- father, who told me that grandchil- on a trip to Beijing from Urumqi and hasn’t dence that China’s human-rights abuses are vio- dren are the reward for not killing been heard from. lating international covenants. your kids. These extreme measures are part of a wider The Uighurs’ plight has wider significance. JEFFREY E. WEISS program to control the northwest region of Xin- China’s supreme leader Xi Jinping is using pro- Los Angeles jiang where Uighurs and the smaller Kazakh mi- paganda campaigns, surveillance and detention nority make up more than half of the popula- to an extent China hasn’t seen since Mao Ze- Letters intended for publication should tion. Last year the region’s security budget dong. Chinese police are pioneering new tech- be addressed to: The Editor, 1211 Avenue of the Americas, New York, NY 10036, nearly doubled and 30,000 new police officers niques and surveillance technology in Xinjiang or emailed to [email protected]. Please were deployed to urban areas. and deploying them across the country. The U.S. include your city and state. All letters The authorities have also installed face-rec- has many important issues with Beijing, but the are subject to editing, and unpublished ognition cameras in public places. Residents systematic repression of the Uighurs reveals letters can be neither acknowledged nor “It’s a long way to Enlightenment. returned. must install tracking devices in their cars and the nature of Xi Jinping’s government. You might need some cash.” THE WALL STREET JOURNAL. Monday, August 13, 2018 | A17 OPINION Erdogan Can Save the Turkish Lira NDAs Can Help By Steve H. Hanke in discretionary monetary policies. In an October 1991 article for these he Turkish lira floats, but pages, I argued that Argentina Harassment not on a sea of tranquillity. should abolish its “central bank” Since Recep Tayyip Erdo- and replace it with a currency T gan became president in board. Victims August 2014, the lira has Turkey can look to an immediate shed 66% of its value against the U.S. neighbor for a currency-board suc- dollar. Since May 14, when Mr. Erdo- cess story. In 1997, Bulgaria was By Stanley D. Bernstein gan announced he was taking Tur- gripped by hyperinflation. The lev And Stephanie M. Beige key’s monetary reins into his own had collapsed, and the monthly in- hands, the lira has plunged 31%. flation rate had soared to 242%. As he latest #MeToo exposé, in- Turkey’s annual inflation rate the president’s adviser, I designed a T volving CBS head Leslie reached 85% last Friday by my mea- currency board that was installed on Moonves, has drawn new at- surements, which use high-fre- July 1. With that, the lev became a tention to the use of nondisclosure quency data and account for price clone of the deutsche mark. Infla- agreements in sexual-harassment changes in all commodities, services tion was crushed immediately, lev cases. Mr. Moonves denies the alle- and assets. This is nothing new. In- interest rates plunged, a hard bud- gations detailed in a New Yorker flation has ravaged Turkey for de- get constraint was put on Bulgaria’s story, but several former employees

cades. The average annual inflation ASSOCIATED PRESS fisc, and the economy boomed. of CBS News allege that the net- rates for the 1970s, 1980s, 1990s and The Turkish president addresses supporters in Rize, his hometown, Saturday. Since the installation of the cur- work has a history of concealing ha- 2000s were 22.4%, 49.6%, 76.7%, and rency board, fiscal deficits have rassment. They claim Jeff Fager, ex- 22.3%, respectively. By design, a currency board has backed by pounds sterling and con- been tightly controlled. Bulgaria’s ecutive producer of “60 Minutes” Those horrendous numbers mask no discretionary monetary powers vertible into pounds at a fixed rate. fiscal discipline and debt reduction and a former CBS News chairman, the periodic lira routs. In 1994, and cannot issue money on its own The father of the British ruble was have made it a star performer in the created a culture that protected ha- 2000-01 and the past few months, credit. It has an exchange-rate pol- John Maynard Keynes, a British Trea- European Union. rassers and retaliated against vic- the lira has been torn to shreds. On icy—the exchange rate is fixed—but sury official at the time. To make the Turkish lira as good tims. Reporters have uncovered nu- May 28, when the lira traded at 4.58 no monetary policy. Its operations Despite the civil war, the British as gold—or some other anchor cur- merous out-of-court settlements of to the dollar, I predicted a collapse are passive and automatic. The sole ruble never deviated from its fixed rency of choice, meaning the euro or sexual-harassment claims against to 7. Friday’s close was 6.43. function of a currency board is to exchange rate with the pound. In U.S. dollar—Mr. Erdogan should an- Charlie Rose and others, all with ac- exchange the domestic currency it contrast to other Russian rubles, the nounce today that Turkey will install companying NDAs—agreements issues for an anchor currency at a British ruble was a reliable store of acurrencyboardin30days.Aspart that the settling party will not pub- He should form a currency fixed rate. Consequently, the quan- value. Naturally, the British ruble of that announcement, he should licly disclose the allegations or the board—a monetary-reform tity of domestic currency in circula- drove other rubles out of circula- state that until the currency board settlement. tion is determined entirely by mar- tion. Unfortunately, its life was is installed, the lira monetary base measure that’s been tried ket forces, namely the demand for brief: The National Emission Caisse will be frozen and the lira will be 70 times and never failed. domestic currency. Since the do- ceased operation in 1920 after allied permitted to freely float. At the end Those who speak up can mestic money is a clone of its an- troops withdrew from Russia. of the 30-day period, a fair exchange suffer reputational harm. chor, a currency-board country is Contrary to popular belief, Ar- rate will be chosen to lock in the lira part of an anchor country’s unified gentina’s monetary regime—which to its new anchor. That is the proce- They don’t want others As fantastic as it may sound, par- currency area. was installed in April 1991 and col- dure we employed in Bulgaria, and it discussing what happened. ticularly for Turks, there is a way to A currency board requires no pre- lapsed in December 2001—was not worked like a charm. save the lira from its death spiral conditions and can be installed rap- a currency board but an unusual ar- The effect of such an announce- and crush inflation immediately. idly. Government finances, state- rangement called a “convertibility ment would be dramatic. In 1998 Turkey should adopt a currency owned enterprises and trade need system.” Like a currency board, President Suharto appointed me his In these instances, NDAs were board. A currency board issues not be reformed before a currency convertibility maintained a fixed special counselor and announced that used to silence victims and protect notes and coins convertible on de- board can issue money. exchange rate between the peso he was considering a currency board accused harassers. Thus, some favor mand into a foreign anchor currency Currency boards have existed in and its anchor currency, the U.S. for Indonesia. That day the rupiah eliminating NDAs on the ground that at a fixed rate of exchange. It is re- some 70 countries. The first was in- dollar. That nominal anchor smoth- appreciated 28% against the green- exposing the details of past settle- quired to hold anchor-currency re- stalled in the British Indian Ocean ered hyperinflation. back. An announcement by Mr. Erdo- ments will prevent employers from serves equal to 100% of its monetary colony of Mauritius in 1849. No cur- But the convertibility system’s gan would similarly send the lira protecting serial harassers, warn po- liabilities, and it generates profits rency board has failed. This perfect deviations from currency-board or- soaring and inflation plunging. tential future victims of harassers’ from the difference between the in- record includes the National Emission thodoxy allowed it to behave more past conduct, and empower victims terest it earns on its reserve assets Caisse, established in northern Russia like a central bank than a true cur- Mr. Hanke is a professor of ap- to come forward who may otherwise and the expense of maintaining its in 1918 during Russia’s civil war. The rency board. These deviations were plied economics at the Johns Hop- feel isolated and powerless. liabilities. Caisse issued “British ruble” notes, significant and allowed it to engage kins University. But we must be careful not to ignore the victim who doesn’t want the details of her claim made public. NDAs can play an important role in The Phony Numbers Behind California’s Solar Mandate protecting victims, without allowing harassers to continue unchecked. By Steven Sexton maintain its net energy-metering optimism about solar panel costs, where transmission constraints Victims of sexual harassment fear policy, which effectively subsidizes the policy’s public benefits are only make supply relatively scarce—not they have a lot to lose by coming alifornia’s energy regulators electricity produced by a rooftop so- half as large. on every roof in California. forward. Once a woman reports C effectively cooked the books to lar panel. Residential solar genera- Were state regulators interested in Though the solar mandate is un- workplace harassment, her job envi- justify their recent command tors are paid as much as eight times science-based policy to increase solar likely to deliver huge savings to con- ronment often changes, becoming that all homes built in the Golden what wholesale generators receive, generation, they would acknowledge sumers, it certainly will raise the uncomfortable at best and unbear- State after 2020 be equipped with according to a grid operator’s analy- that economies of scale allow large- price of new and old homes. This able at worst. Victims who speak up solar panels. Far from a boon to sis of publicly available data. Dozens scale solar farms to generate twice couldn’t come at a worse time: Ris- are often labeled “troublemakers” or homeowners, the costs to builders the electricity of the solar mandate ing housing costs are putting the “sensitive,” and suffer real reputa- and home buyers will likely far ex- at the same cost. Inefficient but sub- dream of homeownership further tional harm: Be careful what you say ceed the benefits to the state. A state-hired consultant sidized rooftop solar limits the mar- out of reach of low- and middle-in- around her, that’s the one who re- The California Energy Commis- lowballed the costs and ket for utility-scale solar by depress- come Californians. Sacramento poli- ported Joe. Not surprisingly, many sion, which approved the rule as ing the wholesale electricity prices ticians accuse the Trump adminis- victims, especially highly paid pro- part of new energy-efficiency regula- assumed massive subsidies big generators receive. Even commu- tration of ignoring science and fessionals at large institutions, sim- tions, didn’t conduct an objective, in estimating benefits. nity arrays atop schools and parking forgoing expert, independent review ply want to move on. They don’t independent investigation of the pol- lots would be less costly than the in pursuing its environmental and want to discuss the harassment icy’s effects. Instead it relied on eco- commission’s mandate. energy agenda. They should look in again—and, most important, don’t nomic analysis from the consultancy Regulators should tailor policy to the mirror. want others discussing it. that proposed the policy, Energy and of states are rethinking these gener- reflect routine variation in the value If the goal is to encourage women Environmental Economics Inc. Its ous subsidies, paid by ratepayers, of solar generation across the state’s Mr. Sexton is an assistant profes- to come forward and report harass- study concluded that home buyers because they shift the costs of main- congested electricity grid. Solar pan- sor of public policy and economics at ment, organizational leaders should get a 100% investment return—pay- taining the electric grid to relatively els are most effective when installed Duke University. expand confidentiality to protect vic- ing $40 more in monthly mortgage poor nonsolar households. The Cali- tims early in the internal complaint costs but saving $80 a month on fornia Public Utilities Commission is process. By helping ensure that the electricity. If it’s such a good deal, set to revisit this regressive policy in details of the harassment don’t be- why aren’t home buyers clamoring 2019—before the solar mandate A Lost Love and an come the subject of water-cooler for more panels already? Most new takes effect. gossip, NDAs can encourage women homes aren’t built with solar panels If the subsidies are removed, so- to report without fear of backlash. today, even though the state is satu- lar adopters would be in the red. ObamaCare Alternative Victims should be able to report sex- rated by solar marketing. This is why the electricity generated ual harassment internally through The Energy Commission is too op- by the solar mandate should be val- By Carolyn Bolton Health and Human Services Sec- the proper channels and, with the aid timistic about the cost of panels. It ued at the cost of its replacement retary Alex Azar announced a final- of a carefully drafted NDA from the assumes the cost was $2.93 a watt in from the grid—not at the subsidized he man I intended to spend ized rule change to ObamaCare that outset, not only receive an appropri- 2016 and will decline 17% by 2020. rate households receive. In a presen- T the rest of my life with died once again makes short-term, cata- ate remedy, but also be protected Yet comprehensive analysis of panel tation at the National Bureau of Eco- in a plane crash in 2010. It strophic health-insurance plans from ridicule and retaliation. costs by the Lawrence Berkeley Na- nomic Research earlier this year, I was devastating, so much so that I available—a revision that will bring How, then, if the conduct remains tional Laboratory estimated the av- estimated the value of rooftop gen- lost interest in my job, as the point formerly marginalized Americans confidential, can you prevent harass- erage cost of installed panels to be eration for each of California’s ZIP of it was little more than paying like me back into the health-insurers from continuing their illegal con- $4.50 a watt for the 2- to 4-kilowatt Codes using one year of price data down debt and saving for a future ance fold. duct, especially if they move on to systems the policy mandates. That is from the grid operator. The average that wasn’t meant to be. I quit the The rule change, effective in Oc- another employer? $4,000 more than regulators claim electricity value of the solar man- job and was offered Cobra, which tober, acknowledges that people— This newspaper recently re- for a 2.6-kilowatt model system in date’s model system is $12.50 a would have let me retain my health especially the young and families in ported on a high-powered attorney the central part of the state, where month, far less than the $80 benefit insurance up to 18 months after my special circumstances—don’t want a with a long history of complaints 20% of new homes are expected to the regulators claim. resignation. one-size-fits-all health-insurance against him who was able to move be built. Berkeley Lab further esti- Moreover, using statistics to esti- But at more than $500 a month, “market” that’s clunkier than basic from one powerful law firm to an- mates that costs fell a mere 1% be- mate which power plants would re- Cobra was more than I could af- cable. It will be a boon to the insur- other without any warning about tween 2015 and 2016, far short of spond to additional solar generation, ford. I had $1,500 to my name, and ance industry and the otherwise his history. The current litigation the 4% average annual decline the my colleagues and I also estimated it had to last for as many months environment discourages employers regulators predict. the total value of the pollution as possible while I grieved and fig- from being truthful about past mis- Now consider the alleged savings avoided by the mandate’s model sys- ured out what to do with my life A short-term catastrophic deeds, lest they find themselves at on energy bills. The commission’s tem to be only $6 a month. Even ac- without Joshua. A newly leased se- policy helped me through a litigation risk from the harassing analysis assumes California will cepting the Energy Commission’s dan, car insurance and student-loan former employee. Legislation is payments left little room in my difficult time in my life. critical to immunize past employers budget for health insurance. from the consequences of giving full My saving grace was that, apart and truthful information to poten- PUBLISHED SINCE 1889 BY DOW JONES & COMPANY from my bereavement, I was a sidelined consumers it serves, as tial employers. Absent legislation, Rupert Murdoch Robert Thomson healthy 22-year-old who—aside people will once again be allowed potential employers should insist Executive Chairman, News Corp Chief Executive Officer, News Corp from dental cleanings and annual to purchase and renew yearlong that every job applicant grant ac- Matt Murray William Lewis Editor in Chief Chief Executive Officer and Publisher physicals—didn’t frequent the doc- catastrophic plans that were capped cess to his entire personnel file, for- tor’s office. But the possibility of at three months when ObamaCare going the possibility of litigation or Karen Miller Pensiero, Managing Editor DOW JONES MANAGEMENT: Mark Musgrave, Chief People Officer; something happening to me while was implemented. retribution. Jason Anders, Chief News Editor; Thorold Barker, Edward Roussel, Chief Innovation Officer; Europe; Elena Cherney, Coverage Planning; I was between jobs weighed heav- This overdue rule change will Confidentiality is a critical tool Anna Sedgley, Chief Operating Officer Andrew Dowell, Asia; Neal Lipschutz, Standards; ily on my conscience, as I didn’t meet the needs of those who find that protects victims as well as the Meg Marco, Digital Content Strategy; OPERATING EXECUTIVES: want to become a burden to my themselves in trying situations like wrongly accused. Instead of banning Alex Martin, Writing; Michael W. Miller, Features Ramin Beheshti, Product & Technology; & Weekend; Shazna Nessa, Visuals; Kenneth Breen, Commercial; family. mine. In an era when there are confidentiality, businesses and cor- Rajiv Pant, Product & Technology; Ann Podd, News Jason P. Conti, General Counsel; At the time, ObamaCare was more than 60 Ben & Jerry’s ice- porations must change workplace Production; Matthew Rose, Enterprise; Tracy Corrigan, Chief Strategy Officer; newly enacted and hadn’t rolled out cream flavors, customizable soda culture. The powerful men exposed Michael Siconolfi, Investigations; Frank Filippo, Print Products & Services; Nikki Waller, Live Journalism; Steve Grycuk, Customer Service; in full. I was able to purchase a machines programmed to behave by #MeToo were able to continue Stephen Wisnefski, Professional News; Kristin Heitmann, Chief Commercial Officer; short-term health-insurance plan like mixologists, and IKEA solutions their misconduct not because their Carla Zanoni, Audience & Analytics Nancy McNeill, Advertising & Corporate Sales; for a fraction of what Cobra would for every nook and cranny imagin- victims signed NDAs, but because Christina Van Tassell, Chief Financial Officer; Gerard Baker, Editor at Large Suzi Watford, Chief Marketing Officer; have cost. It didn’t have all the able, it’s about time Americans are their employers and boards failed to Paul A. Gigot, Editor of the Editorial Page; Jonathan Wright, International bells and whistles of a full plan, again allowed a health-insurance act effectively in the face of repeated Daniel Henninger, Deputy Editor, Editorial Page DJ Media Group: Almar Latour, Publisher but it was enough to ease my mind option that can better fit their pal- allegations of sexual harassment. WALL STREET JOURNAL MANAGEMENT: Professional Information Business: Joseph B. Vincent, Operations; Christopher Lloyd, Head; and protect me for six months ate and their pocketbook. Larry L. Hoffman, Production Ingrid Verschuren, Deputy Head against financial ruin in the event Mr. Bernstein and Ms. Beige are

EDITORIAL AND CORPORATE HEADQUARTERS: of illness or injury. It was perfect Ms. Bolton is a digital-media attorneys at Bernstein Liebhard LLP 1211 Avenue of the Americas, New York, N.Y., 10036 for my needs at that difficult time professional and former newspaper representing victims of sexual ha- Telephone 1-800-DOWJONES in my life. reporter based in Alexandria, Va. rassment and discrimination. TECHNOLOGY: QUALCOMM SAVES $700 MILLION IN FINES WITH TAIWAN SETTLEMENT B4 BUSINESS&FINANCE

Last Week: S&P 2833.28 g 0.25% S&P FIN g 0.57% S&P IT À 0.33% DJ TRANS g 0.06% WSJ $ IDX À 1.58% LIBOR 3M 2.319 NIKKEI 22298.08 g 1.01% See more at WSJMarkets.com Activist Pressures Nielsen to Sell Mystery

Elliott Management has been launching campaigns month after the company re- also said at the time it will the entire business rather than Shadows at a blistering pace this year, ported a weak second quarter consider selling the “buy” seg- just the “buy” segment. has taken a stake of could unveil the new effort as and lowered its revenue esti- ment, which provided nearly A Nielsen spokeswoman said 8% in the struggling soon as Monday. mates for the year. Chief Fi- half of its $6.6 billion in reve- the board continues to evaluate A Digital Multiple private-equity nancial Officer Jamere Jackson nue last year. The remainder how to best position the busi- TV-ratings company firms already have expressed said in July the second quarter comes from its core television- ness and welcomes the views interest in Nielsen, the people “was one of the most challeng- and-media ratings businesses, of its owners, including Elliott. Currency BY CARA LOMBARDO said. ing quarters for our business called its “watch” segment. Information-services com- Nielsen, which measures in over a decade.” He cited That has been doing signifi- panies have been popular BY PAUL VIGNA Activist investor Elliott how people shop and consume challenging conditions for con- cantly better. among private-equity buyers AND STEVEN RUSSOLILLO Management Corp. has taken media such as radio and TV, has sumer-packaged-goods clients, Elliott believes the “buy” recently. Dun & Bradstreet a big stake in Nielsen Hold- been hurt by a rapidly changing which hurt its “buy” business, segment has failed to keep up Corp. this month said it would A rapidly growing digital ings PLC and plans to push the retail environment. The com- which measures retail and with competitors such as IRI, be taken private and Thomson currency that claims to be TV-ratings company to sell it- pany has a market value of al- consumer behavior. which has invested in data-in- Reuters Corp. agreed to sell a backed by U.S. dollars has be- self. most $8 billion and is the S&P The company also said tensive offerings, while Niel- stake in its financial unit to a come a cornerstone of the vol- The New York hedge fund 500’s third-worst performer in Chief Executive Mitch Barns sen has continued to rely on group led by Blackstone atile cryptocurrency market. owns more than 8% of Nielsen, 2018, with its shares off around would step down at year-end its employees to provide anal- Group LP earlier this year. The problem: There isn’t hard worth at least $640 million, 40% so far this year. and initiated a search for his ysis to clients, the people said. Nielsen was taken private by evidence the cash supporting people familiar with the mat- Nielsen’s stock price tum- successor. The hedge fund wants Nielsen several buyout firms in 2006 it exists. ter said Sunday. Elliott, which bled 25% in a single day last New York-based Nielsen to initiate a strategic review of and went public again in 2011. Tether, whose main selling point is its tie to the U.S. dollar, has grown dramatically over the past year—its daily The War on Sugar and Changing Tastes Claim a Casualty: Global Prices trading volume of around $3 Over the past ﬁve years... billion trails only bitcoin’s $5 billion. Tether also has be- U.S. sparkling water come a “crypto bank” for cryp- sales grew by tocurrency businesses that have trouble maintaining real- world banking relationships, $1.4B providing liquidity and a place to park assets, according to a new study from blockchain re- while U.S. soda sales search firm Chainalysis. declined by Tether has assumed this role because of its link to the dollar. Unlike other cryptocur- $1.2B rencies that fluctuate wildly in value, one tether generally equals one dollar. This makes it a sort of digital-dollar sub- Sugar futures are falling stitute. as supplies build and That is also why it is im- demand wanes. portant that Tether has dollar reserves backing each of its Raw sugar futures, approximately $2.5 billion most active contract worth of coins in circulation. But Tether has never pro- $16 cents a pound duced an audit showing it has the purported reserves. The 15 company that controls tether maintains it has the reserves, 14 yet it has never named the 13 banks it uses to hold these funds, nor said where they are 12 A sugarcane trader in based and regulated. Kolkata. Sugar prices Last year, Tether hired ac- 11 are hovering near a countants Friedman LLP, based three-year low as food in New York, to audit the re- 10 companies around the serves. The firm issued a pre- Jan. world reduce the liminary report last year, but Source: CQG commodity in their Tether says it released Fried- Photo: Rupak de Chowdhuri/Reuters products. B9 man before a final audit was THE WALL STREET JOURNAL. completed. Friedman declined to comment. Leonardo Real, Tether’s chief compliance officer, said that since then the company has had difficulty finding a Drillers Spend Heavily to Extend Oil Boom reputable firm willing to take on a cryptocurrency client. He BY REBECCA ELLIOTT panies continue to stumble, in, according to an analysis of ful earnings.” billion, to produce roughly the declined to say why Friedman AND BRADLEY OLSON the result could be a higher free cash flow by FactSet. Pioneer Natural Resources same amount of oil. was let go. cost of capital to finance the As oil prices have risen, Co., one of the biggest opera- “We’ve had a more signifi- “There’s nothing to hide American oil companies— continuing U.S. energy boom profits “have improved, but tors in the Permian Basin of cant increase in cost issue here,” said Mr. Real. “It’s not primed to reap the benefits of or a slower pace of growth. they’re not there yet in terms West Texas and New Mexico, than we would have assumed,” three managers just cranking rising prices after years of Two-thirds of U.S. oil proof making money,” said Todd told investors a year ago it ex- Pioneer Chief Executive Tim out money randomly in a dark wringing more from wells for ducers failed to live within Heltman, a senior energy ana- pected to largely make up for Dove told investors. Some of basement somewhere.” less—are seeing profits erode their means in the second lyst at investment firm Neu- rising operating costs with the new spending will push up In June, Tether hired law as costs rise. quarter, even as oil rose above berger Berman Group LLC. “efficiency gains” such as pro- output next year, he said. firm Freeh Sporkin & Sullivan Those operational chal- $70 a barrel. Collectively, 50 “The realization is setting in ducing more from each well. The drilling frenzy has in- LLP, co-founded by former lenges make balancing lofty major U.S. oil companies re- that it’s going to take longer Last week, Pioneer reversed creased demand for materials Federal Bureau of Investiga- growth objectives and de- ported in their second-quarter than investors thought for course and raised its annual such as sand and water that tion Director Louis J. Freeh, mands for fiscal restraint in- results that they have spent them to generate free cash spending forecast to $3.3 bil- are used in hydraulic fractur- which issued a report stating creasingly difficult. If the com- $2 billion more than they took flow and deliver more power- lion to $3.4 billion, from $2.9 PleaseturntopageB2 PleaseturntopageB2 PERSONAL TECHNOLOGY | By David Pierce INSIDE Nasdaq Faulted Over Tesla Security App Dashlane BY AKANE OTANI Interruption There is a nagging question Tesla’s share price Makes Browsing Easier on Wall Street after Tesla Inc. Chief Executive Elon Musk’s $390 Trading halted Here’s one phone, something Google’s buyout tweet last week: Why you might Android already supports. did Nasdaq let trading in Tesla 380 have heard Many operating systems shares continue for more than before: You and browsers include their an hour afterward? should use a own password managers, but Mr. Musk tweeted at 12:48 370 password I recommend getting some- CITIES CURB p.m. ET on Tuesday that he manager. A good password thing that works across all had “financing secured” for a manager helps create strong your devices. The big three SCOOTER buyout of Tesla at $420 a 360 passwords, is safer than re- are LastPass from LogMeIn, SHARING share, a 16% premium to the using the same ones and can AgileBits’ 1Password, and share price at the time. The 350 keep you—blah, blah, blah. Dashlane. remark set off a frenzy of Stick that next to “Go to bed I’ve tested them all, and STARTUPS, B3 trading in Tesla shares, even earlier” and “Cookies are Dashlane—after a recent up- as investors were struggling to 340 bad for you” in the brim- date—has become my favor- discern whether the tweet was ming file of good advice ite. At $5 a month, it’s legitimate and what precisely 330 you’ll take...later. slightly more expensive than it meant. How about this, though? its competitors, but it now It wasn’t until 2:08 p.m. Aug. 6 7 8 9 10 You should use a password offers an arsenal of security that Nasdaq Inc. acted to halt Source: FactSet THE WALL STREET JOURNAL. manager because it makes tools: a virtual private net- trading in Tesla shares. In that using the internet easier. It work, or VPN; a dark-web 80-minute interim, investors trading halted until a disclo- a more discrete picture of makes logging in faster and tracker; and protection who bought and sold the sure provides some clarity. what was happening,” said means never having to enter against identity theft. shares were potentially disad- Other investors wondered Harvey Pitt, former chairman your credit-card number The first thing Dashlane vantaged by the lack of clear why the exchange kept the of the U.S. Securities and Ex- again—the added security is or any password manager information about the com- halt in place for more than an change Commission and chief just a bonus. needs is passwords. You can URANIUM pany, some investors said. hour and a half, and then why executive of consulting firm Right now is the perfect enter them one by one, but I Typically, exchanges halt it chose to resume trading at Kalorama Partners LLC. “All of time to make the leap. The recommend just setting up STARTS TO trading in a company’s shares 3:45 p.m. this is unprecedented, it’s coming version of Apple’s the app and installing the when it tells them it is about It is the latest episode to highly problematic and it’s not iOS software includes new companion extension for GLOW AGAIN to release “material news,” or raise questions about the gov- consistent with careful and hooks that allow password your browser. When you log information that could sway ernance of U.S. markets. thoughtful approaches to a managers to log you into into any site, Dashlane will COMMODITIES, B9 investors’ trading decisions. “We don’t know what ef- difficult subject.” websites and apps on your PleaseturntopageB4 An exchange typically keeps forts Nasdaq engaged in to get PleaseturntopageB2 B2 | Monday, August 13, 2018 **** THE WALL STREET JOURNAL. INDEX TO BUSINESSES BUSINESS & FINANCE

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 Four Seasons...... A1,A10 P Nasdaq, AgileBits...... B1 Foz for Trading...... A10 Papa John's Alaska Air Group...... A3 Francisco Partners...... B3 International...... B3 Alibaba Group Holding G PepsiCo...... B9 Tesla Irk ...... A2 GAM Holding...... B9 Pioneer Natural Alphabet...... A1 GrabTaxi Holdings PteB3 Resources...... B1 Aman Group...... A10 H Pitney Bowes...... R4 Amazon.com...... B3 Pret A Manger...... B3 Investors AnchorFree...... B4 Heineken...... R5 Project 66...... A10 APA Group...... B3 Horizon Air...... A3 Q Continuedfromthepriorpage B HTC...... B4 K Qualcomm...... B4 The decision-making behind Bird Rides...... B3 R the trading halt isn’t the only Kazatomprom...... B9 BlackRock...... B9 Royal Dutch Shell...... A8 mystery surrounding Mr. Blackstone Group..A1,B1 KKR...... A1 S Kraft Heinz...... R2 Musk’s tweets. The SEC is Blue Origin...... A3 looking into their truthfulness, BMA Group...... A10 L Snap...... B10 Syria Report...... A10 Bridgepoint...... B3 The Wall Street Journal re- Laredo Petroleum...... B2 T Broadcom...... B4 Leonard Green ported. C & Partners...... B3 Target...... B3 Nasdaq rules require listed Tencent Holdings...... A2 Cameco...... B9 LogMeIn...... B1 companies to notify its Market- Tesla...... B1,B10 Carlyle Group...... A1 Lyft...... B3 Watch division, via an elec- M Thomson Reuters...... B1 Casper Sleep...... B3 Total...... A8 tronic disclosure system, at Chainalysis...... B1 Marota City...... A10 Tribeca Investment least 10 minutes before pub- Chubb...... R4 McRoskey Mattress...R4 Partners...... B9 licly releasing “certain material CK Infrastructure Mobvoi...... A2 Twitter...... B10 news announcements” between Holdings...... B3 N U Coca-Cola...... B9 the hours of 7 a.m. and 8 p.m. D Nasdaq...... B1 Uber Technologies...... B3 ET. Typically, the heads-up al- Neuberger Berman Universal Music lows the exchange to coordi- Dashlane...... B1 Group...... B1,B3 Publishing Group...... R6 nate with the company and Dorna Sports...... B3 Neutron Holdings...... B3 V Dun & Bradstreet...... B1 Nielsen Holdings...... B1 evaluate whether to halt trad- E-F Noble Energy...... B2 Vista Equity Partners.B3 ing “pending news”—which Nordstrom...... B3 X Elliott Management...B1 compliance experts say levels NXP Semiconductors..B4 ENI...... A8 Xiaomi...... A2 the playing field for investors O Exxon Mobil...... A8 Y making trading decisions.

Facebook...... A1,B10 Orient Club...... A10 Yellow Cake...... B9 With Tesla, the time lag be- ROBYN BECK/AGENCE FRANCE-PRESSE/GETTY IMAGES tween Mr. Musk’s tweet and Tesla CEO Elon Musk last month. He tweeted Tuesday that he had financing for a buyout of Tesla. Nasdaq’s decision to halt trad- INDEX TO PEOPLE ing suggests the exchange was violated exchange rules can be “Everyone I spoke to was tions, each with its own listing blindsided by the CEO’s publicly reprimanded or even wondering” why Nasdaq didn’t standards that companies had tweet—which would constitute delisted, according to Nasdaq halt Tesla earlier, said Michael to meet to be members. But as A Gerson, Jody...... R6 P a violation of Nasdaq rules, guidelines. Antonelli, equity sales trader Nasdaq and the New York Aggarwal, Reena...... B2 Goehring, Leigh...... B2 Pichai, Sundar...... A1 several traders and regulatory Some contend Nasdaq at Baird. Stock Exchange became for- Antonelli, Michael...... B2 Goldstein, Jeff...... B6 Pitt, Harvey...... B1 experts said. should have moved sooner, Others say Tesla shouldn’t profit public companies in the B Gorodyanksy, David....B4 R A Tesla spokesman declined have been allowed to resume 2000s and competition heated Greenberg, Evan...... R4 Bacchus, Peter...... B9 H Rainsford, Tim...... B9 to address whether Tesla had trading. up to lure listings, some critics Beck, Gary...... A3 Rasmussen, Kasper....B2 alerted Nasdaq ahead of Mr. “Trading should have been contend the exchanges have Haywood, Tim...... B9 A time lag before the C Real, Leonardo...... B1 Musk’s tweet. halted immediately and should become beholden to the com- Hees, Bernardo...... R2 Rees, Michael...... B3 Nasdaq declined to com- not be resumed until Musk ei- panies they list. Chase, Judith Ganes...B9 Heltman, Todd...... B1 trading halt suggests Cheffins, Brian...... B10 J Rocker, David...... B2 ment on its communications ther presents or shows the ab- Unusual trading and unex- Choyne, Amy...... R5 S with Tesla around the tweet. Mr. Musk’s tweet sence of a written commit- plained halts are no small Christinat, Joe...... B2 Jackson, Jamere...... B1 Sarhan, Adam...... B9 “In general, when a com- blindsided Nasdaq. ment to funding,” said David matter for U.S. markets that D Jackson, William...... B3 pany discloses news that’s po- Rocker, a retired hedge-fund have long been considered the Jacobs, Kevin...... R5 Schnatter, John...... B3 Debroux, Laurence...... R5 L T tentially material, whether by manager who said the SEC and best in the world, experts say. Dove, Tim...... B1 tweet or otherwise, Nasdaq’s Nasdaq responses were insuf- Reena Aggarwal, a finance Taubman, William S...R5 Drucker, Peter...... R5 Lopez, Marcelo...... B9 procedure is to contact the given the publicity and the ficient. “A continuation of professor at Georgetown Uni- V F M company immediately,” said spike in Tesla shares that fol- trading at this point is a dis- versity and director of the Foutch, Randy...... B2 Mitch Barns...... B1 Van Den Houte, Brigitte Joe Christinat, a Nasdaq lowed both the tweet and a Fi- service” to everyone holding school’s Center for Financial Foz, Samer...... A1 Mollenkopf, Steve...... B4 ...... R4 spokesman. Nasdaq doesn’t nancial Times report earlier or trading the shares. Markets, said, “If investors Frey, Vaughn...... B3 Musk, Elon...... B1,B10 W need a company’s permission that day about a Saudi sover- Stock exchanges, for much start losing trust in an ex- G N Ward, Sean...... B3 to halt trading in its shares. eign-wealth fund building a $2 of their existence, have oper- change, then trading is going Gerard, David...... B2 Natkin, Mark...... A1 Willingham, Gary...... B2 Companies found to have billion stake in Tesla. ated as nonprofit organiza- to move on from there.”

In the decade since bitcoin’s Mystery introduction, cryptocurrencies have grown significantly, with assets in circulation worth Shadows about $216 billion. But the market is fractured and volatile. Exchanges don’t share trad- A Currency ing data, there are no circuit breakers or other trading Continuedfromthepriorpage halts, and options for hedging that it believed tether had full are limited. Moreover, many of dollar backing. But the report, the exchanges have trouble critics noted, wasn’t an audit maintaining bank accounts, and the law firm wouldn’t since regulated banks are wary identify the banks it contacted about exposure to the sector. to verify the reserves. Eugene Tether Ltd. marketed its R. Sullivan, a senior partner in cryptocurrency as a way to the law firm, declined to com- mediate the sector’s volatil- ment, saying the report speaks ity—offering the safety of dol- for itself. lars with the speed and ano- Mr. Real said Tether plans nymity of a digital currency. to release more evidence of its The pitch worked. Tether’s reserves. market value has risen The opaque way in which steadily over the past 18 tether are created also causes months, to $2.4 billion from concern among investors and about $10 million at the begin- market participants. ning of 2017. That has made it Unlike other cryptocurren- a crucial link in the wider cies, there isn’t a set amount cryptocurrency market. of tether in circulation. In Tether-based trading vol- theory, demand drives new is- ume grew more than 15-fold suance. Cryptocurrency ex- between October 2017 and change Bitfinex places orders March 2018, Chainalysis for new tokens with Tether found. U.S. dollar-based trad- and wires dollars or euros to ing volume, meanwhile, tripled

CALLAGHAN O’HARE/BLOOMBERG NEWS the company’s bank account, in that same period. The drilling boom has increased demand for materials such as sand and water that are used in hydraulic fracturing, driving up prices. according to both companies. As a result, tether has be- Tether sends the newly cre- come a key source of liquidity. U.S. oil production is about to ated tokens to Bitfinex, which At times this summer, tether Drillers slow down considerably. distributes them to investors. has represented as much as U.S. oil production fell Investors have little visibil- 80% of bitcoin trading volume, slightly in May, the latest ity into the process. Bitfinex according to research site Spend Big month tracked by the U.S. En- shares ownership and manage- CryptoCompare. When the year ergy Information Administra- ment with Tether, and it is the began, it accounted for about tion, and has remained at just only entity through which 10% of bitcoin trading volume. For Growth below 10.5 million barrels a Tether issues tokens. Nearly half of tether’s trad- day since March. Last week, “It’s sort of the central ing volume is among just a Continuedfromthepriorpage the EIA cut its forecast for av- bank of crypto trading,” said handful of tether-accepting ex- ing, driving up prices. erage daily crude output in David Gerard, a programmer changes, including some of the In recently reported sec- 2018 by 100,000 barrels. Fed- and author of “Attack of the market’s largest. ond-quarter earnings, more eral forecasters expect the U.S. 50 Foot Blockchain.” Yet “they Some investors say tether than a dozen shale companies to produce an average of 11.7 don’t conduct themselves like has become systemically im- either lowered this year’s pro- million barrels a day in 2019. you’d expect a responsible, portant within the cryptocur- duction targets, said they Some see that forecast as sensible financial institution rency market. “There are a would have to spend more to too high and predict that U.S. to do.” couple of forces in this market extract roughly the same oil growth will moderate be- Kasper Rasmussen, the di- that if they failed, it would be amount of oil and gas, or cause of service costs, slower rector of communications at catastrophic,” said Ding’An missed analyst expectations technological gains, pipeline Bitfinex, said Tether isn’t a Fei, a managing partner at for growth. To be sure, many constraints in the Permian and bank nor it is trying to be one, Ledger Capital, a digital asset

continue to expect their pro- CALLAGHAN O’HARE/BLOOMBERG NEWS pressure on producers to keep but that it does adhere to “ap- investment firm in Beijing. duction to increase compared A worker at a Texas sand mine used by Permian Basin drillers. spending in check and empha- plicable laws and regulations.” “Tether is one of them.” with last year, but they are size profits over growth. having to spend more to meet ciencies.” That has proved redo Petroleum Inc., said in A slowdown in Permian oil those goals. more difficult than expected, an interview. “We will get bet- output could push crude Among them was Noble En- he said. ter, but I don’t expect it to be prices above $100 a barrel be- ergy Inc., which this month The days of rapid efficiency at that kind of rate.” fore the end of the year as revised its annual capital improvements appear to be Laredo increased its yearly supply fails to meet rising de- spending plan to $3 billion, up waning industrywide. Produc- spending forecast by $45 mil- mand, according to Leigh from $2.7 billion to $2.9 bil- ers during the global commod- lion, or about 8%, while hold- Goehring, managing partner of lion, while saying it likely ities downturn figured out ing its oil-output target Goehring & Rozencwajg, a would hit the lower end of its how to produce more from steady, although it raised pro- small investment firm focused targeted production range. each well for less money. Since duction goals for natural gas on natural resources. The company had incorpo- 2016, though, the oil price at and natural-gas liquids. The “Many companies have rated some service-cost in- which operators can turn a company said it was spending promised to live within cash creases into its initial spend- profit drilling a new shale well more now to produce more flow and grow by 10% or 20%, ing budget, said Gary has leveled off in some parts next year. and it’s looking more and Willingham, Noble’s executive of the Permian and increased Some see the weak quar- more like some are going to vice president for operations. by an average of 17% in others, terly performance and opera- have to choose between the “But we also assumed that according to Rystad Energy. tional challenges in the Perm- two,” Mr. Goehring said. “If given our track record,” he “You can’t continue to get ian, which now pumps more the Permian growth engine

said, “we’d be able to offset a 50% better every year,” Randy crude than Kuwait, as indica- slows, there aren’t many other ANDREW HARRER/BLOOMBERG NEWS large part of that with effi- Foutch, chief executive of La- tors that the pace of growth in easy sources of global supply.” Tether trading volume trails only bitcoin among cryptocurrencies. THE WALL STREET JOURNAL. ****** Monday, August 13, 2018 | B3 BUSINESS NEWS Neuberger Cities Leery of Scooter Sharing

Gets Stake Services raise issues for localities stung In British by Uber and Lyft; Investor startups are confident BY DAWN LIM BY ELIOT BROWN AND WILL LOUCH Shortly after two startups European private-equity dropped hundreds of scooters shop Bridgepoint is selling a on the streets of Denver with- minority stake in itself to Neu- out permission in May, frus- berger Berman Group unit trated city officials responded Dyal Capital Partners to help swiftly with vehicles of their finance the firm’s expansion own. A platoon of workers in plans, said people familiar vans and pickups scooped up with the matter. more than 300 of the scooters Dyal has agreed to buy be- and impounded them. tween 15% and 20% of Bridge- As shared-scooter compa- point, which manages more nies Bird Rides Inc. and Lime, than €18 billion ($20.6 billion). flush with investors’ cash, race In return, Dyal will get a into new cities around the cut of the London firm’s prof- U.S., they are finding city offi- its. Bridgepoint made its name cials emboldened to enact reg- backing companies including ulations that limit the compa- sandwich chain Pret a Man- nies’ rapid growth. Urban ger Ltd. and Dorna Sports SL, authorities from Miami to a Spanish company that owns Portland, Ore., are capping the exclusive rights to motor- their numbers at a few hun- cycle racing series MotoGP. dred per company, or in some The deal gives the firm a cases blocking the deployment

multibillion-dollar valuation, altogether. DAVID PAUL MORRIS/BLOOMBERG NEWS said the people familiar with This could prove a big chal- Cities like San Francisco and Washington, D.C., are capping the number of scooters at least initially to a few hundred per company. the matter. The Financial lenge for Bird and Lime, which Times earlier reported some have drawn nearly $900 mil- “It’s good for society to details of the stake sale. lion of investment between have fewer cars on the road Seeking Answers Eric Garcetti said. “We had to Emily Warren, Lime’s policy Dyal, led by former Lehman them with ambitions of and more electric scooters and send them a cease and desist.” director, said cities want to Brothers deal makers Michael launching thousands or tens of forms of other transporta- As Scooters Arrive Travis VanderZanden, Bird’s make sure users are keeping Rees and Sean Ward, is one of thousands of scooters on the tion,” said Travis Vander- CEO, said Bird takes a collabor- sidewalks clean and safe, and several firms dedicated to streets of hundreds of U.S. cit- Zanden, Bird’s chief executive. ative approach with cities. the companies are accountable. buying stakes in alternative ies. Sixteen-month-old Bird The companies’ tactics recall City transportation officials There is hardly consensus in An overall cap “is just not the asset managers. It has raised was recently valued by inves- the battles of Uber and Lyft, across the country generally the fledgling scooter industry only way, or best way, to ac- $6 billion so far for its latest tors at $2 billion, and 20- which barreled into cities to say they welcome the scooter on the right playbook. Two, complish that,” she said. Lime fund and expects to keep rais- month-old Lime at $1.1 bil- first win popularity from con- technology as a tool to reduce Skip Scooters and Spin have and Bird have pushed a “utiliza- ing money until year-end, two lion—the two fastest U.S. sumers before regulators began car use and expand transit crafted strategies based on tion cap” instead, which requires people familiar with the fund- startups to pass a $1 billion to devise new rules for online availability. But they want to be playing by city rules. that scooters be used multiple raising said. It has already valuation, according to data ride-hailing services. Those the ones writing the rules. A decision is looming in San times a day on average. committed some $3 billion of tracker PitchBook. The closely fights largely resulted in laws In Los Angeles, which plans Francisco, where officials plan to Bird and Lime point to cities that pool to deals, one of held companies don’t disclose favorable to the companies. to allow thousands of scooters award up to five scooter compa- such as Santa Monica, Calif., and financial data. The more aggressive re- per company, the city was in nies permits. Industry insiders are Memphis, Tenn., that have less- Multiple other scooter sponse by cities this time is the process of negotiating with watching whether Bird and Lime, restrictive policies. David Estrada, startups have formed recently, based partly on how much eas- Bird in June, when “they just which entered the market despite Bird’s chief legal officer, said cities and ride-sharing companies ier it is to enforce rules with dumped a bunch of Birds the city’s requests to wait for with restrictive policies will ulti- $20.6B Uber Technologies Inc. and scooters—officials can easily downtown,” Los Angeles Mayor rules, will be penalized. mately be the minority. Lyft Inc. are planning a push locate and impound them with Total amount managed by into the space. a smartphone and a truck. transportation. the companies to halt their de- “were dropped into our city private-equity firm Bridgepoint Bird and Lime, a unit of Many cities also feel they Cities are saying, “we need to ployments as they considered without permission or a per- Neutron Holdings Inc., say were too acquiescent with Lyft have more control over what’s regulations. A growing number mit to operate,” said a spokes- they are confident that cities and Uber. And they have seen happening on the streets be- of others—including Austin, woman for the city’s Public will see the value of their ser- in places like China that dock- cause of past experience and Texas, San Francisco and Wash- Works department. The city those people added. vices for reducing car traffic less bike share—a similar lessons learned,” she said. ington, D.C.—are capping the has since drafted regulations Private-equity firms have and expanding transit options. technology to scooters—has At least seven cities have number of scooters at least ini- as part of a pilot program for increasingly turned to selling Users find the electric-motor- led to clogged sidewalks and impounded scooters, blocking tially to a few hundred per scooters to operate that ini- stakes in themselves to access powered, kick-like scooters rivers littered with discarded their entrance until regulations company—far below the com- tially would limit the compa- capital to expand and help fi- with an app, pay at least $1 a bikes, said Susan Shaheen, a are in place. Others including panies’ targets. nies to 250 scooters each. nance their commitments to ride and leave them on the professor at University of Cali- Miami and Indianapolis have In Denver, the scooters —Nour Malas the funds they raise. sidewalk when they are done. fornia Berkeley who studies sent cease-and-desist letters to were impounded after they contributed to this article. U.S. firms including Vista Equity Partners, Leonard Green & Partners and Fran- BUSINESS cisco Partners have all sold WATCH stakes in themselves in recent Casper Plans 200 Mattress Stores years, although such deals have been less common in Eu- BY KHADEEJA SAFDAR rope. UBER TECHNOLOGIES Bridgepoint plans to use Online mattress seller Cas- money from the sale to fund per Sleep Inc. plans to open Philippines Clears its expansion outside Europe, 200ofitsownstoresinthe Deal With Grab one of the people said. The next three years, expanding firm, which previously focused across North America to stave Philippine competition author- on European companies, off competition from dozens of ities have cleared the way for opened an office in New York internet copycats. Southeast Asian ride-hailing firm two years ago and plans to es- Casper Chief Executive Grab Inc. to dominate the local tablish a presence in San Fran- Philip Krim said the stores will market, approving its deal with cisco this year, the person help the startup move from a Uber Technologies Inc. but im- added. brand known for its mat- posing restrictions and threaten- The money will also help tresses-in-a-box to a place to ing fines for breaches. the firm launch new investing buy all types of sleep prod- Uber said in March that it strategies to complement its ucts. “Customers aren’t always would relinquish its battle for €5.7 billion buyout fund, the in the market for a mattress, Southeast Asia’s riders, exchang- person said. Bridgepoint is but everyone cares about how ing its local operations for a currently raising its first they sleep,” he said. 27.5% stake in Grab. credit fund, The Wall Street Casper, which was launched Friday, the Philippine Com- Journal previously reported. in 2014, opened its first per- petition Commission said Grab Bridgepoint is led by Wil- manent retail shop in New would, among other conditions, liam Jackson, an Oxford Uni- York City earlier this year. The be required to bring average versity-educated deal maker 200 stores will include 18 ex- rates for ride acceptance and

who has been at the firm for isting temporary locations JOHANNA HUCKEBA/THE WALL STREET JOURNAL cancellation back to levels over three decades. that Casper is transitioning to Startup Casper Sleep opened its first permanent retail shop in New York City earlier this year. comparable to those before the No Bridgepoint executives permanent shops. Uber deal. Prices will stay will cash out as a result of the The brand also distributes sales. As the cost to acquire opened stores, including in also have served as a sales within a controlled range to deal, and the money will re- some products through Target customers online has in- New York, San Francisco and channel, generating on average prevent any “extraordinary de- main on the firm’s balance Corp., Nordstrom Inc. and creased, some online brands Denver. Meanwhile, Casper’s more than $1,500 per square viation.” sheet, according to another Amazon.com Inc. have been opening stores in customer-acquisition costs foot, according to Casper. Uber didn’t immediately re- person familiar with the mat- Casper is among online busy locations mostly for mar- have dropped in the past year, Mr. Krim said he hasn’t de- spond to a request for comment. ter. brands such as Warby Parker keting purposes. in part because of its open- cided on the size and layout of Grab lauded what it called the Dyal plans to pay the and Everlane that have been Mr. Krim said sales have ings. “It’s a way to educate the 200 stores yet. PCC’s “pro-innovation approach money in installments over adding brick-and-mortar grown more quickly in mar- new consumers,” he said. —Lillian Rizzo and forward-looking decision.” several years. stores to boost visibility and kets where the company has The temporary locations contributed to this article. —Jake Maxwell Watts

APA GROUP Directors Back Papa John’s Offers Financial Help to Franchisees Hong Kong Offer BY JULIE JARGON rarily remove himself from John’s banned him from ap- ing to deflect attention from impact that the founder’s inex- An almost $9.5 billion bid by ads, has blamed his successor, pearing in future ads and mar- the source of the problem— cusable words and actions Hong Kong’s CK Infrastructure Papa John’s International Steve Ritchie, for the sales keting and cut off his use of management’s ongoing failures have had on franchisees.” Holdings Ltd. for one of Austra- Inc. said it would provide fi- problems and the company office space at the company’s with regard to financial per- Mr. Schnatter doesn’t ap- lia’s main gas-pipeline operators nancial assistance to its U.S. has blamed him. Louisville, Ky., headquarters. formance—and blame me for pear to have the support of in- has won over the company’s franchisees through the re- In an effort to help fran- Mr. Schnatter stepped down as its problems.” vestors, either. board, putting the deal’s fate in mainder of the year as it tries chise owners who are now chairman last month but has The company said it was Stephens restaurant analyst the hands of regulators. to turn around the business it struggling, Papa John’s said since said he regrets the deci- time to move on from Mr. Will Slabaugh said in a note to On Monday, the CKI-led con- says has been hurt by its Friday it will reduce franchi- sion and that he doesn’t plan Schnatter. investors last week that he sortium and pipeline operator founder’s remarks. sees’ royalty payments, food to back away from the com- Vaughn Frey, president of feels Mr. Ritchie’s plans for APA Group said they had for- Relations between the pizza prices and online fees and also pany, of which he still owns the Papa John’s Franchise As- new marketing and value of- malized a conditional bid made chain and founder John provide funds to help them 29%. sociation, said in a statement ferings “present a much mid-June. APA directors are rec- Schnatter have become in- with marketing and remodel- The pizza chain earlier this on Friday: “We believe it is greater chance for success ommending shareholders accept creasingly fraught in recent ing. week reported its third con- time for the founder to move [versus] remaining tethered to the offer. weeks. Papa John’s domestic The company has been try- secutive quarterly sales de- on. Steve is pursuing the right Mr. Schnatter’s image” and But CKI will first need to sat- sales have been sliding ever ing to distance itself from Mr. cline, with a 6.1% drop in initiatives to reinvigorate that “this opinion is over- isfy Australia’s antitrust regula- since Mr. Schnatter last fall Schnatter in the months fol- North America same-store growth and recognizes the im- whelmingly shared by the in- tor and clear the country’s For- criticized the National Foot- lowing his use of a racial slur sales, and lowered its full-year portance of working together vestment community.” eign Investment Review Board. ball League for its handling of in May during a call with a sales and profit outlook. to move forward successfully. Papa John’s shares are APA operates more than players’ national anthem pro- marketing agency that was in- The report fueled another We appreciate the assistance down 49% in the past 12 9,000 miles of gas pipelines in tests. Mr. Schnatter, who tended to prepare him for re- round of finger-pointing. Mr. being extended to our franchi- months. Australia that connect to 1.3 stepped down as CEO in De- turning to advertising and Schnatter issued a statement sees and believe the assistance —Waverly Colville million homes and businesses. cember and agreed to tempo- public appearances. Papa saying, “The company is try- program will help mitigate the contributed to this article. —Robb M. Stewart B4 | Monday, August 13, 2018 THE WALL STREET JOURNAL.

TECHNOLOGY WSJ.com/Tech Qualcomm Gets Taiwan Patent Win

BY TRIPP MICKLE lenkopf is pursuing an ambi- and agreed to let Taiwanese tious plan to lift earnings and authorities intervene to re- Qualcomm Inc. notched a reduce the company’s depen- solve any negotiation-related victory in its effort to preserve dence on smartphone-related disputes. its patent-licensing business chip sales. Qualcomm also said it com- as it reached a settlement Qualcomm’s issues in Tai- mitted to invest an undis- with the Taiwanese govern- wan spiked in October when closed amount of money over ment that revokes a previous Taiwan’s Fair Trade Commis- the next five years in Taiwan finding against the chip maker sion fined the company $773 by collaborating on 5G tech- and saves the company nearly million and ruled Qualcomm nology with chip makers and $700 million in fines. violated the country’s laws by others, funding research-and- The settlement comes as unfairly licensing its patents, a development projects with the world’s dominant supplier decision that could have up- universities and developing a of chips for smartphones seeks ended Qualcomm’s business by Taiwanese center for opera- to chart a new path following forcing it to license its intel- tions and manufacturing engi- a tumultuous year that in- lectual property to other chip neering. volved fending off a takeover makers. Under the agreement, Tai- effort by rival Broadcom Inc. The settlement revokes Tai- wan will keep $93 million in and abandoning its takeover of wan’s ruling, Qualcomm said. payments from Qualcomm to- NXP Semiconductors NV In its place, Qualcomm said it ward the fine assessed last amid trade tensions between has pledged to negotiate in year, but the remaining

the U.S. and China. good faith with Taiwanese amount was waived, according ROBERT LEVER/AGENCE FRANCE-PRESSE/GETTY IMAGES Chief Executive Steve Mol- handset makers including HTC to the chip maker. Chief Executive Steve Mollenkopf hopes to reduce Qualcomm’s reliance on smartphone-chip sales.

overview of your online might not work on your cor- it one whose entire business Dashlane health. I added my Gmail ac- porate Wi-Fi. is predicated on that trust. count, home address and The VPN uses Hotspot Some VPN providers do col- other info to Dashlane, and Shield from AnchorFree,a lect user and activity data, Improves the service began crawling VPN provider that says it and you should avoid using dark-web databases to see if stores virtually no user data. them. “We’ve never sold and my information had been (Hotspot Shield typically we’ve never collected user Browsing compromised. costs between $3.50 and $13 data,” said David Indeed, 10 alerts showed a month on its own.) Gorodyanksy, chief executive ContinuedfrompageB1 up, each detailing which in- of AnchorFree, Dashlane’s just ask if you want to save formation had been taken. I ashlane’s most expen- VPN partner. your credentials. was able to quickly change a D sive plan, at $10 a Similarly, Dashlane says it You also can save credit- few passwords and see month, also offers designed everything from its card information, passport which other accounts needed credit monitoring and as servers to its password poli- numbers and more. Every- to be changed, too. Going much as $1 million in iden- cies with hacker-proofing in

thing stays safe behind your EMILY PRAPUOLENIS/THE WALLforward, STREET JOURNAL if any of my info tity-theft insurance. mind. Nothing is ever com- master password, which I The password manager Dashlane works across all your devices. appears in these leaked data- Keeping your data safe is pletely safe, of course, but recommend making as com- bases, the service will notify a good thing, as is knowing you should feel better know- plicated as you can muster. front: Security researchers reused ones. I scored a not- me so I can take action. when it has been compro- ing that these companies You’ll be able to use your have found “invisible fields” too-hot 72. Dashlane was Among Dashlane’s other mised. But what if you never protect your data as if their fingerprint or face to unlock on some websites, which able to automatically change tools, a new built-in VPN had to give out your data in existence depends on it. Dashlane quickly on newer steal extra information by some of my passwords, stands out. Because it en- the first place? If you buy an Eero home phones, tablets and comput- taking advantage of auto-fill- though that required giving crypts your internet traffic As Dashlane, 1Password network and get 1Password ers, but you still have to en- ing technology. Dashlane the app access to my email, and obfuscates your loca- and the rest mature, they’re bundled in, or want LastPass ter the password from time says it doesn’t fill in these and I spent an hour changing tion, it’ll keep you more se- moving to protect more, but because it’s only $2 a month, to time for security. hidden fields, and has other the rest. For a brief, beauti- cure on public Wi-Fi. If you you can supplement their that’s fine. But I like that the Once your accounts are security mechanisms such as ful moment, my password use it at home, it can keep core services with features new Dashlane puts so many stored in Dashlane, you can requiring a master password health sat at a perfect 100. your data out of the hands such as Abine’s Blur suite, features into one easy-to-use even get Dashlane to log you when sharing financial data. Now, because of an old Drop- of your service provider, which blocks web trackers system. Come for the auto- into websites automatically. I added 221 passwords box hack, I’m down to 99. which might sell it. Just and provides disposable fill, which makes quick work Next time you pay for some- into Dashlane, and the app Dashlane’s latest version bear in mind, Netflix and phone numbers, emails and of the internet’s seemingly thing, too, you can simply immediately generated a includes a new Identity other apps with protected credit cards endless forms. Stay for the click to choose a card. score of my “password Dashboard, which the com- content won’t stream when In the meantime, if you peace of mind that comes One warning on that health,” looking for weak or pany uses to provide a rough you use the VPN, and VPNs have to trust a service, make from being safer online. TECH’S MOST AMBITIOUS MINDS, ON STAGE AND ON THE RECORD.

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American-Chinese co-produc- said late summer was ideal tion between Warner Bros. timing for “The Meg.” Estimated Box-Office Figures, Through Sunday and China’s Gravity Pictures, it After two weeks at No. 1, SALES, IN MILLIONS also did well in its debut over- “Mission: Impossible—Fallout” FILM DISTRIBUTOR WEEKEND*CUMULATIVE % CHANGE seas, taking in $50.3 million in slid to second place in its third China and totaling $96.8 mil- weekend with $20 million. The 1. The Meg Warner Bros. $44.5 $44.5 -- lion internationally, according Paramount Pictures release 2. Mission: Impossible Paramount $20 $162 -43 to studio estimates Sunday. starring Tom Cruise has pulled —Fallout With an international cast in $162 million in three weeks. 3. Christopher Robin Disney $12.4 $50 -49 led by Jason Statham and fea- Spike Lee’s critically ac- turing Li Bingbing, Rainn Wil- claimed “BlacKkKlansman” 4. Slender Man Sony $11.3 $11.3 -- son and Winston Chao, “The also opened strongly with 5. BlacKkKlansman Focus Features $10.8 $10.8 -- Meg” cost at least $130 mil- $10.8 million in 1,512 the- *Friday, Saturday and Sunday Source: comScore lion to make. aters. The Focus Features re- Following hits like “The lease, which took the Grand Shallows” and “47 Meters Prix at the Cannes Film Festi- Associated Press an estimated $44.5 million in Down,” the shark movie—43 val in May, was timed to the ticket sales, while Spike Lee years after Steven Spielberg’s anniversary of the violent Adding to Hollywood’s siz- had his best debut in a decade. “Jaws”—has been showing clashes between white na- zling summer, the shark “The Meg” had been fore- surprising bite at the box of- tionalists and antiracism

.WARNER BROS./EVERETT COLLECTION thriller “The Meg” opened cast by some analysts for fice. Jeff Goldstein, distribu- counterprotesters in Char- The shark thriller ‘The Meg’ was an American-Chinese co-production. well above expectations with closer to half that total. An tion chief for Warner Bros., lottesville, Va.

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! " wsj.com/classifieds # © 2018 Dow Jones & Company, Inc. All Rights Reserved. © 201 Dow Jones & Company, Inc. All Rights Reserved. THE WALL STREET JOURNAL. Monday, August 13, 2018 | B9 MARKETS Sugar Prices Sour As Demand Drops And Supplies Swell BY JULIE WERNAU equation than we’re hearing just about everywhere else,” Sugar prices are hovering said Adam Sarhan, chief execu- near a three-year low as food tive of 50 Park Investments. companies around the world Mr. Sarhan is betting that reduce the commodity in their sugar prices will continue to products and move toward al- move lower. ternative sweeteners amid The problem with demand health concerns including dia- is because of shifting con- betes, obesity and heart dis- sumer tastes. Consumers are ease. leaving sugary beverages be- This raises the possibility of hind. That has major beverage a long-term reduction in de- companies shifting priorities. mand even as the world’s larg- U.S. soda sales have de- est producers of sugar are clined by $1.2 billion over the notching record production. past five years, according to

Sugar’s downward lurch bucks Susquehanna Financial Group, LIN SHANCHUAN/XINHUA/ZUMA PRESS the trend of other agricultural while sparkling water sales Work at a nuclear power plant in China. The country has 19 reactors under construction, one reason uranium demand is poised to rise. commodities, such as corn and have grown by $1.4 billion, ac- wheat, whose gluts are easing cording to market-research as heat waves sweeping Eu- firm IRI. rope and Asia slash forecasts Coca-Cola Co. has rolled Uranium Bulls Are Back for this year’s harvest. out new Diet Coke flavors for While futures prices have the first time in its history in increased 2% for corn and 28% an effort to boost sales. In the BY PAUL GARVEY pates a rally in prices. “I’m gigawatts this year to 14.1 for wheat, raw sugar futures latest quarter, Coca-Cola re- Power Shift seeing the biggest opportunity gigawatts by 2028, according have declined 31% this year to ported double-digit growth in A wave of mine closures The price of uranium has of our lifetime today in the to the U.S. Energy Information 10.54 cents a pound on the ICE its Coca-Cola Zero Sugar prod- and the rollout of nuclear- climbed recently on reports of uranium space,” he said. Administration, as the region Futures U.S. exchange. uct, while its flagship cola rose power plants world-wide are supply cuts and new nuclear- The recent rise in prices looks to reduce its reliance on Sugar is now the worst-per- 3%. In Spain, PepsiCo Inc. said fueling bullish bets on the power plants. comes in response to supply fossil fuels. forming commodity this year it has brought down the long-depressed uranium mar- cuts, which could result in up- Meanwhile, developed econ- and speculators are betting by amount of sugar in its prod- ket. $28 a pound ward pressure for the long omies, such as the U.S., are nearly 2 to 1 that prices will ucts by 29% compared with Several investment funds term. likely to maintain nuclear continue to fall. 2006 and is working toward have launched this year to wa- 26 Kazakhstan-based Ka- power’s share of their electric- the goal of two-thirds of its ger on a turnaround in the ra- zatomprom, the world’s big- ity production, given con- soft drinks containing fewer dioactive material used in nu- 24 gest uranium producer, said in straints in the output of other than 100 calories. clear reactors. Since the 2011 December it was cutting out- fuels, analysts say. Sugar’s poor outlook “Consumption in Europe Fukushima disaster in Japan, 22 put by 20%. Last month, Can- “There’s no doubt that is striking given other and the United States hasn’t uranium had been the worst- ada’s Cameco Corp. an- global energy requirements grown for years and it isn’t performing commodity as 20 nounced it would indefinitely are increasing dramatically,” commodities are likely to because of the prolif- countries re-evaluated their suspend operations at its big said Peter Bacchus of Bacchus 18 doing so much better. eration of alternative sweeten- reliance on nuclear power. McArthur River and Key Lake Capital Advisers, an advisory ers,” said Judith Ganes Chase, Before Fukushima, uranium mines. firm in London. “Uranium has 16 president of commodities re- prices were trading at about The impact of Cameco’s to be part of the solution.” search firm J. Ganes Consult- $70 a pound. In May 2017, 2016 ’17 ’18 move on the uranium market Bacchus Capital was central The marked decline in sugar ing LLC of New York. they hit $19.60—a level at Source: UxC can’t be underestimated, said in the creation and listing of prices is playing out in varying While this potentially her- which at least three-quarters THE WALL STREET JOURNAL. Mr. Lopez, adding that it was Yellow Cake PLC, which made ways around the world. Con- alds a secular shift in demand of the world’s uranium pro- the “equivalent of Saudi Ara- its debut on the London Stock sumers stand to gain in Eu- for sugar, supply of the com- duction is unprofitable, ac- consulting firm Trade Tech bia leaving the oil market.” Exchange this month. The rope, where sugar prices tend modity is increasing. cording to estimates. In the climbed in recent weeks to Supply is dropping at the company, which buys and to track world-market prices, In its update for July, the U.S., low uranium prices $25.85 a pound, its highest in same time demand is poised stores refined uranium, raised and in parts of the Middle East International Sugar Organiza- prompted producers to peti- more than two years. to rise. China has 19 nuclear $200 million. Money manager and Canada, where sugar is tion says a record surplus ex- tion the Trump administration China’s investments into reactors under construction, BlackRock Inc. bought a 4.7% imported at world prices. pected this year, followed by a to cap imports. The Commerce nuclear reactors and the clo- according to the World Nu- stake. Consumers in places such as surplus next year, means ex- Department said last month it sure of several uranium mines clear Association. The country Tribeca Investment Part- the U.S., Japan and China cessive stocks of sugar will has opened an investigation are spurring the creation of intends to build another 203 ners, a fund manager in Aus- won’t, though. In those coun- take time to liquidate. Green that could lead to tariffs. new funds that are betting the reactors. Russia and India are tralia with $1.8 billion in as- tries, the world sugar price Pool Commodity Specialists, a Uranium doesn’t trade in an uranium market will finally each building six reactors as sets, also backed the Yellow wouldn’t flow through to con- consultancy, projects a 19-mil- open market like many other turn. part of longer-term plans to Cake IPO and this month sumers of sugar-support pro- lion-ton surplus this year, the commodities, and many trans- Marcelo Lopez is running a more than double their exist- launched a uranium-specific grams that increase the prices largest ever; INTL FCStone, a actions occur under negotiated new $30 million uranium in- ing capacity. fund. It aims to raise about consumers pay for sugar. brokerage, says this year’s sur- private contracts. But an esti- vestment fund at L2 Capital Capacity in the Middle East $74 million to bet on ura- The losers are large produc- plus has already offset two mated spot price calculated by Partners in Brazil. He antici- is forecast to jump from 3.6 nium’s resurgence. ing countries such as Brazil. years of deficits. Producers there are selling And producers aren’t cut- sugar at prices that are now ting back. Sugarcane farmers Currencies below the cost of production, in India are expanding their according to analysts. acreage following a raft of GAM to Liquidate U.S.-dollar foreign-exchange rates in late New York trading The downbeat price outlook measures to boost sugar ex- US$ vs, US$ vs, Fri YTD chg Fri YTD chg for sugar is especially striking ports that are encouraging Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%) given that other commodities production. That is despite the $7.3 Billion of Funds Americas Europe are doing so much better. fact that the country has pro- Argentina peso .0342 29.2310 57.1 Czech Rep. koruna .04447 22.485 5.7 BY LAURENCE FLETCHER “Currently, sugar is telling duced 6.5 million tons more scribed as a “high level” of in- Brazil real .2588 3.8642 16.7 Denmark krone .1531 6.5321 5.3 us a completely different story sugar than it uses over the vestor redemption requests. Canada dollar .7611 1.3140 4.5 Euro area euro 1.1412 .8763 5.2 about the demand side of the year that ends Sept. 30. Swiss money manager GAM GAM said it expects inves- Chile peso .001529 654.20 6.3 Hungary forint .003530 283.30 9.4 Holding AG said Friday it tors to receive their cash “as it Ecuador US dollar 11unch Iceland krona .009173 109.01 5.3 would liquidate 7.3 billion becomes available throughout Mexico peso .0529 18.9109 –3.9 Norway krone .1196 8.3620 1.9 4.8 8.1 Swiss francs ($7.3 billion) of the liquidation process.” The Uruguay peso .03313 30.1800 Poland zloty .2658 3.7616 Venezuela b. fuerte .000005207100.0001 2002443.1 Russia ruble .01477 67.718 17.4 its funds following the suspen- affected funds include the Ab- Asia-Pacific Sweden krona .1096 9.1229 11.4 sion of a top bond fund man- solute Return Bond, Absolute Switzerland franc 1.0049 .9951 2.1 Australian dollar .7297 1.3704 7.0 Turkey lira .1556 6.4275 69.4 ager last week. Return Bond Plus and the Un- China yuan .1461 6.8469 5.3 Ukraine hryvnia .0368 27.1480 –3.5 GAM, whose shares are constrained Bond funds. The Hong Kong dollar .1274 7.8496 0.5 UK pound 1.2771 .7830 5.8 down by almost one-quarter firm said it was working on al- India rupee .01447 69.095 8.2 since it suspended Tim Hay- ternative vehicles for investors Indonesia rupiah .0000690 14493 7.5 Middle East/Africa wood for conduct “of signifi- who want to stay invested. Japan yen .009017 110.90 –1.6 Bahrain dinar 2.6501 .3774 0.1 7.4 0.5 cant concern,” said the boards “We believe that this deci- Kazakhstan tenge .002799 357.22 Egypt pound .0560 17.8580 Macau pataca .1237 8.0846 0.5 Israel shekel .2691 3.7163 6.8 of nine of its funds decided to sion underscores our commit- Malaysia ringgit .2448 4.0850 0.6 Kuwait dinar 3.3019 .3029 0.5 place them into liquidation, ment to treating all clients New Zealand dollar .6579 1.5200 7.8 Oman sul rial 2.5974 .3850 0.01 subject to shareholder and equally and fairly and to en- Pakistan rupee .00807 123.950 12.0 Qatar rial .2749 3.638 –0.3 regulatory approvals. suring that investors receive Philippines peso .0188 53.250 6.6 Saudi Arabia riyal .2666 3.7505 ... The news is the latest blow proceeds in a timely manner,” Singapore dollar .7281 1.3735 2.7 South Africa rand .0710 14.0760 13.9 5.9 in a torrid couple of weeks for said Tim Rainsford, GAM’s South Korea won .0008848 1130.17 Sri Lanka rupee .0062516 159.96 4.2 Close Net Chg % Chg YTD % Chg GAM, which last week was group head of sales and distri- Taiwan dollar .03252 30.746 3.6 WSJ Dollar Index 90.14 0.84 0.94 4.84

RUPAK DE CHOWDHURI/REUTERS forced to block client with- bution, referring to the liqui- Thailand baht .03000 33.330 2.3 Sources: Tullett Prebon, Dow Jones Market Data India has produced 6.5 million tons of sugar more than it uses. drawals following what it de- dation. Vietnam dong .00004296 23277 2.5

THE TICKER | Market events coming this week

Monday Gasoline up 2.9 July, expected up 0.3% Philadelphia Fed survey Distillates up 1.2 July, previous 25.7 Earnings expected* Unit labor costs Aug., expected 21.8 Estimate/Year Ago($) Stars Group 0.54/0.56 Business inventories 1st qtr., prev. up 2.9% Sysco 0.93/0.70 May, previous up 0.4% 2nd qtr. prelim. exp. Earnings expected* June, expected up 0.1% up 0.5% Estimate/Year Ago($) Tuesday Applied Materials Capacity utilization Earnings expected* 1.17/0.86 Import price index June, previous 78.0% Madison Square Garden June, previous down 0.4% Estimate/Year Ago($) July, expected 78.1% Cisco Systems 0.69/0.61 (2.08)/(3.58) July, expected down 0.1% Macy’s 0.50/0.48 Nordstrom 0.85/0.65 Nvidia 1.66/0.92 Empire Manufacturing NetApp 0.80/0.62 Earnings expected* Walmart 1.22/1.08 Estimate/Year Ago($) July, previous 22.6 Aug., expected 20.0 Thursday Advance Auto 1.86/1.58 Friday Agilent Tech. 0.63/0.59 Initial jobless claims CDK Global 0.85/0.55 Industrial production Previous 213,000 Leading indicators Home Depot 2.85/2.25 June, previous up 0.6% Expected 216,000 June, previous up 0.5% Tapestry 0.57/0.50 July, expected up 0.3% July, expected up 0.4% Wheaton Precious Metals 0.13/0.15 EIA report: natural gas Productivity Previous change in stocks in Consumer Sentiment 1st qtr., prev. up 0.4% billions of cubic feet Index Wednesday 2nd qtr. prelim. exp. up 46 July, final 97.9 Mort. bankers indexes up 2.2% Aug., prelim. 97.7 Building permits Purch., previous down 2% June, previous 1.273 mil. Refinan., prev. down 5% Retail sales Earnings expected* June, previous up 0.5% July, expected 1.30 mil. Estimate/Year Ago($) EIA status report July, expected up 0.1% Deere & Co. 2.73/1.97 Housing starts Previous change in stocks in millions of barrels Retail sales, ex. autos June, previous 1.173 mil. Crude oil down 1.4 June, previous up 0.4% July, expected 1.26 mil.

* FACTSET ESTIMATES EARNINGS-PER-SHARE ESTIMATES DON’T INCLUDE EXTRAORDINARY ITEMS (LOSSES IN PARENTHESES) ADJUSTED FOR MARY ALTAFFER/ASSOCIATED PRESS STOCK SPLIT NOTE: FORECASTS ARE FROM DOW JONES WEEKLY SURVEY OF ECONOMISTS Analysts expect retailer Macy’s to report quarterly profit of 50 cents a share on Wednesday. B10 | Monday, August 13, 2018 ** THE WALL STREET JOURNAL. MARKETS Turkey's Ability to Shock Markets Looks Limited

By Ben Eisen Foreign currency-denominated emerging-markets Current-account balance as a percentage of GDP, MSCI Emerging Markets Index weighting, debt as a share of gross domestic product selected economies by country Some investors and economists are skeptical that 0% 10 20 30 40 50 60 70 %8 Turkey’s currency crisis will Turkey China 31.2% continue to weigh on global Hungary markets. South Korea 14.1 Though the Turkish lira’s Argentina Taiwan 11.8 14% slide against the U.S. Poland dollar on Friday rippled Chile 4 Russia India 9.0 through global stocks and currencies, many markets S. Korea South Africa 6.8 recovered early losses, an Israel indication that Turkey’s Brazil 6.4 Malaysia financial woes are worse Russia 3.5 Czech Rep. than those of other emerging Surplus Turkey’s weighting in the economies but contained in 0 Mexico 3.1 Colombia Nonfinancial MSCI Emerging Markets Index nature. corporates Deficit China “Turkey has tended to be S. Africa Malaysia 2.4 Government 1.5% more vulnerable,” said Mexico Thailand 2.3 Torsten Sløk, an economist Brazil Financial sector at Deutsche Bank. Indonesia 1.9 Russia Households 1.0 Despite a build-up in –4 emerging-market leverage Indonesia Poland 1.2 in recent years, Turkey’s South Saudi Arabia Africa Chile 1.2 debt denominated in foreign 0.5 currencies is high relative Thailand Argentina Philippines 1.0 to most of its peers. That India external debt becomes more Turkey Qatar 0.9 expensive to repay when China –8 0 Turkey 0.7 Turkey’s lira slides against 2015 ’16 ’17 ’18 2016 ’17 ’18 those currencies. Its current-account deficit is also larger than many of its 10% peer emerging markets, such as South Africa and Currency performance against the U.S. dollar, year to date Argentina. A high current-account deficit means 0 its economy requires large inflows of foreign money. For most investors who Chinese yuan (offshore) buy emerging-markets stocks, their exposure to Turkey is –10 likely to be contained. The MSCI Emerging Markets South African rand Index, to which roughly $2 Russian ruble trillion dollars in assets are linked, has an exposure to –20 Turkey of less than 1%—and it is shrinking. That compares with more than 30% for China. –30 And while currencies around the world have been falling against the U.S. dollar Argentine peso recently, the lira’s fall is among the worst. –40 Turkish lira January February March April May June July August

Sources: Deutsche Bank via Institute of International Finance (debt); Organization for Economic Cooperation and Development (current-account balance); MSCI (weighting); Dow Jones Market Data (currencies) THE WALL STREET JOURNAL. HEARD ON THE STREET Email: [email protected] FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard

Trouble Fewer Stocks, More Value Social Networks All U.S. listed companies in the Wilshire 5000 index* Market value of all public stocks Unlikely to 8,000 $30 trillion United States Are Losing Friends 7,000 25

Go Global 6,000 20 The big social-media com- Wall Street analysts also Emerging markets are hit- 5,000 15 panies have become highly are looking past the recent ting the headlines again: valuable by effectively selling reports and still expect all Turkey is in deep trouble, 4,000 10 access to their rapidly grow- three companies to grow and ripples are spreading ing user bases. That makes their respective user bases. across markets. But trouble 3,000 5 weak user growth numbers According to analyst projec- brings opportunity, too. Euro area especially dangerous for tions tabulated by Visible Al- The temptation when 2,000 0 their valuations. pha, the number of Face- trouble hits a big emerging- 1970s’80s ’90s 2000s ’10s 1980s’90s 2000s ’10s Facebook, Twitter and book’s monthly active users market nation is to treat the *Index created in 1974 with data going back to 1970 Snapchat parent Snap Inc. all is expected to top three bil- asset class as homogenous Sources: Wilshire Associates (number of listed stocks); World Bank (market value) THE WALL STREET JOURNAL. posted declines in key user lion by 2022, up from about and dump emerging-market bases for the second quarter. 2.2 billion today. currencies, bonds and stocks Facebook posted its first slip Large advertisers likely en masse. Public Firms Here to Stay ever in the combined number aren’t going to shift their Yet investors should prob- of daily active users in the budgets based on a bad quar- ably be sanguine. There are U.S. and Europe—markets ter, especially after having few places that look as vul- Question: How many com- correctness,” which restrains Prof. Cheffins says this is to that drive a majority of the made major pivots toward nerable as Turkey, with its panies are in the Wilshire entrepreneurial spirit and fund growth, not to build the company’s advertising busi- social media in recent years. wide current-account deficit, 5000 index of all U.S. stocks? forces companies to employ physical capital needed to ness. Snapchat’s daily active In the second quarter, Face- high reliance on short-term This is a trick, of course: independent directors who launch production. And this users fell for the first time in book’s daily active users flows of credit, surging infla- There are only 3,500, down lack insight. (Ironically, Part- funding is now available in the young company’s operat- grew just 1.5%, its slowest tion and overheating econ- from a peak of nearly 7,500 ners itself is publicly listed.) many forms: not just private ing history. Twitter has pace on record, but advertis- omy—all exacerbated by the in 1997 and roughly 5,000 The signs of decline are capital but also debt, which logged drops before, but this ing was up 42%. country’s apparent inability when the benchmark launch- equally well known. Public is made more attractive by time investors were expect- But the risk is that if users or unwillingness to respond ed in 1974. There are many companies get picked off by tax advantages and an aging ing it to add 2.5 million to its continue to bail, social net- with orthodox policy, such as reasons to worry about a de- deal-hungry private equity or society’s desire to take less monthly active user base for works will need to earn more higher interest rates. cline of public companies, they use debt to buy back risk. the June quarter. Twitter in- cash from those who remain. Turkey’s woes aren’t but fears about the death of their own stock. There has But for all the growth in stead lost one million. Admittedly all three have enough for a wider emerg- public equity—revived last been a dearth of initial pub- private assets and corporate Investors have driven proven adept at that in the ing-market crisis. Indeed, the week by Elon Musk’s poten- lic offerings, especially by $1 debt, public stock markets down their stocks by an av- past. Facebook, for instance, country’s meltdown is at tial bid to take his electric billion-plus tech “unicorns,” are still bigger. The market erage of 16% following their made about $22 in ad reve- odds with a broader picture car maker Tesla private—are which remain in the hands of value of all U.S. stocks is respective second-quarter re- nue per average monthly that had started to stabilize, certainly overdone. founders and venture capital higher than ever at more ports. But all three remain user over the past 12 as markets adjusted to a Why worry? Fewer public funds. In the U.S., 2014 was than $30 trillion. That sits relatively richly valued com- months—roughly double that world in which higher U.S. companies would mean ordi- the best year for more than a against more than $6 trillion pared with others in the in- of three years ago. But this growth and a stronger dollar nary investors could miss out decade for IPOs, but volumes of high-grade U.S. corporate ternet sector. Snap trades at strategy is limited by the has been the big change. on good returns from invest- have been weaker before and bonds at face value and nearly 11 times forward sales amount of ads that can be While the lira has fallen ing in equities. Also, if more since, according to Dealogic. about $5 trillion for all pri- following its selloff, while crammed into users feeds over 20% in the past month, firms are in private hands, it But is this really a prob- vate assets under manage- Facebook and Twitter are without damaging their ex- other currencies like the Bra- is harder for politicians and lem with going public? Many ment globally. around eight times. The Nas- perience. Even the best of zilian real, Mexican peso and the public to monitor and in- entrepreneurs want to keep Also, more than half of daq internet Index currently friends can only take so Indian rupee have been fluence corporate behavior. control of their creations for private-equity-owned firms averages about 4.3 times for- much. —Dan Gallagher much more resilient. Emerg- That has real potential con- as long as possible. On top of are sold to other corpora- ward sales, according to ing-market asset prices sequences for employment, this, modern businesses sim- tions, according to Pitch- FactSet. started to move off their the economy and the envi- ply need less investment to Book, a research firm. The high valuations indi- Unfriended lows in July. ronment. get going, argues Brian Chef- U.S. stock markets have cate that investors seem to Share-price performance Turkey’s deepening woes Corporate complaints fins, a corporate law profes- fewer companies, but they view the recent bouts of user will hurt risk appetite and about being public are well sor at Cambridge University are bigger. That may mean a declines as a blip, rather 100% Twitter sentiment. But Turkey will rehearsed. Shareholders fo- in a new paper. concentration of economic than a long-term problem. 75 Facebook Snap be forced to respond to the cused on quarterly results Modern-company assets and political power, which Facebook and Twitter both 50 markets’ concerns at some stymie corporate develop- are mostly intangible rather might be as troubling as a cited changes they are mak- point. When that happens, a ment and long-term growth. than physical: intellectual lack of transparency and ac- ing to improve the health 25 buying opportunity could The costs and governance property, branding and pat- countability in private mar- and security of their net- 0 emerge for the stocks, bonds demands are too onerous. ents rather than machines kets. But one thing investors works as reasons for their –25 and currencies of countries One of Europe’s biggest pri- and buildings. needn’t worry about is the recent user declines. Snap, –50 that don’t face challenges as vate-equity firms, Partners Startups today, as in the death of public-company eq- meanwhile, blamed a re- deep as Turkey. Group, says public markets dot-com boom, still burn uity. cent—and highly controver- JFMAMJJA —Richard Barley suffer excessive “governance large amounts of cash, but —Paul J. Davies sial—redesign of its app. Source: SIX JOURNAL REPORT

‘It is a difficult time for View songwriters who aren’t writing massive hit songs.’ Jody Gerson CEO, Universal Music From Publishing Group TheT R6

‘Destination retail centers ‘The government continue to What are today’s under the gain market pressing issues for National Flood share.’ CEOs, chief financial Insurance William Taubman officers and others Program Chief Operations Officer, in the C-suite? Taubman Centers charges an Hear from the bosses At WSJ.com/ inadequate LeadershipReport themselves in this report, rate in and join the most conversation online. instances.’ Evan Greenberg CEO, Chubb O R4

‘There is a misconception on ‘Not all the accessibility brands will and cost of getting go to a more involved in natural, the sport.’ healthy Amy Choyne marketing Chief Marketing Officer, U.S. Tennis Association approach.’ At WSJ.com/ Bernardo Hees LeadershipReport CEO, Kraft Heinz R2 P

‘Some people find they miss the old amenities ‘The younger they are used to.’ Kevin Jacobs generation is getting CFO, Hilton Worldwide Holdings more interested At WSJ.com/ in beer, getting LeadershipReport influenced by the craft phenomenon.’ Laurence Debroux CFO, Heineken R5

INSIDE

How Bosses Waste Their Managing the New, The Hidden Impact The Leading Factor Behind The Science of Employees’ Time Multigenerational Workplace In How We Use Names A Company’s Results: Its People Career Hot Streaks Managers are often oblivious Bosses need to make older In a professional setting, referring The best-managed organizations Research shows hot streaks can to the impact of their words and workers feel valued while giving to someone by last name only excel in employee engagement last for several years. And they actions. But they can change. younger ones opportunity to rise conveys more eminence and development can happen in late career. R2 R4 R4 R5 At WSJ.com/LeadershipReport R2 | Monday, August 13, 2018 THE WALL STREET JOURNAL. JOURNAL REPORT | C-SUITE STRATEGIES How Bosses Often Waste Their Employees’ Time BY ROBERT I. SUTTON A film director we interviewed described how he was dissecting the flaws in a scene for his team. Then LEADERS DON’T mean to waste one member sighed. their employees’ time. Unfortunately, The director called him on it, and many of them heap unnecessary the man mumbled that he didn’t work on the people below them in have anything to add. But when the the pecking order—and are down- director nudged him to speak, he right clueless that they’re doing it. made a suggestion about changing They give orders without realiz- the scene that the director praised ing how much work those directives and implemented. entail. They make offhand comments and don’t consider that their em- A radical change ployees may interpret them as com- As part of embracing complaints, mands. And they solicit opinions leaders might consider a radical (and without realizing that people will often uncomfortable) change in how bend over backward to tell them they define star employees. what they want to hear—rather than Research on psychological safety the whole truth, warts and all. led by Amy Edmondson at the Har- That is what my Stanford col- vard Business School shows that the league Huggy Rao and I have learned best employees for promoting orga- from our “organizational friction” nizational learning are often those project. We’re studying why some who never leave well enough alone, organizations make the right things pointing out mistakes and flawed too difficult to do and the wrong practices. But those who manage- things too easy to do—and what ment rates as top performers are of- leaders can do to avoid such mis- ten those who silently do what steps. they’re told and what has always been done—and don’t annoy their The roots of waste superiors with complaints and ques-

Before describing how to avoid it, PETER ARKLE tions about flawed practices. it’s important to understand why so My work with Dr. Rao reveals many leaders are blind to the ways to what Dr. Rao and I call “executive and contests to encourage clerks to company also lost several top pros- similar problems: Employees who they waste employees’ time. magnification,” when people bent on offer smiles, eye contact, greetings pects, who accepted jobs elsewhere start big programs are often cele- First, many bosses don’t pay buttering up a leader react far more and thanks to customers. before interviews with the CEO brated, but rarely those who end old, enough attention to followers’ be- strongly to his or her words or ac- This campaign was launched, in could be scheduled. obsolete and ineffective programs haviors, needs and troubles. tions than the leader ever intended. part, because the CEO complained A year too late, the CEO decided and practices. And managers who The CEO of one firm I studied, for For example, an executive told me about a rude clerk he encountered. It she was too busy to interview every lord over big teams and keep adding instance, fell in love with new man- a story, perhaps apocryphal, about a took a couple of years before he re- candidate. But she remained oblivi- underlings are rewarded with presti- agement concepts, such as “lean” CEO who commented that there alized his brief rant had triggered a ous to how her actions had burdened gious titles and big raises—even operations, and frequently an- were no blueberry muffins at a big campaign that he never colleagues and driven away candi- when their ever-expanding army of nounced new companywide initia- breakfast meeting. He wasn’t espe- wanted—and he ordered the com- dates. bureaucrats adds unnecessary rules tives—often once a quarter. But cially fond of them; it was just small pany to wind it down. and procedures that sap time and those announcements typically talk. After that, his staff sent strict Another way that executives Listening to criticism energy from people who do the most didn’t take into account initiatives instructions about this preference to waste employees’ time, slow the How can leaders stop making important work. from previous quarters. Employees every host. It took him years to dis- work and add to their own burdens these mistakes? How can they recog- Instead, the best leaders discour- were often asked to drop what they cover why there were piles of blue- is by “cookie licking,” a term in- nize that they have created an atmo- age this addition sickness by prais- were doing before and start a new berry muffins every place he went. spired by sneaky children who lick sphere where wasting time is more ing, promoting and paying employ- mission from scratch. In another case, an executive cookies to deter others from eating the norm than the aberration? ees who remove destructive friction Each new initiative entailed a new asked his workers why there was a them. They can start by being skeptical and waste. round of training, meetings and pa- new door in one room. His people Cookie licking happens when when they hear nothing but sunny As with most positive steps, play- perwork. Even though many employ- took it as a criticism, so they plas- leaders of growing companies don’t feedback from followers. They ing the subtraction game is much ees learned the fine art of “fad surf- tered and painted it over to please realize or accept that the time has should also be vigilant about their like mowing a lawn. Leaders can’t ing”—that is, complying with the him. When he explained that he had come to delegate responsibilities. minor complaints and offhand re- just do it once and declare victory. changing directives as little as possi- not meant it as complaint, they put For instance, it made sense for one marks. When they say anything that They have to do it on a regular basis, ble and focusing on their core the door back in. CEO we know to interview every job could be misconstrued as a com- or else the old bad habits will creep work—they still wasted a lot of time. candidate when her company had 25 mand or desire for change, it helps back into place. At many companies, meanwhile, Not all smiles employees—but not when it grew to to add, “Please don’t do anything, I employees become aware of how Executive magnification can gen- over 500. am just thinking out loud.” Dr. Sutton is a professor in the self-absorbed their bosses are, and erate far more troubling waste. In Yet she insisted on doing so even And when leaders encourage can- department of management so focus on telling the bosses what the 1980s, a co-researcher and I though scheduling interviews placed dor and criticism from employees, science and engineering at they think the bosses want to hear, studied a retail chain that spent mil- enormous burdens on her assistant they should make sure it isn’t just Stanford University and co-author and on doing things they believe will lions on improving employee cour- and human-resources staffers, as her lip service, and back it up with ac- of “Scaling Up Excellence.” He can keep their bosses happy. This leads tesy. They used training, incentives schedule became more packed. The tions. be reached at [email protected].

The Maker of Kool-Aid and Jell-O Thinks Healthy Kraft Heinz has some of the most iconic American brands. That may be one of its biggest weaknesses.

BY ANNIE GASPARRO natural platform, I didn’t have go to a more natural, healthy an organic platform. So even marketing approach. You need with consumers telling me to understand what your brand KRAFT HEINZ CO. has a large great things about Capri Sun— is about. Maxwell House is all number of famed brands that you all grew up with good about the value of hard work— are locked into Americans’ memories about the brand— people who wake up in the memories. Among them: Kool- you wouldn’t choose it any- morning, do their work with Aid, Jell-O, Oscar Mayer. more. I didn’t have the right honor and go back home to But that strength, in prod- product offering. [Kraft Heinz their families. We’re not trying ucts not typically associated has since begun to address to make Maxwell House be with healthy choices, may now this issue by, for example, in- something that it’s not. be a weakness, as consumers troducing organic and no- seek fresher, more natural added-sugar versions of Capri WSJ: What is causing the sales foods. Sun, Oscar Mayer hot dogs slump at Kraft Heinz and in A merger three years ago without byproducts and Kraft the packaged-food industry? created the food giant, and Mac & Cheese with no artifi- MR. HEES: The challenges we now that the integration is cial coloring.] are having are partly due to over, cost cuts have boosted some tough categories, like profit margins. But U.S. sales WSJ: When you removed pre- packaged meats, and partly have been a sore spot, and the servatives from the natural due to our innovation efforts company’s challenge is to mod- and organic varieties of Capri to come to market faster. We

ernize its brands without leav- Sun, it caused a mold problem still need to do much better as BRIAN SORG FOR THE WALL STREET JOURNAL ing loyal customers behind. in the juice pouches. How do a company at that [being fast], ‘We’re not trying to make Maxwell House be something that it’s not.’ The Wall Street Journal sat you handle hiccups like that? but I think we have come a down with Chief Executive MR. HEES: We corrected it im- long way in two years. BERNARDO HEES Bernardo Hees to talk about mediately. There are a lot of The speed at which things Kraft Heinz’s strategy for sales connections between packag- are changing is new. E-com- where to invest. We acceler- tatoes and onions to which the wait to have 100% of certainty growth. Edited excerpts follow. ing, the product, the right merce, discounters, club stores; ated commercial growth by in- consumer adds an egg before in each one of the product temperature, transportation. you sell more food in gas sta- vesting over $250 million in warming]. Probably half of the launches, you’re probably go- Healthy foods We went back and adapted the tions today than ever before. new channels like e-commerce, ideas that go into the innova- ing to miss the boat. Our reno- WSJ: How is Kraft Heinz ad- different components. You try I’m very pleased with the way food service, hiring more field tion funnel don’t make it to vation of Oscar Mayer hot justing to demand for health- to be as prepared as you can, I’m seeing things move in our sales teams. We are going to launch. That is very different dogs [eliminating artificial ier, fresher food? but you are always going to teams. We are much better see top-line growth in the sec- from four years ago [when preservatives, added nitrates MR. HEES: The most important face something. than two years ago, but we are ond half. The flowers from the fewer ideas were cut]. and meat byproducts] took us job I need to do related to the always pushing for more. seeds we have been planting nine months from conception brands is have them be rele- WSJ: How do you renovate After two years, learning the for almost a year now, I think, WSJ: What’s difficult about en- to market. Before, it would vant. With our Capri Sun brands without alienating core data and seeing what things are starting to show up. tering new categories? take us at least two years. drinks, for example, until two consumers? work and what doesn’t work, MR. HEES: You need to under- It was critical for us to win yearsagoIdidn’thaveanall- MR. HEES: Not all brands will we have more confidence about Limited resources stand the proposition you’re the grilling season in 2016. We WSJ: You’ve said your strategy making, what the product needed to have it in the market is to make fewer but bigger brings to the table. Otherwise, by May. R&D said it wasn’t pos- Changing the Mix bets when it comes to product it’s very difficult to penetrate. sible. But we did a completely New and revamped products introduced since the Kraft Heinz merger was announced in March 2015 launches. Why? Even retailers are going to tell different process. We are prob- MR. HEES: Resources are a you, “Wait, why are you launch- ably using 70% or 75% of the April 2015 April 2016 July 2016 August 2017 April 2018 limit. We can’t launch every- ing that?” Understanding the [market research and consumer Heinz Mustard is Capri Sun Devour, a new O, That's Good! Food Network Kitchen thing. We look at it as an in- need and what consumers want focus group] data, not 100%. If introduced to organic launch brand of frozen refrigerated meals Inspirations salad novation funnel. A lot of in new categories is critical. you are 75% certain, you are compete with French's meals, launches introduced in dressings, cooking things get out of the funnel. Just Crack An Egg, for example: probably ready to go. The other partnership with sauces and What we hold back is every- 70% of breakfast is the con- 25% is just insurance. Oprah Winfrey meal kits launch thing that we think is not go- sumer eating in the car. But we ing to succeed and is just kick- normally don’t feel good about WSJ: How do you decide which ing the can down the road. For it. You have to take your kids to brands to invest in for growth? example, we had an idea for school or exercise or whatever. MR. HEES: We have to define 2015 2016 2017 2018 Ore-Ida Veggie Tots: veggies With Just Crack, it’s all natural, the role of each brand in the infused in the tots, so that it takes two minutes, and it’s overall strategy. You don’t kids would eat their veggies. good for you. You can take it in have resources to do every- December 2015 May 2017 February 2018 April 2018 We tested it, but it had limited the car if you want. thing. You focus on things that Kraft Mac & Cheese is Oscar Mayer hot dogs Just Crack An Egg Heinz Mayonnaise interest from core Ore-Ida Ta- have the maximum return. revamped: artificial revamped: no added breakfast bowls introduced ter Tots parents. Comparing speeds preservatives, flavors nitrates or nitrites, launch We are playing in many new WSJ: How do you compare Ms. Gasparro is a reporter and dyes removed artificial preservatives categories, like with Just Crack with peers on your speed at for The Wall Street Journal or byproducts An Egg [a microwavable pack- renovating legacy brands? in Chicago. Email her at Source: the company THE WALL STREET JOURNAL. age of diced meat, cheese, po- MR. HEES: If you’re going to [email protected]. R4 | Monday, August 13, 2018 THE WALL STREET JOURNAL. JOURNAL REPORT | C-SUITE STRATEGIES The Problem With Government Flood Insurance Evan Greenberg, CEO of Chubb, says federal policies exacerbate risks

BY LESLIE SCISM ural catastrophes. In his an- price to live with that risk. nual letter to shareholders ear- And it disincents government lier this year, he said, “The from putting money toward in- LAST YEAR, property insurers evidence of climate change is frastructure to mitigate expo- endured one of their worst immediately apparent, pro- sure to flood. years ever, with up to an esti- found and disturbing.” mated $144 billion owed to Mr. Greenberg, who has WSJ: What do you think should policyholders world-wide from more than four decades of ex- happen? disasters including major At- perience in the property-casu- MR. GREENBERG: The NFIP is lantic Ocean hurricanes and alty insurance industry, says deeply in the red, and it California wildfires. the risk environment is becom- crowds out the private sector Chubb Ltd., one of the ing more complex, due both to from playing a greater role in world’s biggest insurers of nature and man-made activity: flood insurance. businesses and known for its climate change combined with Our country requires a coverage of the personal prop- people’s growing preference more comprehensive solution erty of the affluent, accounted for homes near coastlines. that includes the expertise and for $2.76 billion of the pay- He believes these risks are capacity of private insurers. outs. But its chief executive, exacerbated by government The science around flood in- Evan Greenberg, says there policies that subsidize devel- surance has improved. The pri- was no hand-wringing at the opment and shield people from vate sector would charge an company about the costs—the the true cost of their living actuarially sound rate—that’s losses were within risk-man- choices. In particular, he advo- to everyone‘s advantage be-

agement expectations. For the cates for changes to the fed- JOHN MADERE cause it brings stability to the full year, Chubb still posted eral National Flood Insurance ‘Property values accumulating along coasts are an evolving problem.’ system. There is still a role for net profit of $3.9 billion. Program, including a bigger the government to play to Still, Mr. Greenberg has big role for the private sector in EVAN GREENBERG serve those who are less fortu- concerns about the increased underwriting flood risk. nate and have an affordability frequency and severity of nat- Mr. Greenberg spoke with natural catastrophes are the Ph.D.s, mathematicians, rocket creasing our exposure. Where problem but cannot move. The The Wall Street Journal about highest on record and the scientists and climatologists. we can’t, we will shrink our government should subsidize extreme weather and the third year since 2005 with exposure. the cost for those people. Living on the Edge changes he would like to see in $100 billion or more of aggre- WSJ: Will state insurance de- That’s a societal decision. And The insured value of property in the government program. Here gate industry catastrophe partments approve the large WSJ: You’ve been outspoken it’s the right decision. counties along the hurricane- are edited excerpts of the talk. losses. There were events rate increases that insurers about man-made risks such as It will take time to develop vulnerable Atlantic and Gulf where industry modeling per- may feel necessary for home- the concentration of exposures a private-sector market. The WSJ: Would you elaborate on formed reasonably well, and owners if extreme weather in coastal areas, and you’ve coasts jumped 80% in 13 years. government ought to maintain your comments about evidence other events such as the Cali- leads to higher claims costs? said you think the govern- a role as reinsurer of last re- $14trillion of climate change as “appar- fornia wildfires that included a MR. GREENBERG: For insurance ment’s National Flood Insur- sort for extreme events. 12 ent, profound and disturbing”? fair amount of nonmodeled or lines that require filing rates ance Program contributes to [The NFIP says that the ma- MR. GREENBERG: Climate poorly modeled loss. with state regulators, premium that by underpricing policies. jority of its policies charge 10 change shows up in rising sea increases are based on evi- MR. GREENBERG: People want premiums that fully reflect 8 levels and in large storms. Pat- WSJ: What do you do to better dence of loss. You have to be to live near water. Property possible flood events. In a terns of drought, shorter win- understand this evolving expo- able to justify the rates you values accumulating along statement, NFIP Chief Execu- 6 ters and more evaporation are sure? charge customers. Some juris- coasts, along with the increas- tive David Maurstad said that 4 other examples of extreme MR. GREENBERG: We invest to dictions understand this and ing size of the population, are the government is “currently conditions. There is more evi- continually upgrade and refine balance the needs of their con- an evolving problem. The rise redesigning the rating method- 2 dence right now that hurri- our modeling and risk-man- stituencies. And some, for po- of sea-level temperatures and ology” to improve it with addi- 0 canes contain more moisture agement tools for catastro- litically expedient or populist water levels increases the ex- tional risk data and commer- and are increasing in intensity phes. We’re using aerial imag- reasons, choose to ignore the posure. The government under cial catastrophe models, with 2004 ’06 ’08 ’10 ’12 ’14 ’16 more rapidly. ery, modeling and drones to need to raise prices, and I the NFIP charges an inade- new rates beginning in 2020.] Note: Figures are estimates and include validate flood footprints and think that’s ultimately not in quate rate in most instances. It residential and commercial property. Dots represent data points; dotted line is WSJ: How does climate change assess the impact of storms. the interests of their constitu- underprices the cost of risk. It Ms. Scism is a news editor extrapolated. impact your operations? We have an enterprise risk- ents. When we can achieve an incents people to live in places for The Wall Street Journal Source: AIR Worldwide MR. GREENBERG: Total insured management team with some adequate rate, we are amena- they otherwise wouldn’t be- in New York. Email her at THE WALL STREET JOURNAL. losses globally in 2017 from very smart people, including ble to both maintaining and in- cause they don’t pay the right [email protected].

The New, Multigenerational Workplace The Hidden Impact BY CAROL HYMOWITZ handful of older workers, com- four to five different genera- sis, and reminded them that In How We Use Names panies now must deal with tions is new territory, and one they have seniority protection large numbers of workers who big mistake they make is to through their union. Eventu- BY STAV ATIR AND MELISSA J. FERGUSON THE CHALLENGES OF manag- are up to six decades apart in dwell on those very age differ- ally a few old-timers retired, ing a multigenerational work- age. That means they must ences. Doing so will inevitably allowing some young employ- force are on full display at Pit- create opportunities for young lead to assumptions that will ees to advance to senior pro- When discussing prominent figures in literature, we may ney Bowes Inc. employees to advance (or risk often turn out to be both duction jobs. mention such giants as Jane Austen, Hemingway, Dickens There, Brigitte Van Den losing them) while also making wrong and condescending. and Virginia Woolf. In contemporary politics, perhaps we’ll Houte, vice president of human sure veterans, whose skills “Stereotypes abound, Wisdom of ages bring up Obama, Trump, Angela Merkel and Theresa May. resources and global talent they need in today’s tight labor whether it’s the belief that A team of only young em- Did you notice anything odd about the preceding para- management, must persuade market, don’t feel overlooked. older workers don’t understand ployees may not include any- graph? There’s clearly a pattern: We referred to the women employees in their 20s that And to maintain productivity technology and won’t learn one who has ever worked for by full name and to the men by surname alone. That’s a they have a future at the Stam- and innovation, they must per- new things or that millennials several bosses or has exten- tendency that’s common in many professional fields—and it ford, Conn.-based company, es- suade employees of disparate are constantly job hopping,” sive knowledge of a company’s could be a disadvantage for women. pecially as it makes a push into ages to collaborate. says Joe Casey, an executive practices and culture, while a In our research, we have discovered that people were e-commerce services to offset “It’s a sea change for em- coach at Retirement Wisdom in team with only older workers more than twice as likely to refer to male professionals by falling demand for its tradi- ployers, causing reversals of Princeton, N.J., and a former might not have anyone profi- surname only as they were to refer to female professionals tional postage-meter equip- authority,” says Peter Cappelli, human-resources manager at cient in social media or big- that way. We also found that people generally regarded sci- ment. At the same time, she a management professor at the Merrill Lynch. The reality, he data analytics. And while entists referred to only by surname as more famous and must encourage veterans 50 University of Pennsylvania’s says, is that “there are huge young employees sometimes eminent, a judgment that could result in more awards, fund- and older—who make up about Wharton School who has re- variables within each genera- work faster, older ones make ing and other career benefits. one-third of the workforce—to fewer mistakes. Taken together, those findings suggest that the difference support and even take direc- Reverse or reciprocal men- in the way we tend to refer to women and men might lead tion from the newcomers. All Together Now toring programs, which pair to gender bias in workplaces of all kinds. Every few months Ms. Van young and seasoned talent, A growing share of older people are in the work force. Civilian The gender link Den Houte invites a group of labor-force participation rate by age. also promote knowledge shar- young employees to spend a ing across generations. Bon In one of our studies, we analyzed hundreds of tran- day with seasoned executives 90% 16 to 24 25 to 54 55 to 64 65 to 74 Secours Virginia Health System scripts of political segments from radio shows from 2014 who share their knowledge of Richmond, Va., has formal and 2015. We examined how often pundits referred to politi- about the company’s history 80 and informal mentoring pro- cians by surname only. Surname references made up 30% and operations and offer advice 70 grams for its 14,000 employ- of all references to male politicians and 13% percent of refer- about how to get ahead. And to 60 ees, one-third of whom are ences to female politicians. spur growth in the e-commerce 50 over 50 and who range in age In another study, we asked people to write an essay business, she has helped create from 18 to 93. Among these: a about a fictional scientist based on information we pro- mixed-age teams of about 15 40 program that each year identi- vided—including a male first name in some cases and a fe- employees from different de- 30 fies about 75 “high potential” male first name in others. The scientist called Douglas Ber- partments with IT, sales, legal 20 employees who are 35 or youn- son was referred to as simply Berson in the essays more and other experience. Decisions 10 ger and pairs them with senior than four times as often as Dolores Berson was, even are made collaboratively—and executives with whom they though the first name was the only difference between the young employees have as much 0 meet about once a month. two in the information the study participants were given. say as long-tenured ones. ’96 ’06 ’16 ’26 ’96 ’06 ’16 ’26 ’96 ’06 ’16 ’26 ’96 ’06 ’16 ’26 The executives sometimes “The old way of working”— Source: Bureau of Labor Statistics THE WALL STREET JOURNAL. learn as much as they teach, The fallout with employees more segre- says Jim Godwin, senior vice What are the implications of this naming tendency for gated by age and skills and vet- searched effective ways to tion.…Managers have to iden- president of human resources. professionals? Our research suggests that people generally erans typically having the most manage older workers. “Sud- tify what skills and strengths His first mentee, an IT em- consider someone called only by surname to be more well authority—“no longer works,” denly 20- and 30-year-olds are each individual employee can ployee who was versed in known and eminent—which could be bad news for those says Ms. Van Den Houte. working with people their par- contribute and confront their emerging technologies, “taught known by their full names, who more often are women. ents’ and grandparents’ ages own biases so they can move me a lot about new applica- In a series of experiments, we asked participants to read Peers across generations who are subordinates or peers, their teams beyond labels.” tions and how to train others about a few fictional scientific researchers. Some of the re- Most companies have long not superiors as they used to Another key issue: getting to use them, even though I’m searchers were referred to by only their surname and some employed at least a smattering be. And there aren’t just a older workers, often fearful of pretty tech-savvy,” he says. by their full name with a gender-neutral first name—Casey of gray-haired rank-and-file handful of seniors who are losing their jobs, to help youn- Managers often think that Boland, for instance. People consistently judged the sur- veterans who prefer working mostly in the C-suite and rarely ger employees. Vanessa Contre- most benefits are targeted at name-only researchers as more famous and eminent in their to retirement, even when they seen. They’re at all ranks.” ras, vice president of human particular groups of employ- field than the full-name researchers. report to bosses half their age. The numbers tell the story. resources and manufacturing at ees. But the evidence suggests We also found a naming effect when people were asked What’s happening now, Millennials, age 22 to 37, are McRoskey Mattress Co.inSan that what’s beneficial for one to judge whether these fictional researchers deserved a though, is something entirely the largest group in the labor Francisco, says that when she age group is usually good for prestigious career award. Researchers referred to by full new: Older employees—who force, but older workers are the joined the 119-year-old com- others. Faced with more than name were deemed deserving by 43% of those who read are living longer and want or only group whose workforce pany a decade ago, 90% of the 1,000 job openings currently, about them, but when the same researchers were referred need to work longer—are be- participation rate is rising, says company’s nearly three dozen Bon Secours has retained older to only by surname, they were considered worthy by 49% of coming a core part of the la- the Bureau of Labor Statistics. employees were over 50. employees thanks to com- readers. Such bias has the potential to affect the career bor force. Instead of retiring About 27% of 65- to 74-year- To woo young workers pressed workweeks and other prospects of professionals in general. in their 50s and 60s, they’re olds had full- or part-time jobs needed for the future, Ms. flexible arrangements. These So, the next time you and your friends are discussing filling jobs in offices, factories, in 2016, and by 2026, 30% are Contreras promised to train also help to retain workers your favorite up-and-coming politicians, or people in your hospitals and elsewhere. expected to be employed, ac- them to do several jobs so they with young children or those own field, take note of how you refer to the men versus the And that, in turn, is trans- cording to the bureau. Among could advance. But she first juggling work and college or women. You might be communicating more than you realize. forming workplace dynamics, 55- to 64-year-olds, 64% were had to assure veterans that certification programs, says forcing managers to accommo- working in 2016, and that’s ex- they wouldn’t lose their jobs if Mr. Godwin. Dr. Atir is a postdoctoral researcher at the University of date a grayer and more multi- pected to rise to about 67% in they shared their knowledge. Chicago Booth School of Business. Dr. Ferguson is a profes- generational workforce. Rather the next decade. She told them the company Ms. Hymowitz is a fellow at sor and chair of the psychology department at Cornell than primarily overseeing a For managers, the idea of wasn’t planning to cut staff, as Stanford Longevity Center. University. They can be reached at [email protected]. younger workforce, with a leading teams that include it had during the financial cri- Email [email protected]. THE WALL STREET JOURNAL. Monday, August 13, 2018 | R5 JOURNAL REPORT | C-SUITE STRATEGIES

A Brewer’s Strategy in a Stagnant Market Tennis,Hotels Heineken’s CFO says the company’s best shot in the U.S. is to think locally And Malls: More Online BY NINA TRENTMANN Go to wsj.com/leadershipreport for C-Suite interviews with: THE BEER MARKET isn’t what it used to be. AMY CHOYNE, Dutch brewer Heineken NV faces chief marketing officer of the stagnating beer consumption and U.S. Tennis Association, on changing consumer tastes in some of getting more people to play: its core markets. Craft beers are “There is definitely a miscon- booming, but consumption of non- ception on the accessibility and craft beer has been declining for cost of getting involved in the years in Western Europe and the U.S. sport. Nearly every community In response, Heineken—the has tennis courts to access pub- world’s second largest brewer, after licly, from parks to recreation Anheuser-Busch InBev SA—has been centers to schools. Entry-level working to expand its customer tennis can be very affordable.” base. It has acquired craft-beer makers, focused its marketing strategy KEVIN JACOBS, on local markets and ventured into chief financial officer of new product categories, including Hilton Worldwide Holdings zero-alcohol beer and the cannabis- Inc., on the importance of infused seltzer water sold by one of design in the evolving hotel its recent acquisitions, Lagunitas landscape: Brewing Co. of California. And ear- “We have gotten a lot better lier this month, Heineken announced at keeping up with the pace of the acquisition of a 20.67% stake in change. But the rate at which China’s biggest brewer, China Re- the next big idea is put in front sources Beer Holdings Co., for $3.1 of consumers, and they turn to billion, as part of an agreement that us and ask why we aren’t doing will give the Dutch brewer access to it, too, is more rapid than it has

an extensive distribution network in HERMAN VAN HEUSDEN ever been.” China, the world’s largest beer mar- ‘There is probably not much room for brands that don’t have a defined personality.’ ket by volume. WILLIAM S. TAUBMAN, To help free up money for acqui- LAURENCE DEBROUX chief operations officer of sitions and product development, Taubman Centers Inc., on Chief Financial Officer Laurence De- something we have in our portfolio, Our best shot, being a smaller the mall owner’s strategy in an broux has been streamlining opera- and we won’t sell Ichnusa in the Looking for Some Fizz player, is to understand the trends increasingly online world: tions and cutting costs. She spoke to U.S., in the U.K. or in France. Those Beer sales have been weak overall. on a state-by-state, very regional ba- “The basis of our plan”—a The Wall Street Journal about the local portfolios are more complex to Sales based on volume in liters, sis and to play along. In the United $500 million renovation of Bev- changing beer market and what Hei- manage but are also maybe what indexed to 2007 = 100. States, there is such a diversity of erly Center in Los Angeles— neken is doing to evolve along with makes us more fit to this new world people, of behavior, opinions, life- “was everything but the depart- 120 it. Edited excerpts follow. of consuming. styles. It is not a supergood idea to ment stores. We basically did put the Tiger brand [a beer brewed nothing with the department Local flavor WSJ: Given that you also still have Global in Singapore] into New York. But on stores. We just did something 110 WSJ: What is Heineken doing in mar- traditional customers, how do you the West Coast, we have a high de- with everything else.” kets where beer consumption is stag- make sure that you as a brand mand for the Tiger brand. nating or falling—for example, in transform enough but not too much? 100 Western Europe or the U.S.? MS. DEBROUX: You do that with a U.S. WSJ: How does this month’s China tas. That is about the world of MS. DEBROUX: In the U.S., it is really portfolio of brands. I believe that in deal fit into your global strategy? craft—Lagunitas does not have con- clear that classical beer consumption the future, there is probably not MS. DEBROUX: China is the second- sumers, they have tribes. They don’t is declining and the share of beer much room for brands that don’t 90 largest premium-beer market and is do advertising on TV; Tony [founder compared with other alcohol sold have a defined personality. Western Europe forecast to be the biggest contribu- Tony Magee] does concerts. That’s has been going down. What has po- tor to premium volume growth in the way they work. That is not going tential to grow is craft or beer that WSJ: What is your plan to stop or 80 the next five years, driven by its rap- to influence the whole of how Hei- brings something different—for ex- even reverse the stagnating and 2007 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 idly growing middle class. This stra- neken works, that’s not going to be ample, Mexican beer. That’s still a downward trend in the U.S.? tegic partnership will help us to sig- completely transforming the com- quite dynamic part of the market MS. DEBROUX: If I look at our more nificantly expand availability of the pany. It is helping us to understand. and one where people are going. traditional portfolio in the U.S., our Even the craft-beer boom has slowed. Heineken brand in China. If we acquire them to Heinekenize What you see is the younger gen- market share is 4%. It can be up a The percentage change in global sales It fits our overall strategy to lead them, that’s not going to work. We eration is getting more interested in little, down a little, but we are a volume by year: the premium segment in beer and ci- will waste our investment, because beer, getting influenced by the craft small player in this huge market— 20% ders across the world and to lever- the tribe that follows them is going phenomenon. which is not a growing market, apart age the power of the Heineken to go and we are not going to learn. The whole trend for me is very from the craft market. 15 Craft brand, supported by a strong portfo- The clear choice we have made is consistent and in a way very encour- In the past couple of years, we lio of international premium and lo- not to integrate them. The seltzer aging for a company that has never pretty much stabilized a decline that 10 cal brands. water is an experiment, and they given up on the diversity of the prod- started perhaps 10 years ago. I do will be very limited in terms of uct. The Heineken brand is still 15% of not see massive growth for the Hei- 5 Lessons learned where they can sell it, only in Cali- our volume, but this is a company neken brand. We might be able to WSJ: Your subsidiary Lagunitas re- fornia. If you ask me whether it’s that has around 300 brands globally— strengthen our presence in trendy 0 Noncraft cently launched a seltzer water in- scalable, probably not. That’s not the every country with a local portfolio. bars and restaurants, as we have his- fused with cannabis. Is that a way idea. torically been more sold in stores. -5 forward? WSJ: Can you give an example of We can have adjustments, but this is MS. DEBROUX: We have left them Ms. Trentmann is a news editor this? not where the bulk of the growth is, ’09’082007’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 very independent. Because if you ac- for The Wall Street Journal’s CFO MS. DEBROUX: Ichnusa, which is a in traditional lager. That’s not where Source: GlobalData PLC quire a craft brewer like Lagunitas, Journal in London. Email her at very local Sardinian brewery. That’s the young people are turning. THE WALL STREET JOURNAL. you have to let Lagunitas be Laguni- [email protected].

MANAGEMENT TOP 250 | RICK WARTZMAN AND LAWRENCE CROSBY The Key Factor Driving a Company’s Results: Its People The best-managed companies excel in employee engagement and development

AMONG Peter Drucker’s most fa- to use Mr. Drucker’s words, as “do- nificant drop in their employee mous maxims was that “any busi- ing the right things well.” People Power score. ness enterprise has two—and only To come up with our rankings, Looking at the 50 biggest gainers and 50 biggest losers from 2012 to 2017 among Two companies illustrate the these two—basic functions: market- we evaluated 693 large, publicly 693 companies measured for their overall effectiveness, here are their average phenomenon. Lam Research Corp., ing and innovation.” traded corporations. The companies changes on a 0-100 scale in that period across ﬁve dimensions of performance. the semiconductor equipment By the former, he meant under- were then compared with one an- maker, was the third biggest gainer standing what the customer needs other through standardized scores, 50 biggest 50 biggest overall, soaring 19.2 points in total and values so deeply that “selling” which have a range of 0 to 100 and losers gainers effectiveness from 2012 to 2017. becomes superfluous. By the latter, ameanof50. Employee engagement and development 11.2 The company, which ranked No. 72 he meant the creation of better and In calculating our scores, we –13.5 in last year’s Management Top 250, more economical goods and ser- drew on 37 indicators covering five went up in all five categories, but it Financial strength 7.8 vices, as well as processes and pro- different areas: customer satisfac- –7.7 made its largest leap—22.8 points— cedures. tion, employee engagement and de- in the employee area. Meanwhile, Customer satisfaction 6.2 At the same time, Mr. Drucker velopment, innovation, social re- –6.6 heavy equipment manufacturer Cat- left little doubt about the engine responsibility and financial strength. erpillar Inc. was the third biggest quired to make these functions But while all five interrelate—and Innovation 5.8 loser overall, with an effectiveness flourish. They weren’t going to hap- it’s important for executives to pur- –5.5 score that tumbled 13.8 points from pen magically on their own. sue excellence across functions—it 4.5 2012 to 2017. Ranked No. 225 last Social responsibility “The yield from the human re- is evident from our historical data –4.5 year, its scores went down in all five source,” he wrote, “really deter- that the employee category is the Sources: Drucker Institute, using data from American Customer Satisfaction Index, Bloomberg Finance L.P., categories. Yet its largest falloff was mines the organization’s perfor- key source of change in total effec- Clarivate Analytics, CSRHub, Glassdoor, HIP Investor, PayScale, Satmetrix Systems, Supply Chain Resource 14.2 points in employee engagement mance.” tiveness scores over time. Cooperative, Sustainalytics, Temkin Group and wRatings THE WALL STREET JOURNAL. and development. Our employee metrics capture “Following our peak in 2012, Cat- Behind the biggest gainers… how well a company conveys to its points. The average advance in cus- There is, of course, no guarantee erpillar experienced an unprece- The Drucker Institute’s gauge of workers a vision and sense of mis- tomer satisfaction was 6.2 points. that if a company makes strides in dented four-year downturn in our corporate effectiveness certainly sion; its pay and benefit levels; job the employee category it will auto- business and the company under- seems to back him up on that. Our satisfaction; and opportunities for And the biggest losers matically see its total effectiveness took significant restructuring and latest research shows that a com- training and promotion. Similarly, the 50 companies suf- score increase. cost reduction actions,” Caterpillar pany’s results are driven, to a major For our most recent test, we fering the biggest decreases in ef- Symantec Corp., for instance, said in a statement. “We recognize degree, by how well it manages its computed effectiveness scores from fectiveness since 2012 were off the registered a 5-point jump in its em- that this was a challenging time for workforce. 2012 and put them up against last most in employee engagement and ployee score, to 59.1, from 2012 to our employees. In 2017, we launched Based on Mr. Drucker’s ideas and year’s scores. And we found that development—by an average of 13.5 2017. Nonetheless, the cybersecurity a new corporate strategy that in- ideals, our measure serves as the the 50 biggest overall gainers on points. None of the other four areas company’s effectiveness score cludes a focus on profitable growth basis of the Management Top 250, our list during that span shot up by came close. slipped 6.4 points over that time to and a high-performing, productive an annual ranking of corporate per- an average of 11.2 points in em- We also assessed those compa- 56.0, landing it at No. 147 in last and engaged culture. In 2018, the formance produced in partnership ployee engagement and develop- nies that started one full standard year’s Management Top 250. Sharp Caterpillar team achieved record with The Wall Street Journal. Inau- ment. deviation above the mean in 2012 in declines in customer satisfaction first-quarter and record second- gurated last December, it aims to That’s more than one full stan- terms of overall effectiveness but and financial strength were primarily quarter profit per share. We are very provide a comprehensive view of a dard deviation—enough to move a whose total score went down by responsible. Symantec didn’t re- proud of our employees’ dedication company’s “effectiveness”—defined, company from the middle of the 2017. Likewise, we looked at those spond to requests for comment. and resilience.” pack to the top 15%, or from the that started one full standard devia- Still, the general pattern is unde- As we’ve pointed out—and it Mr. Wartzman is the director top 15% to the top 2%. tion below the mean in effective- niable: Many of the biggest gainers bears repeating—the best managers and Mr. Crosby is the chief data The gainers also made progress ness and whose total score climbed in total effectiveness during the keep a close eye on all five dimen- scientist at the KH Moon Center in other categories during that six- over the six years. In both cases, past six years were propelled by a sions of performance. But if you’re for a Functioning Society, a part year period, but not by a full stan- variation in employee engagement substantial upswing in their em- trying to figure out where to focus of the Drucker Institute. They can dard deviation. In financial strength, and development was the leading ployee score. And many of the big- first, you can’t go wrong by taking be reached at [email protected]. the average improvement was 7.8 factor in their rise or fall. gest losers overall were hit by a sig- good care of your people. R6 | Monday, August 13, 2018 THE WALL STREET JOURNAL. JOURNAL REPORT | C-SUITE STRATEGIES Why This Is a Difficult Time to Be a Songwriter Universal Music Publishing’s CEO says it doesn’t have to be this way

BY ANNE STEELE censing system for the digital about music today when we age and raise songwriters’ fees focus on streaming? won the unanimous approval MS. GERSON: What everybody’s JODY GERSON arrived at Uni- of the Senate Judiciary Com- missing is the role of the re- versal Music Publishing mittee, paving the way for a cord company. There’s talk Group as chairman and CEO in full Senate vote on the bill. about whether artists need to 2015, just as streaming became The central part of the Music be signed to a record company. key to the music industry’s via- Modernization Act calls for the I would like you to show me bility. The second-largest music formation of a single entity— one streaming platform that publisher’s revenue has risen run by major publishers and has broken an artist, made a 30% since then. But Ms. Gerson funded by music-streaming ser- major investment in breaking wants to push that number vices—charged with creating a an artist. It is not easy. higher—by getting streaming comprehensive database of mu- Just because a song is on a services to pay songwriters sical works and those who own digital platform doesn’t mean more to license their music. the rights to them. The legisla- you’re breaking that artist. While the music industry is tion would streamline the com- The companies that put the rebounding thanks almost en- plicated way those services get most into the development of tirely to the rise of services access to millions of songs and artists are still record compa- like Spotify and Apple Music, pay for the rights to carry them nies. The investment in break- revenue is still a fraction of in part by granting them blan- ing artists still is something

what it was in the heyday of ket licenses for downloads and JOHN MICHAELthat FULTON we can’t underestimate, CD sales. Unless they make on-demand streaming of songs ‘The fees are not where we want them to be.’ and platforms do not do that. huge hits that get streamed listed in the database. Hit artists, superstars, are millions of times, songwriters In a conversation with The JODY GERSON never flukes. It just doesn’t are getting much smaller cuts Wall Street Journal, Ms. Ger- happen that way. It takes a vil- in the streaming economy. son discussed the proposed MS. GERSON: My hope is that where we want them to be. We promotions, where there are a lage to break an artist. “I am hopeful that we’ll get legislation, why hits are key in there’s one entity that makes get paid much less than the la- very limited amount of slots, it right,” says Ms. Gerson. “I streaming—and why it is im- it easier for digital platforms bels. The overall pie needs to and those slots are the only Lending a hand think that the idea that music portant to look beyond them. to license. The bottom line is, grow with the success and the slots that can guarantee you a WSJ: How do you help up-and- is as accessible to everyone Edited excerpts follow. having music so accessible to increase in subscriptions [to hit single. While the streaming coming songwriters? What can around the world as it is now so many people is going to be services such as Spotify]. Also, services are kind of all-you- you do to make sure they stay is a positive sign. I think that The music scene a good thing. Before, when you because so many songs are can-eat, I worry that all-you- in the business and break out? eventually we’ll get the fees to WSJ: What is your hope for the bought a single or you bought written by many songwriters, can-eat cuts into the potential MS. GERSON: TheNo.1partis where we want them to be.” Music Modernization Act and a cassette or you bought a re- it cuts into the already limited of the best songs being heard. making sure that they can In June, legislation that what it will do for streaming cord, you paid for it once. Now amount of money that the I don’t know if it devalues by make a living. We give them would revamp the music-li- royalties? every single time somebody writers are seeing. When you having so much to choose opportunities, we are their streams a song, that song has think historically about song- from. Does it devalue music, or biggest cheering sections, and the potential to earn. writing, there were two song- is it improving the value of we make sure that we do a lot Money From Streaming writers at the most, one who music? I think time will tell. of writing camps. You put a A breakdown of where $1 of revenue for Spotify, the global WSJ: Is it a good or a bad time wrote the melody and one who bunch of writers together in a music-streaming leader, goes. Figures for Apple Music are similar. to be a songwriter? wrote the lyric. Now you have WSJ: How do you make a hit? room to focus on a project. Music publishers and songwriters don’t get a big share. MS. GERSON: I think it is a dif- songs where you have five, six, Is there data that you use from We recognized how few fe- ficult time for songwriters seven songwriters, and that is the streaming services to give male songwriters are on songs who aren’t writing massive hit going to hurt the economics of feedback to songwriters to say, on the charts. So we’re creat- songs. When I first came into being a songwriter. “This is what’s charting”? ing, with Alicia Keys and some the industry, you could write a MS. GERSON: A lot of people other women, all-female writ- 52 cents 35.9 cents cut on a big album, like for WSJ: How is the importance of are relying on data today. I ing camps. A lot of things hap- To sound Stays with 6.1 cents Performance fee to rights group Whitney Houston, and it would getting placed on Spotify’s don’t go in that direction. I pen when women get together. recording Spotify sell a lot of records, and you popular playlists [created by judge music based on what I They create sisterhood. Per- owners, (Ascap or BMI), songwriter and publisher could make a lot of money as a the service’s curators and fol- feel. Does it move me? Is that haps it combats the idea that mainly record songwriter. But unless you’re lowed by users, which can gen- a lyric that articulates a feel- the guys [who work on songs] labels writing hit singles or you have erate millions of streams] and ing that I have better than I bring in their friends. Women pieces of songs on enormous the hit-driven nature of can articulate it? Is there a can bring in their friends. I 6 cents numbers of streamed product, streaming affecting how song- driving beat that makes me think it gives them the sense Mechanical royalties to it is very difficult right now. writers do their job, and how want to move? Is there a mel- of supporting one another. publisher and songwriter you do your job? ody that makes me want to

Note: Performance fees are paid for the right to publicly perform a song, including streaming WSJ: What challenges are MS. GERSON: I still would like sing along? I have found in my Ms. Steele is a Wall Street a recording on an interactive service. Mechanical royalties are paid for the right to reproduce songwriters seeing in getting to believe that the cream rises career anytime that I have Journal reporter in Los a song in a recording (vinyl, CDs, downloads and cached or server copies online). paid in the streaming era? to the top. Playlisting I hope trusted my instinct, I’m right. Angeles. She can be reached Source: Jordan Bromley, Manatt, Phelps & Phillips LLP THE WALL STREET JOURNAL. MS. GERSON: The fees are not will not go the way of radio WSJ: What are we missing at [email protected].

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