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***** THURSDAY, MAY 17, 2018 ~ VOL. CCLXXI NO. 115 WSJ.com HHHH $4.00

DJIA 24768.93 À 62.52 0.3% NASDAQ 7398.30 À 0.6% STOXX 600 393.21 À 0.2% 10-YR. TREAS. g 3/32 , yield 3.093% OIL $71.49 À $0.18 GOLD $1,290.20 À $1.30 EURO $1.1807 YEN 110.40 Old Rival’s Release Opens Door to New Chapter in Malaysia What’s Russia News Tried to Promote Business&Finance Trump, hari Redstone moved Sto block CBS’s efforts to strip her family of voting Panel Says control, with the family’s holding company dictating a change to board rules. A1 WASHINGTON—A GOP-led Senate committee backed U.S. Disney executives have dis- intelligence agencies’ finding cussed bringing back anima- that Moscow tried to boost tion guru Lasseter, who is on ’s 2016 presi- leave after accusations about dential campaign by hacking his behavior, in a role. B1 and spreading misinformation, Vista and Thoma Bravo a bipartisan conclusion that are seeking to raise money breaks with a House panel’s for what would be the buy- position and the president’s out firms’ biggest funds. B1 rejection of the notion that Russia wanted him to win. Credit card issuers’ re- turns are being pressured by rising loan losses and in- By Byron Tau, Rebecca Ballhaus creased rewards expenses. B1 and Erica Orden The Russell 2000 index of small stocks hit a record, re- The Senate Intelligence

flecting tax-overhaul gains and AHMAD YUSNI/EPA/SHUTTERSTOCK Committee’s conclusion, made signs growth in the U.S. looks HANDOFF: Former opposition leader Anwar Ibrahim was released from detention Wednesday in Kuala Lumpur, a week after the election public Wednesday after a more robust than overseas. B1 of Malaysia’s new prime minister, Mahathir Mohamad. Mr. Mahathir has pledged to hand over power to Mr. Anwar in a year or two. A7 closed-door hearing with for- Other U.S. indexes rose, mer intelligence chiefs, is part getting a boost from retail of the panel’s continuing shares. The Dow ended 62.52 probe, begun 14 months ago, points higher at 24768.93. B11 into alleged Russian interfer- ence in the 2016 election. It Macy’s reported a rise in Shari Redstone Hits Back at CBS supports the findings of the in- same-store sales amid signs telligence agencies under for- the department-store chain CBS’s board operates. The ad- week that it wants to prevent including challenging the re- mer President , a is pulling out of a slump. B2 Move aims to block justment would make it nearly Ms. Redstone and her family’s moval of any director. Democrat. The SEC said it hasn’t attempt to strip her impossible for the current direc- Inc. “This is an unprecedented The Republican president been able to collect more family’s voting power tors to be able to water down holding company from over- usurpation of a controlling and many of his allies have re- than $800 million in fines for the family’s voting power. hauling CBS’s board and forc- stockholder’s voting power,” peatedly dismissed the idea ill-gotten gains after a court over media company The decree marks a signifi- ing a merger with . National Amusements’ that Moscow meddled on his ruling set time limits. B10 cant escalation in the battle The Redstones and National wrote. behalf—particularly disputing BY KEACH HAGEY breaking out between Ms. Amusements responded The documents filed by the that the Russian effort might Zuckerberg will meet AND JOE FLINT Redstone and CBS Chief Exec- Wednesday in a legal filing, Redstones were in opposition to have had an impact on the with European officials amid utive in a long- saying they had no such inten- the motion for a temporary re- election’s outcome. criticism of ’s han- Shari Redstone fired back at running disagreement over the tions. They called CBS’s at- straining order that CBS’s spe- A House Intelligence Com- dling of users’ data. B4 CBS Corp., moving to block the future of the media company tempts to issue new voting cial committee of independent mittee report released earlier Commercial oil stocks in media company’s efforts to strip and Ms. Redstone’s desire to shares to reduce their nearly board members filed on Mon- Please see RUSSIA page A4 industrialized economies have her family of voting control. recombine CBS with Viacom 80% voting control to 17% day. The committee is seeking fallen to their lowest level in Inapowermovetoprotect Inc. The fight has been thrust “egregiously overboard and to block National Amusements Trump discloses reimbursement three years, the IEA said. B11 its position as the media giant’s into the courts as both sides unjustified.” They also argue from replacing board members tied to Stormy Daniels...... A4 controlling shareholder, the Red- attempt to outmaneuver the that CBS would have other op- or modifying the company’s Novartis executive departs over Fox named the new lead- stones’ family holding company other and decide the fate of tions legally that wouldn’t re- governance documents before payments to Cohen firm..... A4 ers of what would continue dictated a significant change on the television powerhouse. quire diminishing the Red- CBS convenes a special meeting Watchdog readies report on as an independent enterprise Wednesday to the rules of how CBS said in a lawsuit this stones’ voting interest, Please see CBS page A8 FBI’s Clinton email probe.... A4 if the Disney deal closes. B6 World-Wide Gymnast More Seats for Frequent Fliers Airbus Deal Powered A GOP-led Senate panel backed a finding that Mos- Payout Some airlines are making it cow tried to boost Trump’s Saudi Royal Family’s Wealth easier to cash in miles. A13 2016 campaign by hacking and spreading misinforma- Rocks How the six major U.S. airlines tion, breaking with a House stack up in a survey of frequent- committee’s position. A1 University flier rewards availability Crown prince has leveraged businesses connected to government A new financial disclosure % OF SEAT PT. CHG. from Trump acknowledged AIRLINE AVAILABILITY FROM 2017 that he reimbursed Cohen Southwest 100% No change Michigan State University BY JUSTIN SCHECK AND BRADLEY HOPE for a $130,000 payment to est yachts, a French palace and a $450 million agreed to pay $500 million to Leonardo da Vinci painting that was later do- an adult-film actress. A4 JetBlue more than 300 victims of sex- 94.3% No change RIYADH—Prince Mohammed bin Salman nated to the United Arab Emirates. Michigan State agreed to ual abuse by Larry Nassar, the was a teenager when he realized his father, How the prince amassed his wealth exempli- American +27.8 pay $500 million to victims sports-medicine doctor it em- 82.1% Prince Salman bin Abdulaziz, was, by Saudi fies ways that the autocratic kingdom, essen- of sexual abuse by Nassar, ployed, a sum that is among royal standards, a pauper. tially a family business, continues to intermin- leaving unclear the univer- the largest for victims of abuse United 75.5% +10.7 While other sons of ’s founder gle commercial ventures and Saudi sity’s future financial path. A1 and leaves unclear the future grew wealthy from government business, Sal- government connections to a degree far from Delta –2.2 Trump still plans to hold financial path for one of the 72.1% man, then the governor of this capital city, Western norms. While it’s been long known a summit with North Korean nation’s top public universities. supported his family with handouts from his the Saudi royal family keeps a share of the na- Alaska –12.1 leader Kim, U.S. officials said, 69.3% brother the king. Mohammed decided to tion’s oil income, other business dealings in- brushing off sharp comments By Douglas Belkin, change that, he later told associates. volving the family’s dominant branch have Note: The research, sponsored by CarTrawler, Nearly two later, Salman is king, been held more closely. from Pyongyang. A6, A7 Louise Radnofsky and Melissa Korn in March looked for two award seats on each and Mohammed bin Salman, known as MBS, is Among the connections: Prince Mohammed airline’s 10 busiest long routes and 10 busiest The Senate intelligence medium-length routes for 14 different the crown prince who says he wants to crack is managing director—and 20% owner—of a panel recommended Haspel Officials at the 50,000-stu- round-trip dates between June and October. down on corruption and remake the Saudi chemical producer that supplies large, state- as the next CIA director, clear- dent campus declined to say Source: IdeaWorks economy along more modern lines. Prince Mo- controlled firms, Saudi corporate filings ing the path for her confirma- how they would pay for the set- hammed is also fantastically wealthy. In recent showed as recently as last year. A company tion by the full chamber. A3 tlement, and it isn’t clear if years, he has acquired one of the world’s larg- Please see PLANES page A12 The Assad government they have figured out how. They took control of Syria’s largest declined to rule out raising tu- province, state media said, as ition or a state bailout, and they At the Disease Job Fair, Typhoid it pushed to capture remain- can’t use the university’s en- dowment. Michigan State’s in- ing rebel-held territory. A9 Battles E. coli for the Sickest Talent terim President John Engler Taliban insurgents gave also didn’t rule out bankruptcy iii World’s First up their bid to take over the in testimony before the Michi- capital of the western Af- gan State Senate in March. CDC divisions compete to recruit ghan province of Farah. A9 The East Lansing, Mich., uni- outbreak detectives; cookies, balloons “Self-Driving” GOP centrists are push- versity will pay $425 million to ing for a House vote on im- the victims, or about $1.25 mil- lion each. It will set aside an Database migration bills, sparking additional $75 million in a trust BY BETSY MCKAY class last month to its elite conservative opposition. A2 to protect any future claims of training program for outbreak The Senate voted to rein- sexual abuse against Nassar. Elizabeth Soda, a physician investigators. It was time to de- state net-neutrality rules, but The settlement dwarfs the who has investigated dangerous cide where within the agency the measure faces long odds more than $100 million issued bacteria all over the world, was the new investigators would of passage in the House. A2 by State Univer- on the hunt for the best candi- spend their next two years—es- Oracle U.S. births last year hit sity to settle civil claims filed dates to help her find and stop pecially challenging since this a 30-year low as American by more than 33 men who said life-threatening ill- year there are Autonomous women had children at the they were sexually abused by nesses for the respi- only 66 recruits to retired assistant football coach ratory diseases fill 99 openings. lowest rate on record. A3 Jerry Sandusky. branch of the Cen- On a hotel con- Database The Michigan State settle- ters for Disease Con- ference floor in CONTENTS Markets...... B11-12 ment covers lawsuits filed by trol and Prevention. Yummy Atlanta, the com- Banking & Finance... B10 Opinion...... A17-19 Business News.. B3,6 Sports...... A16 young athletes, many of them Naturally, she put petition was fe- Crossword...... A16 Technology...... B4 gymnasts, who claimed that on a bright orange-and-white verish. No Human Labor – Half the Cost Heard on Street. B12 U.S. News...... A2-5 Nassar was abusing his pa- Nemo fish costume she picked “Join the fight against evil No Human Error – 100x More Reliable Life & Arts...... A13-15 Weather...... A16 tients for two decades. up on Amazon. bacteria!” scientists urged on a Management...... B5 World News...... A6-9 The university’s board of “Finding Pneumo with RDB,” poster inviting coveted candi- trustees agreed to the settle- read a handmade sign pinned dates to discuss diphtheria, > ment terms Tuesday night. On onto her back. “Meet us in room meningitis and whooping cough Wednesday morning, the 206-207.” over breakfast. board’s chairman, Brian Bres- “You gotta stand out, right?” Admission to the CDC’s Epi- oracle.com/selfdrivingdb lin, issued a statement saying she said. demic Intelligence Service, as the board was “truly sorry to This is outbreak-themed the fellowship program is called, s Copyright 2018 Dow Jones & Human labor refers to tuning, patching, updating, and maintenance of database. Company. All Rights Reserved all the survivors and their speed dating. is almost as tough as to an Ivy Copyright © 2018, Oracle and/or its affiliates. All rights reserved. Please see NASSAR page A2 The CDC admitted a new Please see JOBS page A12 每日免费获取报告 1、每日微信群内分享5+最新重磅报告； 2、每日分享当日华尔街日报、金融时报； 3、每周分享经济学人 4、每月汇总500+份当月重磅报告 （增值服务）

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A2 | Thursday, May 17, 2018 **** . U.S. NEWS Senate Makes Play For Net Neutrality

BY JOHN D. MCKINNON for net neutrality,” said Sen. Brian Schatz (D., ) in an WASHINGTON—The Senate interview. “People didn’t think voted Wednesday to reinstate we were going to succeed in Obama-era open-internet the Senate…so now it’s on to rules, handing a symbolic de- the House of Representatives.” feat to the Trump administra- House Energy and Com- tion over its efforts to roll merce Committee Chairman back those regulations. Greg Walden (R., Ore.) said re- The measure, adopted 52 to cently that he doesn’t expect 47, faces long odds of passage the reinstatement measure to in the House. The White come to the House floor. House says it supports the FCC Chairman Ajit Pai said new rules, adopted by the he was disappointed by the GOP-run Federal Communica- Senate vote but that the inter- tions Commission late last net “will continue to be free year, and many Republicans and open” after his rule takes

LOREN ELLIOTT/ believe President Donald effect on June 11, just as it U.S. Border Patrol agents and people who illegally crossed the border, near McAllen, Texas, last week. Republican centrists in the Trump would veto the rein- was before the 2015 Obama- House want votes on bills that include a path to citizenship for young immigrants, and conservatives are trying to block that. statement measure if it ever era order. He added that the reached his desk. current FCC’s “light-touch ap- The Obama-era FCC’s net- proach will deliver better, Immigrant Bills Split House GOP neutrality rules, adopted in faster and cheaper internet 2015, required internet service access and more broadband providers such as cable and BY KRISTINA PETERSON are clamoring for an immigra- dozen of the most conservative find an immigration solution, wireless firms to treat all on- tion vote that could widen their Republicans. “We’re nervous says the centrists’ approach line traffic equally. The rules The measure to bring WASHINGTON—Support appeal at home, while conserva- about what kind of bill that turns power over to Democrats. barred them from blocking grew in the House for an effort tives threatened to potentially would be,” he said. “Our party Leaders of the centrist group and throttling websites, or back Obama-era rules to force a vote on several immi- derail the farm bill to avoid that wasn’t elected to put together a met Wednesday evening with creating fast and slow lanes. faces long odds of gration proposals, sparking outcome. The farm bill includes bill with 190 Democrats and a top House GOP leaders, who The debate is sure to con- some conservatives to consider federal support for farmers and handful of Republicans.” were hoping to find a plan that tinue for months, in part be- passage in the House. using a coming vote on the tighter work requirements for The centrist Republicans are would satisfy all sides. cause Democrats view it as farm bill as leverage to try to food-stamp recipients. seeking to use a rarely em- “We have our plan, we’re good politics as well as good block them. Rep. Carlos Curbelo (R., ployed procedure known as sticking to it, but we’re willing policy. Democratic leaders GOP Reps. John Katko of Fla.), one of the immigration “Queen of ,” under to see what theirs looks like,” have said they believe battling competition.” New York and David Trott of push’s leaders, said his group which the House would vote on Mr. Curbelo said as he left the with Republicans over rein- The Obama-era rules were Michigan on Wednesday joined was “very close” to securing four immigration measures, and meeting. statement of the 2015 open-in- supported by big internet a push from 18 other centrist enough support. That “could the one with the most votes Conservatives, worried that ternet rules will help them get firms such as Amazon.com Republicans to force a House happen this week,” he said. would pass. one of the more centrist or more millennials—especially Inc. and Alphabet Inc.’s floor vote on a series of immi- The momentum for the im- The measures range from a Democratic measures might millennial males—to support , as well as smaller ser- gration bills, including ones migration push alarmed some Democratic proposal to offer a pass, were discussing whether them at the polls in Novem- vices. All said they worried with a path to citizenship for of the House’s more conserva- path to citizenship to Dreamers to try to prevent that outcome ber. the big internet service pro- young undocumented immi- tive members, who take a to a far more conservative bill by withholding support for They also held out hope viders such as cable and wire- grants known as Dreamers. tougher line on immigration from House Judiciary Commit- the farm bill expected to come that the Senate action could less firms could use their le- That left the GOP centrists just and worry that the centrists’ ef- tee Chairman Bob Goodlatte (R., to the House floor on Friday. frighten embattled House Re- verage over the internet’s five GOP votes shy of the 218 fort could end up allowing a bill Va.) that emphasizes interior House GOP leaders have publicans into supporting the pipes to compete unfairly. signatures needed to trigger the to pass with mostly Democratic enforcement and provides $30 been working for weeks to measure, leading to an upset Providers such as Comcast votes, assuming all Democrats support. billion for the border wall. find enough GOP support for policy victory. They noted that Corp. and AT&T Inc. said they later join them. “This immigration thing is They also include a place- the farm bill. Most Democrats in Wednesday’s vote three supported net neutrality, too, The push is pitting one wing coming to a head,” said Rep. holder that House Speaker Paul are expected to oppose the bill Senate Republicans crossed but adamantly opposed the of the Republican Party against Jim Jordan (R., Ohio), one of Ryan (R., Wis.) can fill with leg- over their objections to its over to support the reinstate- 2015 rules. They feared the another. Centrists facing tough the founders of the House Free- islation of his choosing. Mr. work requirements for food ment. measure would open the door re-election fights in November dom Caucus, roughly three Ryan, who has said he wants to stamps. “There’s good momentum to regulation of their rates.

U.S. WATCH some of the Michigan girls and NASSAR women have also filed suit against USA Gymnastics, alleg- ANTITERRORISM President Donald Trump via a ing that Nassar’s link to the Report Puts Price Tag message two months ContinuedfromPageOne elite team allowed him to at- ago, said every American citizen families for what they have tract new patients and that USA At About $2.8 Trillion has a duty to seek the truth and been through, and we admire Gymnastics knew or should hold leaders accountable. the courage it has taken to tell have known about his actions. The U.S. has spent as much “If our leaders seek to conceal their stories.” The per-victim settlement as $2.8 trillion on the fight the truth, or we as people be- Michigan Sen. Tonya Schu- amount tracks closely with the against terrorism since the Sept. come accepting of alternative re- itmaker, chair of the subcom- $1.25 million USA Gymnastics 11, 2001, attacks, according to a alities that are no longer mittee for higher education agreed to pay Ms. Maroney, in study published Wednesday. grounded in facts, then we as appropriation, said the univer- December 2016, to resolve her The report from the Wash- American citizens are on a path- sity hadn’t approached the sexual-abuse claims against ington-based Stimson Center way to relinquishing our freedom,” state for money to cover the Nassar, The Wall Street Jour- think tank said the figure in- he said. The former chief diplo- settlement. “I would certainly nal has reported. Ms. Maroney cluded spending on the wars in mat didn’t name Mr. Trump in his hope before they agreed to a filed a lawsuit in December Afghanistan, Iraq and Syria, in speech but appeared to refer to settlement they figured out against Michigan State, the addition to homeland-security the president’s clashes with news how to pay for it,” she said. U.S. Olympic Committee and efforts and overseas programs.. organizations. A spokeswoman A Michigan State spokes- others, seeking in part to be The report said that the U.S. for Mr. Tillerson didn’t respond to woman said the school “will released from the confidential- lacked a system for accounting a request for further comment. be working on the solution in ity agreement attached to that for spending on counterterrorism —Jessica Donati the near future,” and that the earlier settlement. and that loopholes have increas- school was in negotiations Mr. Engler said at the time ingly allowed billions to be spent CALIFORNIA with its insurer about how of his legislative testimony that on items that shouldn’t qualify Explosive Device much of the settlement it REBECCA COOK/REUTERS he hoped insurance would for emergency funding. would cover. Former Michigan State gymnastics doctor Larry Nassar, who pleaded cover settlement costs. “The Stimson study group Killed Woman at Spa In testimony earlier this guilty to sexual assault, at his sentencing hearing in February. Judy Galliher, a spokes- found a variety of weaknesses year before the state legisla- woman for United Educators, in definitions, tracking, and con- A blast that killed one ture, Mr. Engler warned that abuse in Michigan state court tinuing our mediation efforts which provides insurance for sistencies that limit accuracy woman at a day spa in Southern the costs for the settlement to resolve the claims of scores to reach resolution as well.” Michigan State, said Wednes- and contribute to a lack of California was caused by an ex- ultimately would be borne by of women who alleged he sex- Michigan State still faces an day she couldn’t share any in- transparency regarding the cur- plosive device, authorities said. “students and taxpayers.” ually abused them under the investigation by the Michigan formation related to the in- rent data,” the report said. Investigators don’t know who “I don’t know if it would guise of medical treatment. He Attorney General’s office into surer’s portion of the “These weaknesses make it diffi- set off the explosion or why, but it force bankruptcy [for the uni- also pleaded guilty to child- its handling of complaints settlement. cult to evaluate whether CT is being investigated as a criminal versity] or not,” he said. “I pornography counts and was against Nassar, as well as in- A person familiar with spending has been effective.” act, Don Barnes, Orange County hope not.” sentenced to more than 200 vestigations by the U.S. Depart- higher-education insurance —Jessica Donati undersheriff, said Wednesday. Ms. Schuitmaker said she years behind bars. ment of Education and at least policies said an insurer could Bomb technicians have been didn’t believe the costs would The settlement doesn’t ad- two congressional committees. try to lump together all of the STATE DEPARTMENT sorting through the wreckage. be passed on to students in dress similar claims also Elite gymnasts including losses related to a serial of- Ex-Secretary Tillerson “The damage at the scene was the form of higher tuition. The brought by athletes against USA 2012 Olympic gold medalists fender into one policy year, extensive, so it’s hard to identify state allocated the university Gymnastics, the McKayla Maroney, Aly Rais- capping their liabilities at the Says Freedom at Risk some of the pieces of the poten- $289 million for the current Olympic Committee and others. man and Jordyn Wieber al- one-year maximum—in this tial device,” said Paul Delacourt, year, or 11% of its budget. That The Nassar case rocked the leged negligence by Michigan case, $39 million. The person Former Secretary of State assistant director in charge of the money comes with a cap on world of elite gymnastics and State in failing to act on re- noted that universities gener- Rex Tillerson said a crisis in in- Federal Bureau of Investigation’s tuition. If the school tried to spurred leadership overhauls ports of abuse going back to ally have additional liability tegrity and ethics among Amer- Los Angeles field office. “What raise tuition to pay for the set- at USA Gymnastics, the U.S. the late 1990s. The three are coverage as well, besides the ica’s leaders is putting the coun- we have identified are some tlement they would lose $289 Olympic Committee and Michi- covered by the Michigan State primary insurance policy. try’s freedom and democracy at items that are not consistent million, she said. gan State, where the president settlement, their said. The school could argue, risk, delivering the message in a with a business of that type.” The school’s estimated an- and athletic director resigned. National-team gymnasts are however, that claims should be commencement address at the The explosion went off Tues- nual revenue for this year of USA Gymnastics issued a also suing USA Gymnastics and paid from multiple years’ of in- Virginia Military Institute. day afternoon at a medical build- $1.36 billion is matched by its statement Wednesday saying it the U.S. Olympic Committee, as surance policies, because the Mr. Tillerson, speaking to grad- ing in Aliso Viejo, sparking a fire expected expenditures. was “very encouraged” by the well as individual officials and claims allege abuse from differ- uates Wednesday in a rare public and injuring three other people. Nassar pleaded guilty last settlement in principle, adding: coaches in some instances, al- ent years. “There would be an appearance since he was fired by —Zusha Elinson year to 10 counts of sexual “We remain committed to con- leging negligence. Meanwhile, argument that a separate pol- icy and a separate limit would come into play. This happens a THE WALL STREET JOURNAL CORRECTIONS AMPLIFICATIONS lot in asbestos, and it’s a very (USPS 664-880) (Eastern Edition ISSN 0099-9660) (Central Edition ISSN 1092-0935) (Western Edition ISSN 0193-2241) complex issue legally,” said James Lynch, chief actuary of Editorial and publication headquarters: 1211 Avenue of the Americas, New York, N.Y. 10036 Tencent Holdings Ltd. has The Closed-End Funds ta- said the automobile was a U.S. the Insurance Information In- Published daily except Sundays and general legal holidays. Periodicals postage paid at New York, N.Y., and other mailing offices. bought stakes in 277 startups ble that appeared in Monday’s invention. Also, the last name stitute, a trade group repre- Postmaster: Send address changes to The Wall Street Journal, since 2013. In some editions Business & Finance section in- of the essay writer’s collabora- senting insurance companies. 200 Burnett Rd., Chicopee, MA 01020. Wednesday, a Page One What’s correctly contained data from tor on a book about soccer, As part of the settlement, All Advertising published in The Wall Street Journal is subject to the applicable rate card, copies of News item incorrectly gave the week ended May 4. The Michael Davies, was mis- there will be no confidentiality which are available from the Advertising Services Department, Dow Jones & Co. Inc., 1211 Avenue of the year as 2014. data as of Friday, May 11 are spelled as Davis. agreements or nondisclosure the Americas, New York, N.Y. 10036. The Journal reserves the right not to accept an advertiser’s order. Only publication of an advertisement shall constitute final acceptance of the advertiser’s order. available at WSJ.com/Correc- agreements, according to at- Letters to the Editor: Fax: 212-416-2891; email: [email protected] Amazon.com Inc. intro- tions. An Off Duty article Satur- torneys for the survivors. duced Prime in 2005 for $79 day about “bonus preppers” “This historic settlement NEED ASSISTANCE WITH YOUR SUBSCRIPTION? annually. A Business News ar- American Henry Ford in- incorrectly called Nick Rob- came about through the brav- By web: customercenter.wsj.com; By email: [email protected] ticle Wednesday about Prime troduced assembly-line-pro- bins’s fiancée his wife, and the ery of more than 300 women By phone: 1-800-JOURNAL (1-800-568-7625); Or by live chat at wsj.com/livechat customers’ discounts at Whole duced automobiles to the article failed to mention that and girls who had the courage Foods incorrectly said that the world. A Review essay Satur- she is employed by the com- to stand up and refuse to be REPRINTS & LICENSING service was introduced in 1995 day about the World Cup soc- pany that makes their home’s silenced,” said John Manly, an By email: [email protected]; By phone: 1-800-843-0008 for $75 annually. cer tournament incorrectly water system. attorney for the victims. —Rebecca Davis O’Brien GOT A TIP FOR US? SUBMIT IT AT WSJ.COM/TIPS Readers can alert The Wall Street Journal to any errors in news articles and Kris Maher by emailing [email protected] or by calling 888-410-2667. contributed to this article. .

THE WALL STREET JOURNAL. ** Thursday, May 17, 2018 | A3 U.S. NEWS Births Hit Lowest Number Since 1987

Last year’s fertility- more than a century ago, said Brady Hamilton, a statistician rate drop was the at the center. largest one-year The figures suggest that a number of women who put off decline since 2010 having babies after the 2007-09 recession are forgo- BY JANET ADAMY ing them altogether. Kenneth M. Johnson, senior demogra- American women are hav- pher at the University of New ing children at the lowest rate Hampshire, estimates 4.8 mil- on record, with the number of lion fewer babies were born babies born in the U.S. last after the recession than would year dropping to a 30-year have been born had fertility low, federal figures re- ratesstayedatprerecession leased Thursday showed. levels. Some 3.85 million babies “Every year I expect the were born last year, down 2% number of births to go up and from 2016 and the lowest they don’t,” said Prof. John- number since 1987, according son. to the Centers for Disease This dearth of births could Control and Prevention’s Na- exacerbate the problems of tional Center for Health Statis- America’s aging population. tics. The general fertility rate Many baby boomers are in or for women age 15 to 44 was are near retirement, leaving a 60.2 births per 1,000 women— smaller share of young work- the lowest rate since the gov- ers to pay into Social Security ernment began tracking it and Medicare. The postrecession baby lull appeared to be ending when Fewer Babies births ticked up in 2014. But Births per 1,000 women reached they’ve now fallen for three an all-time U.S. low in 2017 straight years, and last year’s fertility-rate drop was the 120 births per 1,000 women largest one-year decline since 110 2010. Even women in their 30s—a

100 group that had increas- JOSH GALEMORE/CASPER STAR-TRIBUNE/ ingly carried America’s child- Federal figures show that American women are having children at the lowest rate on record. Above, a newborn in Casper, Wyo., in April. 90 2017 bearing in recent years—saw 60.2 their fertility rate decrease in women, up 2% from the prior and health outcomes through- 80 2017. For women age 30 to 34, year. out their life. there were 100.3 births per One bright spot in Thurs- “I’m absolutely astounded 70 1,000 women, down 2% from day’s figures, which are pre- at the continuing decline in the prior year. Among women liminary, is a continued sharp teen birthrates,” Mr. Hamilton 60 age 35 to 39, the birthrate was decline in teen births, which said. 52.2 births per 1,000 women, fell 7% last year. Public health advocates 50 down 1% from 2016. Since 2007, the teen birth- credit the broader use of long- 1920 ’40 ’60 ’802000 ’17 The only age group that rate has declined by 55%, and acting birth control such as in- Source: CDC’s National Center had babies at a higher rate in is down 70% since its peak in trauterine devices with help- for Health Statistics 2017 was women in their early 1991. Children born to adoles- ing drive down these rates, THE WALL STREET JOURNAL. 40s, with those age 40 to 44 cents are more likely to have though many factors are likely having 11.6 births per 1,000 poorer educational, behavioral at play. CIA Nomination Advances in Senate

BY BYRON TAU next week. She has the support said she has spent 33 years the U.S. now considers torture. of at least six Democrats, all but with the agency rising through And she wrote a memo that WASHINGTON—The Senate assuring her confirmation. the ranks of the CIA’s post-So- led to the destruction of 92 vid- Intelligence Committee recom- Ms. Haspel, 61 years old, viet European operations to eotapes showing detainees be- mended Gina Haspel as the would become only the second hold top jobs supervising co- ing subject to harsh interroga- next Central Intelligence person to lead the CIA after vert actions, managing U.S. tion. A CIA review said the Agency director, clearing the spending an entire career un- spies’ collection of human in- decision to destroy the tapes path for her confirmation by dercover. During her confirma- telligence and working on was made by Ms. Haspel’s boss, the full chamber. tion, Democratic lawmakers counterterrorism. Jose Rodriguez, who was then The committee on Wednes- have voiced frustration over the Her nomination was, at director of the National Clan- day voted 10-5 to advance Ms. limited amount of information times, mired in controversy be- destine Service. Haspel’s nomination to be the available about her past and cause of certain parts of her Ms. Haspel became deputy first woman to lead the agency, long CIA career. furtive career. Between 2003 director of the agency in forwarding it to the full Senate. The CIA has said she is a na- and 2005, Ms. Haspel was in 2017. After her predecessor, Republican leaders are hoping tive of Ashland, Ky.; a graduate charge of a secret detention Mike Pompeo, was confirmed as to confirm her this week, of the University of Louisville; center where at least one de- secretary of state in April, she though the vote could slip into and a Johnny Cash fan. It also tainee was waterboarded, which also became acting director.

North

Carolina HANDCRAFTED MODERN CHAIN Teachers Latest to VISIT OUR SOHO BOUTIQUE AT Protest 118 PRINCE STREET

Thousands of teachers marched in support of increased school funding on Wednesday in Raleigh, N.C., trying to harness momentum from protests in other states to draw attention to deteriorating buildings and salaries that lag the

CHARLES MOSTOLLER/ national average. Pennsylvania Contest Is Contrast of Styles

BY SCOTT CALVERT old Mr. Wolf comes across as spent more than $12 million in tell you like it is or a timid reserved and professorial, Mr. the primary, including more leader who is more interested Pennsylvania State Sen. Wagner, 62, is known for his than $3 million of his personal in getting re-elected than get- Scott Wagner, who has been blunt political rhetoric. money, had $2.2 million on ting things done,” Mr. Wagner likened to President Donald The election could wind up hand in late April. said in his prepared remarks. Trump, captured the Republi- as a referendum not only on Registered Democrats ac- The Wolf campaign went on can primary for governor Mr. Wolf’s first term as gover- count for 48% of the state’s 8.5 the offensive Wednesday, post- Tuesday, winning the right to nor, but also as a gauge of Mr. million voters, and Republi- ing a web video that calls Mr. challenge Democratic Gov. Tom Trump’s standing in Pennsyl- cans make up 38%, according Wagner “the very worst of Wolf this fall. vania, said Chris Borick, a po- to the Pennsylvania Depart- Harrisburg.” It asks, “Do we Mr. Wagner took the pri- litical-science professor at ment of State. “Other parties” really want a guy like Scott mary with 44% of the vote af- Muhlenberg College in Allen- account for 13%. Wagner as our Governor?” ter a bruising, expensive cam- town, Pa. In 2014, Mr. Wolf defeated The Wagner campaign re- paign. Retired health-care “I think Wagner is very then-Gov. Tom Corbett, a Re- sponded by saying Mr. Wolf consultant Paul Mango fin- much the type of candidate publican, 55% to 45%. In the “seems to have changed his ished second with 37% and that’s going to be a test of 2016 presidential contest, Don- mind on attack ” after criti- lawyer Laura Ellsworth came Donald Trump’s agenda and ald Trump narrowly defeated cizing Republicans for running in third with 19%. approach to politics this fall,” Democrat in negative campaigns. The general election pits Mr. Borick said. “He is in many Pennsylvania, 48.6% to 47.9%. Jack Hanna, chairman of two wealthy businessmen from ways of style and ideology In his victory speech Tues- the Pennsylvania Democratic York County in the south-cen- aligned with the president.” day evening, Mr. Wagner said Party, issued a statement call- tral part of the state. Mr. Wag- The general-election cam- the state needs more jobs and ing Mr. Wagner an “extremist” ner owns a large waste-hauling paign is sure to be expensive. economic development, and and said he is “absolutely un- firm, and Mr. Wolf previously Mr. Wolf, who didn’t face a he said property taxes were fit” to be governor. Mr. Hanna owned a cabinet company. primary challenger, has a $14 too high. said the Democratic Party But the two men share little million war chest, according to “The people will have a stands for issues like good else in common, personally or campaign finance reports. Mr. clear choice this fall: a bold jobs, a higher minimum wage politically. While the 69-year- Wagner, whose campaign disrupter who isn’t afraid to and access to good health care. .

A4 | Thursday, May 17, 2018 PWLC101112HTGKBFAM123456789OIXX **** THE WALL STREET JOURNAL. U.S. NEWS Trump Discloses Repaying Cohen Watchdog

BY JULIE BYKOWICZ Ethics said Wednesday that it Readies AND RICHARD RUBIN considered the payment to Mr. Cohen to be a liability that A new financial disclosure needed to be disclosed, and Report on from President Donald Trump flagged the matter to the Jus- acknowledged that he reim- tice Department. bursed his lawyer, Michael Co- The Wall Street Journal pre- FBI Probe hen, for a $130,000 payment to viously reported that Mr. Cohen BY ARUNA VISWANATHA an adult-film star just before struck an agreement with Ms. AND SADIE GURMAN the 2016 election, the first time Clifford weeks before the presi- the president has officially dential election. Through a lim- Multiple subjects of a report stated the payment in govern- ited liability company, Mr. Co- on the Justice Department’s ment disclosures. hen paid Ms. Clifford $130,000. handling of a 2016 investiga- A footnote in Mr. Trump’s Mr. Trump’s attorney, Rudy tion into Hillary Clinton’s 2017 financial disclosure re- Giuliani, said recently that the email use have been notified leased Wednesday documented president paid monthly install- that they can privately review a reimbursement of between ments of $35,000 to Mr. Cohen the report by week’s end, sig- $100,001 and $250,000 for ex- beginning in early 2017 to re- naling the long-awaited docu- penses in 2016 to his attorney imburse him. Mr. Giuliani said ment is nearing release. for payment to Stephanie Clif- he wasn’t aware of whether Mr. Those invited to review the ford, known professionally as Cohen had advised the presi- report were told they would Stormy Daniels. The payment dent about why he had paid have to sign nondisclosure wasn’t listed in his previous fi- Ms. Clifford, who alleged a sex- agreements in order to read it, nancial disclosure, released last ual affair with Mr. Trump. Mr. people familiar with the matter year. Disclosure rules require li- Trump has denied a relation- said. They are expected to have

abilities to be listed. ship with Ms. Clifford. HECTOR RETAMAL/AGENCE FRANCE-PRESSE/GETTY IMAGES a few days to craft a response The Office of Government The Office of Government Donald Trump disclosed reimbursing , above, for a payment to Stormy Daniels, below. to any criticism in the report, Ethics’ acting director, David which will then be incorpo- Apol, wrote in a letter Wednes- include income from several rated in the final version to be Novartis Executive day to , U.S. entities that were formed dur- released in coming weeks. deputy attorney general, that ing his presidency, including Michael Horowitz, the Jus- Exits Over Payment he was forwarding Mr. Trump’s more than $100,000 in sales tice Department’s inspector financial disclosures from this from T Retail LLC, which is de- general, told lawmakers last year and last in case there is scribed as a startup online re- month he expected to issue A top executive at Swiss any open inquiry. tail business. He also reported the report in May, but Tues- drugmaker Novartis AG is “OGE has concluded that the more than $20,000 in manage- day’s notification was the first stepping down amid the con- information related to the pay- ment fees from Westminster indication that Mr. Horowitz troversy over payments that ment made by Mr. Cohen is re- Hotel Management LLC, an en- has largely completed his in- corporations made to a com- quired to be reported and that tity created in May 2017. quiry. Congressional commit- pany owned by President the information provided meets Although Mr. Trump’s sons tees are expected to review Donald Trump’s longtime per- the disclosure requirement for are running the business, the the report in coming weeks. sonal lawyer. a reportable liability,” the new president maintains significant Mr. Horowitz’s office issued Novartis said general coun- financial disclosure says. ownership, including in entities a related report last month, sel Felix Ehrat, 61 years old, is The letter to Mr. Rosenstein formed during his time in the which laid the groundwork for retiring from the company in notes that Citizens for Respon- . Most of the the firing of former FBI Dep- connection with $1.2 million in sibility and Ethics in Washing- Westminster management com- uty Director Andrew McCabe,

payments it made over the ton had filed a Justice Depart- DREW ANGERER/GETTY IMAGES pany is owned by DJT Holdings finding that he misled investi- course of a year to Michael ment complaint in March LLC, which is in turn owned by gators probing his role in pro- Cohen’s shell company, Essen- alleging that Mr. Trump had refer the matter to the Justice months of 2017 and all of 2016. the Donald J. Trump Revocable viding information to a re- tial Consultants LLC. improperly failed to note the Department for criminal prose- The new report covers only Trust, one of the primary vehi- porter for The Wall Street Novartis has said the pay- reimbursement to Mr. Cohen in cution. 2017. cles for the president’s hold- Journal. Mr. McCabe disputed ments, made in $100,000 a report he signed in June 2017. Mr. Trump’s lawyers didn’t The properties Mr. Trump ings. the allegations. monthly installments under a Presidents aren’t required to immediately respond to a re- has frequented as president ap- Among other new items, the The inspector general’s contract that ended in Febru- submit financial disclosure quest to comment. pear to be driving his income. president reported receiving yearlong review is expected to ary, were aimed at gaining in- forms in their first year in of- Overall, the president’s fi- The Trump International Hotel $1,900 in golf equipment from yield sharp criticism of ac- sight into U.S. health-care fice, and Mr. Trump did so vol- nancial picture appeared to re- in Washington produced more pro golfers Kevin Streelman tions by several top officials, policy. Novartis Chief Execu- untarily last year, following the main largely the same as the than $40.4 million, his Mar-a- and Bryson DeChambeau. Mr. including former Federal Bu- tive Vasant Narasimhan last tradition of previous presi- last time he reported his fi- Lago private club in Florida Trump also disclosed an actor’s reau of Investigation Director week called the agreement a dents. He certified the form as nances, about a year ago. He more than $25 million, and pension, which was $6,543 in James Comey’s announcement mistake and denied any in- true. Such a certification means listed assets of at least $1.4 bil- Trump National Doral golf club 2017. in July 2016 that Mrs. Clinton volvement himself. that if a person knowingly in- lion and income of at least near Miami about $75 million— He also received royalties had been reckless with the na- —Brian Blackstone cluded incorrect financial infor- $452 million, slightly less than making it potentially his high- from appearances in “The Fresh tion’s secrets but he was rec- mation, the OGE can seek a in his previous financial disclo- est-earning asset. Prince of Bel-Air” and “The Lit- ommending against prosecut- civil penalty such as a fine or sure—which included several Mr. Trump’s new disclosures tle Rascals.” ing her. RUSSIA

ContinuedfromPageOne this year said Russia didn’t aim to boost Mr. Trump’s chances of winning the elec- tion but instead sought to sub- vert the notion of free and fair elections and spread “chaos and discord” in the U.S. Russia’s alleged role in the election—and whether there was any collusion between Mr. Trump’s associates and the Kremlin—is a central part of ’s investigation, which is separate

from the congressional probes. MARY ALTAFFER/ASSOCIATED PRESS Several guilty pleas and President Trump’s son-in-law, , and Donald Trump Jr. criminal indictments of Mr. Trump’s associates have arisen in in 2016. The range a meeting between Mr. from Mr. Mueller’s investiga- meeting, which was previously Trump and President Vladimir tion, including charges of tax reported and is being investi- Putin of Russia. That never fraud and to laun- gated by Mr. Mueller, was took place. der money. None of the pitched by Mr. Goldstone as an Weeks after the election,Mr. charges relate to collusion opportunity for Russians to Goldstone also sent Mr. with Russia, and the House In- share incriminating informa- Trump’s personal assistant a telligence Committee report tion on Democratic presiden- document noting that the said it found no evidence of tial nominee Hillary Clinton, was “one of the coordination between the Mr. Trump’s 2016 rival. key issues” preventing a thaw campaign and Moscow. It was attended by the presi- in U.S.-Russia relations. The Mr. Trump has denied there dent’s eldest son, Donald assistant forwarded the docu- was any collusion and has crit- Trump Jr., his son-in-law, Jared ment to , then icized Mr. Mueller’s probe as a Kushner, and his then-cam- the incoming White House “witch hunt.” Russia has de- paign chairman, Paul Manafort. chief strategist. nied interfering in the election. Mr. Goldstone and Russian law- The U.S. intelligence com- The Senate Intelligence Com- yer , munity issued a finding in Jan- mittee is expected to release a among others, also attended. uary 2017 that Mr. Putin or- more detailed evaluation in the Donald Trump Jr. asked the dered a campaign to influence coming weeks that addresses the outcome of the 2016 elec- the question of collusion. tion and that Mr. Putin aspired The president hailed the Russia’s alleged role to help Mr. Trump to victory House Intelligence Committee’s and denigrate Mrs. Clinton as findings last month, tweeting, in the election is a part of a broader ambition to “As I have been saying all central part of Robert undermine Western liberalism. along, it is all a big Hoax.” He The Senate Intelligence issued no public comment, as Mueller’s probe. Committee’s members “see no of Wednesday evening, on the reason to dispute the conclu- Senate panel’s release, and the sions,” Sen. Richard Burr (R., White House didn’t respond to N.C.), the panel’s chairman, said a request for comment. visitors if they had dirt on in a statement Wednesday. A separate Senate commit- Mrs. Clinton, according to the Sen. Mark Warner of Vir- tee release Wednesday de- testimony of one of the Rus- ginia, the committee’s top Dem- tailed several attempts by a sians who attended. But the ocrat, said: “Despite the short billionaire Russian-Azerbaijani Russians provided scant infor- time frame they had to prepare family to communicate with mation and focused instead on it, the intelligence community Mr. Trump’s associates over the Magnitsky Act, with Ms. did a very good job.” Russia’s interest in a repeal of Veselnitskaya asking the youn- The House and Senate intel- the Magnitsky Act. The 2012 ger Mr. Trump to “look out for ligence committees were both U.S. law targets Russian hu- this,” according to Mr. Gold- charged in early 2017 with ex- man-rights abuses. stone’s testimony. amining the evidence around The Senate Judiciary Com- Donald Trump Jr., accord- what happened during the mittee released transcripts of ing to Mr. Goldstone, told her presidential election and writ- interviews it had conducted that to take her concerns to Mr. ing a public report. The House suggest the Agalarovs sought to Obama’s administration and committee process has been act as a conduit, before and af- ended the meeting. The presi- rife with partisan infighting ter the election, for Russians dent hasn’t called for the Mag- over the course of the year- seeking the law’s repeal. nitsky Act to be overturned. long investigation. The Senate Most notably, Rob Gold- In 2015, shortly after Mr. Intelligence Committee has re- stone, a representative of the Trump launched his campaign, mained more unified through- Agalarovs, arranged a meeting Mr. Goldstone offered to ar- out the process. .

A6 | Thursday, May 17, 2018 ** THE WALL STREET JOURNAL. WORLD NEWS North Korean Remarks Don’t Deter U.S.

Trump officials proceed said of the North Korean state- ments. “This indicates there has with plans for summit been no change in their think- despite tough talk ing.” There have been a number of from Pyongyang indications that the U.S. and North Korea may not mean the President Donald Trump is same thing by denuclearization. still planning to hold a summit Trump administration offi- meeting in Singapore with cials have referred to a speedy North Korean leader Kim Jong approach that might be accom- Un, U.S. officials said, brushing plished within a year under off sharp comments by one of which sanctions relief and eco- Pyongyang’s senior diplomats nomic benefits wouldn’t be con- that caught the Trump adminis- ferred until the end. tration by surprise. Mr. Kim has suggested he was interested in a phased and By Michael R. Gordon potentially prolonged approach and Nancy A. Youssef in which benefits would be de- in Washington livered along the way. and Jonathan Cheng The Trump administration, in Seoul for now, appears determined to get Mr. Trump and Mr. Kim to- While proceeding apace with gether to explore if the gap summit plans, Mr. Trump and might be bridged and is seeking his foreign-policy team on to avoid provocations. Wednesday also refrained from After North Korea de- firing back with tough words of nounced the Max Thunder exer-

their own. Mr. Trump previ- PARK CHUL-HONG/YONHAP/ASSOCIATED PRESS cise on Wednesday, South Ko- ously has called North Korean A U.S. F-22 jet fighter landed in Gwangju, South Korea, on Wednesday during a military exercise. rean officials made clear that it leader Kim Jong Un “rocket wouldn’t include American man” and warned of American president is very used to and sertions that Pyongyang should which had been at the initial horn, a former U.S. negotiator, B-52s, a nuclear-capable “.” ready for tough negotiations.” quickly dismantle its nuclear ar- stage of nuclear development,” adding it was a message that bomber that worries Pyong- Secretary of State Mike The administration’s unchar- senal in return for economic Mr. Kim said. North Korea’s flexibility yang. Pompeo spoke to his South Ko- acteristically subdued response benefits. Some U.S. experts said North shouldn’t be taken for granted. American officials insisted rean counterpart as part of a followed North Korea’s angry John Bolton, Mr. Trump’s na- Korea’s comments may be an But Anthony Ruggiero, a for- B-52s were never part of the ex- broader effort to coordinate for denunciation of the Max Thun- tional-security adviser, has sug- effort to strengthen its bargain- mer Treasury Department offi- ercise and refused to discuss the June 12 summit, and called der air exercise in South Korea, gested that the dismantlement ing position after Trump ad- cial, asserted the comments operations of the bombers, Singapore’s foreign minister to which involve F-22s, some of of North Korea’s nuclear arsenal ministration officials asserted showed North Korea was still which are stationed on Guam. thank his government for the most-advanced U.S. fight- should be based on Libya, their “maximum pressure” cam- clinging to its decades old strat- A spokesman for South Ko- agreeing to host the summit, ers. where leader Moammar Gadhafi paign had driven the North Ko- egy of trying to get economic rea’s president on Wednesday the State Department said. Most significant were the agreed to give up his nascent rean leader to the bargaining benefits up front while defer- said the “current situation is a “This is something we fully comments of Kim Kye Gwan, nuclear program. table. ring hard decisions on disman- difficult process” but played expected,” White House press North Korea’s first vice minister “It is absolutely absurd to “They are putting down tling its arsenal. down the possibility that the secretary Sarah Sanders said of at the Ministry of Foreign Af- dare compare the DPRK, a nu- some markers and resetting ex- “They could have been writ- North would back out of the the North Korean warning. “The fairs, who objected to U.S. as- clear-weapon state, to Libya, pectations,” said Robert J. Ein- in the 1990s,” Mr. Ruggiero summit. Over the Years, Twists, Turns and Backtracking in North’s Negotiations BY CHRIS GORDON The Non-Proliferation ments. After the IAEA was re- The Six Party Talks, conducted its first nuclear test. test firing was for a civilian Treaty, 1993: In the early fused access to sites it sus- 2003-2009: These talks were In 2007, talks were re- space program. The U.N. Secu- North Korea over the past 1990s, North Korea, a signa- pected contained hidden launched in August 2003 among started. North Korea disabled rity Council said it was a vio- 25 years has altered course or tory of the international nu- nuclear-weapons material, the the U.S., China, South Korea, its nuclear reactor at Yongbyon lation of a resolution banning backtracked on a string of in- clear Non-Proliferation Treaty, U.N. Security Council insisted Russia, Japan and North Korea. and allowed the IAEA to send ballistic-missile tests. ternational commitments per- drew suspicions from the In- that North Korea comply with In 2005, North Korea promised inspectors. North Korea, how- As a result, North Korea taining to its weapons pro- ternational Atomic Energy the agreement. to give up its nuclear weapons ever, insisted the inspections said it would no longer be grams. Agency, the United Nations In March 1993, North Korea and programs and return to the be restricted to Yongbyon. bound by the Six Party Talk Here are some previous in- body charged with regulating said it was withdrawing from NPT. In return, it would receive In April 2009, North Korea agreements. One month later, stances of North Korean diplo- compliance of the treaty the NPT, though it later sus- aid and security guarantees. test-fired a three-stage Unha-2 the country conducted its sec- matic shifts: through inspection agree- pended the decision. In October 2006, North Korea rocket. North Korea said the ond nuclear test.

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THE WALL STREET JOURNAL. ***** Thursday, May 17, 2018 | A7 WORLD NEWS Bolton Draws Pyongyang Ire Old Rivals Chart

BY DION NISSENBAUM Malaysia’s Path AND MICHAEL C. BENDER

WASHINGTON—President Donald Trump’s new national After Upheaval security adviser has suddenly become the administration’s political lightning rod in talks BY JAMES HOOKWAY economic nationalism during with North Korea, which deliv- his first stint in office, from ered an unusually personal at- KUALA LUMPUR, Malaysia— 1981 until his 2003 retirement. tack on Wednesday in threaten- When it finally came, Anwar Many in Mr. Anwar’s camp ing to pull out of June’s high- Ibrahim’s release from deten- are wary of Mr. Mahathir’s au- stakes summit with the U.S. tion Wednesday was almost as tocratic tendencies, although he John Bolton, known for his dramatic as the democracy has said he would try to rein bushy white mustache and his leader’s first arrest more than himself in. confrontational foreign-policy 22 years ago—ordered by the The two have a long and views, is a longstanding figure man who is again leading Ma- complex history. Two decades in the capital’s foreign-policy laysia, Prime Minister Mahathir ago, helicopter searchlights circles and has quickly estab- Mohamad. swept the streets outside Mr. lished himself as the presi- Swarmed by news-camera Anwar’s home as police moved dent’s prime confidant since teams at the hospital where he in to arrest him. The prime min- taking the job five weeks ago. had been serving a sentence on ister had fired Mr. Anwar as his Mr. Bolton has become a con- what he says were trumped-up deputy after a dispute over how stant presence at Mr. Trump’s sodomy charges, Mr. Anwar was to steer the economy through side, a position once held by hustled into a black SUV by the 1990s Asian financial crisis. chief of staff John Kelly, whose prison guards for a trip to the Knowing he was facing ar- sway with the president has national palace to see the coun- rest on sodomy charges, Mr. waned. Mr. Bolton has moved to try’s king, Sultan Muhammad V. Anwar took to the streets, orga- quickly consolidate power by Along the way supporters nizing mass protests against forcing out rivals jockeying for waved banners and chanted Mr. Mahathir and the ruling co- influence in the White House, “Long live Anwar!” in Malay alition. Mr. Anwar spent six

current and former Trump ad- KEVIN LAMARQUE/REUTERS and English and “Reformasi!” years in prison before his con- ministration officials said. ‘It’s what the North Koreans do,’ national security adviser John Bolton said of the criticism. (Malay for “reform”). viction was overturned. He has sought to dispel his After a brief ceremony with In an interview before his re- image among detractors as a nounced the comparison as an sucker. They said I was a very State Mike Pompeo, the for- the king and a handshake with lease, Mr. Anwar said he ac- pompous warmonger by build- insulting and “sinister move.” ugly fellow,” Mr. Bolton said mer Central Intelligence Mr. Mahathir, Mr. Anwar left a cepted Mr. Mahathir’s offer to ing bridges with other admin- “We shed light on the qual- on Radio. “So I kind Agency director who has trav- free man for the first time in hand over power and had agreed istration officials including ity of Bolton already in the of get used to it. It’s what the eled to North Korea twice. three years, saying he would to put their conflicts behind him. Defense Secretary past, and we do not hide our North Koreans do. The ques- A former ambassador to the rest and travel before consider- —Yantoultra Ngui in and Jared Kushner, Mr. feeling of repugnance toward tion is whether this really is a U.N., Mr. Bolton has worked to ing his political role. Putrajaya, Malaysia, and Trump’s son-in-law and a key him,” said Kim Kye Gwan, sign that they’re not taking build trust and bring in his “I will be informed and I will Jake Maxwell Watts in Kuala presidential adviser. North Korea’s first vice minis- our objective of denucleariza- own allies. take an interest,” Mr. Anwar Lumpur, Malaysia, On Wednesday, North Korea ter for foreign affairs. tion seriously.” Mr. Bolton pushed out Tom said, looking trim and with a contributed to this article. unleashed a blistering con- It wasn’t the first time North Bossert, the president’s former tidy goatee. “But I don’t have to demnation of Mr. Bolton, who Korea has singled out Mr. Bol- homeland-security adviser and serve in the cabinet for now.” came to the White House job ton for criticism. In 2003, when Mr. Bolton has eliminated the White House His return will likely revive a after arguing publicly that the he was serving as an undersec- cyber coordinator position, a decades-old rivalry with Mr. U.S. had the right to strike the retary of state while President pushed out some move some Democrats criti- Mahathir, political insiders country even if it didn’t pose George W. Bush tried to negoti- people and brought in cized because it came amid say—this time, to direct the an imminent threat to America ate with North Korea, Mr. Bol- growing cyberthreats. ragtag coalition they formed to or its allies. ton delivered a speech in Seoul his own allies. Mr. Bolton also nudged out defeat former Prime Minister Mr. Bolton has championed where he denounced then-North two top deputies who had Najib Razak and the United Ma- a hard-line negotiating position Korean leader Kim Jong Il. been loyal to his predecessor, lays National Organization, ahead of the planned June 12 “I knew I had struck home Lt. Gen, H.R. McMaster, and which had led the country since summit in Singapore. In televi- when the DPRK’s news agency Mr. Trump and his press brought in one ally known for independence in 1957. sion interviews, he has warned denounced me as ‘human secretary, Sarah Sanders, feuding with Mr. Mattis and One complication is that the that the U.S. won’t ease eco- scum,’ probably the highest ac- brushed off North Korea’s the Pentagon leadership. 92-year-old Mr. Mahathir has nomic pressure until North Ko- colade I received during all my threats. Some analysts sug- The swift personnel moves, already pledged to hand power rea gets rid of its nuclear- service in the Bush years,” Mr. gested North Korea might try- in additional to a reorganiza- to Mr. Anwar in a year or two, weapons program. He has cited Bolton wrote in his memoir, ing to marginalize Mr. Bolton’s tion of the NSC that merged making him something of a Libya’s agreement in 2003 to “Surrender is Not an Option.” more uncompromising views several directorates, demon- lame duck. The two are at odds

eliminate its nascent nuclear On Wednesday, Mr. Bolton within the administration and strated that Mr. Bolton had on economic policy, Mr. Anwar LAI SENG SIN/REUTERS program as a template for talks dismissed the latest criticism. encourage Mr. Trump to lean the president’s ear, one person more a free-market advocate Anwar Ibrahim kisses his wife with North Korea, which de- “They called me a blood- more on new Secretary of familiar with his thinking said. and Mr. Mahathir a champion of after his release Wednesday.

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A8 | Thursday, May 17, 2018 ** THE WALL STREET JOURNAL. WORLD NEWS WORLD WATCH

JAPAN Origin Rules Pose Brexit Challenge Long Growth Streak Comes to an End BY JASON DOUGLAS Japan’s economy contracted Assembly Lines in the first three months of At a Ford Motor Co. plant Estimated percentage of domestic and foreign inputs in U.K. exports 2018 on weak private consump- near London, workers manu- tion and business investment, facture cylinder blocks, crank- U.K. inputs EU Non-EU putting the brakes on the na- shafts and other components Fishing and aquaculture tion’s longest growth streak in for Ranger pickup trucks that 28 years, government data are sold to buyers across the Mining and quarrying showed. . Basic pharmaceuticals The world’s third-largest The finished vehicles don’t economy shrank at an annual- Chemicals roll out of a factory in the U.K. ized pace of 0.6% in the Janu- or anywhere else in the EU. The Autos ary-March period, compared with components made in Britain Transport equipment revised 0.6% growth in the final are sent to South Africa, where quarter of 2017. The contraction Electrical equipment the trucks are put together and was the first since the final shipped back thousands of Metals quarter of 2015. miles to European dealers. Computers It comes as the Japanese This continent-spanning as- economy seemed to have finally sembly line highlights what Petroleum products escaped decades of stagnation, executives and trade experts 0 25 50 75 100% helped by economic policies in-

say will be one of Brexit’s CHRIS RATCLIFFE/BLOOMBERG NEWS Source: Center for European Reform/Absolute Strategy Research cluding the Bank of Japan’s ag- challenges: Rules of origin in Engines are assembled at Vauxhall factory in Luton, England. THE WALL STREET JOURNAL. gressive monetary easing. trade with the EU. The new data are a setback The rules are used by cus- resa May’s plan to leave the reckons that after Brexit, com- sources, the proportion of treated as European compo- for Prime Minister Shinzo Abe, toms authorities to establish customs union will bring rules plying with rules of origin for “homemade” content is care- nents of the South Africa-made who has used the run of growth where a product came from in of origin into play. the 40% of her sales that cur- fully calculated depending on vehicle, which is currently able as evidence of the success of order to waive or levy a tariff. Mrs. May wants to replace rently go to the EU would ab- the amount of work carried to enter the EU tariff-free. his economic platform. For vehicles, smartphones and the customs union with a free- sorb around 6% of the average out in the home country. Local- The concern for Ford is that Still, officials and analysts ex- other products that include raw trade agreement with the EU. sale price, and up to 15 hours a content thresholds needed to won’t necessarily be the case pect the decline to be tempo- materials and manufactured For the 80% of British export- month of her staff’s time. qualify for preferential access once the U.K. exits the EU. rary. Some analysts expect the components from around the ers that sell to the EU, that Rules of origin have been a vary depending on the prod- Those crankshafts and cylin- economy to rebound as soon as world, making that determina- will create new costs. feature of free-trade accords uct. Around 50% is typical. der blocks won’t qualify as lo- this current April-June quarter. tion can be fiendishly complex. Complying with rules of ori- for decades. The goal, accord- Trade agreements also allow cal content for the EU—unless —Megumi Fujikawa Some of the world’s tough- gin is “quite a laborious pro- ing to Sam Lowe, a trade pol- for so-called cumulation, which the U.K. can agree on new cu- est trade disputes revolve cess—and an expensive one,” icy expert at the Center for permits components and other mulation agreements with the TURKEY around the issue. U.S. Presi- said Nimisha Raja, founder of European Reform, a nonparti- inputs to be designated as local EU and South Africa. dent Donald Trump has taken Sittingbourne, England-based san London think tank focused content for a finished product Absent such a deal, “the Currency Hits Dollar aim at the origin provisions of Nim’s Fruit Crisps, which on EU policy, is to prevent one provided they originate from components would have to be Low Before Uptick the North American Free makes and sells dried-fruit party to a trade agreement the parties to that trade deal. sourced from South Africa or Trade Agreement between the chips world-wide. Costs include passing off cheap imports as Consider Ford’s Ranger. The the EU in order for Ford to The lira tumbled to a record U.S., Canada and Mexico. legal fees, auditing fees and oc- homemade, in order to qualify U.K. is a member of the EU and continue to meet the rules-of- low against the U.S. dollar, ex- Goods currently move casionally translation fees. for preferential access to an- the EU has a free-trade accord origin requirements for the tending a steep slide that inves- freely between member states “Selling to the EU is like other party’s market. with South Africa. That means Rangers produced in South Af- tors attribute to President Recep inside the EU’s customs union. selling to someone in Man- When products include the crankshafts and other Ford rica for the EU market,” a Ford Tayyip Erdogan’s unorthodox But U.K. Prime Minister The- chester,” Ms. Raja said. But she components from a variety of parts made near London are spokeswoman said. economic approach and concerns over his influence over the cen- tral bank. The lira, which hit a low of A Modern Love Story, a More Modern Monarchy 4.5011 to the dollar in early trad- ing Wednesday, reversed its daily losses after the central Prince Harry and Meghan Markle’s marriage promises to bring British aristocracy in step with Britain bank issued a statement saying it would take “necessary steps” to shore it up. In afternoon trad- BY JENNY GROSS ing, the lira was up 0.5% at 4.4250 to the dollar. LONDON—When Prince Mr. Erdogan, who has said Harry marries American ac- high interest rates are “the tress Meghan Markle in a mother and father of all evils,” is pomp-filled ceremony on campaigning for re-election on a Saturday, it will mark a giant pledge that the central bank will step in the modernization of continue to lend on the cheap. the British monarchy, as its —Yeliz Candemir younger members increas- ingly take center stage and NILE RIVER recast the family as a less tradition-bound clan. Riparian States The grandson of Queen Agree to Joint Study Elizabeth II and Ms. Markle have planned a wedding out- Officials from Ethiopia, Egypt side Windsor Castle that and Sudan made progress after seeks to include members of months of acrimony over how to the public. But the glare of share the waters of the Nile media attention around the river, smoothing tensions in a nuptials underscores contin- conflict that has threatened to ued tension between the royal upset the political balance in the family and the British press. Horn of Africa. The wedding between The spat is pitting Egypt Prince Harry, the sixth in against a rising Ethiopia, which line to the throne, and Ms. is building a $4.2 billion dam on Markle, a mixed-race, di- the Nile’s main tributary that vorced star of the popular Egypt, which depends on the American television series Nile for its water supply, fears “Suits,” marks a seismic shift will divert too much water and in the once-stodgy reputa- PHIL NOBLE/REUTERS place pressure on its agriculture. tion of the British monarchy. Wax figures of Prince Harry and Meghan Markle are on display in Windsor, England, ahead of the couple’s nuptials there on Saturday. Another tributary of the Nile “Someone who has been flows through Sudan to where divorced and doesn’t come Prince William and his Indeed, while the pomp Broadcasters are planning and Ms. Markle have been the two channels meet at Khar- from an aristocratic family wife, Catherine, the Duchess and circumstance of the cer- blanket coverage of the fes- the subject of intense scru- toum. shows the monarchy is of Cambridge, have helped emony Saturday will be tivities, while cable channels tiny in the press. In recent The foreign ministers of adapting to a modern age,” reboot the image of the rooted in centuries-old cus- and television networks are days, her family has been Egypt and Ethiopia and Sudan’s says Vernon Mogdanor, a royal family by presenting a toms, the wedding will break rolling out reality shows, the focus, with TMZ.com re- water minister agreed at a professor in U.K. constitu- more polished image in the with tradition in other ways. documentaries and series re- porting that her father meeting in Cairo to a joint scien- tional history at King’s Col- media than the previous At the reception, Ms. Markle lated to the event. But the won’t attend the wedding, tific study of how quickly the lege London. Ms. Markle’s fa- generation of royals. But is expected to give a speech, media and the royal family and the Times of London dam being built by Ethiopia ther is a white Prince Harry, 33, and Ms. a first for a royal wedding, have long had a complicated saying some family members should be filled. They signed a cinematographer, and her Markle, 36, promise to do according to local media re- and, at times, troubled rela- were “determined to milk document calling for the leaders mother is an African-Ameri- more to bring the British ar- ports. And Ms. Markle’s tionship. everything they could out of of the three countries to meet can social worker and yoga istocracy in step with mod- mother, Doria Ragland, may Since their romance be- their relationship to the every six months. instructor. ern Britain. walk her down the aisle. came public, Prince Harry royal bride.” —Matina Stevis-Gridneff FROM PAGE ONE

a stock dividend, and as long starter for Mr. Moonves. five independent directors CBS as National Amusements is A CBS spokesman said, evaluating the merger. All five still the controlling share- “There could not have been a were named as plaintiffs along holder, it has the power to deal on price in isolation from with CBS in Monday’s lawsuit ContinuedfromPageOne change CBS’s bylaws without the other aspects of this trans- against Ms. Redstone and Na- on Thursday to vote on diluting signoff by the board. action.” tional Amusements. the Redstones’ control. The supermajority requires CBS said in court documents Last Friday, Mr. Klieger, who In a Wednesday hearing in 90% of CBS’s 14 board mem- that its special committee came is Ms. Redstone’s lawyer in ad- Delaware Chancery Court, the bers to approve such a change, to the conclusion last weekend dition to being a CBS director, judge ordered an effective according to a person familiar that a merger wasn’t in the resurfaced longstanding con- standstill to prevent both sides with the matter. Because Ms. best interests of CBS sharehold- cerns about Mr. Gifford and his from making any more moves Redstone, who is vice chair- ers. In determining to take ac- behavior, and asked that he be before he issues a decision on man of CBS, would likely have tion to dilute the Redstones’ removed from the board. CBS’s request for the temporary the support of the two Red- voting interest, CBS pointed to CBS said in a statement that restraining order. The written stone family lawyers also on media reports, including in The it is “unfortunate and revealing decision was expected by Thurs- the board, Rob Klieger and Da- Wall Street Journal, that Ms. that NAI has resorted to base- day before CBS’s board meeting. vid Andelman, that would Redstone was considering re- less personal attacks.”

Judge Andre Bouchard or- make CBS’s proposed dilution JESSE GRANT/GETTY IMAGESplacing FOR VIACOM board members. Mr. Gifford referred a call dered the short-term standstill of the Redstones’ voting con- Shari Redstone is embroiled in a fight to keep control of CBS. While National Amuse- to CBS and its statement. in response to National Amuse- trol unlikely to pass, the per- ments denies it ever consid- National Amusements ar- ments’ last-minute maneuvering son said. and look forward to present- two years. After dropping an ered a wholesale overhaul of gues that voting to strip it of before the hearing. “I have Neither Mr. Klieger nor Mr. ing our case in court.” effort in late 2016, she revived CBS’s board, it said in its filing its controlling position would never seen anything quite like Andelman responded to a re- In court documents, Na- it at the start of the year. that it did push to replace one be “a breach of fiduciary duty what transpired here,” he said. quest for comment. tional Amusements said that According to the National CBS board member: Charles by the directors who vote in A half-hour before the start “The latest step by NAI pro- while it had no intention of Amusements’ lawyers, the CBS Gifford. A major figure in Bos- favor of it” with “simply no of the hearing, National vides further evidence of why overhauling CBS’s manage- and Viacom special commit- ton’s financial community and precedent in Delaware law.” Amusements announced a we concluded that we had no ment and board, CBS’s latest tees considering the merger chairman emeritus of Bank of CBS countered that it is a change to CBS’s bylaws requir- choice but to file our action in actions “have forced NAI to came to an economic agree- America, Mr. Gifford is close “basic principle of Delaware ing a supermajority of board the Delaware courts, in order consider exercising its rights.” ment on the terms of the to Mr. Moonves and sat on law that a controlling stock- members to approve actions to protect the interests of all Ms. Redstone has been urg- merger, and were simply held CBS’s powerful compensation holder cannot use its control such as dividends and amend- CBS shareholders,” CBS said in ing CBS and Viacom, the two up over Ms. Redstone’s desire committee, according to peo- over corporate process to ments to bylaws. The effort to a statement in response to the companies National Amuse- that Viacom Chief Executive ple familiar with the matter. harm other stockholders.” dilute National Amusements’ bylaw change. “We continue to ments controls, to consider a Bob Bakish get a board seat in He also sits on CBS’s special —Peg Brickley voting power is structured as be confident in our position merger for the better part of the merged company—a non- committee, which consists of contributed to this article. .

THE WALL STREET JOURNAL. **** Thursday, May 17, 2018 | A9 WORLD NEWS Top Maduro Rival Riles Venezuelan Vote

As opposition parties boycott Sunday Lawyers Publicize election for president, Caracas Prison Riot Falcón campaigns With Inside Video

BY KEJAL VYAS CARACAS—U.S. and Vene- AND JUAN FORERO zuelan rights lawyers con- demned what they said was TURMERO, Venezuela— a riot that broke out here Henri Falcón, the top Venezue- Wednesday at a detention lan opposition candidate in center controlled by the intel- Sunday’s presidential election, ligence police where more faces two obstacles to winning: than 50 political prisoners are his friends and his foes. held, including a Utah man He must not only outmaneu- who has been locked up ver a ruling administration us- without since 2016. ing state machinery to dominate In a series of cellphone the vote. But Mr. Falcón must videos that lawyers said were also overcome the reluctance of distributed on social media by a coalition of like-minded oppo- families of detainees, Ameri- sition parties boycotting a con- can Joshua Holt and several test they say is rigged. Venezuelan political dissi- Mr. Falcón’s message, in dents made a desperate plea contrast, is: You can’t win if for help as inmates took con- you don’t participate. trol of a part of the Helicoide “I decided to show my face prison in Caracas. to the country,” Mr. Falcón told Rights lawyers said the followers last week from a inmates were protesting stage in this hard-bitten indus- against torture and their in- trial town southwest of Cara- definite jailing without due cas. “I don’t care about the process.

criticism....It’s the moment of OSCAR B.CASTILLO/FRACTURES COLLECTIVES FOR THE WALL STREET JOURNAL “The only people kidnap- truth now, a time for common Candidate Henri Falcón, campaigning recently in Turmero, is leading the unpopular Venezuelan President Nicolás Maduro in some polls. ping me is the government of sense, for being rational.” Venezuela,” Mr. Holt, a 26- Mr. Falcón, a 56-year-old re- has contracted 40% in the past have lost all purchasing power, gue that it is self-defeating not dro Nikken, an elections ex- year-old former Mormon mis- tired soldier, ex-governor and, five years, punctuated by eliminate exchange controls to support Mr. Falcón, no mat- pert here who has advised Mr. sionary who was arrested most notably, a former govern- blackouts and a broken water- that deter foreign investment, ter the odds. A Brookings Insti- Falcón, said it would be chal- with his Venezuelan wife on ment ally, has emerged as the delivery system, hunger, high and seek help from the Inter- tution study over a 20-year pe- lenging. “The possibility that espionage and weapons sole politician with a chance to crime rates and hyperinflation. national Monetary Fund. riod of 171 situations where he wins is big,” he said. “The charges, said in one of the end a government whose poor Mr. Falcón is campaigning in Not all of his supporters are politicians threatened or car- possibility that the win be rec- videos. stewardship has sparked an ex- towns like this one, in Venezu- enthusiastic but see him as the ried out boycotts found that ognized isn’t.” The reported uprising odus of as many as three mil- ela’s heartland, where President the tactic is counterproductive. Polls show most voters are comes just ahead of Presi- lion Venezuelans to other Nicolas Maduro's administra- Vicente Díaz, an opponent ignoring the call to abstain. dent Nicolás Maduro’s re-elec- countries. tion’s popularity has waned. ‘It’s the moment of of the government who served Yolanda Campos, 55, who tion bid on Sunday. The U.S. Polls are mixed, but some Among Mr. Falcón’s on the electoral board, has says she loved Mr. Maduro’s government and much of show Mr. Falcón ahead of the pledges: He would welcome truth now, a time for publicly said he would vote for predecessor, former President Latin America have deemed unpopular president, who is humanitarian aid from abroad common sense, for Mr. Falcón. And if millions of Hugo Chávez, is ready to back the vote a sham and have running for a second term. To that the government blocks others do the same, Mr. Díaz Mr. Falcón. Her daily wage is promised heavier sanctions win, Mr. Falcón acknowledges, and stop subsidizing Venezu- being rational.’ said, then the government now about 12 cents. She has against Venezuela. he needs to deliver a substan- ela’s Caribbean neighbors with wouldn’t be able to steal the gone six months without dia- In two Twitter messages, tial victory. oil shipments. Wearing a T- election. “If an avalanche of betes and blood pressure pills Attorney General Tarek Wil- “We are going to be recog- shirt with the slogan “better votes is produced it could because she can’t afford them. liam Saab, a Maduro loyalist, nized by the world because to welcome than to say good- best chance to defeat Mr. Ma- swamp any electoral condi- Running water is but a mem- said a team of Venezuelan who could not recognize eight bye,” he said he wanted flee- duro. tion,” he said. ory in her home. prosecutors was working to million, seven million Venezue- ing Venezuelans to return. “He’s not Winston Churchill, Mr. Falcón’s camp is trying She welcomes Mr. Falcón’s resolve the situation but lans in the street, celebrating Though a leftist who is but he’s what we’ve got,” said to defend from fraud by de- plan to dollarize the economy didn’t provide details. Calls to that they have a new govern- loath to criticize socialism, Mr. one longtime politician who ploying 34,000 monitors at and said that she, her four the country’s Information ment,” he told The Wall Street Falcón nevertheless has of- publicly supports Mr. Falcón. most of Venezuela’s 14,000 children and many neighbors Ministry seeking comment Journal in an interview. fered what would be a radical “People say, ‘I don’t like Fal- voting centers to help compare in her slum will vote for him. weren’t immediately returned. He appeals to the needs of recipe for Venezuela: replace cón.’ I say, ‘I don’t either.’ But the voting-machine receipts “Falcón is the best option to —Kejal Vyas the working-class voters, those the bolivar with the dollar to the alternative is Maduro.” with the final count. get Maduro out of there,” she and Ryan Dube most hurt by an economy that help poor Venezuelans who Many in the opposition ar- But even supporters like Pe- said, “anything but Maduro.” Ex-First Lady Drops Mexico Presidential Bid

BY JUAN MONTES Zavala’s withdrawal could nar- far, Ms. Zavala isn’t throwing cal honesty, but also to allow Institutional Revolutionary AND ANTHONY HARRUP row the double-digit poll lead of her support behind any candi- the people who generously Party said they would invite Ms. leftist nationalist Andrés Ma- date, although people close to supported me the freedom to Zavala to join their campaigns. MEXICO CITY—Former first nuel López Obrador, who is her said she could eventually make their decision in this dif- Ms. Zavala’s campaign suf- lady Margarita Zavala said she widely seen as the least market- join Mr. Anaya’s campaign. ficult contest.” fered from lack of funding, and is withdrawing her candidacy friendly of the candidates. Ms. Zavala, a former law- She broke with the PAN in she has been losing support in for the July 1 presidential “The most likely thing is maker and the wife of former October to run as an indepen- recent polls. election, likely giving a boost that Margarita’s supporters president Felipe Calderón, dent candidate after an inter- A survey conducted May to Ricardo Anaya of the con- will move to Ricardo Anaya, made the announcement in a nal dispute with Mr. Anaya, 11-13 by Consulta Mitofsky servative National Action and [her decision] will give roundtable program with the who was party president at showed Mr. López Obrador Party, who polls say is in sec- him momentum ahead of the Televisa network that was to the time. Mr. Anaya refused to with 44.5% of voter prefer- ond place, ahead of a Sunday debate. That could add fuel to be aired late Wednesday. Tele- organize a party primary to ences, compared with 28% for debate. the PAN candidacy,” said Luis visa posted a brief excerpt choose the PAN candidate, Mr. Anaya and 19.8% for José Wednesday’s announcement, Carlos Ugalde, a political con- from the program online. then agreed on a coalition Antonio Meade of the ruling

MARCO UGARTE/ASSOCIATED PRESS which narrowed the field to sultant and former head of Ms. Zavala said she was with two other smaller parties party. Independent candidate Polls this month showed four, was followed by gains in Mexico’s electoral agency. leaving the race “out of a prin- and himself as the candidate. Jaime Rodríguez had 4% and Margarita Zavala trailing badly. the peso against the dollar. Ms. Campaign aides said that so ciple of congruence and politi- Both the PAN and the ruling Ms.Zavala3.7%. Taliban Quit Attempt For Syria, Another Milestone in Conflict

To Seize Afghan City BY RAJA ABDULRAHIM

KABUL—Taliban insurgents were posted. The Syrian government gave up their bid to take over Meanwhile, offensive opera- took control of the country’s the capital of the western tions by government troops largest province, state media province of Farah on Wednes- were continuing outside the said, as the Assad regime day, slipping out of the city in capital, said Army Lt. Col. moved ahead with its Russia- the early-morning darkness Martin O’Donnell, spokesman and Iran-backed campaign to without any apparent resis- for U.S.-led international capture remaining territory tance from government forces, forces in Afghanistan. from rebels after more than residents said. It wasn’t immediately seven years of conflict. known whether the ease with Rebel fighters and thou- By Craig Nelson, Habib which the Taliban left the city sands of civilians are leaving Khan Totakhil resulted from an explicit the last opposition-held en- and Ehsanullah Amiri agreement between command- clave in central Homs province ers on both sides. Breaking off this week under evacuation After a day of intense fight- fighting to avoid further deals with Damascus, after ing with government forces, bloodshed is a time-honored years of government siege and backed by Afghan and U.S. and frequently practiced tradi- a recent military assault that fighter aircraft and drones, tion in civil conflicts in Af- forced their surrender. Taliban fighters were unable ghanistan. The Homs province and its to seize control of the remote Abdul Basir Salangi, the eponymous capital played an provincial capital—a goal Af- provincial governor, said the important role in the uprising ghanistan’s largest insurgency Taliban were “shamefully de- against President Bashar al- has been unable to achieve feated” in their attempt to Assad as its neighborhoods LOUAI BESHARA/AGENCE FRANCE-PRESSE/GETTY IMAGES anywhere in the country since capture the city. and towns were some of the Syrian security forces raise the government flag in the town of Rastan in Homs province. 2015. Mr. Salangi said more than first in the country to break To avert further bloodshed, 300 Taliban fighters were free of government control. same strategy: siege and bom- to the United Nations. Others placed from elsewhere in Syria. roads out of the capital, which killed or wounded in the fight- The Assad regime is increas- bardment. wanting to leave have been Jan Egeland, head of the bears the same name as the ing. Among government sol- ingly consolidating control Limited U.S., French and slowed by a shortage of buses. U.N. task force for humanitarian province, were left open by diers and police, 10 were killed over large parts of the coun- British missile strikes on Syr- More than 120,000 people aid to Syria, has called it “the government forces so Taliban and another 10 wounded. try, further throwing into ian-government targets in re- have been displaced from vari- biggest refugee camp on earth.” fighters could withdraw to the Three civilians also died, he doubt the likelihood of a nego- sponse to the chemical attack ous parts of Syria as a result And those being displaced sparsely populated and largely said. The casualty figures tiated peace settlement. haven’t slowed the regime’s of the recent surrender agree- aren’t necessarily finding rural areas outside the city, couldn’t be independently ver- The Assad government in drive to seize territory. ments, according to the U.K.- safety. On Wednesday, the Or- said one local man contacted ified. The extent of property early April completely cap- Although ostensibly pro- based Syrian Observatory for ganization for the Prohibition by telephone from the Afghan damage in Farah wasn’t clear. tured Eastern Ghouta, the last tected under an internationally Human Rights. Those who of Chemical Weapons con- capital, Kabul. Thwarted in their original rebel stronghold near the cap- backed agreement brokered have been displaced have been firmed that chlorine gas was By late morning, he and au- aimtoseizecontrolofFarah, ital Damascus, after nearly last year by Turkey, Russia and bused to one of the last oppo- likely used as a chemical thorities said, shops were the Taliban, in the aftermath two months of a Russia- Iran, the Homs enclave came sition strongholds, an area in weapon in February on the open in Farah and residents of the fighting, sought quickly backed assault that included a under air attacks by regime northwest Syria which in- town of Saraqib, in Idlib prov- who had fled were returning to redefine success. They is- suspected chemical-weapons warplanes following the gov- cludes Idlib and northern ince. It didn’t issue blame for to their homes, some on sued a statement describing attack. Since then, it has ac- ernment capture of Ghouta. Aleppo provinces. the attack, which injured a streets still littered with bod- their fighters’ departure from celerated its push to seize More than 30,000 people The U.N. estimates 2.2 mil- number of people. ies and where government the city as a strategic retreat small, isolated pockets under already have left the opposi- lion people are in Idlib, two- —Nour Alakraa tanks and armored vehicles ordered by commanders. rebel control through the tion Homs enclave, according thirds of them having been dis- contributed to this article. . A12 | Thursday, May 17, 2018 THE WALL STREET JOURNAL. IN DEPTH

Some Saudi officials were PLANES left scratching their heads. Within the government and air- line, says one official, “everyone ContinuedfromPageOne thought it makes more sense majority-owned by two of the for the PIF to finance that deal,” crown prince’s younger broth- since buying 50 planes at once ers was awarded a coveted would net Saudia a huge dis- broadband license from the count. Under the lease deal, government, Saudi records Saudia wouldn’t get the benefit showed. of that discount. Additionally, in 2015, Prince Deal documents the Journal Mohammed helped engineer a reviewed and interviews with multibillion-dollar deal between people involved in the deal de- European plane giant Airbus SE tail a convoluted chain of trans- and Saudi Arabia’s state-owned actions that ends up benefiting Saudia Airlines, according to Tharawat, the bin Salman com- documents reviewed by The pany. As one government offi- Wall Street Journal and inter- cial put it, “at the end it went to views with more than a dozen Tharawat, who got others to fi- people involved in the transac- nance it, and made huge profits tion. The deal is worth tens of without risking any of their millions of dollars to his family, money.” the documents show. The chain begins with Quan- A spokeswoman for the tum, the bank Tharawat co- Saudi embassy in Washington owns, and where Turki bin Sal- declined to comment about man was appointed chairman. Prince Mohammed’s business Quantum arranged funding dealings. from investors and banks for buying planes, receiving a pay- Crackdown ment for each equity invest- ment and tranche of debt The story of the Airbus deal raised, people familiar with the suggests this mixing of business arrangement say. The ALIF fund and government remains a sta- raised about $4 billion as of

ple of the Saudi economy, de- REMY DE LA2017, MAUVINIERE/EPA/SHUTTERSTOCK according to IAFC’s web- spite the crown prince’s highly Prince Mohammed bin Salman and then-French President François Hollande stand in the background at a 2015 signing ceremony. site. publicized crackdown on many ALIF used the money to buy other royals who the prince said $100,000 to invest in Saudi to invest $100 million in ALIF if Airbus planes at a big dis- abused their power to get rich. stocks, he has said. The Airbus Deal the fund bought only Airbus count—more than 60% off the Indeed, Airbus decided to go Prince Mohammed kept trad- A 2015 plane deal by Saudi Arabia's state-controlled airline, Saudia, planes. On June 23, 2014, Air- list price, say people familiar into business with the king’s ing through college and law sent profits to a company owned by Turki bin Salman — son of the bus and IAFC held a “signing with the deal. By leasing the family despite its reservations school. Through the early Saudi king and brother of crown prince, Mohammed bin Salman. ceremony” in London, hosted by planes to Saudia at about mar- over the blurry distinction be- 2010s, as his father moved up Prince Turki bin Salman, Inter- ket-rate, rather than passing on tween private and public finan- the royal ranks, he was ap- Saudia Airlines Airbus national Airfinance said in a the discount, ALIF targeted 15% cial interests, according to peo- pointed to a series of govern- press release. returns. That’s higher than the ple familiar with the matter. ment positions. During that Then, in January of 2015, normal 7% to 9% returns for a An Airbus spokesman de- time Prince Mohammed made King Abdullah died and the fund handling such leases to an clined to comment, saying the billions of Saudi riyals—hun- original Saudia-Airbus plane airline like Saudia, says Paul Ly- company had a policy of not dreds of millions of dollars—on deal stalled. ons of U.K. aviation-business discussing any of its business the Saudi stock market, he has consultancy IBA Group Ltd. dealings that could potentially told several people interviewed New plan IAFC, which manages ALIF, be under investigation by law by the Journal. has a potentially big upside it- enforcement agencies. Prince Mohammed also Soon after Salman took the self: It stands to get a big chunk Leased Sold The modern Saudi state was branched into business. Saudi 50 planes 50 planes throne, Saudi officials told Air- of the deal’s profit, even though created in 1932 when Abdulaziz corporate records as of 2017 bus they had a new plan, say it doesn’t have any equity in the ibn Saud united two regions of show he owns stakes in at least ALIF fund people familiar with the deal: fund. Deal documents show the Arabian peninsula and be- five real-estate development Rather than selling the jets to IAFC gets 35% of profits above came the first king. American companies, as well as a recy- the Saudi government, Airbus 7% return on investment, and geologists would soon discover cling firm. He is also 20% owner would sell them to ALIF—the 50% of profits above 10%. oil in the desert, providing a of Watan Industrial Investment fund connected to the bin Sal- Mr. Selham, the Tharawat gusher of cash to fund a lavish Co. Ltd., a chemical producer man family—which would in CEO, said neither Quantum nor lifestyle for the royal family. that supplies state-controlled %of profit turn rent the planes to Saudia. Turki bin Salman is a share- ALIF Many of Abdulaziz’s sons— firms including Aramco, the fundraising People involved in the pro- holder of IAFC, which is regis- he had dozens—and grandsons government’s oil company, the Investors cess say Saudia didn’t solicit tered in the Cayman Islands and started companies to take on documents show. competitive bids from leasing doesn’t disclose its ownership. no-bid government contracts or A company called Tharawat companies, and rebuffed the ad- However, IAFC’s operations otherwise profit from their po- has emerged as a key player in Quantum vances of companies seeking to are intermingled with the litical power. the business activities of Prince offer competitive rates before bank’s. Quantum’s chief execu- Those practices continued af- Mohammed’s family. According choosing ALIF to do the deal. tive is also managing partner of Tharawat owns 54% ter King Abdulaziz died in 1953 to corporate filings, one of his Saudia Vice President Abdul- IAFC, and IAFC and Quantum and the crown passed to a suc- younger brothers, Turki bin Sal- rahman Altayeb said in an email cession of his sons. One prince man, owned 99% of the invest- Tharawat Holding that “the aircraft acquisition held the country’s only express- ment firm as of May 2017, while transaction was in accordance At the time of the mail license, via a joint venture another brother, Naif, owned with Saudia’s internal proce- with DHL, the shipping com- the remaining 1%. Prince Turki owns dures, which included a review deal, some Airbus pany now owned by Deutsche has since bought his brother’s Prince Turki, of the lease price to ensure its executives had Post AG, which became an oft- stake, according to Ammer al brother of crown prince competitiveness against the repeated example of how the Selham, Tharawat’s CEO. market benchmark, as well as reservations. royal family steered business In practice, Prince Moham- Siemond Chan/The Wall Street Journal aircraft delivery schedule being toward itself. A DHL spokes- med controls and benefits from Source: Documents from companies THE WALL STREET JOURNAL. in line with Saudia’s require- woman declined to comment. Tharawat’s business, say several ments related to its fleet plan.” Prince Salman didn’t focus so people familiar with their deal- construction to take advantage agreeing up front to take 50 At the time of the deal, some share staff, according to state- much on gathering wealth, say ings, including two who have of “the government’s tenth de- planes, Saudia would get a ma- Airbus executives had reserva- ments by Quantum and IAFC people close to the family. discussed the firm with him. velopment plan including in- jor discount. tions. Airbus faced investiga- and people familiar with the While his brothers built for- Mr. Selham disputed that, say- vestments worth $358.2 billion As it turned out, Prince Mo- tions into potential corruption companies. tunes, Salman gathered power. ing: “At no time was HRH in real estate.” Saudi corporate hammed’s family was at that overseas by Western law en- A person involved in struc- He spent 48 years as Riyadh’s Prince Mohammed bin Salman a filings show that Tharawat very moment eyeing its own in- forcement, including a probe by turing the deal defended the governor, overseeing the city’s shareholder or a beneficiary of owned a company that part- vestment in airplanes. the U.K.’s Serious Fraud Office fund’s high projected returns, expansion from a dusty desert the company.” nered with Ochsner Health Sys- Tharawat in 2014 acquired a into possible bribery by an Air- and said the lease rate shouldn’t enclave to a petrodollar-fueled Tharawat and a subsidiary tem in New Orleans to bring 54% stake in Quantum Invest- bus subsidiary in Saudi Arabia, be compared with other air- metropolis of modern skyscrap- own the majority of a tech firm Saudis to the U.S. for organ ment Bank, a Dubai-based com- and didn’t want further prob- plane-leasing deals. There are ers and wide boulevards. called Jawraa that was awarded transplants. pany with scant history of deal lems. “When I saw Turki was few comparable arrangements, It was around 2000 when the a coveted broadband license The kingdom’s struggling making, corporate documents taking over, it kind of brought this person said, since it in- teenage prince had what he from the Saudi government in flagship air carrier, Saudia Air- show. Prince Turki, Moham- cold water on all our excitement volved many planes and an Is- would later call a shocking real- 2014, Saudi records show. The lines, provided Tharawat with med’s younger brother, became about the fund,” says a person lamic-finance component. ization: His father wasn’t rich. license allowed it to become another lucrative opportunity. Quantum’s chairman. Quantum involved. Prince Mohammed finalized Salman subsisted on money one of three companies operat- In 2014, at the advice of executives didn’t respond to re- Ultimately, this person said, the deal during a 2015 visit to from his brother, then-King ing new mobile-phone networks Western “transformation” ex- quests for comment. Airbus relented. It was one of France, says a Saudi official. Fahd, Prince Mohammed has in the country. perts, the money-losing airline Executives from Quantum the biggest plane deals of the Not long after, the crown prince told people. He lived a hand-to- Tharawat has had interests reached a tentative deal with and another small bank formed year. Plus, a person involved took credit for the transaction, mouth existence—if a lavish in fish farms, real estate, tech Airbus to revitalize its aging a company called International with the discussions said, Air- according to a person who was one—spending the cash on fam- services, agricultural-commod- fleet. The arrangement would Airfinance Corp., or IAFC, to en- bus officials decided “we don’t present. ily expenses, rather than saving ity trading and restaurants. It have provided Saudia with doz- ter the jet-leasing business. want to prevent the son of the “I am the mastermind behind or investing. owns an office park in Riyadh. ens of jets financed by the IAFC became the manager of king doing business.” this deal,” the prince said, ex- The concerned prince, seek- An investment vehicle Tharawat Saudi government’s Public In- a fund called ALIF, structured to Others with a stake in the plaining how it showed his suc- ing more financial indepen- owns, Nasaq Holding, says on vestment Fund, or PIF, says a follow Muslim strictures against deal were thrilled by the in- cess in balancing state financial dence, scraped together about its website that it is investing in person involved in the talks. By paying interest. Airbus agreed volvement of a Saudi prince. interests with his family’s.

awful disease over another. rather than them hiring us, and JOBS It’s an attempt at viral mar- that’s a very new experience,” keting for jobs that are also de- said Alexandra Medley, a veteri- scribed in a dense 180-page gov- narian and incoming EIS officer. ContinuedfromPageOne ernment-issue booklet. EIS Making the rounds, Dr. Med- League school. Nearly 500 doc- officers are dispatched to the ley, 32, peppered EIS officers tors, veterinarians, nurses and front lines of outbreaks of all with questions. Would she be researchers applied for the 66 kinds, from deadly Ebola in able to work with many differ- spots in this year’s incoming West Africa and Zika in Brazil to ent bugs? What about overseas class—the smallest in more than bedbugs in Tennessee and toxo- projects? Jared Rispens, a 30- 20 years, due to tight funding. plasmosis from venison kebabs year-old physician, quizzed su- CDC veterans were out to on a men’s church retreat in pervisors of the vessel sanita- generate as much excitement for Wisconsin. They also help com- tion program, which responds their diseases as possible at a bat smoking, obesity and HIV. to gastrointestinal outbreaks on four-day conference in April. Founded in 1951, it’s a critical cruise ships. He wanted to make “Ask me about brain-eating program, said Anne Schuchat, sure he’d be able to spend lots amebas,” a supervisor in the the agency’s principal deputy di- of time out in the field—mean- waterborne disease prevention rector, a former EIS officer her- ing at sea. The program’s table

branch beckoned on a sign. She self. Her first outbreak involved BETSY MCKAY/THE WALL STREETwas JOURNAL (3) topped with an armada of was referring to Naegleria fowl- a fungal infection traced to Different divisions of the Centers for Disease Control and Prevention competed to attract new stress balls shaped like ships. eri, an organism found in warm sphagnum moss that had been members of the Epidemic Intelligence Service during a recent job fair. “So people will remember us,” lakes and rivers that can travel used to pack tree saplings. For explained Amy Freeland, a pro- up the nose to the brain and de- the investigation, Dr. Schuchat Kim Skrobarcek, a physician “Black Panther” and “The Ma- vited recruits to a spread includ- gram epidemiologist. stroy tissue. interviewed members of a who tapped her skills as a for- trix”—lay scattered on the table ing cupcakes with frosting. An algorithm fine-tuned by Aside from promises of cut- small-town garden club. It was mer college sorority social chair and taped along a nearby hall- “We try to keep it pretty safe,” CDC statisticians helped match ting-edge epidemiologic investi- “lovely,” she recalls. “They had to design them. way. “We’re attracting millenni- Matthew Wise, deputy chief of officers with jobs. Dr. Rispens gations and travel to exotic lo- ice tea and lemonade, and I was Not to be outdone, the ma- als,” explained Anjoli Anand of the outbreak response and pre- landed in vessel sanitation, Dr. cales, agency scientists use drawing blood.” laria branch hung a blue net the malaria branch. vention branch, said. Medley in global migration and costumes, signs, balloons and At this year’s job fair, staff over its table, studded with The division of foodborne, The charm offensive feels un- quarantine, their top choices. tables groaning with chocolate- from the division of health-care hand-drawn paper cutouts of waterborne and environmental usual to the new recruits, who The job fair is “like a crazy form chip cookies and Nerds can- quality promotion wore T-shirts mosquitoes. Printouts of popu- diseases, which investigates sal- are accustomed to stiff competi- of speed dating in a lot of dies—which staff pay for out of with the slogan “Superbugs Be- lar Instagram and Snapchat monella and E.coli outbreaks, tion for coveted medical resi- ways,” said Eric Pevzner, chief pocket—to entice candidates to ware! Resistance is Futile.” memes—Kermit the Frog, Willy decorated tables with balloons in dencies and Ph.D. programs. of the EIS program. “But there’s steer their careers toward one “It shows we’re fun,” said Wonka, and movie heroes from the shape of a poop emoji and in- “We’re sort of hiring them a lot of science behind it.” .

THE WALL STREET JOURNAL. ** NY Thursday, May 17, 2018 | A12A GREATER NEW YORK Clash Looming Over Port Authority Plan to Privatize At issue in standoff as the 16-acre World Trade Cen- projects, in particular at La- ing Bridgegate. ecutive officer’s position. The ter site. Guardia and John F. Kennedy The lane closures, over five authority has spent two years between Govs. Cuomo A Murphy administration of- airports where Mr. Cuomo is days in 2013, caused gridlock in looking for a chief executive, but Airport Is and Murphy is balance ficial confirmed that the gover- pursuing an ambitious infra- Fort Lee, N.J. Mr. Wildstein tes- the search failed in large part nor wants to fill the Port Au- structure agenda. tified in federal court that they because legislators in New Jer- of power at the agency thority’s deputy executive The Port Authority appears were intended to punish the sey refused to pass a bill en- Reassessed director post, a dormant posi- to be the first area in which the town’s mayor for refusing to en- shrining the position. BY PAUL BERGER tion that came to symbolize the two governors are headed for dorse Gov. Chris Christie’s re- The current executive direc- BY JOSEPH DE AVILA agency’s politicization amid the public disagreement. The pair election bid that year. tor, Rick Cotton, was appointed Just four months after taking scandal over lane closures at the have collaborated on a range of Mr. Christie, a Republican, by Mr. Cuomo. His principal Westchester County officials office, New Jersey Gov. Phil George Washington Bridge. But issues, including gun control was never charged. But his top New Jersey counterweight is are putting the brakes on a plan Murphy looks set to square off Mr. Murphy needs the agree- and opposition to the federal- appointee at the Port Authority, the agency’s chairman, Kevin to privatize the county airport. with his New York counterpart ment of New York Gov. Andrew tax overhaul. Deputy Executive Director Bill O’Toole, who was appointed by George Latimer, the Demo- over control of a sprawling bi- Cuomo, who appoints half the News of Mr. Murphy’s inten- Baroni, was convicted in 2016 in Mr. Christie. cratic county executive who state agency that oversees many agency’s board and wields veto tion to fill the Port Authority the conspiracy. He has appealed John Degnan, a former Port took office in January and has of the region’s most important power over the panel’s actions. post first surfaced on New Jer- his conviction. Authority chairman, said that as been critical of the airport transportation infrastructure. “We cannot take steps back- sey Globe, a news site founded A special panel convened by long as the chief executive post deal, said the county would re- The two Democratic gover- ward,” Dani Lever, a spokes- by David Wildstein, a former Govs. Christie and Cuomo rec- is unfilled, it makes sense for evaluate the previous adminis- nors share control of the Port woman for Mr. Cuomo, said in a Port Authority appointee who ommended that Mr. Baroni’s Mr. Murphy to pursue filling the tration’s proposal that would Authority of New York and New statement Wednesday. was at the center of the Bridge- former position be merged with deputy executive director role. hand over operations to a pri- Jersey, an agency with an an- If Mr. Cuomo blocks the ap- gate scandal. that of the executive director— “Because at the moment,” Mr. vate company. nual budget of $8.1 billion which pointment, Mr. Murphy could Mr. Wildstein in 2015 pleaded an appointment traditionally Degnan said, “the management “What is the standard by runs the region’s major airports, use his own veto power over the guilty to two counts of conspir- filled by New York’s governor— of the Port Authority is domi- which we give up public author- six bridges and tunnels as well board’s agenda, holding up key acy for his role in mastermind- to create an impartial chief ex- nated by New York people.” ity?” Mr. Latimer said at a news conference Wednesday. “We ought to have a public debate Powerful Storms Leave a Trail of Destruction about what is the trade-off.” A few days after Republican County Executive Rob Astorino lost his bid for a third term in of- fice this past November, his ad- ministration tapped Macquarie Infrastructure Corp. to take over the operations of the air- port. Under that deal, Macquarie would have received a 40-year lease, during which it would have paid the county $595 mil- lion and invested $550 million in airport upgrades. The county legislature never voted on the accord and it never took effect. Mr. Astorino had argued that $550M Cost of upgrades once planned for Westchester County Airport.

the deal would make money for the county and produce a - ter-run airport. But some resi- dents worried that would lead to more flights at the airport and more noise. Mr. Latimer said the county legislature and the public will be allowed to weigh in on whether the county should hand over op- erations of the airport to a pri- vate firm. Westchester County Board of

SETH WENIG/ASSOCIATED PRESS Legislators Chairman Ben THE BIG CLEANUP: A man in Newburgh, N.Y., on Wednesday walked past damage caused by thunderstorms that pummeled the Northeast. At least three people were Boykin, a Democrat, said he killed and more than 200,000 homes and businesses were without power. New York Gov. Andrew Cuomo deployed the National Guard to assist with recovery. looked forward to reviewing the privatization plan. “Whatever choices are made about the best way to govern the airport, the decision-making SOS to Rescue Ship From Scrap Heap of History process needs to be thorough and transparent,” Mr. Boykin said. “Any decisions must be BY KATE KING sensitive to the concerns of ev- eryone involved—taxpayers, air- CAMDEN, N.J.—Preserva- port customers and surrounding tionists are sounding the residents—while protecting our alarm about the future of the environment.” Barnegat, a historic but dilapi- If the county decides to pri- dated light ship docked at a vatize the airport, it could also private marina here. review proposals from other Preservation New Jersey, a companies, not just Macquarie, private nonprofit, is including Mr. Latimer said. the Barnegat on its 2018 list of “Since we didn’t adopt what 10 most-endangered historic happened last year, we are not places in the state with hopes bound to dealing with just that of sparking a grass-roots fund- proposal,” Mr. Latimer said in raising effort. The ship is in reference to Macquarie’s offer. dire need of maintenance and A Macquarie spokeswoman

repair, said the group’s direc- KATE KING/THE WALL STREET JOURNAL U.S COAST GUARD said the company respects Mr. tor, Courtenay Mercer. Built in 1904 and docked in New Jersey, the Barnegat is believed to be one of fewer than two dozen light ships remaining in the U.S. Latimer’s decision to review “Eventually, if nobody does the privatization plan with the anything to restore it, it’s just crews that deployed flashing Barnegat is easily recognizable gat partly because his father ships entering the Delaware public. “We stand ready to going to fall apart,” she said. lights and foghorn signals to from afar by its name, which is worked on it in 1944, maintain- River. The ship was decommis- participate in the discussion “There seem to be no plans or warn commercial ships away painted in large white letters ing and repairing its body. sioned in March 1967 and then as he and his team deem ap- funding to restore it.” from shallow water, rocks, on its red hull. But for years the Mr. Sadler said he would spent several decades docked propriate,” she said. Built in New Jersey in 1904 sandbars and other dangers. historic ship, which is now cov- like to fix up the Barnegat and in Maryland and Philadelphia. While Mr. Latimer said the and listed on the National In their heyday in 1909, there ered in rust and peeling paint, make it accessible to the pub- Mr. Lang said the Barnegat is county could still move forward Register of Historic Places, the were 51 stationed in the U.S. has sat unused and largely hid- lic as a museum, but the ship an important historical touch- with privatization, he expressed Barnegat is believed to be one “This was before GPS and den from the public at Pyne is now in need of a total over- stone for New Jersey that’s skepticism about using the air- of fewer than two dozen light the satellite-navigation sys- Poynt Marina in Camden. haul, which he estimated could worth preserving. “If and when port to make money. He said the ships remaining in the U.S. A tems that we have today,” said Rod Sadler, who owns Pyne cost several million dollars. this ship no longer exists be- airport’s impact on the environ- total of 179 light ships were Michael Lang, director emeri- Poynt Marina and chairs the During the final years of cause there’s nobody maintain- ment, its role as a transporta- built for the U.S. government tus for the Camden Shipyard & nonprofit that owns the Barne- World War II, Barnegate was ing it,” he said, “there will be tion hub and how it interacts from 1820 to 1952 for use as Maritime Museum. gat, bought the ship in 1993. used as an examination vessel, quite a few people who say, ‘that with its neighbors were higher “floating lifehouses,” with Like most light ships, the He was interested in the Barne- intercepting and inspecting was an opportunity missed.’ ” priorities for him.

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A12B | Thursday, May 17, 2018 NY **** THE WALL STREET JOURNAL. GREATER NEW YORK A Firehouse Is Converted Into Fortune

Queens building once described as a ‘white elephant’ is on the market for a record $5.5 million

BY JOSH BARBANEL

Back in 1981, Megan Dees Friedman happened upon a sturdy red brick building with marble trim that had been the local firehouse in the age of horse-drawn en- gines. She had to have it. The building was across the East River from her home on ’s Upper East Side, in a drab PROPERTY working-class section of Long Island City known as Dutch Kills. The listing broker described

it as a “white elephant.” They THE CORCORAN GROUP; GARY URBANOWICZ (BELOW) settled on a price of $115,000. Nearly four decades later, large living room features a that part of Queens has be- Soaring Prices stone fireplace and a wall of come a destination brimming Sales price for homes in glass opening onto a 25-foot with restaurants, bars, hotels northwest Queens* wide limestone terrace fac- and apartment towers. And ing Manhattan, with views of $5 million Ms. Friedman is putting the midtown skyscrapers. An ele- firehouse, with a glass-walled 1-3 family vator was added, too. highest price addition on top, on the mar- 4 Prices have been rising

ket for $5.5 million—an am- BYRON SMITH FOR THE WALL STREET JOURNAL Condo sharply in Long Island City bitious price that would set a A former Long Island City firehouse has been transformed into a top-dollar residential property. highest price and nearby neighborhoods for 3 record for Long Island City. years, with the median one- The listing shows how fire department in Long Is- to-three-family house price some people, through luck, land City was replaced by 2 jumping 67% to $1.07 million vision or inertia, stand to be- professional crews. The city 1-3 family between 2011 and 2017, ac- come winners in New York rented the building for many 1 median price cording to data from Stribling City’s real-estate market- years at $600 annually, rising & Associates. The median place as the fortunes of the to $660 a year in the 1920s. condo price is up 69% during city—beyond Manhattan— In 1932 a new bigger city- 0 Condo median price the same period, to $830,000. have soared in recent years. owned fired house opened on 2008 ’10 ’12 ’14 ’16 The priciest home sale in The 25-foot-wide, three- 29th Street. Long Island City was for $4 * Includes Long Island City, Astoria story, two-family house at Ms. Friedman, then known and Sunnyside million in December 2015. 38-06 28th St. stands out in as Megan Dees, grew up in Source: Stribling & Associates That 20-foot wide, three- the neighborhood, a few Manhattan and had a brief THE WALL STREET JOURNAL. story townhouse is at 21-16 blocks north of the approach career as a model in Paris 45th Ave. in a small historic ramps to the Ed Koch and , working In the early 2000s, Ms. district in Hunters Point. Queensboro Bridge, where alongside her identical trip- Friedman and her second Cary Tamura of Corcoran, there is a mix of small wood- let sisters. When she bought husband, John Friedman, a who is listing Ms. Friedman’s frame houses, mostly clap- the house, with her then lawyer, undertook a major house, said the Dutch Kills board buildings re-clad in husband, they owned several renovation of the house. firehouse has several advan- white aluminum or vinyl sid- Manhattan boutiques and Working with Rick Corsini, a tages, including a cobble- ing, along with low-rise in- imported clothing and hand- Los Angeles architect, they stone driveway, a parking dustrial buildings, and newer made crafts from Latin especially the Upper East nearby homes were occupied added a third story with a garage for rare off-street hotels and apartments. America and India. Side, by car and by subway. by mainly older working-class loft-like, open, modern de- parking, and a 25-foot-wide The firehouse was built in They turned the basement Later, after Ms. Friedman families, often city employees sign, and extended the back footprint. He is listing the the mid-19th century in the and ground floor into ware- divorced, she was quickly whose children didn’t want to of the house. house with two other Corc- federal style, long before the house and office space, and able to rent out the ground stay in the neighborhood, she A wide wall of windows oran brokers, Frans Preidel street was populated with moved into an upstairs apart- floor as an apartment by recalled. When neighbors above the original brick and Rajan Khanna. small houses. It was home to ment. The couple quickly dis- placing a classified ad with learned she had paid $115,000 front created a double-height “The price would set a re- Engine 161, a horse-drawn covered one of the key selling the key-phrase “two stops for the building, they said it space, flooding the large cord,” said Patrick Smith, a steam-powered pumper in points for Long Island City: from Bloomingdales.” was three times what the kitchen with light. At the broker at Stribling & Associ- the 1890s, after the volunteer Its proximity to Manhattan, When they moved in, the house was worth. rear of the third floor, a ates. “It is aspirational.” Unborn Child of Actress Dies GREATERNEW YORKWATCH BY ZOLAN KANNO-YOUNGS died on Friday May 11, accord- ing to a statement from Ben The unborn daughter of Rubinowitz, who represents CONNECTICUT Ruthie Ann Blumenstein, the Ms. Blumenstein. Police: Alligator Used Tony-Award winning actress Ms. Blumenstein was 39 who was severely hurt while weeks into her pregnancy. In Extortion Attempt pregnant in a Brooklyn crash, The tragedy revived calls has died from injuries sus- for a crackdown on traffic vio- Police in Connecticut have ar- tained in the accident, said a lations across the city. rested a man they say placed a lawyer for Ms. Blumenstein. Ms. Bruns, who has pleaded 3-foot alligator on top of a man Ms. Blumenstein’s 5-year-old not guilty, was charged with in an extortion attempt. daughter, Abigail, and Joshua manslaughter in the incident. Isaias Garcia, 30 years old, of Lew, 20 months, were killed in The Brooklyn District Attor- Garland, Texas, was held on March when Dorothy Bruns, a ney’s office said she ignored $250,000 bail after pleading not 44-year-old Staten Island mo- warnings from doctors not to guilty Tuesday to several torist, plowed into pedestrians drive due to a medical condi- charges including kidnapping and in the Park Slope crosswalk. tion. David Jacobs, the attor- threatening. The unborn baby, Sophia ney for Ms. Bruns, declined to Authorities said a 21-year-old Rosemary Wong Blumenstein, comment on Wednesday. man called his aunt April 6 to say he had been kidnapped and his abductor was demanding Celebrated Places. Legendary Experiences. $800. The aunt contacted police who told her to demand proof her nephew was OK. Police said she received a photograph of her nephew face down in a bathtub, the open-mouthed alligator on topofhim. Police traced the suspect’s phone to a Shelton, Conn., hotel where he was arrested. Online judicial court records didn’t list an attorney for Mr. Garcia. —Associated Press

NEW JERSEY School Settles Over Sexual Misconduct

A New Jersey prep school that acknowledged sexual mis- conduct against students and Kykuit other children committed by the Rockefeller Estate three faculty members in the 1970s has reached a settlement with nearly two dozen victims. Discoveraworldofartandbeauty The Pingry School in Basking Ridge will pay an undisclosed in the home of one of America’s amount to the 21 victims and improve programs to protect most prominent families. students on campus as part of the settlement reached last week. The school has said it’s “deeply sorry” for the sexual TOURS MAY- NOVEMBER misconduct. It issued a 44-page report in March 2017 by a pri- Sleepy Hollow, NY vate firm that investigated abuse allegations made by for- mer students. The report said the allegations by former stu- dents against the three faculty members were corroborated. Pingry officials didn’t know  Take Metro-North and receive a $5 discount! about the alleged abuse, ex- cept for a board member who BUY TICKETS ONLINE AND SAVE heard about a faculty mem-  or call 914.366.6900 ber’s behavior but never offi- hudsonvalley.org cially reported it. —Associated Press . THE WALL STREET JOURNAL. Thursday, May 17, 2018 | A13 LIFE&ARTS

says American’s changes came during 2017 and its low percentage reflects a poor start to the year in frequent-flier traffic. THE MIDDLE SEAT | By Scott McCartney United says it made adjustments in November to increase availabil- ity of saver awards in the U.S. and Canada. Between November and April, MileagePlus members Top Frequent-Flier booked 400,000 more saver awards than during the same pe- riod a year earlier, the airline says. “Looking forward to our peak summer months, we see a double- Programs for 2018 digit increase in award redemp- tion,” a United spokeswoman says. Southwest and JetBlue liberally make seats available for awards Southwest leads a survey of award availability on 25 airlines, along with Air and again topped the survey, along with Air Canada at 96% availability Canada, Turkish and JetBlue; American makes a big move to open up seats and Turkish at 95%. Mr. Sorensen says low-cost air- lines consistently yield the best value for travelers in terms of free coach tickets. Six low-cost carriers in the survey averaged about 78% availability; traditional carriers, 72%. Southwest had seats available at 25,000 points or less for a domes- tic round-trip on 100% of queries, the same as last year. JetBlue’s success rate was 94%, also un- changed from 2017. Annual SEC filings show that customers are cashing in a lot more points than in previous years at Southwest and JetBlue. On South- west, a staggering 13.8% of passen- ger traffic was on Rapid Rewards

FROM TOP: PATRICK T. FALLON/BLOOMBERG NEWS; BAYNE STANLEY/ZUMA PRESS tickets in 2017, up from 12.7%. Re- markably, on average, nearly one of A FEW OF THE BIGGEST airlines level—25,000 miles for a domestic the most widely used, and an im- It turned out to be dramatic. every seven passengers on any are making big changes to their U.S. round-trip, for example—on 14 portant comparison of each pro- American says it made more flight is riding on an award ticket. frequent-flier programs, actually specific travel dates June through gram’s stinginess or generosity seats available so it would be com- Southwest says redemption has opening up availability and cutting October. Each airline’s 10 busiest with award seats. parable in award availability to been on an upward trend as cus- the number of miles needed for long routes and 10 busiest me- While a few airlines showed big competitors like United and Delta. tomers find more ways to earn tickets to places people really dium-length routes are queried to improvement, overall availability American jumped ahead of both, miles, such as with credit cards. want to go. get the fullest picture of award was about the same as last year, though United also showed im- That’s what the airline wants—it The annual IdeaWorks survey of availability. according to IdeaWorks. A few air- proved availability. gets paid for miles sold to credit- award availability shows that lines showed declines of around 12 “Not only have we increased card companies. while overall ability to find flights percentage points in their success availability but it’s to markets that Once customers use an award at basic “saver” levels was about Travelers have rates in using awards for a specific our customers value,” Ms. Blaise- ticket, they rank Southwest higher the same as last year at 25 air- trip, including the carrier Alaska. Shamai says. “It’s got to be where in customer satisfaction surveys lines, American Airlines signifi- complained for years Alaska says it hasn’t changed its they want to go.” and are more likely to buy higher- cantly relaxed its grip on award about skimpy availability award allocations and that what- American says it compares its priced fares, use a Southwest- seats, especially to Hawaii and Eu- ever reduced availability for the availability with that of competi- branded credit card more fre- rope. American had availability on of award seats. flights IdeaWorks found in its tors by looking at the percentage quently and buy ancillary add-ons 80% of the possible trips March searches was temporary. of passenger traffic on frequent- like early boarding, says Jonathan IdeaWorks checked, up from about For years American has been flier awards reported to the Secu- Clarkson, Southwest’s senior direc- 50% last year. near the bottom of the IdeaWorks rities and Exchange Commission tor of loyalty, partnerships and That moved American from the Travelers have complained for survey in availability. In 2012, for annually. For 2017, United and products. That spending helps pay lowest award-seat availability years about skimpy or nonexistent example, American had award Delta were both over 7.5%; Ameri- for “free” tickets. among U.S. airlines to No. 3 behind availability of award seats and big seats available on only 17% of trips can just 6.1%. Ms. Blaise-Shamai “The people who earn and re- Southwest and JetBlue. United increases in the number of miles longer than 2,500 miles—a key deem more points also do a lot of made changes, too, and its avail- needed for awards. Savvy travelers measure as travelers often want to other things we like,” he says. “All ability was up more than 10 per- know they can get more bang for use miles for long trips. This year, Award Traffic that fosters engagement and sort of centage points to 76% overall. their miles if they use them for the long-trip success rate was 71%. Some airlines disclose what a more genuine loyalty to our brand Most of United’s improvement first-class upgrades and interna- After American’s dismal show- percentage of passenger traffic versus just simple reward seats.” came on domestic routes rather tional business-class seats, or re- ing last year, Bridget Blaise-Sha- involves frequent-flier awards JetBlue jumped from 4% of its than long international trips, ac- deem them on partner airlines. But mai, American’s vice president of used for tickets or upgrades. passenger traffic in 2016 on awards cording to Jay Sorensen, president the basic-economy ticket is still customer loyalty, promised change. to 5%, a 25% boost. Like Southwest, Percentage of traffic on of IdeaWorks, an JetBlue says its customers are accu- frequent-flier awards aviation consultancy mulating more points and reaching based in Shorewood, 2017 2016 levels where they can cash them in American boosted Wisc. Southwest for awards faster. “These are not availability of frequent- 13.8% More airlines are giving out accidental things,” flier award seats at its miles or points based on the price 12.7% lowest ‘saver’ level, he says. “They have Delta of a trip instead of distance. upped their game.” especially on flights to 7.9% Eleven of the 25 airlines in the Hawaii and Europe. The annual sur- 7.9% survey now use price; Air France/ vey, sponsored by KLM and Lufthansa made the United travel-technology 7.5% switch in the past year. firm CarTrawler, But there’s no correlation be- looks at how diffi- 7.7% tween the cash price of a ticket cult it is for travel- American and the number of miles or points 6.1% ers to redeem fre- needed to buy it at most airlines, quent-flier miles and 6.3% Mr. Sorensen says. The exceptions points for trips. Dur- JetBlue are Southwest, JetBlue and Norwe- ing March, 5.0% gian, where points have specific IdeaWorks made 4.0% buying power in terms of the more than 7,000 trip Notes: Passenger traffic measured in revenue ticket price. At other airlines, the searches among 25 passenger miles; one RPM is one passenger value of a point or mile is hidden. airlines, looking for flown one mile “That is yet another point of two seats at the ba- Source: The airlines disappointment for the consumer,” THE WALL STREET JOURNAL. sic “saver” award Mr. Sorensen says.

INFLUENCERS HOW TO TURN FAILURE INTO ‘BILLIONS’

BY CHRIS KORNELIS Damon and Edward Norton. In the two decades since, there have been successes, such as writing BRIAN KOPPELMAN is miserable “Ocean’s 13,” and disappointments, when he doesn’t write. And he from flopped movies (“Runner didn’t write until he was 30. Runner”) to being fired by Martin “My desire to be better than I Scorsese from the showrunner job was, my desire to be perfect on the on HBO’s “Vinyl.” (Mr. Scorsese’s page, my knowledge that I would representative didn’t respond to a fail to be as good as I wished as I request for comment.) Showtime was,” he says, “stopped me from is now airing the third season of doing the work.” “Billions,” for which he and Mr. Doing the work helped him Levien are executive producers, overcome his fear of it. For two co-creators and showrunners. hours every morning, whether he Along the way, Mr. Koppelman wanted to or not, Mr. Koppelman launched “The Moment,” a podcast and his writing partner, David Le- in which he invites people who cre- vien, worked on a movie script ate things—actors, musicians, writ- about two poker-playing friends. ers, chefs—to talk about their ca- Mr. Koppelman, who spent his 20s reer paths. Guests range from well- working in the record industry, known names like the novelist John says it was transformative. Grisham, who recounted the initial “Those two hours changed me,” commercial failure of “A Time to he says. “I was finally facing this Kill,” to behind-the-scenes types thing that scared the shit out of me, like screenwriter Eric Heisserer, and I was trying every day to do it.” who detailed the years of rejections His career changed, too. After he waded through en route to an many rejections, the script eventu- Oscar nomination for “Arrival.”

SASHA MASLOV FOR THE WALL STREET JOURNAL ally sold and became the 1998 Mr. Koppelman, 52 years old, Brian Koppelman, host of ‘The Moment,’ in the mixing studio at Goldcrest Post Productions in New York. movie “Rounders,” starring Matt Please see KOPPELMAN page A15 . A14 | Thursday, May 17, 2018 THE WALL STREET JOURNAL. LIFE & ARTS

WORK & FAMILY | By Sue Shellenbarger Don’t Get Too Used to Your Own Desk

MANY WORKERS still miss the private offices that their employers Before You Take started tearing down years ago. Away Their Desks... Now companies are planning a To help employees adapt to new surprise: They’re taking away unassigned seating: your desk, too. Employers are replacing tradi- n Set and enforce rules for using tional one-desk-per-employee set- shared meeting spaces. ups with a smaller number of n Require online reservations for first-come, first-served desks, conference rooms. plus additional workspaces with n Build soundproofing into names like huddle rooms and shared workspace areas. touchdown spaces. Some 25% of n employers are placing at least Allow more working from some employees in unassigned home and elsewhere. seating, and 52% of the rest plan n Require senior executives to to in three years, according to a set an example by using various survey of 138 employers by the spaces wisely. real estate services firm CBRE n Encourage work groups to set and CoreNet Global, a real estate team rules on social professional group. behavior. While some employees embrace n the flexibility and ambience of un- Provide apps to help team- assigned seating, losing a desk is a mates find each other and com- wrenching change for others. Get- municate. ting used to it requires time, some n Provide technology to replace give-and-take by employers and paper notes and files. often a little etiquette training. n Offer etiquette training to curb The Minneapolis offices of the slobs and squatters. Perkins + Will, above, converted its architecture firm Perkins + Will n shifted to unassigned seating two Minneapolis offices to unassigned Provide shared office and years ago, offering 52 adjustable seating. Genentech, right, moved to cleaning supplies.

sit-stand desks for the 70 employ- unassigned seating for some groups FROM TOP: COREY GAFFER; TIM GRIFFITH/GENENTECH ees there. The firm offered more at its California headquarters. seats in conference rooms, smaller they want to sit with the same huddle rooms, workbenches and a Kate Lister, research chair of an In- people every day,” Ms. Lister says. cafe. The setup makes it easy for ternational Facility Management Like many employees who work teams to work closely together Association committee on the in such setups, Cristina Harnden, a and gather around shared project evolving workplace. The new de- regional vice president with files in different areas, workplace signs “give people all these places Teknion, a Toronto furniture-de- director Lisa Pool says. and spaces to work—some quiet, sign firm, still tends to work at the Each employee has a personal some for group work or socializ- same desk every day. Unassigned locker. One of Ms. Pool’s colleagues ing,” she says. seating fosters more conversation takes a family photo from his Unilever recently consolidated and sharing of information among locker and sets it up on his desk several offices into one redesigned employees, and she likes walking every day, but most keep digital space at its U.S. headquarters in among different work areas, she photos on computers and phones. Englewood Cliffs, N.J. About 1,500 says. Still, “I find it a little harder Anyone who leaves a desk for more employees share 1,200 desks and to connect with my team,” she than two hours is expected to pack other workspaces. Eliminating of- says. “Sometimes I don’t know up and wipe it down with sanitary fices along the windows leaves who’s here and who isn’t.” wipes from one of several office- plenty of daylight for everyone, Untidy colleagues can be more supply carts. Ms. Pool totes a back- says Mike Clementi, Unilever’s vice annoying if they make messes in pack with her work gear. Others president of human resources. shared spaces. Some 10% of em- carry oversize purses or briefcases. Molly Kennedy, a senior global ployers offering unassigned seating At first, Perkins + Will market- brand manager for Unilever, was a also added more cleaning services, ing manager Brooke Doepke little anxious at first that “you the facility-management associa- couldn’t imagine giving up her as- might sit down in one place in the tion survey says. And 9% provided signed desk. “I had Post-its every- morning and come back and later etiquette training to curb behav- where,” she says, plus a drawer find somebody had taken your iors like squatting, or usurping filled with proposals and a stand- seat,” she says. shared space for oneself. ing file on her desk. She learned to That hasn’t happened. Plus, she Genentech for several years has use OneNote, a note-taking and has gained more freedom to work given employee groups the option file-sharing app, and found she from home or elsewhere, Ms. Ken- of moving into “neighborhoods” was able to move from one team nedy says. Unilever has long had a with customized technology, a va- to another using only digital files. policy allowing employees to work riety of seating and private break- “I became a total convert, skeptic from anywhere, but the shift to un- away rooms, says Carla Boragno, to believer, once I got the burden assigned seating has led to more vice president of site services for of paper out of the way,” she says. use of the policy. cycling desks, says Donna Burnell, bringing the comforts of home the South San Francisco, Calif., Employers reap savings on real Another plus for employees is managing director of enterprise into the office, with multiple biotech firm. All must first reach estate by reducing average space often improved technology. When workplace services. choices of seating and décor. agreement on social rules, such as per employee. Some 20% to 40% of Fifth Third Bancorp recently The shift is a challenge for Some 11% of employers meet re- not interrupting a colleague work- traditional desks are already unoc- shifted to unassigned seating for some. “We have five generations sistance from employees, accord- ing in a breakaway room. cupied on average because em- about half of the 3,000 employees coexisting in the workplace, from ing to a 2015 survey of 538 em- Many of the groups are increas- ployees are working elsewhere, at its Cincinnati headquarters, it the traditionalist who has aspired ployers by the International ing productivity by collaborating CBRE executives estimate. added more computer monitors so to a corner office for their entire Facility Management Association. more and reducing email and for- Companies also are taking a cue employees could review and com- career, to the millennial who “Some people don’t really want a mal meetings, she says, but only from the co-working spaces popular pare documents without printing couldn’t care less where they sit,” locker. They want a desk for pic- after a few months of adjustment. among young workers by adding a them. The redesign offers a variety Ms. Burnell says. She encourages tures of their family and their dog, “It does take time to get used to variety of seating and décor, says of seating, including treadmill and resistors to see the redesign as and a sense that it’s ‘mine.’ And this,” Ms. Boragno says.

TRENDING SURPRISE SUCCESS FOR ‘SUPER TROOPERS 2’

BY KEVIN LINCOLN movie was going to make $5 mil- lion or $6 million the opening weekend, enough that people on SINCE THE 2001 release of “Su- Wednesday were already like, per Troopers,” the five men who ‘Sorry guys! We tried!’” says Mr. co-wrote and starred in the low- Chandrasekhar, who directed both budget police comedy have movies. “It was going to either be watched it develop a cult follow- the end of Broken Lizard, or this, ing. So when Fox, which released which is more to come.” the first one, said it wasn’t sure an According to Larry Baldauf, co- audience existed for a sequel, the executive vice president of market- filmmakers decided to prove there ing at Fox Searchlight, the studio was. was particularly pleased with the The five of them—Jay Chan- work the Broken Lizard members drasekhar, Kevin Heffernan, Steve put into selling the movie. He Lemme, Paul Soter, and Erik Stol- credits their efforts with hanske—started an Indiegogo cam- helping get fans to see paign to raise money for “Super it in theaters, rather Troopers 2,” with the understand- than wait for it on ing that if they brought in $2 mil- home video.

lion or more, Fox would distribute “I have never FOX SEARCHLIGHT (2) the film. They passed that bench- experienced a Above from left, Jay Chandrasekhar, Steve Lemme, Erik Stolhanske, Paul Soter and Kevin Heffernan mark in a little over a day, accord- group of people in ‘Super Troopers 2.’ Left, Rob Lowe. ing to Mr. Chandrasekhar, and by that understood 30 days had raised $4.4 million. their brand and aging $3.6 million nia were huge. All these places bined that DIY strategy with Fox’s “Super Troopers 2” opened on rolled up their domestically and that don’t ever scratch a top 10 in advertising and promotion. April 20, grossing about $15 mil- sleeves like they the latter $3.3 mil- typical comedy grosses, we were “The crowdfunding campaign lion and landing No. 4 in its first did to support their lion, according to getting massive numbers in. I’m was really just the beginning,” Mr. weekend, exceeding studio and an- property,” Mr. Baldauf Box Office Mojo. not saying we’re the Trump of Perello says. Earlier this year, Bro- alyst expectations. Like the origi- said. “These guys effec- While “Super Troopers movies, but it behaved in a similar ken Lizard members met with fans nal, it focuses on the antics of the tively said, if you don’t see this 2” ticket sales slowed in its sec- sense that the experts couldn’t and performed live during the “Su- Vermont Highway Patrol, this time in a theater, you can forget about ond and third weekends, with the predict it.” per Troopers 2” tour, partly to in a French Canadian town as it seeing Super Troopers 3, 4 and 5. arrival of Disney blockbuster Producer Rich Perello believes thank donors and to assure them becomes a part of the U.S. For the They just kept hammering that “Avengers: Infinity War,” “Troop- that the film’s success has as much that they wouldn’t take the money filmmakers, who collectively call theater experience.” ers 2” has still exceeded its initial to do with the promotional efforts and disappear. themselves Broken Lizard, bring- Other filmmakers have used ticket-sales projections. of its creators as it does the ro- Does the latest film’s box-office ing the movie to theaters with the crowdfunding services to get proj- “This movie sort of behaved bust home-entertainment success success mean there will be a help of individual donors, then ects off the ground, including somewhat like the last presidential of the original over time. Broken third? Neither Fox Searchlight nor seeing it open strongly, validated Zach Braff, who raised $3.1 million election. The votes were coming Lizard self-released its first film, Broken Lizard can say quite yet, their belief that a sequel would be for his movie “Wish I Was Here,” from places you weren’t expect- “Puddle Cruisers,” by taking it on though both are enthusiastic about successful. and the makers of a “Veronica ing,” Mr. Chandrasekhar says. “The a tour of college campuses, and their experience on the second “This business is all about ex- Mars” movie who raised $5.7 mil- biggest town in the country for us has applied that approach to sub- one—and they expect that if there pectations, and there was a real lion. But neither took off at the was Madison, Wis. Idaho was sequent projects. For “Super is a third movie, fans won’t have common expectation that the box office, with the former man- huge, middle and northern Califor- Troopers 2,” the filmmakers com- to wait 17 years for it. . THE WALL STREET JOURNAL. Thursday, May 17, 2018 | A15 LIFE & ARTS

James Levine leading the Met Orchestra in 2015.

was Mr. Cosby the first black man to star in a weekly dramatic TV se- ries, “I Spy,” but “The Cosby Show,” for which he is now best remem- bered, was universally praised for portraying a middle-class black family in a way that appealed to viewers of all races. As for Mr. Levine, he was one of the half- dozen greatest opera conductors of the postwar era. Yet the Kennedy Center and Met Opera Radio seem to be trying to pretend that neither man ever existed. Fewofusliketoadmitit,but most human beings are impossibly complicated, none more so than artists. You can simultaneously be a great comedian and a sexual predator, a great musician and a pedophile. To argue otherwise is to falsify history, and to falsify his- tory is to dynamite the founda- tions of reality. I used the word “unperson” ear- lier in this piece. It was coined by George Orwell in “Nineteen Eighty- Four,” his 1948 dystopian fantasy about a totalitarian society similar to the Soviet Union whose ruler, Big Brother, rewrites history every day to expunge his enemies from the re- cord books. To this end, his Minis- try of Truth prints new editions of books and newspapers from which

HIROYUKI ITO/GETTY IMAGES the names of politically incorrect “unpersons” have been scissored SIGHTINGS | By Terry Teachout out, even as the offenders them- selves have been jailed and brain- washed. As a character explains, “If Portrait of the Artist as an Unperson the Party could thrust its hand into the past and say of this or that event, it never happened—that, surely, was more terrifying than mere torture and death?” IN THE WAKE of Bill Cosby’s con- Cosby. He was already well on the lebrity once upon a time. Yale went gaged in sexually abusive and ha- Perhaps it doesn’t matter all that viction on three counts of sexual as- way to becoming a cultural unper- so far as to confer an honorary doc- rassing conduct toward vulnerable much that the Kennedy Center has sault, the board of trustees of the son when the Kennedy Center torate of “humane letters” upon artists…over whom [he] had author- hosed Mr. Cosby’s name off its in- Kennedy Center has voted to re- joined Johns Hopkins, Notre Dame him in 2003 for his “contributions ity.” (Mr. Levine continues to deny creasingly trivial roll of pop-culture scind his 1998 Kennedy Center and Yale—among many others—in to society.” We are now invited to the accusations, and unlike Mr. sycophancy. But Met Opera Radio Honor for lifetime achievement in the #MeToo-triggered pile-on. In suppose that those contributions Cosby he has not been charged with did something far more consequen- the performing arts, as well as his addition, none of his old TV shows have lost all meaning in light of the any crimes.) The Met says that re- tial when it chucked Mr. Levine’s 2009 Mark Twain Prize for Ameri- is being telecast anymore, and even revelations about the viciousness of cordings of his performances “will historic recordings into the memory can Humor. A written statement ex- the Academy of Motion Picture Arts his sex life. be reintroduced to the program- hole, an act of suppression that plained the decision as follows: and Sciences has given him the Meanwhile, Met Opera Radio, the ming at an appropriate time.” It bears a distant but nonetheless def- “The Board concluded that bum’s rush, simultaneously expel- Metropolitan Opera’s Sirius XM sat- would be hard to come up with a inite resemblance to book-burning. [Cosby’s] actions have overshad- ling Roman Polanski for good mea- ellite radio channel, has admitted statement less transparent, or more By doing so, it effectively declared owed the very career accomplish- sure. (Yes, it took them long enough that it is no longer broadcasting evasive, than that. that great musicians must also be ments these distinctions…intend to to do something about Mr. Polanski, live recordings conducted by James I won’t lose any sleep over the good men—a position that can be recognize.” but that’s another column.) Levine, who performed at the Met twin descents of Messrs. Cosby and defended only by the tone-deaf. I can’t say I’m surprised, any It’s worth pointing out, however, from 1971 until last December, when Levine into the dark pit of disgrace. more than I am by the fast-growing that the Kennedy Center, the Mo- he was suspended and subsequently But there’s a difference—a huge Mr. Teachout, the Journal’s drama list of colleges and universities that tion Picture Academy and Yale were fired after an investigation in which one—between shunning such men critic, writes “Sightings,” a column have shredded the honorary degrees deliriously happy to ride on the ca- the Met claimed to have found and rewriting the history of which about the arts, twice monthly. Write they previously conferred upon Mr. pacious coattails of Mr. Cosby’s ce- “credible evidence” that he “en- they are a prominent part. Not only to him at [email protected].

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NBA PLAYOFFS The NBA’s YouTube Generation

Jayson Tatum has spent his entire life watching basketball on YouTube. It shows.

BY BEN COHEN

Boston JAYSON TATUM is unlike any of the other precocious 20-year-olds near Boston in almost every way. He already has a job. And he’s phe- nomenally good at it. He’s the leading scorer on a Celtics team only two wins away from the NBA Finals, and to watch him these days is to wonder how Tatum is this good this young. But one of the reasons he’s this good is because he’s this young. Tatum is young enough that he grew up with YouTube. There was never a time in his life that he couldn’t watch any clip of any NBA player any time he wanted. “That’s how young I am,” Tatum said. He was 7 when YouTube was in- vented, and it wasn’t long until he was searching for Kobe Bryant vid- eos. “I’ve been watching Kobe ever since I can remember,” he said. But what made him the player he is today is not that Tatum simply watched Kobe. It was what he watched. And how he watched it. He studied Kobe. “Not just watching the dunks,

but actually trying to learn,” he PHOTO ILLUSTRATION BY FERNANDO ACOSTA/THE WALL STREET JOURNAL (PHOTO: BRIAN BABINEAU/NBAE/GETTY IMAGES) said. “I think I learned that at a There was never a time in 20-year-old Jayson Tatum’s life that he couldn’t watch any clip of any NBA player any time he wanted. very young age.” Tatum is the youngest player spent their entire lives watching details imperceptible to the un- through FaceTime. maturation of 21-year-old Jaylen still in the NBA playoffs, and he’s basketball on demand. The ex- trained eye. “The skills within the In the summer of 2013, when Brown and the 20-year-old Tatum. already played more postseason traordinary amount of knowledge skill itself,” Hanlen said. “Think Tatum was still in that high-school They have entrusted Tatum minutes than anyone his age ever at their disposal is one of the rea- about that. Thirteen years old, and gym, Boston president of basket- with more responsibility during had. He’s also the most reliable sons they’re entering the league he was focusing on the nuances of ball operations Danny Ainge made the playoffs, and he’s responded. playmaker on a Celtics team with with polished skills and making the jab step.” a deal with the desperate Brooklyn Ainge marvels at how Tatum’s an unlikely 2-0 lead on LeBron their influence felt immediately. But there were only so many Nets for their draft picks in 2014, mind works. There’s a reason he James and the Cleveland Cavaliers YouTube allowed Kristaps Por- Bryant videos that Tatum could 2016 and 2018 and maybe the plays as if he’s seen an incredible in the Eastern Conference Finals. zingis to admire Kevin Durant all watch and re-watch on his phone, most valuable piece of all: the amount of basketball: because he He does things that rookies should the way from Latvia, Joel Embiid right to swap picks in 2017. actually has. Ainge can tell. It’s not not be able to do. to emulate Hakeem Olajuwon and Four years later, the Celtics uncommon for Celtics coach Brad But it’s not only Tatum who Tatum to geek out about Bryant. You watch cat videos on won the NBA draft lottery and Stevens to propose hypothetical plays beyond his years. This is “I wanted to be just like Kobe,” could have taken anyone with the situations in practice and gauge happening across the entire Tatum said. He tried to be like Kobe YouTube. Jayson Tatum No. 1 pick. Instead they traded it Tatum’s response. If your defender league. The best NBA players are by watching Kobe on YouTube. watched Kobe Bryant’s for the No. 3 pick and what could is on this side, Stevens might say, getting better younger. “Any chance that I could,” he said. be another top pick next year. how would you get open on the They were born with advantages When Tatum was 13 years old, footwork on YouTube. Their rationale at the time: “We other side? that weren’t available to older which was not long ago, he was a think there’s a really good chance “It’s fascinating to me that he’s players and had access to more in- promising enough player to have a the player we’ll take at 3 is the got an answer,” Ainge said. “He formation than anyone before them trainer, Drew Hanlen, who put him same player we would have taken knows how he would do it. And it in the history of basketball. through a series of unusual work- Hanlen’s laptop and his mother at 1,” Ainge said. would probably work.” Justin Tatum, a high-school bas- outs in which they didn’t shoot, Brandy Cole’s computer. Over time That player was Tatum. It turned Tatum was inundating himself ketball coach, could tell his son to dribble or do anything resembling he began incorporating skills he out to be a brilliant decision. with data right after his warm-up watch clips with three words: “You- basketball. They analyzed the in- swiped from Carmelo Anthony, His development into a player before Game 2 on Tuesday night. Tube this guy.” Which sounds to- tricacies of Bryant’s footwork. Paul George, Kevin Durant, Tracy with star potential has enormous He took a seat on the bench, and tally normal until you remember it Tatum watched and rewatched McGrady and Paul Pierce. implications for the future of the for the next five minutes, his eyes wasn’t possible until very recently. with Hanlen and his assistant Sam He incorporated those elements NBA. These playoffs have shown didn’t leave Celtics assistant coach NBA players who grew up watching Limon, who made Bryant mixtapes to his own game during 6 a.m. there may be no team with a Micah Shrewsberry’s laptop screen. Michael Jordan couldn’t even on YouTube and was such a Kobe training sessions every morning brighter outlook than the Celtics, But he doesn’t need a coach’s watch clips of Michael Jordan. Le- fan that “Kobe fan” was in his email before school. If his coaches were who could win the East this year encouragement. If he’s curious Bron James didn’t have YouTube. address, until he was deconstruct- late, they found Tatum there and then get a lot better next year about something, he still grabs his He’s been in the league for longer ing the subtleties of something as shooting by himself. On the days when Kyrie Irving and Gordon Hay- phone sometimes and watches the than YouTube has been a company. specific as Bryant’s shot fakes. He when Hanlen was on the road, he ward return from injuries, but they NBA he always has. But today’s young players have spent hours taking note of granular monitored Tatum’s progress wouldn’t be here without the rapid “I go on YouTube,” Tatum said.

Weather TheWSJDailyCrossword| Edited by Mike Shenk Shown are today’s noon positions of weather systems and precipitation. 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ADS ATONE STEED . THE WALL STREET JOURNAL. Thursday, May 17, 2018 | A17 OPINION

America’s So-Called Allies BOOKSHELF |BY Jonathan Marks Teaching No one has will drive Iran to build a nu- with their decision after World projects. Just days after the suggested yet clear weapon—no other fact or War II to elevate domestic wel- agreement was reached in July that the consideration is permitted to fare and demote the conti- 2015, the head of Iran’s Quds Trump with- intrude. nent’s military significance. Force, Qasem Soleimani, was in Tolerance drawal from The nuclear intentions of Europe became an economic Moscow, no doubt discussing Barack Iran’s government are a seri- power whose interests are the Russo-Iranian alliance in WONDER Obama’s nu- ous subject at all times. That is solely commercial. Despite the Syria, which quickly drove tor- LAND clear-weapons why the Trump administration Middle East’s continued strate- rents of refugees into Europe. deal will cause is fixated on the agreement’s gic importance, Europe’s view In other words, the Obama- Speak Freely By Daniel the sea level to so-called sunset provisions. of it is entirely bloodless—a Kerry deal with Iran helped to By Keith E. Whittington Henninger rise, but we’re At the Iranians’ insistence, region that is merely a de- destabilize Europe’s politics. (Princeton, 208 pages, $24.95) almost there. Mr. Obama and John Kerry pendable trading partner for The European publics should The chain reaction of post- agreed that the restriction on Europe’s biggest companies. demand a new deal. Hate withdrawal disasters cataloged Iran’s first-generation centri- The U.S. Treasury recently By Nadine Strossen by the global media includes fuges would end in 2025. After identified how Iran’s central the possibilities that Iran will that, and another sunset in For the Europeans, bank has been laundering (Oxford, 199 pages, $24.95) race now toward building a nu- 2030 on low-enriched ura- Obama’s nuclear deal money through Iranian com- clear weapon, that a war be- nium, Iran’s centrifuges could panies to acquire dollars in hen it comes to tolerating offensive speech, tween Iran and Israel could en- produce material for a bomb in with Iran was always other Middle Eastern coun- W American colleges and universities often hold gulf the Middle East, and that weeks. about the money. tries and then finance its Quds themselves to a lower standard than the rest of America has become “divided” France’s president, Emman- Force in Syria and other re- society. Kentucky State University, for instance, includes from its allies. uel Macron, seemed to be gional proxies. “embarrassment” on its list of sanctionable “offenses Then it got worse. One week aware of the problem in his Which is to say, Iran’s Euro- against persons.” Dickinson College promises to sic its Bias later, the U.S. moved its em- April address to Congress. “As When in 2013 Mr. Obama pean trading partners are un- Education & Response Team on those whose speech is bassy in Israel to Jerusalem, for Iran, our objective is clear: raised the possibility of a deal derwriting, in part, the Iran- deemed “offensive or inflammatory to some”—even if no creating more “friction” with Iran shall never possess any that would lift the Iranian driven Middle Eastern mess— rule has been violated. our allies. nuclear weapons,” he said. sanctions regime, the Europe- from Syria and , In “Speak Freely: Why Universities Must Defend Free America’s unhappy allies “Not now, not in five years, not ans were all in. Whatever Mr. through Iraq to Yemen. The Speech,” Keith Whittington argues that even free societies are the U.K., France and Ger- in 10 years. Never!” Obama’s nuclear dreams, the U.S., as always, is supposed to are shaky on the proposition that “free speech is essential to many, cosigners of Mr. By the time he returned to deal’s primary attraction for clean it up. Americans don’t the advancement of knowledge,” but for the university, “free Obama’s deal, along with anti- France, Mr. Macron had re- Europe—and Iran—was always have the luxury, literally, of be- inquiry and debate” are “the only possible means” of allies Russia and China. joined the chorus that the overwhelmingly about money. ing AWOL from the world’s advancing its “core mission” “America’s three closest Obama deal can’t be breached. Recall that in 2012, the Eu- most difficult problems. of “producing and friends in Europe,” the Wash- Ever. ropean Union’s growth rate As someone might say, this disseminating knowledge.” As ington Post reported, “are One would like to take seri- had fallen below zero. Europe is a bad deal. such, it should demand even near-bursting with anger and ously Europe’s concerns about was also dealing with an exis- On Wednesday, The Wall more freedom for speech than exasperation at the United Iran’s bomb, but history makes tential threat in the Greek debt Street Journal reported that the society it inhabits. It must States.” A rule of thumb sug- that difficult. In fact, the Ira- crisis, which required several French, German and Danish welcome the unorthodox and gests itself: Might European nian nuclear threat is a Euro- multibillion-euro bailouts. companies—such as Total, Win- reject “those who prefer to be anger correlate directly with pean red herring, a distraction Once the Obama nuclear deal tershall and Maersk Tankers— sheltered” from challenge. the correctness of U.S. policy, whose purpose is to take our became final in 2015, Europe’s are winding down their busi- Mr. Whittington, a professor of such as this decision to with- eyes off other realities. deal makers were inside Iran ness ties with Iran in response politics at Princeton, knows that draw from the Iran deal and For the Europeans, the like- like a shot. European Union to the U.S. sanctions. That all is not well in academia. Bad restart the sanctions regime? lihood of Iran going nuclear is members, led by Germany, should start closing the spigot enough, for example, that students And when does an ally become a secondary concern. What’s it quickly became the mullahs’ on Iran’s revenue sources. The shouted “We are in pain!” in front something less than that? to them? Iran’s targets are Is- main trading partners. world will be a better place. of Emory University’s administration Once the media takes own- rael, the Gulf Arabs and the Bear in mind that the agree- We are going back to the building in protest of Trump-friendly ership of any fixed thought— Great Satan. European nations’ ment’s flaws were recognized status quo before the Obama slogans written on campus. Worse, the school’s here that the U.S. withdrawal active strategic interest in the at the time, such as ignoring Iran deal—back to reality. president responded by suggesting that Emory would be a from the Obama agreement Middle East ended decades ago Iran’s messianic and imperial Write [email protected]. better institution if students were spared exposure to disfavored electioneering speech. When “those who prefer to be sheltered” are thus encouraged, Mr. Whittington writes, “the university has lost sight of its core mission.” North Korea, and Iran, and Iraq! Oh, My! Consider the “safe spaces” controversy, over student demands for places of refuge from speech they consider By Karl Rove throwing a preplanned hissy entirely different from what and German Chancellor Angela threatening. Universities serve their function best when they fit, testing American and South Mr. Trump means. And Mr. Merkel—get Iran to agree to offer arenas in which students can debate each other he world doesn’t post- Korean leaders to see how they Kim can’t be trusted. He, his anytime-anywhere inspections, rigorously, but also places where those who share a common T pone challenges so that respond. Both governments father and his grandfather an end to enrichment (instead view or interest can reason from a common starting point. policy makers will have should ignore his antics. Mr. have made at least five pledges of caps), and a dead stop to its The university benefits, too, when there are places where time to prepare. Mike Pompeo Trump cannot appear to want to end or disable North Korea’s missile programs, the U.S. students can feel comfortable and recharge themselves to was sworn in as secretary of this summit more than Mr. Kim nuclear-weapons program—in should happily oblige. face challenges anew. But the call for “safe spaces” often state three weeks ago, and does. The North Korean dicta- 1985, 1994, 2005, 2007 and But even if the 3Ms can’t suggests that the debate itself is an affront, that the John Bolton walked into the tor agreed to attend only be- 2012. Each time, they broke get such a treaty, letting them invitation to “let us reason together” is a ruse to slow down West Wing as national security cause his economy had tanked the commitment. Experts like try might make it easier later social justice. Students can espouse that position, but a adviser 2½ weeks earlier. after years of international David Kay, former United Na- to gain international support university must cede no ground to it. Along with President Trump, sanctions, and his saber-rat- tions chief weapons inspector, for reinstituting sanctions. In Don’t look to “Speak Freely” for an indictment of the two newcomers are facing tling had caused Japan and have pointed out that it would any event, Mr. Trump’s new snowflakes and radicals, though. Mr. Whittington, who claims three huge foreign-policy chal- South Korea to strengthen be extremely difficult to verify foreign-policy team has to pull his “inner Texas populist” puts him well outside the faculty lenges coming like a runaway if North Korea has ended its it off before the 90-day clock political mainstream, nevertheless defends his “welcoming freight train. program, turned over its fissile runs out in August. That won’t colleagues” and thoughtful students. Universities can be First is the scheduled June Pompeo and Bolton material, and destroyed its be easy. “subverted by insiders” who “do not appreciate” the 12 meeting in Singapore be- have hardly settled in, warheads in compliance with Finally there’s Iraq. Its elec- tween Mr. Trump and the “Lit- any agreement. tions Saturday presented the tle Rocket Man.” Kim Jong Un but history already So when Messrs. Trump, U.S. with the prospect of a new Colleges are becoming increasingly soft on free is not some moronic playboy. has come knocking. Pompeo and Bolton arrive in government controlled by Moq- speech when they should be adhering to an even Although only in his 20s when Singapore, they’d better have tada al-Sadr, the Shiite cleric he became North Korea’s “su- a plan. No winging it, no day- whose militias attacked Ameri- higher standard than the societies they inhabit. preme leader” in 2011, Mr. Kim light between the U.S. and can soldiers during the Iraq quickly consolidated power. their militaries and draw closer South Korea, and no sanc- war. Keeping Baghdad from He is ruthless in eliminating to the U.S. The Chinese govern- tions relief for Pyongyang un- drifting toward radicalism, or institution’s “value and fragility,” but the vast majority of potential rivals, having or- ment, whose wishes Mr. Kim til the results are locked in. further into Iran’s orbit, will re- faculty pray not for a revolution but for students to “read dered the killings of his half- has too often ignored, also The three Americans must quire adroit maneuvering by their assignments and pay attention” in class. The universities brother, an uncle, the uncle’s pressured him to the table. present a unified front, insist- the U.S. and regional allies. are not yet lost—but if they ever are, it will be because these family and some of the uncle’s Mr. Kim may view the Sing- ing on concrete goals and If Messrs. Pompeo and Bol- same faculty members who guard their individual classrooms associates. apore summit as a publicity clearly defined paths to im- ton can help President Trump so well neglected the overall climate of the university. Mr. Kim is also crafty. An- stunt, signaling goodwill so as plement them. to success in these three chal- Some arguments for campus free speech have little to do gered by military exercises be- to coax the U.S. and South Ko- The second big foreign-pol- lenges, the world will owe with the university’s special characteristics. Nadine Strossen tween South Korea and the rea into a bad bargain. In light icy challenge is Iran. On May 8 them thanks. If they fail, insta- makes these arguments better than anyone. In “Hate: Why U.S., he decided Tuesday to of this possibility, Mr. Trump’s the president announced the bility and violence could follow. We Should Resist It With Free Speech, Not Censorship,” the cancel a coming meeting with message needs to be clear: If U.S. would withdraw from the In case they had any doubt, former president of the American Civil Liberties Union and a South Korean President Moon Mr. Kim doesn’t go to Singa- Obama nuclear deal and reim- these stakes should remind the professor at New York Law School aims to “refute the Jae-in. He also threatened to pore with intent to begin de- pose sanctions in 90 days. Mr. new Trump foreign-policy argument that the United States,” like many other nations, call off the Singapore summit if nuclearizing, it’s his loss. Pompeo signaled that Europe team how unforgiving being on “should adopt a broad concept of illegal ‘hate speech.’ ” She the U.S. demands unilateral All this messiness shows was welcome to try getting a the world stage can be. puts the term in quotes because it has “no single legal North Korean nuclear disarma- that the talk of a Nobel Peace better deal from Iran. That’s definition” and “has been used loosely to demonize a wide ment. Of course, he knew about Prize for Mr. Trump is wildly smart, as long as the Trump Mr. Rove helped organize array of disfavored views.” the drills and the U.S. insis- premature. The negotiations administration spells out what the political-action committee The argument Ms. Strossen addresses has intuitive tence on denuclearization be- will be complicated and diffi- kind of agreement it wants. If American Crossroads and is appeal. Hateful speech directed against vulnerable groups, fore he accepted Mr. Trump’s cult, and there is no certain the “3Ms”—French President the author of “The Triumph of the argument goes, is uniquely dangerous. It is not enough and Mr. Moon’s invitations. outcome. What Mr. Kim means Emmanuel Macron, British William McKinley” (Simon & to restrict such “hate speech” when it constitutes a “true The North Korean leader is by “denuclearization” might be Prime Minister Theresa May Schuster, 2015). threat” or “harassment” or otherwise sits outside the First Amendment’s protection zone. Hate speech is so potent a source of violence, discrimination and psychic harm that it compels us to bend the rule that restricts government from At the CIA, Immorality Is Part of the Job suppressing “disfavored, disturbing, or feared” speech. But, Ms. Strossen argues, despite the power of speech to By Fay Vincent to undo. The new generation CIA had been involved in the likely exposure of important motivate and wound, there is “insufficient evidence” that of CIA veterans like Ms. Haspel 1973 overthrow of the Allende top-secret operations. The gov- constitutionally protected hate speech contributes he confirmation hear- must wonder if anyone in the government in Chile. Helms ernment relented, and Williams significantly to violence, discrimination or psychic harm. T ings for Gina Haspel to current Senate has even heard was bound by his oath as a CIA arranged for Helms to plead There is little evidence, too, that hate-speech laws are head the Central Intelli- of the Church Committee. officer never to reveal classified guilty to a misdemeanor with effective. We do know, however, that such laws are often gence Agency became a the- Senators today seem to as- secrets. Yet before the Senate no penalty. In 1983 President enforced “to the disadvantage of disempowered and ater of the absurd, as senators sume there is agreement on he was under the perjury threat Reagan recognized Helms’s marginalized groups” and used by authorities to suppress pressed her for an assurance what constitutes moral conduct if he fulfilled his obligation to long service with a National dissent. “Non-censorial” methods can also be very effective. that she would apply “moral” in spycraft. But recruiting spies preserve intelligence secrets. Security Medal as an implicit Although government action is Ms. Strossen’s main subject, standards to intelligence-gath- What was the moral thing to do apology. No CIA director has she does consider campus speech, and her arguments are ering, including interrogation in that situation? since been charged with a readily transferred even to private universities, which, of terrorists. Spying is a dirty yet Helms lied because he was crime. though outside the First Amendment’s purview, “should not As I watched, I kept thinking necessary business, operating under longstanding Intelligence work can in- suppress constitutionally protected ‘hate speech.’ ” Hate- of Sen. Frank Church and the directions he and others at the volve complex judgments speech policies are no more effective, or less subject to disaster his Senate select com- not best examined agency had received from se- about morality and even legal- abuse, at universities than they are elsewhere. mittee inflicted upon the CIA in in open hearings. nior senators, including Demo- ity. The law must remain our Mr. Whittington is right that the university, in principle, 1975. The committee was trou- crat Richard Russell of Georgia, bulwark, morality a sweet “has no place for those who prefer to be sheltered” from bled by the disclosures of vari- who worried candid answers in frosting. To serve as head of “searching interrogations.” In practice, however, universities ous misguided, even bizarre open hearings might risk “the the CIA is to be in charge of vi- welcome many such people, who come mainly to advance CIA endeavors during the Cold is not the work of moralists. lives of our boys.” They in- tal operations that must be their prospects. Like people outside of universities, their first War, including an attempt to The CIA’s mission involves per- structed Helms to protect in- subject to the rule of law, not impulse on encountering speech they find appalling is to kill Fidel Castro. It ultimately suading others to disregard telligence operations in such the moral sensitivities of any want the speaker to shut up. Neither of these books explains adopted a series of proposals their deepest moral and legal hearings. one person. how such students might be moved to cherish free speech. to rein in the agency that led obligations. It is a dirty yet nec- Helms’s defense lawyer. Ed- Dick Helms died in 2002. Yet both of these authors involve their readers in the the Carter administration to essary business, not best exam- ward Bennett Williams, warned His portrait hangs in honor at pleasures of confronting a difficult problem, treating the impose broad changes. ined in open hearings. the Justice Department he CIA headquarters. There is no dangerous views of determined adversaries with an open The effort to reform intelli- In 1977 my friend Dick would have Helms testify in portrait of Frank Church. mind and proceeding with greater confidence as a result. This gence operations to make Helms was prosecuted by the open court to numerous exam- summer, “Speak Freely” will be distributed to every Princeton them moral was a noble one— Carter Justice Department for ples of CIA officials lying to Mr. Vincent, a retired law- freshman for consideration and discussion. That’s a start. and the damage it wrought to perjury after he denied in an Congress to preserve secret yer, was commissioner of Ma- national security took decades open Senate hearing that the agency activities, with the jor League Baseball, 1989-92. Mr. Marks is a professor of politics at Ursinus College. . A18 | Thursday, May 17, 2018 THE WALL STREET JOURNAL. OPINION

REVIEW & OUTLOOK LETTERS TO THE EDITOR Funny Business at the Labor Board Fix, Don’t Avoid, Hard Immigration Issues e wrote a couple of months ago about ions. Did Mr. Berry ask Ms. Ketcham to stand Your editorial “One More Immigra- The bill both decreases “chain mi- how Democrats in cahoots with the down and change her opinion about Mr. Eman- tion Try” (May 11) mischaracterizes gration” and modernizes our legal W my bill, the Securing America’s Fu- immigration system by increasing the National Labor Relations Board In- uel? (We sought comment from Mr. Berry and ture Act (SAFA). This legislation not number of green cards for foreign spector General were weap- Ms. Ketcham but received no How dubious backstage only provides certainty via an indefi- nationals who bring the skills needed onizing ethics rules to protect reply.) nite renewable legal status for those to boost our economy and create jobs the Obama joint-employer politics saved a pro- NLRB General Counsel Pe- who are currently in limbo due to the for American workers. It also creates standard. New evidence shows ter Robb and Hy-Brand have Deferred Action for Childhood Arriv- a new, workable agricultural guest- they may also have over- union Obama ruling. filed motions supporting Mr. als program, it also provides reforms worker program for America’s farm- stepped their legal authority. Emanuel that ask the board to to discourage illegal immigration in ers and ranchers, which is supported The Obama NLRB in 2015 reconsider its vacatur. Hy- the future. The bill contains tools to by over 200 agricultural groups. Un- jettisoned 30 years of labor law with its Brown- Brand notes that the IG’s determination is un- thwart surges at our nation’s bor- lawful immigrants currently working ing-Ferris ruling that held businesses responsible precedented, and the three-member panel “ab- ders. It closes loopholes in asylum in the agriculture sector will be able for workers of subcontractors if the businesses rogated its responsibility to consider whether law to reduce fraud and tightens to adjust so they can legally partici- exercised indirect control over employment the IG Report was erroneous, valid, or should be standards to prevent people from pate in the program. This isn’t self- gaming the system. It ensures unac- deportation. terms. This made it easier for unions to organize returned for further investigation.” companied minors who make the While the recently filed discharge workers. In December the Trump NLRB over- An analogy to judges is relevant here. Judges dangerous trek to the border are re- petition would allow for a vote on turned Browning-Ferris in its Hy-Brand decision. don’t have to recuse themselves from cases on turned home safely and quickly. my bill and others, the petition is the iii issues on which they have previously expressed Further, the SAFA includes reforms wrong approach to fix our immigra- Prodded by Democrats in Congress, IG David opinions or represented clients. Federal judge to ensure the enforcement of our im- tion system. It would lead to an un- Berry then launched an investigation into Allison Burroughs, who was appointed by Barack migration laws in the interior of our balanced approach and is likely to ig- whether board member Bill Emanuel had vio- Obama, is now hearing a case regarding off-label country. It requires employers to use nore the tough issues that need to be lated White House ethics rules by participating drug promotions though she previously repre- E-Verify to ensure they hire legal addressed to prevent parents from in Hy-Brand. An executive order requires ap- sented a pharmaceutical company in a similar workers. E-Verify is simple, easy to bringing their children here illegally pointees to recuse themselves from a “particular case. Why should Mr. Emanuel be held to a use and much less cumbersome than in the future. the current paper-based I-9 system. REP. BOB GOODLATTE (R., VA.) matter involving specific parties” that are “di- higher standard than Judge Burroughs? Those who view E-Verify as a poison Roanoke, Va. rectly or substantially” related to a former em- The National Labor Relations Act also doesn’t pill don’t want to provide meaningful Mr. Goodlatte is chairman of the ployer or client. allow three board members to delegate to them- enforcement of our laws. House Judiciary Committee. Mr. Emanuel’s former employer Littler Men- selves authority to make decisions as the panel delson didn’t represent any party in Hy-Brand, did when they vacated Hy-Brand. What’s to stop so there was no reason to recuse himself. Yet Mr. a plurality of the board—or of any independent Berry concluded that Mr. Emanuel should have bipartisan commission—from doing so when- Time for a Market-Based Monetary System? stepped aside because Littler had represented ever it’s politically expedient? subcontractor Leadpoint Business Services in Hy-Brand also asserts that the IG’s disclosure Stanley F. Druckenmiller is correct Gently falling asset prices are a bonus Browning-Ferris. According to the IG, the two of confidential pre-decision-making board com- in noting that we move further away of capitalism. With a market mone- cases were the same because the majority opin- munications in his reports violates its due pro- from capitalism with each new ad- tary system price declines occur at ministration (“Where’s the Invisible the point of productivity gains, hence, ion in Hy-Brand drew on similar arguments as cess rights and agency policy. In 2012 Mr. Berry Hand When You Need It?”, op-ed, no relative price distortions and no the dissent in Browning-Ferris. reprimanded a board member for disclosing May 3). But his defense of capitalism malinvestment. Inflation, on the other After Chairman Philip Miscimarra stepped similar deliberative information. is weaker than it should be. Most no- hand, inherently distorts relative down, the board’s two Democrats and one Repub- Investigative information somehow leaked to tably, it is odd that he starts his essay prices depending on where the new lican sidelined Mr. Emanuel and on Feb. 26 vacated Democratic Senators, who then attacked Mr. with a criticism of Japan’s ill-fated artificial credit enters the economy, Hy-Brand. The panel cited a Designated Agency Emanuel and pressured board members to va- commitment to industrial policy and leading eventually to recession. Ethics Official’s (DAEO) determination that Mr. cate Hy-Brand. Hy-Brand claims that the leaks ends it with praise for Alexander EDWARD H. CRANE Emanuel should have been disqualified from the violate its “right to a fair hearing on the facts on Hamilton, the godfather of American President emeritus, Cato Institute case. The panel didn’t disclose the DAEO’s recom- law, rather than political considerations and industrial policy. Odd, too, is his mon- Falls Church, Va. mendation or analysis. This is odd. Congressional pressures.” The National Right to etarist deference to the Fed, attribut- Mr. Emanuel’s counsel wrote to the IG on Work Foundation and Competitive Enterprise ing to it the power “of controlling Before 1913, annual U.S. GDP fluc- long-term interest rates.” Money and tuated between +/- 15%. Since 1913, March 22 that nobody had advised him to recuse Institute recently filed Freedom of Information credit are a world-wide dynamic and annual U.S. GDP has only fluctuated himself. After Democratic Senators complained, Act requests seeking the IG’s communications long rates are driven by endless mar- between +/- 6%, a major improve- he consulted the DAEO, Lori Ketcham, who told with Members of Congress, and the board should ket forces. Thousands of well-paying ment. It would seem that having a him he was under no obligation to do so. Mr. respond promptly. jobs depend on the myth of an om- central bank is a good thing. Emanuel asked for the opinion in writing. But “a iii nipotent Fed, but it is a myth. Finally, SINCERELY, P. GARTSIDE day or two later, the DAEO told Member Eman- The NLRB is less constrained by administra- why this obsessive fear of deflation? Cedar Hills, Utah uel that she had been told by the OIG” not to pro- tive law than most executive agencies, which al- vide it, according to Mr. Emanuel’s counsel. lowed Obama appointees to freelance. But now The IG wrote in a March 20 report that “the Democrats want to use White House ethics rules Another Look at Foreign Investments in U.S. DAEO is required to seek the services of the OIG to handcuff President Trump’s appointees. NLRB After reading my May 8 letter on in the U.S. as being either increases when appropriate” and should not “interfere in Chairman John Ring shouldn’t indulge phony why U.S. trade deficits don’t neces- in American indebtedness or trans- our investigative efforts.” But the purpose of ethics charges and should promptly hold a vote sarily imply greater American indebt- fers of American assets to foreigners. agency ethics officials is to provide legal opin- to reinstate its Hy-Brand decision. edness, Steven Crow describes the PROF. DONALD J. BOUDREAUX examples that I use to make my point George Mason University as all involving “transferring U.S. as- Fairfax, Va. Korean Summit Maneuvers sets to foreign creditors” (Letters, May 14). Mr. Crow is mistaken. Prof. Steven Crow comments on orth Korea is threatening to cancel the Kim is talking because he wants the U.S. to pay Consider my example of BMW the sale of Manhattan in terms of June 12 summit between Kim Jong Un him for promises of denuclearization and a few building a factory in South Carolina. balance of trade. He raises the ques- N This factory was created by BMW. tion in an illustration of whether the and Donald Trump if it means giving up concessions such as the closure of his nuclear its nuclear weapons unilater- testing facility. In other words, Because it didn’t exist before BMW American Indians or the Dutch got Kim Jong Un thinks created it, this factory cannot possi- the better deal in this transaction. ally, and credit the North for he is repeating the strategy of bly have been a U.S. asset that was Consider the power of compound in- candor. The North is restating he can resist immediate his grandfather and father in transferred to foreigners, be they terest via the 1626 purchase of Man- its long-time position, and denuclearization. negotiating with the U.S. creditors or otherwise. BMW’s fac- hattan Island by Peter Minuit, direc- better for the world to know And why not? Kim believes tory in Greer, S.C., exists only be- tor-general of New Netherland from the truth going into the sum- he is in the driver’s seat. In the cause BMW conceived of it, financed the Man-a-hat tribe for an apparently mit than bank on false hopes. last year he has tested a more it, built it and operated it profitably ridiculously low sum of $24 in trin- The Trump Administration is treating the powerful warhead and launched missiles able for the past quarter-century. It is nei- kets. Suppose that sum had been de- statement as a fit of pique, and in one sense to hit Chicago. Now a U.S. President has agreed ther an asset that ever belonged to posited in an investment earning 6%- that’s right. Kim isn’t likely to walk away from to parley directly with him, and China is back- an American nor one whose creation plus over the next 364 years (1626- the summit, a diplomatic prize Pyongyang has ing him. Kim met with Chinese President Xi Jin- resulted in any further American in- 1990), it would have grown to a tidy sought for decades. But the North’s threat ping last week and the two agreed that the debtedness. sum of over $39 billion, which was What the U.S. supplies in this case the value of all land in the borough should bust some pre-summit illusions, not North and U.S. should undertake “phased and (as in countless others) is chiefly the of Manhattan as of April 1990 accord- least in the Oval Office. synchronous measures” toward denucleariza- promising economic opportunity—in- ing to the city assessor’s office (ex- The Trump Administration has talked up the tion. That is far from the complete, verifiable cluding the relatively free-market cluding streets and rights of way). It chances of a breakthrough based on Kim’s sus- and irreversible denuclearization that White economy—that makes investment in may not have been such a bad deal pension of his nuclear and missile tests and his House national security adviser John Bolton South Carolina attractive. We Ameri- for the tribe. The deal was even willingness to discuss denuclearization of the says the U.S. wants. Note that the Korean state- cans can take pride in this fact. But sweeter for the Man-a-hats since Korean Peninsula. But the two sides have very ment attacked Mr. Bolton personally. we play directly and stupidly into the American Indians customarily didn’t different ideas about what that means, as well Mr. Trump says he will walk away from talks hands of protectionists if we persist view themselves as landowners. JAMES H. BOYKIN, PH.D. as how and when it would happen. if Kim isn’t serious about denuclearization. But in mislabeling all foreign investments Mr. Trump credits his “maximum pressure” his bluster and the silly chatter about a Nobel Richmond, Va. of sanctions and diplomatic isolation for bring- Prize are making it more difficult to leave the We Fixed One Gender Issue ing Kim to the table. Certainly his Administration table. Kim’s maneuvering ahead of the summit How Many Judges Recused? has done more than its predecessors to pressure suggests he is confident he can resist immedi- But Have Created Another Regarding your editorial “Have We the North. But the sanctions weren’t in place long ate denuclearization. Mr. Trump needs to make Dean Paula Marantz Cohen (“It’s Got a Muni Bond for You” (May 11): enough to bring the regime to its knees. clear that won’t happen. the Era of Feelings, and Not Neces- The Illinois Supreme Court in 2015 sarily Good Ones,” May 5) mentions concluded that “pensions are consti- that feelings are a bigger part of col- tutionally protected.” How many of lege life than when she was in college the judges who were enrolled in the Magical Thinking in Italy in the 1970s. She gives several exam- state pension plan recused them- ples of then and now. taly has had more than 60 governments in ward a contribution-based benefit system. selves from the case because of their In 1975 male college graduates out- 73 years, so the new mooted coalition gov- Those measures averted an imminent financial blatant conflict of interest? I numbered female graduates in society GEORGE C. CHRISTY ernment of the 5-Star Movement and the crisis and put Rome on a sounder financial foot- 17.6% to 10.6%. By 2016 33.7% of Pasadena, Calif. League probably won’t last much longer than ing. Recent labor-market reforms may also be American females were college gradu- the others. Then again, Italian financial markets on the block. ates as opposed to 33.2% of males. dipped Wednesday with good reason after the More problematic for the rest of Europe are Since these figures are cumulative, it plans of this populist left-right coalition were the two parties’ demand for an exemption from masks the dramatic change in current Pepper ... leaked to the press. the European Union’s 3% GDP cap on annual enrollees. Now females outnumber And Salt The two parties share populist impulses, de- budget deficits. Mr. Salvini, who has dubbed the males 60% to 40% in college. spite 5-Star’s roots in impoverished regions of euro a failed currency, posted on Facebook Cry-ins and crying rooms now ap- THE WALL STREET JOURNAL southern Italy and the League’s wealthier, Wednesday he’d like to return to a “pre-Maas- pear on leading colleges. But what northern base. Five-Star’s Luigi Di Maio and the tricht setting,” implying when Italy had the lira about the males who don’t even at- League’s Matteo Salvini ran against the failures and no guardrails from Brussels. tend college? What does this portend for the future in this highly competi- of the established political parties and took Running against the EU is popular in Italy, tive global economy? Feelings only go staunchly anti-immigration stances, albeit with but it isn’t clear how much risk the new coali- so far in decision-making. Reality, different solutions. tion is willing to take. Messrs. Di Maio and reason and the rule of law aren’t to Five-Star wants expansive welfare payments Salvini are holding out the threat of a referen- be denied. for poor Italians, revenues to pay for it not in- dum on leaving the EU if negotiations with MICHAEL Y. WARDER SR. cluded. Italy’s public debt to GDP, at 132%, is al- Brussels fail. The Huffington Post Italia re- Upland, Calif. ready second-highest in the eurozone behind ported Tuesday that the two parties want the Mr. Warder was vice chancellor of Greece. Poor Italians need more economic European Central Bank to cancel some €250 Pepperdine University 2005-2014. growth to generate job opportunities, not pub- billion in Italian debt. That won’t happen but lic handouts that discourage work. The League’s it could be used as a threat to win other con- Letters intended for publication should promise of a pro-growth 15% flat tax is a far bet- cessions. Both parties also oppose sanctions be addressed to: The Editor, 1211 Avenue of the Americas, New York, NY 10036, ter idea, especially in a country where tax on Russia, which could create more problems or emailed to [email protected]. Please avoidance is rife. for EU-U.S. relations. include your city and state. All letters The two parties would also reverse the 2011 The Italians have a genius for surviving bad are subject to editing, and unpublished Monti government pension reforms, which governments, so perhaps the best to be said is letters can be neither acknowledged nor “Instead of a movie, let’s just stay returned. raised the retirement age and moved Italy to- they’ll find a way to survive this one too. home and read a comic book.” . THE WALL STREET JOURNAL. Thursday, May 17, 2018 | A19 OPINION The GOP’s Ambitious College Reform Plan

By Allen C. Guelzo hearings to the definition of a “credit for loan absolution if a student en- hour” and how many such hours tered government service, disap- ollege administrators have should be required per course. pears—undercutting a major tool for barely had time to digest the The unwieldy federal funding sys- the recruitment of bureaucrats. full impact of tax reform, but tem has led to unintended conse- Also under the bill, no institution Cthey are already facing a quences. North Carolina Rep. Virginia benefiting from federal funding will new challenge as Washing- Foxx, chairman of the House Commit- be allowed to restrict student speech ton weighs a major piece of legislation tee on Education and the Workforce, through “speech codes” or “free- that could shake up the way higher told the Carolina Journal that “hav- speech zones.” Nor will they be per- education does business. ing allowed students to basically have mitted to deny student religious or- The 1965 Higher Education Act, one unlimited borrowing with unlimited ganizations the same “right, benefit, of the brightest stars in Lyndon B. forgiveness has driven the cost of or privilege that is generally afforded Johnson’s Great Society constellation, college upward....Themoremoney to other student organizations at the is due for reauthorization this year. the federal government was putting institution.” And it limits the ability The legislation was intended, in John- into higher education, the higher the of the Education Department to issue son’s words, “to strengthen the educa- cost of going.” new mandates or regulations without tional resources of our colleges and Since the HEA’s last reauthoriza- congressional hearings. tion in 2008, undergraduate tuition What’s the case against Prosper?

and fees have increased by 25% in real ISTOCK/GETTY IMAGES The Center for American Progress Simplify student loans, terms. The HEA might have expanded charges that it won’t “put a dent in expand vocational options, access to college, but the soaring The first is rationalization of stu- increasing funding for private-sector unacceptable gaps in access and com- costs—and the borrowing required to dent loans. Prosper consolidates the apprenticeships. “The legislation is pletion by race and income”—even protect free speech, end meet them—has turned the process six existing student-aid programs going to expand student access to— though low-income students and mi- ‘public service’ subsidies. into a kind of debt peonage for many into a single Federal ONE Loan Pro- and the ability to participate in—in- norities have suffered disproportion- students. “I live in fear,” Michael Arce- gram, and likewise streamlines dustry-led ‘earn and learn’ pro- ately under the current debt-laden neaux, a graduate of Howard Univer- grants into a single program. It re- grams,” Rep. Foxx explained. And to system. The American Federation of sity, wrote in a New York Times op-ed, places the existing repayment plans ensure that students can target, in Teachers is, unsurprisingly, appalled universities and to provide financial “that one day I may fall behind on with a single 10-year plan of 120 advance, the college programs that at the drying up of the PSLFP, since assistance for students in postsecond- payments, and fear of what that would equal payments and a single income- will benefit them most, Prosper di- that might dampen the appeal of ary and higher education.” Half a cen- mean for my mother, who co-signed based plan (in which borrowers rects the secretary of education to teaching to recent graduates. tury later, the Education Department my loans with great trepidation.” would pay back 15% of their discre- create a “data dashboard” for com- And David Stacy of the Human manages more than $1 trillion in fed- Instead of a clean reauthorization tionary income, down to a minimum parison shopping. Rights Campaign, a gay-rights organ- eral money flowing through six stu- of the HEA, Rep. Foxx wants a com- of $25 a month). And it simplifies the These changes are unlikely to ization, was incensed that Prosper dent-loan programs, as well as nine plete overhaul. On Dec. 12, her com- dreaded Free Application for Federal please higher-ed lobbyists. But it’s would allow religious colleges of all repayment plans, eight forgiveness mittee passed a bill called Prosper, or Student Aid so that families can com- Prosper’s other goals that are setting sizes to be, well, religious. “You’re programs and 32 deferment options. “Promoting Real Opportunity, Suc- plete it more easily. off eruptions, since they grind di- not just talking about a little Bible The HEA has also given the depart- cess, and Prosperity through Educa- Second, Prosper opens up new in- rectly on several campus sore spots. college,” Mr. Stacy told the New York ment extraordinary power to dictate tion Reform.” At 590 pages, Prosper centives for students, especially at Under Prosper’s terms, the Public Times. “When you think about Catho- policy at every level of college and is not a quick study. But it reaches for community colleges, to make the Service Loan Forgiveness Program lic universities, there are a lot of university life, from sexual-assault four important goals. transition to gainful employment by (PSLFP), which offered a rare avenue those, and quite a few of these uni- versities would discriminate against same-sex student relationships.” The bill may have little difficulty in Kasich Could Be Trump’s Best Hope the House, but it still has to undergo review by the Senate’s Health, Educa- By Bobby Jindal Mr. Trump needs a candidate who si- George Bush’s low approval ratings sought the party’s nomination in tion, Labor and Pensions Committee, phons off not only Republican Never and corruption scandals engulfing 2016, sensing it was a valuable prize where chairman Lamar Alexander will onald Trump once joked that Trumpers, but moderates who might House Republicans, and by empower- given Hillary’s weaknesses, Demo- likely have to make concessions to D he could shoot someone on otherwise vote for the Democrat. For- ing DCCC chairman Rahm Emanuel to crats are lining up to challenge Mr. Democrats, especially about PSLFP, to Fifth Avenue and not lose tunately for him, the Democrats are recruit viable candidates in swing Trump. It is hard to imagine the next bring it to the floor. votes. That may be true—his ap- making themselves increasingly unat- districts. She contradicted the Wash- revelation will shake Mr. Trump’s More significantly, Prosper dodges proval ratings have inched up re- tractive to those moderates. ington maxim that you can’t beat core supporters, but it is also hard to the nagging question of what, exactly, cently, tweetstorms and Stormy Dan- While the media obsesses over all something with nothing; there was imagine a strong economy winning a college education should be—pre- iels notwithstanding. things Trump, they ignore the Demo- no Democratic version of the 1994 over his most hardened detractors. sumably neither a political indoctri- But can he be re-elected? He’s un- crats’ infighting. Rep. Dan Lipinski Contract with America. Mrs. Pelosi Meanwhile, the Democrats’ radical nation camp nor a mere hatchery for likely to face an opponent as unpop- barely survived a well-funded pri- did not build a mandate for a na- leftward turn leaves those moderates worker bees. But if passed, it will ular and uninspiring as Hillary Clin- mary challenger despite strong union tional progressive platform, prefer- who will not vote for Mr. Trump ripe help the HEA promote, if not a great ton in 2020. His best hope may be support in a safe blue district due to ring to abide another maxim that you to support an independent bid. Mr. society, at least a freer and more John Kasich. The departing Ohio gov- progressives’ outrage over his pro- shouldn’t interfere when your oppo- Kasich, are you listening? prosperous one. ernor has made noises about chal- life views. The Democratic Congres- nent is destroying himself. lenging Mr. Trump in the primaries, sional Campaign Committee has an- In 2018 she is trying to repeat his- Mr. Jindal served as governor of Mr. Guelzo is a visiting professor but an independent bid would be gered grass-roots liberals with its tory, and it may work—but Demo- Louisiana, 2008-16, and was a candi- in the James Madison Program in better for the president. heavy-handed attacks on Laura Mo- crats in 2020 will have to offer more. date for the 2016 Republican presi- American Ideals and Institutions at ser in a Texas primary. Sen. Eliza- Just as seemingly every Republican dential nomination. Princeton University. beth Warren is attacking Democrats An independent candidacy for working with Republicans to could split voters who lighten the regulatory burden im- posed by Dodd-Frank. dislike the Democrats but Democrats are fleeing to increas- can’t abide the president. ingly radical policy positions to im- munize themselves against attacks from the likes of Ms. Warren and Sen. Bernie Sanders. Whereas Presi- A Kasich candidacy would not dent Obama refused to include a threaten Mr. Trump’s hold over base public option in his signature health voters. While some in the Republican bill, potential presidential contenders establishment pine for someone to like Sens. Warren, Cory Booker, represent the “real” party, GOP voters Kirsten Gillibrand and Kamala Harris are generally happy with Mr. Trump. have rushed to cosponsor Mr. Sand- Donors wonder why their millions are ers’s single-payer bill, which would spent on winning elections only to take away private health insurance— pursue social policies they consider along with Medicare—from everyone distractions at best, whereas millions who has it. of primary voters feel their votes are Many moderate Democrats who no longer wasted electing politicians used to support school choice, or at who support unfair trade deals and least charter schools, are now silent open borders. or reversing their positions. House Mr. Trump has been assailed for Minority Leader Nancy Pelosi at- waffling on social issues like abortion tacked the Republican-passed tax and gun control, for an economic pol- cut and mocked the resulting bo- icy that embraces runaway spending nuses and salary increases. Billion- and rejects free trade, for being too aire Tom Steyer is spending millions conciliatory toward Russia, and for an insisting impeachment need not entitlement policy that is unsustain- wait for the results of Robert Muel- able. His defenders cite his successes ler’s investigation. in appointing conservative judges and Democratic extremism may not be cutting corporate taxes. enough for Republicans to hold Con- He benefits, ironically, from the gress this November. Republican con- qualities that earn him scorn from the trol of government has accomplished media. As was evidenced during the what Mr. Obama failed to do—make Republican primary, it is ineffective ObamaCare popular and increase to attack Mr. Trump from the right funding for Democrats’ priorities. while he is vowing to build a border The GOP failure to repeal ObamaCare wall and ban Muslim immigration. He and approval of a bloated omnibus is willing to go rhetorically further spending bill will dampen conserva- than even the most antiestablishment tive voters’ enthusiasm. While the politician, leaving no room in 2016 for administration bears much blame, Ted Cruz or in 2020 for another con- House Republicans are likely to pay a servative challenger. price this November. But the base isn’t enough to win, Yet Democrats’ improving mid- and Mr. Trump so far shows little term prospects do not necessarily sign of picking up new supporters. herald success in 2020. In 2006 Mrs. Thus a challenger is not sufficient— Pelosi became speaker by focusing on

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Stacking Up Money raised by private-equity Disney Weighs Top Executive’s Fate funds focused on information technology Company discusses reduce his managerial power Pixar Animation Studios tions they don’t consider se- pany’s most valuable fran- $200 billion but allow him to retain creative and Walt Disney Animation, vere enough to warrant a chises, including “Toy Story” role for a creative star influence, according to a per- which Mr. Lasseter helped de- manager’s termination. and “Finding Nemo.” After 150 who went on leave son familiar with the matter. velop into family-entertain- In Mr. Lasseter’s case, Dis- Disney acquired Pixar in 2005, Those discussions come as ment powerhouses, have ney executives led by Chief Ex- he helped lead a revival of Dis- 100 after accusations a six-month leave taken by Mr. adapted to operating in his ab- ecutive Robert Iger are decid- ney Animation Studios, which Lasseter following accusations sence, even as staff members ing the fate of a man long made “Frozen” and “Zooto- 50 BY ERICH SCHWARTZEL of unwelcome hugging and remain in the dark about who considered one of Hollywood’s pia,” and consulted on every- AND BEN FRITZ other touching winds down. will lead them, employees most bankable and well-known thing from toy design to 0 So far, Disney has given no in- said. The entertainment giant creative geniuses. theme park attractions. LOS ANGELES—Executives dication whether or not Mr. faces a tricky situation in de- In his position as chief cre- Along the way, Mr. Lasseter 2007 ’10 ’15 ’17 at Walt Disney Co. have dis- Lasseter will return. It is also ciding what to do about Mr. ative officer of Disney’s stu- became something of a celeb- Source: Preqin cussed bringing animation guru possible that Monday, which Lasseter, a predicament facing dios, a title he has retained rity himself, showing up at Dis- THE WALL STREET JOURNAL. John Lasseter back to the com- marks the end of the leave, many companies in the #Me- while on leave, Mr. Lasseter ney fan conventions to present pany in a new role that would will pass with no decision. Too era as they address infrac- steered a number of the com- Please see DISNEY page B2 Tech HEARD ON THE STREET Russell 2000 Buyout By Jacky Wong 6% s5.3% year to date Rivals Tencent 4 Gets Back Face Off 2 BY LAURA COOPER In the Game AND DAWN LIM Two of the largest technol- 0 ogy-focused private-equity Tencent firms are competing to raise Holdings, the money for what would be their world’s largest biggest funds, ratcheting up –2 videogame S&P 500 an already heated race for company, has s buyouts in the industry. lost almost 1.8% Vista Equity Partners $90 billion of its market –4 January February March April May Management is attempting to value since March due to con- raise $12 billion for its latest cerns about slowing growth buyout fund, while Thoma and shrinking margins. Its Small Business Optimism Index Flows into small-cap equity funds, in billions* Bravo LLC is looking for latest report card should put 110 $1 around $10 billion, according those worries to bed. to people familiar with the China’s most valuable firm 105 0 matter. Vista’s effort hasn’t reported a 48% increase in previously been reported. revenue and a 61% jump in 100 –1 The moves represent quick net profit for its first quar- returns to the fundraising ter—both handily beating 95 –2 market for the firms and un- analysts’ estimates. That derscore their voracious appe- came after Tencent’s rare 90 –3 tites for deals. miss in revenue growth the 2016 ’17 ’18 2014 ’15 ’16 ’17 ’18 Vista and Thoma quarter before, which had Bravo, until recently not prompted worries about a *Monthly inflows and outflows comprise Morningstar-tracked small-cap growth, value and blended funds. widely known on Wall Street, THE WALL STREET JOURNAL. slowdown in games sales, its Sources: FactSet (index performance); National Federation of Independent Business (optimism index); Morningstar (flows) have become some of the most largest profit driver. The active and aggressive players market also had worried that in technology investing, in Tencent’s spending plans for Small Stocks Speed Past Large Caps some cases competing with its videos, artificial intelli- each other for deals. gence and mobile payments There is no guarantee the could hurt its margins. BY AKANE OTANI money into multinational com- the country’s longest growth 1% Wednesday to 1616.37, top- firms will reach those targets, But neither of those AND MICHAEL WURSTHORN panies they felt were best po- streak in 28 years. ping its Jan. 23 closing high. and it is possible they will ex- things happened in the latest sitioned to benefit from a syn- The comparatively rosier For the year, the index is now ceed them. Investors believe quarter. Gaming revenue hit Shares of small U.S. compa- chronized pickup in the global outlook for the U.S. has up 5.3%, outperforming both the funds would still likely be another record as sales from nies climbed to a fresh record, economy. drummed up fresh optimism the S&P 500, which has risen smaller than the $15 billion smartphone games jumped reflecting their gains in the re- Yet in recent weeks, data among investors in small 1.8%, and the Dow Jones In- tech-focused pool that inves- 68% from a year ago. And cent tax overhaul and signs have suggested that momen- caps—especially with many dustrial Average, which is up tor Silver Lake raised in 2017. Tencent’s margins have actu- that U.S. growth once again tum around the world could be expecting small companies, 0.2%. Those indexes are still Assuming Vista and Thoma ally expanded—mainly looks more robust than that faltering. Growth in the euro- which tend to pay higher ef- more than 5% below their Jan- Bravo succeed in their fund- thanks to its videogame unit. from overseas. zone appears to have slowed fective tax rates than multina- uary highs. raising efforts, their next chal- Gross profit margins in its The rally marks a remark- in the first quarter of the year, tionals, to get a boost from “When you have an envi- Please see FUNDS page B4 cloud and payment busi- able rebound for small caps, while data Tuesday showed corporate tax cuts. ronment where we’re deregu- nesses also improved. which fell behind large stocks Japan’s economy contracted The Russell 2000 index of lating as opposed to increas- Tencent is banking next last year as investors poured over the same period, ending smaller U.S. companies rose Please see SMALL page B10 on the latest global phenom- Card Issuers enon—“battle royale” games, in which a large group of Grapple With players shoot each other un- INSIDE Plot Thickens for MoviePass til only one remains stand- ing. The company owns the Harder Times right to distribute BY BEN FRITZ “PlayerUnknown’s Battle- BY ANNAMARIA ANDRIOTIS grounds” and “Fortnite”— Michael D’Ariano has saved the two most popular titles a lot of money thanks to Mov- Rising loan losses and in- in this genre—in China. It iePass. But he has lost even creased rewards expenses are has developed a mobile ver- more. pressuring credit-card lend- sion of the former that is As one of the more than 2.7 ers’ returns, raising concerns available globally, while it million subscribers to the ser- that one of the most profitable owns nearly half of Epic vice that lets people see a new consumer-lending categories Games, Fortnite’s developer. film every day for just $9.95 a in recent years may have hit a Tencent’s investors had ZUCKERBERG month, he has watched more peak. become used to its shares than 40 movies this year. Cards remain highly lucra- going up and up, until recent PUTSONBEST The Bronxville, N.Y., sales- tive for banks, but the benefits months. Its share price has manbelievesinMoviePassso of a rising interest-rate envi- slipped to 36 times expected FACE FOR EUROPE much that he bought 1,000 ronment have been muted earnings, down from 43 shares of stock in its parent lately. The added revenue of SOCIAL MEDIA, B4 times at its recent peak in company, Helios & Matheson RICHARD B. LEVINE/NEWSCOM/ZUMA PRESS cardholders paying more in in- March, according to S&P Analytics Inc., over the past The service has loyal subscribers but loses money on ticket sales. terest payments each month Global Market Intelligence. four months. He thought it has been offset by competition That still isn’t cheap. But in- OIL SUPPLY could be the next Inc. “I’m saving $70 a month iePass has built the kind of from lenders trying to poach vestors can now expect a re- His investment is turning out going to the movies and losing brand loyalty that most com- card customers by offering turn to the good old days of RECEDES TO more like a grisly drama than a thousands investing in the panies dream about. Users lower rates. Tencent’s shares heading feel-good comedy. Shares in He- company that’s letting me do evangelize on what may be the “The easy money has been ever higher. THREE-YEAR LOW lios have dropped 93% since the that,” lamented Mr. D’Ariano. best consumer value in Amer- made in card lending,” said end of January. Since May 7, Since slashing its monthly ica. On average, a movie ticket Don Fandetti, consumer fi- Tencent’s net profit jumps on COMMODITIES, B11 they are down 68%, closing subscription price last August in the U.S. costs $9.16, accord- nance analyst at Wells Fargo & videogames, services ...... B4 Wednesday at 68 cents. from as much as $99, Mov- Please see PASS page B2 Please see CARD page B6 .

B2 | Thursday, May 17, 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 E News Corp...... B6 Nordstrom...... B2 Macy’s Sales Take a Positive Turn Accell Group...... B10 Eaton Vance...... B12 Airbus...... A12 Essential Consultants Novartis...... A4,B12 Amazon.com...... A2 ...... B12 P BY SUZANNE KAPNER and customers also spent American Express...... B6 Exxon Mobil...... B6 Paddy Power Betfair..B2 AND ALLISON PRANG On the Rise more on full-priced goods. Ashmore Group...... B12 F PowerSchool Group....B4 That helped the average ticket Autonomous Research Shares in Macy’s surged after the retailer reported sales growth Facebook...... B4 R After closing dozens of price rise 5%, according to the ...... B6 that surpassed analysts’ estimates. FanDuel...... B2 Royal Dutch Shell...... B6 stores, Macy’s Inc. reported company. B Comparable store sales Macy’s daily s are price Fiat Chrysler S higher sales at locations still h The retailer also benefited Banca Mediolanum...B11 Automobiles...... B3 open amid signs that the de- Change from previous year from a rebound in spending Banco BPM...... B11 Fidelity Investments B12 SailPoint Technologies partment-store giant is pulling by international tourists af- Holdings...... B4 5.0% 1Q 2018 $34 Wednesday Barracuda Networks...B4 Ford Motor...... B3 out of a prolonged slump. ter they pulled back in recent Silver Lake...... B1 t3.9% $33.17 ▲11% Bayer...... B5 G The results were buoyed by years due to the strong dol- Bitmain Technologies Sky...... B6 General Catalyst...... B10 a strong economy, with low 2.5 lar...... B10 Southwest Airlines....B3 General Motors...... B3 unemployment and recent tax 32 Mr. Gennette said Macy’s BJ's Restaurants...... B10 Synchrony Financial....B6 Goldman Sachs Group BlackRock...... B12 T cuts that should give consum- was getting traction from re- ...... B10 0 BMW...... B5 ers more money to spend. vamped shoe and fine jewelry H Tencent Holdings They bode well for other re- departments as well as a new BP...... B6 ...... A2,B1,B4 30 Breyer Capital...... B10 Helios & Matheson tailers scheduled to report loyalty program that offers Thoma Bravo...... B1 –2.5 Analytics...... B1 earnings this week, including tiered rewards based on C Tibco Software...... B4 ...... B6 Walmart Inc., J.C. Penney Co. spending. It is also adding new Caesars Entertainment T. Rowe Price Group.B12 and Nordstrom Inc. 28 categories to its website ...... B2 I Turing Pharmaceuticals –5.0 Cambridge Analytica..B4 IDG Capital...... B10 ...... B12 “The customer is feeling through its vendor direct pro- Capital One Financial.B6 Isuzu Motors...... B3 Tusk Ventures...... B10 confident, and is out there gram, such as drones and dec- CBS...... A1 J 21st Century Fox...... B6 ready to spend,” said Macy’s –7.5 26 orative home goods. Celgene...... B12 Chief Executive Jeff Gennette. Mr. Gennette also pointed J.C. Penney...... B2 U 2015 ’16 ’17 ’18 MarchApril May Churchill Downs...... B2 Macy’s said same-store to the rollout out of Macy’s M UniCredit...... B11 Circle Internet Financial sales in its fiscal first quarter Sources: the company(sales); FactSet (shares) THE WALL STREET JOURNAL. Backstage, the company’s dis- US WorldMeds...... B4 ...... B10 Macy's...... B2,B12 rose 3.9% from a year earlier, count concept, as helping to Citigroup...... B6 Malibu Boats...... B10 V and by 4.2%, including li- plan that lets all full- and than its prior guidance. The buoy sales. In the first quarter, Coinbase Global...... B10 Mercator Advisory Valeant Pharmaceuticals censed departments. part-time staff share in the company also raised the Macy’s opened about 20 of Comcast...... B6 Group...... B6 International...... B12 A big driver of the sales in- gains, based on local store and prospects of seeing annual these stores. It plans to open D Morgan Stanley...... B12 Viacom...... A1 crease was a promotional corporate performance. “We’re sales growth. The depart- 100 this fiscal year. Mylan...... B12 Vista Equity Partners Daimler...... B3 event that shifted into the moving better and faster than ment-store chain now expects The company also said ear- Management...... B1 Digital Currency Group N first quarter; last year it oc- ever before,” Mr. Gennette annual sales to be in a range lier this month it bought a ...... B10 National Amusements W curred during the second said. of down 1% to up 0.5%, com- New York City concept store Discover Financial ...... A1 Walmart...... B2 quarter. Stripping out this Shares in Macy’s shot up pared to its prior forecast of called STORY that changes Services...... B6 Navistar InternationalB3 Walt Disney...... B1,B6 event, same-store sales on an nearly 11% Wednesday after sales falling between 0.5% what it is selling and its de- owned-plus-licensed basis the retailer reported same- and 2%. sign every four to eight weeks. would have risen 1.7% for the store sales growth that widely Macy’s revenue rose 3.6% to Macy’s also said that STORY’s INDEX TO PEOPLE period ended May 5, according surpassed analysts’ estimates $5.54 billion. CEO and founder, Rachel to the company. and raised its projections for Profit climbed 78% to $139 Shechtman, will become a A Houchois, Philippe...... B5 Peikin, Steven...... B10 But Macy’s is also taking in- the year. million, or 45 cents a share. brand experience officer at ternal steps that are boosting Macy’s said it now expects On an adjusted basis, the com- Macy’s. Avakian, Stephanie...B10 K Pruett, William...... B12 R performance, including a to earn between $3.75 and pany earned 48 cents a share. B Kelly, Gary...... B3 streamlined merchandising $3.95 a share on an adjusted Macy’s had less excess in- Heard: Macy’s results are a Redstone, Shari...... A1 Bakish, Bob...... A8 King, Matt...... B2 structure and a new incentive basis, a range 20 cents higher ventory to clear in the period, miracle on 34th Street...... B12 Rupkey, Chris...... B11 Bell, Oliver...... B12 Kokesh, Charles...... B10 S F L Samana, Sameer...... B10 Lasseter, John...... B1 Fandetti, Don...... B1 Shechtman, Rachel Levin, Kip...... B2 Farnsworth, Ted...... B2 ...... B2,B12 Foran, Brian...... B6 M Springer, Jack...... B10 G-H Moonves, Les...... A1 T Gennette, Jeff...... B2 N-P Trojan, Gregory...... B10 Gifford, Charles...... A8 Nelms, David...... B6 Z Gwirtzman, Randy....B10 Nelson, Erik...... B11 Zuckerberg, Mark...... B4

Pixar’s “The Incredibles 2,” out DISNEY June 15, and Disney Animation’s “Ralph Breaks the Internet: Wreck-It Ralph 2” in November. Continuedfromthepriorpage Other projects that have ad- new footage or sell versions of vanced without his involvement his signature Hawaiian shirts. include “Toy Story 4” and “Fro- Rosé from his family’s Sonoma zen 2,” scheduled for 2019. Valley vineyard is still avail- In considering a redefined

able at Disneyland and Walt role for Mr. Lasseter, Disney ROB CARR/GETTY IMAGES Disney World. leadership appears to be at- Churchill Downs, which hosts the Kentucky Derby, is one of a number of firms looking for a foothold in a new sports-gambling market. A representative for Mr. tempting to maintain the ben- Lasseter didn’t respond to a efit of his creative input with- request for comment. out the liabilities that could Gambling Firms Chase the Sports Bet If Mr. Lasseter returns in his come from his being in charge prior role, Disney risks alienat- of thousands of employees, as ing employees and opening it- he previously was. BY CHRIS KIRKHAM daily. FanDuel, based in New and possibly fees to be If it acquired FanDuel, self to blame for any future in- Day-to-day management AND AUSTEN HUFFORD York City, declined to com- charged by sports leagues, Paddy Power Betfair would get appropriate behavior on his duties, including hiring or fir- ment. such as the National Basket- a database of six million users, part. Some current and former ing capabilities, would be re- Ladies and gentlemen, place Churchill Downs Inc., ball Association and Major most of whom have handed Pixar employees have told me- moved or contained in the sce- your bets. Gambling firms are which hosts the Kentucky League Baseball. over their credit-card informa- dia outlets, including The Wall nario being considered, the wagering that the U.S. sports- Derby, said Wednesday it is Paddy Power Betfair has al- tion. Paddy Power last year Street Journal, that Mr. Lasseter person familiar with the mat- betting market is the next planning to expand its sports- ready been in the U.S. market acquired a smaller daily fan- regularly hugged or otherwise ter said. Limiting Mr. frontier after the Supreme betting business. That came for years, operating a horse- tasy-sports company called touched them without consent. Lasseter’s managerial over- Court lifted limits on the busi- on the heels of similar an- racing TV channel and related Draft. DraftKings Inc., another sight could be a challenge, ness, and several are vying to nouncements from casino op- online betting. The company fantasy-sports operator, also however, as his power came be first out of the gate with erators, including Caesars En- also runs an online casino in said Monday it would enter less from his official title than offerings. tertainment Corp. New Jersey, where lawmakers the sports-betting market. The company appears his unofficial standing as Dis- Businesses on both sides of The Supreme Court on have said they would move Even before Monday’s deci- to be trying to keep ney’s most-valued creative are working to Monday opened the door to le- quickly to pass legislation to sion, FanDuel Chief Executive employee, people who worked launch or expand U.S. opera- gal sports betting across the regulate and tax legalized Matt King said he had a team the benefit of Lasseter’s with him said. tions, hoping to get a piece of country by invalidating federal sports betting. of people working on making creative input. It is still possible he could what could be a multibillion- prohibitions from 1992 that Kip Levin, chief executive of sports-betting products, an ex- leave altogether or come back dollar industry. had essentially restricted the the Paddy Power Betfair’s U.S. pansion from the company’s with his old job unchanged, Paddy Power Betfair PLC, legal market to Nevada. Gam- operation, said his company paid fantasy offerings. the person added. a Dublin gambling company, bling operators, sports leagues plans to move quickly into the Churchill Downs said Some employees said that His absence has been felt in said Wednesday it is in talks and state governments are New Jersey market, and ex- Wednesday it would enter on- Mr. Lasseter’s behavior didn’t every corner of Disney’s ani- to merge its U.S. business with now vying for their share of pects to be offering wagers on line-gambling and sports-bet- bother them. However, others, mation business, current and FanDuel Inc., a fantasy-sports the potential revenue, as state National Football League ting markets in New Jersey particularly younger women, former employees say. Though company that offers games lawmakers discuss tax rates games this fall. and Pennsylvania. said they were uncomfortable he personally directed only and came forward in the light five movies, he consulted on of the #MeToo movement. every movie at Pixar and Dis- In announcing his leave in ney Animation, weighing in PASS Boom and Bust November, Mr. Lasseter, 61 every few weeks to every few Shares in MoviePass's parent company have surged and plunged since the company made its years old, said: “I especially months depending on how movie-a-day offering. want to apologize to anyone smoothly production was go- Continuedfromthepriorpage Helios & Mat eson s are price who has ever been on the re- ing, employees said. Approval ing to an industry trade group, h h ceiving end of an unwanted from Mr. Lasseter was neces- and much more in major cities. $35 hug or any other gesture they sary to move past benchmarks For barely more than that, Aug. 15, 2017 Wednesday felt crossed the line in any in writing, storyboarding, pro- a dedicated MoviePass user 30 Helios & Matheson way, shape, or form.” duction and editing. can see every Hollywood re- acquires majority $0.68 Since then, Mr. Lasseter has Now Disney is relying pri- lease and several obscure in- control of MoviePass, disappeared from public view. marily on a panel of artists, dependents or Bollywood im- 25 slashes price to May 8 $9.95 a month Feb. 8 Disney employees said they producers and executives at ports to boot. Surpasses Helios reports it for one film a day has only $15.5 hadn’t heard from him and each studio to make creative Some said the offer was too 20 2 million didn’t know his whereabouts. decisions, according to current good to be true, an opinion subscribers million cash Sept. 14 available He left immediately before and former employees, a more that may now merit a “spoiler Jan. 9, 2018 April 17 15 Hits 400,000 the debut of Pixar’s Oscar-win- diffuse approach than Mr. alert” warning. In its annual 1.5 million Annual report reveals subscribers ning “Coco” and has remained Lasseter’s arrangement. report, filed last month, the subscribers auditors have absent even as the studios —Jim Oberman contributed independent auditor for Helios from fewer ‘‘substantial doubt’’ 10 ready two high-profile releases: to this article. expressed “substantial doubt” than 20,000 Helios can remain in just 30 a growing concern about its ability to continue days operating. 5 MoviePass pays theaters full price for every movie ticket its members order, meaning that 0 its core business is designed to 2017 ’18 operate at a loss. The company’s Source: FactSet THE WALL STREET JOURNAL. plan, executives have said, is to take advantage of a user base regulatory filing last week, He- Film Festival in the south of Mr. Farnsworth argued that that has grown nearly 150-fold lios, which generates more France, which he described as the company has access to in nine months to sell advertise- than 98% of its revenue from “a riot, one big party.” hundreds of millions of dollars ments and to persuade theaters MoviePass, said it had only He was seeking new films through other means, includ- to give them a cut of revenue. $15.5 million cash and $27.9 his company could invest in ing a deal to sell up to $150 Despite some successes, in- million of accounts receivable. through its MoviePass Ven- million of new stock that, cluding email ads for the com- The revelation sent its al- tures, which buys stakes in when announced last month, edy remake “Overboard” and ready struggling stock into a motion pictures that it can also sent shares plummeting. deals with small cinema chains, tailspin. market to its users. MoviePass Recent changes, such as ban- MoviePass lost $98.3 million Helios Chief Executive Ted Ventures already owns part of ning seeing the same movie on $48.6 million of revenue in Farnsworth, however, wasn’t “Gotti,” a biopic of the crime twice, have brought Mov-

DAN STEINBERG/INVISION/ASSOCIATED PRESS the quarter ended March 31, in crisis mode when reached boss starring John Travolta iePass’s monthly burn rate John Lasseter’s influence was pervasive at the animation studios. Helios reported Tuesday. In a by phone Friday at the Cannes that premiered at Cannes. down by 40%, he said. .

THE WALL STREET JOURNAL. ** Thursday, May 17, 2018 | B3 BUSINESS NEWS Southwest Completes Inspection Of Engines

BY DOUG CAMERON

ANNAPOLIS, Md.—South- west Airlines Co. said it has completed engine inspections across its fleet of more than 700 jets after a fatal accident on one of its flights last month. Chief Executive Gary Kelly on Wednesday said Southwest has sent a small number of en- gine fan blades back to their maker for further tests and is

working with manufacturers AJ MAST FOR CHEVROLET and regulators on the poten- General Motors is re-entering a market segment that it abandoned around the time of its 2009 bankruptcy. The auto maker’s new, beefier Chevrolet Silverado model. tial redesign of parts and in- spection protocols. The April 17 engine blowout on a flight from New York to Heavy-Pickup Contest Heats Up Dallas sent debris from the en- gine cowling into parts of the jet’s wing and fuselage, break- With a new entry, The beefy new Chevrolet customers like Fred Hollmann, Ford is the segment’s major ing a window and killing pas- Silverados will be built under Truck Trailer owner of a landscaping com- player, with about 45% market senger Jennifer Riordan. Af- GM hopes to cut into an agreement with truck GM hopes to close the gap with pany near Cincinnati. Mr. Holl- share, according to ACT. But terward, Southwest canceled Ford’s traditional lead maker Navistar International Ford in the lucrative market for mann said he plans to buy sev- GM will face other competi- around 500 flights to perform Corp. at a plant in Springfield, commercial vehicles. eral pickup trucks through tors, too, including Fiat Chrys- the engine inspections across in a growing market Ohio. The trucks are as much next year to update his fleet of ler’s Ram division, Daimler its fleet. as three times as heavy as a U.S. commercial vehicle sales about 50 vehicles. Business is AG’s Freightliner brand and Mr. Kelly said at South- BY MIKE COLIAS regular Silverado, and users Ford GM strong, and his lower taxes Isuzu Motors Ltd. west’s annual meeting that the convert them into everything have improved cash flow, he GM’s overall commercial 350,000 vehicles airline remained in contact The business of big trucks is from dump trucks to ambu- said. Provisions in the tax law business suffered after bank- with Ms. Riordan’s family. bigger than ever, opening up a lances. 300,000 allow business owners to fully ruptcy, which scared away Mr. Kelly said that bookings new front in the market-share GM’s return to the segment write down the depreciation of some customers. The com- were still down as the airline battle between General Mo- reflects Detroit’s sharper focus 250,000 a heavy truck the same year it pany’s sales to business cus- has pulled back on marketing tors Co. and Ford Motor Co., on trucks and sport-utility ve- was purchased, an incentive tomers totaled about 165,000 in the wake of the accident. which dominate the produc- hicles as demand for passen- 200,000 Mr. Hollmann said he plans to vehicles in 2012, down by The carrier of the most U.S. tion of pickups that signifi- ger cars recedes. GM, Ford and 150,000 utilize. nearly half from 2006. domestic passengers still ex- cantly outweigh conventional Fiat Chrysler Automobiles NV “We’ve got several trucks The medium-duty Silvera- pects revenue per available models. are adding new truck models 100,000 that have just gone by the dos will be the biggest vehicles seat mile to decline between A strong U.S. economy and in a bid to boost profits. Big wayside and need to be re- GM sells, though it will lever- 1% and 3% in the second quar- the December tax overhaul are pickup trucks and the SUVs 50,000 placed,” Mr. Hollmann said. age other parts of its truck ter. Southwest said 1 to 2 per- helping lift sales of commer- that share the same frames of- The medium-duty truck seg- business. For example, the 0 centage points of that decline cial vehicles, mainly pickup fer fatter profit margins than ment is relatively small—there cabin—typically no-frills—will was attributable to the recent trucks and delivery vans used cars and generate the majority 2012 ’15 ’17 were about 150,000 sold last be similar to the interior of a softness in bookings. by farmers, general contrac- of global profit at the compa- *Excludes sales to government entities year, according to Columbus, regular Silverado, with crea- Before the accident, ana- tors and other skilled trades, nies. Source: Bobit Business Media Ind.-based ACT Research Co. ture comforts like Wi-Fi and lysts had expected that unit- auto dealers say. While Ford, Ed Peper, head of GM’s fleet But buyers tend to be big Apple Car Play. revenue measure to be flat to with its F-Series pickup, has business, believes the return of ager of Ford’s commercial spenders and typically pur- Keith McCluskey, a Cincin- down 2% from a year earlier. long held a sizable lead in the the medium-duty Silverado sales, is confident Ford can chase many types of vehicles nati Chevrolet dealer, was a The airline’s stock has been battle for business customers, truck to GM’s lineup will bring protect its medium-duty busi- from the same auto maker, said major seller of medium-duty the industry’s worst performer GM this year plans to reintro- back business customers who ness because it has strong re- Steve Tam, an ACT vice presi- trucks before GM killed the this year, falling around 20% duce a so-called medium-duty defected to Ford. “We’ve been lationships with business cus- dent. Medium-duty trucks, line. He has already fielded as investors fret over plans to commercial truck, a category losing customers because we tomers and the companies that which are more customizable calls from customers eager to add capacity that could spark the auto giant abandoned don’t have this,” Mr. Peper convert the trucks for specific than other types of trucks, can check out the new one, but he competition with other carri- around the time of its 2009 said. use. go for more than $60,000, plus believes winning back business ers to cut fares. bankruptcy. John Ruppert, general man- Ford and GM are going after hefty conversion costs. from Ford will be tough.

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B4 | Thursday, May 17, 2018 **** THE WALL STREET JOURNAL.

TECHNOLOGY WSJ.com/Tech FUNDS Tencent’s Net Jumps ContinuedfrompageB1 lenge will be to invest all that On Games, Services money without further inflating the prices of tech businesses and driving down the buyout BY WAYNE MA cloud services and digital- firms’ returns. Skyrocketing de- content subscriptions. Video mand from private-equity and BEIJING—Tencent Hold- subscriptions were up 85%, sovereign-wealth funds already ings Ltd. blew past expecta- while cloud-services revenue has pushed up purchase prices tions, reporting a 61% increase doubled from a year earlier. sharply. in net profit for the first three Revenue in the segment Technology has been the months of the year on the containing those ancillary most popular sector for private- strength of mobile games and businesses more than doubled equity investors in recent years, other digital content, and its in the first quarter, making up accounting for 20.5%, or $79.5 fast-growing mobile payments 22% of overall revenue, up billion, of all acquisitions glob- business. from a 15% share in the year- ally in 2017, according to Dea- The company’s earnings in earlier period. logic. Buyers acquired control- the quarter offer a window Tencent’s costs, however, ling stakes in technology into the forces shaping China’s are rising as it spends heavily companies larger than $10 mil- consumers, who are increas- to buy content to keep users lion at an average price of 23 ingly relying on their smart- glued to its products. times earnings before interest, phones for entertainment con- The company, based in taxes, depreciation and amorti- tent and making purchases. Shenzhen, China, said cost of zation last year, matching the Tencent’s core business re- revenue, which includes 2015 peak, according to Dealogic. mains online games, with con- content costs, rose by 51% in Buyout firms have been sumers continuing a rapid mi- the quarter when compared drawn to technology, particu- gration from PC to mobile. with the same period last larly so-called software-as-ser- Revenue from PC games was year. vice companies, for their prom- flat from a year earlier, while Tencent reported net profit ise of recurring revenues, which mobile-game revenue was up Wednesday of 23.29 billion can help support the hefty debt 68%. yuan ($3.66 billion) for the loads the investors tend to use The company—known for first quarter, beating the 17.1 to finance takeovers. its WeChat social-messaging billion yuan estimate of ana- Vista, which was founded in app that recently topped one lysts polled by S&P Global 2000 and manages over $31 billion users—said its mobile Market Intelligence. Revenue

billion, has invested in compa- DANIEL LEAL-OLIVAS/AGENCE FRANCE-PRESSE/GETTY IMAGES games continue to dominate rose 48% to 73.53 billion yuan. nies including educational- A U.K. protester carries a papier-mâché head of the Facebook founder amid criticism of data handling. download charts, particularly Shares of Tencent, which software provider Power- QQ Speed Mobile, a racing has a market capitalization of School Group LLC and data- game similar to Nintendo’s 3.75 trillion Hong Kong dollars analytics provider TIBCO Zuckerberg Seeks to Ease Mario Kart released for smart- (US$478 billion), ended 0.4% Software Inc. The Austin, phones in December. lower at HK$397.60 in Hong Texas, firm just closed an $11 Tencent’s fastest-growing Kong on Wednesday before the billion-plus fund last year. A businesses are payments, earnings release. 2014 Vista fund delivered Strains on European Visit roughly 1.25 times invested capital as of December 2017, according to pension data and BY NATALIA DROZDIAK people’s privacy.” closed doors. “Given the deep research firms. The result AND SAM SCHECHNER A Facebook spokesman de- mistrust caused by the Cam- doesn’t include a recent deal clined to comment when asked bridge Analytica scandal, this to sell part of its stake in Pow- BRUSSELS—Facebook Inc. if Mr. Zuckerberg would travel meeting must be public. There erSchool, which is expected to CEO Mark Zuckerberg will to other European capitals or should not be double stan- generate nearly four times in- meet with French President meet with other officials. dards for the U.S. Congress vested capital. Emmanuel Macron and other Facebook has come under and the European Parliament,” Vista, which focuses exclu- European officials next week, fire in recent months over rev- said Green group leaders Phi- sively on software, employs over as the Silicon Valley giant elations that the social net- lippe Lamberts and Ska Keller. 200 people. About half of them tries to calm tension with reg- work allowed personal infor- A trip by Mr. Zuckerberg are part of a consulting arm that ulators and policy makers on mation of as many as 87 next week would coincide with works to improve operations at both sides of the Atlantic. million users to be obtained the bloc’s sweeping new pri- businesses the firm owns. In re- Mr. Zuckerberg will meet by data-analytics company vacy laws, which enter into cent years, Vista has expanded with top European lawmakers Cambridge Analytica. Face- force on Friday, May 25. Face- beyond its core buyout funds in Brussels to discuss the so- book has said it would imple-

into other strategies, including cial network’s handling of its ment some privacy controls in- QILAI SHEN/BLOOMBERG NEWS small-cap deals and credit. The users’ personal information, The Facebook CEO spired by the law world-wide. A WeChat conference. Tencent is known for the messaging app. firm has also set its sights on a and its potential impact on European lawmakers have fund with a longer life span than European elections, said Euro- will meet with French stepped up calls for Mr. Zuck- traditional private-equity deals. pean Parliament President An- President Macron and erberg to testify in Brussels Thoma Bravo, with more tonio Tajani. The hearing about the Cambridge revela- FDA Clears Nonopioid Drug than $21 billion in assets, has in- won’t be open to the public, EU officials. tions after he spoke before vested in cloud-security busi- an EU official said. U.S. lawmakers in mid-April. ness Barracuda Networks Inc. In Paris, Mr. Zuckerberg will In the U.K., a British parlia- For Withdrawal Symptoms and cybersecurity firm Sail- participate in a lunchtime mentary committee requested BY AISHA AL-MUSLIM cal conditions. Point Technologies Holdings meeting Wednesday at France’s book also has faced heat over that Mr. Zuckerberg testify “We’re developing new Inc. Élysée Palace called “Tech for interference in the 2016 U.S. about Facebook’s handling of The U.S. Food and Drug Ad- guidance to help accelerate Thoma Bravo, which has of- Good” that will include such presidential election by Rus- user data or face a formal ministration has approved the the development of better fices in Chicago and San Fran- tech executives as Uber Tech- sian operatives using the so- summons. first nonopioid treatment to treatments, including those cisco, raised $7.6 billion for its nologies Inc. CEO Dara Khos- cial network. Facebook has said Mr. Zuck- help adults manage opioid that help manage opioid with- prior flagship fund in late 2016. rowshahi, a French official Ahead of European Parlia- erberg had no plans to go to withdrawal symptoms as the drawal symptoms,” FDA Com- Its 2014 fund delivered 1.58 said. Mr. Zuckerberg will also ment elections in 2019, the EU the U.K., and a spokesman agency looks to continue to missioner Scott Gottlieb said times invested capital as of De- have a private meeting with has been pushing platforms to Wednesday said he had “noth- encourage the development of in prepared remarks. “We cember 2017, according to pen- Mr. Macron, the official added. do more to halt the spread of ing else to add right now.” The therapies to help patients suf- know that the physical symp- sion-fund data. “We are looking forward to misinformation or “fake company sent a top executive fering from addiction. toms of opioid withdrawal Thoma Bravo invests more meeting next week with the news,” on their sites, or face to testify before the commit- The FDA granted the ap- can be one of the biggest bar- broadly, and besides software president of the French Re- possible regulation. Mr. Ma- tee last month. In January, proval of Lucemyra to Louis- riers for patients seeking help focuses on technology-enabled public Emmanuel Macron,” the cron has also directed his gov- Facebook Chief Operating Offi- ville, Ky.-based pharmaceutical and ultimately overcoming services. The firm, which has 85 company said, adding of its ernment to work on proposing cer Sheryl Sandberg also met company US WorldMeds LLC, addiction.” employees and operating execu- meetings with EU lawmakers: a law to rein in fake news dur- with Mr. Macron in Paris, and the agency said Wednesday. The treatment, which isn’t tives, has expanded into funds “We…appreciate the opportu- ing election periods. with EU officials in Brussels. The company also develops designed to be a treatment for that invest in smaller deals too. nity for dialogue, to listen to Some EU lawmakers criti- —Valentina Pop, Jenny Gross products for patients with Par- opioid addiction, is expected —Laura Kreutzer their views and show the steps cized the decision to hold the and William Horobin kinson’s disease, malignant to be commercially available contributed to this article. we are taking to better protect meeting in Brussels behind contributed to this article. hyperthermia and other medi- in the U.S. in August.

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Free shipping and returns. Order online or call 844.482.4800. ORDER AT ZVOX.COM . THE WALL STREET JOURNAL. Thursday, May 17, 2018 | B5 MANAGEMENT Eye on the Ball, Not on the Phone European Executives To keep staff focused, managers try to keep devices at a distance; is the effort Prohibition-like? Are Upbeat BY JOHN SIMONS

Two thousand six hundred seventeen times a day. That Despite is how often the average per- son taps, pokes, pinches or swipes their personal phone. Headwinds It all adds up to about 2 BY NINA TRENTMANN hours and 25 minutes, ac- cording to a study by mobile European companies are re- app research firm Dscout Inc. porting slower profit growth as And a good chunk of that currency headwinds and higher time comes during work costs squeeze earnings. Their hours. outlook is shadowed by the Jason Brown had had specter of potential tariffs, de- enough of it. Two years ago, spite a robust economic fore- the chief executive of Brown, cast for the region. Parker & DeMarinis Advertis- Still, more European execu- ing paused for a moment to tives are optimistic about their look across the meeting room company’s outlook, said Merrill as he delivered a presenta- Lynch strategist Manish Kabra, tion. The majority of those who reviewed 411 transcripts gathered were fiddling with from first-quarter European their phones. company events. “The mind-set “I lost it,” says Mr. Brown. is positive but slowing down,” In his anger, he issued a com- Mr. Kabra said. panywide edict: “Don’t show As of Monday, 58% of the up at a meeting with me with 363 companies in the Stoxx Eu- your phone. If someone rope 600 that had reported shows up with their phone, quarterly results beat analysts’

it’ll be their last meeting.” OTTO STEININGER earnings expectations, accord- Many managers are con- ing to JPMorgan Chase & Co. flicted about how—or even a coat hanging near their technology from meetings use was a problem, so last in touch with a sick child or A year ago, 66% of all com- whether—to limit smart- workspace. about two years ago and re- month he installed an app researching information rele- panies listed on the index beat phone use in the workplace. “I firmly believe that mul- cently asked that his execu- called Moment on his iPhone vant to the meeting. forecasts. Per-share earnings Smartphones enable people titasking is a myth,” says Bill tive team and other manag- that tracks the total amount “I told them we’re not in were up 10% from a year ear- to get work done remotely, Hoopes, an IT project man- ers not check their phones as of daily time he spent on his middle school,” he says. “I’m lier, compared with a 25% ad- stay on top of rapid business ager at L3 Technologies Inc. they walk to and from meet- phone. His first measurement not collecting phones in a vance for 2017’s first quarter, developments and keep up Mr. Hoopes put his convic- ings. revealed four hours in a day. bucket. Just don’t have it out according to JPMorgan. with clients and colleagues. tions into practice at group “Don’t act like we’re too Since early April, he has re- face up on the table.” “Raw material costs and cur- But the devices are also the gatherings when he took over important to say hello,” he duced that to roughly an The no-phones-at-meet- rency effects are the two main leading productivity killers in a team of about 25 people at says he told them. “Make eye hour. ings rule at Mr. Brown’s ad factors European companies the workplace, according to a the aerospace defense com- contact with people.” At work, Mr. Lee per- agency lasted about two are battling with,” said Philippe 2016 survey of more than pany three years ago. “Every Mr. Ishbia is now piloting suaded his team of eight to months as it wasn’t all that Houchois, an analyst at Jeffer- 2,000 executives and human- time someone’s phone went another solution to phone ad- download the app and post effective. Instead of phones, ies LLC. The euro has appreci- resource managers conducted off, they had to stand for the diction. A group of about 250 their daily phone hours on a staffers wore smartwatches ated more than 15% against the by CareerBuilder, an HR soft- rest of the meeting,” he says. workers are part of an exper- whiteboard. The team mem- to meetings or brought their dollar from a year ago. Oil and ware and services company. Before long, he asked the iment in which they refrain ber with the lowest time gets laptops, which were just as other commodity prices crept There is also some evi- group to leave their phones from all personal phone use bragging rights. distracting, he says. Now, he up during the quarter. dence that the mere presence at their desks when two or at their desks. If they want to “We’re thinking of having tells his 40 employees not to Bayer AG, the German of smartphones hurts produc- more people got together. use their devices they must a trophy we can pass attend meetings unless they chemicals company, said cur- tivity. When workers in a re- Over time, he says, he has go to a common area desig- around—or maybe just sham- really have to be there and rency effects held back earn- cent study by the University noticed not only an improve- nated for phone use and so- ing the loser,” he says. are ready to fully engage. ings by around €160 million of Texas and University of ment in the quality of con- cializing. Forty-five days into Shane Wooten, CEO of en- Mr. Brown missed his ($191.5 million). California had their personal versation and ideas in meet- the trial run, workers are terprise video platform com- phone, too, and likened the Higher prices for steel and phones placed on their ings, but also that his people checking their phones a lot pany Vidplat LLC, has limited experience to outlawing alco- plastics were a drag on profit- desks—untouched—their cog- seem to show more respect less, he said. personal devices at meetings hol during the Prohibition ability for car manufacturer nitive performance was lower and appreciation for one an- Bryan Lee, a product man- with his employees since Jan- era: “A theoretical state that BMW AG, which also suffered than when their devices were other’s work. ager at enterprise software uary—and he faced some re- almost no one wants to live from fluctuations in the value in another location, such as Mat Ishbia, CEO of United company Docker Inc., sus- sistance. Workers argue their in, including those making of the Chinese yuan and the in a handbag or the pocket of Wholesale Mortgage, banned pected that his daily phone phones are vital for staying the rules,” he says. Russian ruble.

May 22, 2018 | Four Seasons Hotel | Washington, D.C. How innovation is revolutionizing the business of health

This spring, the editors of The Wall Street Journal will convene experts from across the health and health-care industries to focus on the innovations transforming this critical sector.

SPEAKERS

Scott Gottlieb, M.D. Rear Adm. Anne Schuchat, M.D. Steven H. Collis Commissioner, Acting Director, Chairman, President and CEO, U.S. Food and Drug Administration Centers for Disease Control and Prevention AmerisourceBergen Corporation Andrew Bremberg Mark T. Bertolini Alex Gorsky Assistant to the President and Director, Chairman and CEO, Chairman and CEO, Domestic Policy Council, Aetna Inc. Johnson & Johnson The White House Mary E. Klotman, M.D Michael A. Mussallem David A. Ricks Dean, School of Medicine Chairman and CEO, Chairman and CEO, and Vice Chancellor for Health Affairs, Edwards Lifesciences Eli Lilly and Company Duke University Steven J. Corwin, M.D. Regina M. Benjamin, M.D. George M. Church, Ph.D. President and CEO, Founder and CEO, Professor of Genetics, NewYork-Presbyterian BayouClinic, Inc. Harvard Medical School Thomas McLellan, Ph.D. Surgeon General of the United States Director, Co-Founder and Scientiic Director (20092013) PersonalGenomes.org (19922015), Treatment Research Institute Alexis Borisy Anthony S. Fauci, M.D. Deputy Director and Senior Scientist Director, Director, National Institute of (20092011), White House Ofice of Third Rock Ventures Allergy and Infectious Diseases, National Drug Control Policy Peter B. Bach, M.D. The National Institutes of Health Sarah E. Wakeman, M.D. Director, Center for Health Policy and Eric Topol, M.D. Medical Director, Substance Outcomes and Faculty Member, Department Founder and Director, Scripps Translational Use Disorders Initiative, of Epidemiology and Biostatistics Science Institute, Professor of Molecular Massachusetts General Hospital Memorial Sloan Kettering Cancer Center Medicine and Executive Vice President, Assistant Professor of Medicine, Stephanie Domas, P.E., C.E.H. The Scripps Research Institute Harvard Medical School Vice President of Research, Daphne Zohar MedSec Co-Founder and CEO, David N. Osser, M.D. PureTech Health plc. Associate Professor of Psychiatry, Feng Zhang, Ph.D. Harvard Medical School Core Institute Member, Attending Psychiatrist, Domiciliary Broad Institute of MIT and Harvard Treatment Program for Homeless Veterans, Veterans Affairs Boston Healthcare System PROUDLY SPONSORED BY:

Request your invitation: healthforum.wsj.com

© 2018 Dow Jones & Co., Inc. All rights reserved. 6DJ6496 . B6 | Thursday, May 17, 2018 THE WALL STREET JOURNAL. BUSINESS NEWS

Downstream Flow Profits from refining divisions, Oil Firms Tap Refining, Retailing long a laggard, have outpaced drilling... Petrochemicals, gas since the 1960s. downstream businesses—and gave his unit a fresh impera- ising new growth. They offer BP profit before interest and taxes stations offer growth, Companies are expected to restructuring efforts they are tive to “really significantly access to emerging markets, $30billion. add 7.7 million barrels a day of simultaneously pursuing to contribute to group perfor- where demand for fuel is ex- Exploration new refining capacity by 2023, improve efficiency—will add mance, because we have to.” pected to be especially robust. and production as swings in crude 25 according to the International billions of dollars to earnings. Today, higher crude prices BP says it is on track to open 20 Refining prices roil drilling Energy Agency. In petrochemi- The downstream focus sharp- pose a risk that margins from 500 retail sites in Mexico by and marketing 15 cals, the agency estimates that ened amid a period of lower refining won’t be as strong as the end of the year, up from BY SARAH KENT 10 over the next five years in- oil prices and concerns over they have in recent years. And zero at the start of 2017. vestment in the U.S. alone will long-term oil demand. Cheaper all the new investment in ca- A geographically wide net- 5 Major oil companies are add 13 million tons a year of crude—the primary feedstock pacity could end up swamping work of branded retail outlets 0 doubling down on gas stations, new capacity to produce ethyl- for refining—boosted margins the market, analysts warned. also could create new opportu- -5 refineries and processing ene, the main component of “It remains to be seen the nities where the industry now 2010 ’11 ’12 ’13 ’14 ’15 ’16 ’17 plants, betting on a once-un- plastic. way demand is going to shape sees threats—such as electric loved part of the energy busi- American refining, in par- BP says it is on track up,” said Jonathan Leitch, re- charging stations. ...though margins have fallen as ness to shore up profits and ticular, is booming. Surging search director at Edinburgh- Last year, Shell bought one crude prices recovered expand their customer bases. shale production has provided to open 500 retail based consultancy Wood of Europe’s biggest electric-ve- Industrywide refining margins, BP PLC plans to open thou- cheap and plentiful oil close to sites in Mexico by Mackenzie. hicle charging companies, New U.S. Gulf Coast sands of gas stations in new the country’s petrochemical Investor pressure also has Motion. It has teamed up with markets such as Mexico and heartland around the Gulf the end of the year. mounted on the major oil com- a group of car manufacturers $20 .per barrel India over the next three Coast. Fuel demand is ex- panies to start positioning for to install more than 500 fast- years. Exxon Mobil Corp. is pected to rise. All those dy- an age when fossil fuels may charging points at existing 15 investing heavily to expand its namics helped drive Marathon no longer power the world’s Shell stations, across 10 coun- 10 petrochemical operations, Petroleum Corp.’s agreement and profits. Oil companies’ fleet of passenger cars. Execu- tries in Europe over the next which make products like plas- to buy rival Andeavor last “upstream,” or oil exploration tives are betting their big pet- two years. 5 tics and the basic ingredients month for $23 billion, a deal and development, meanwhile, rochemical plants can offer di- The rise of electric vehicles for all sorts of household that would create the coun- was suffering from lower versification. According to the is “a reality, and an opportu- 0 goods. In November, Royal try’s largest refiner. prices. IEA, petrochemical production nity,” Shell’s downstream di- 1Q 2017 2Q 3Q 4Q 1Q ’18 Dutch Shell PLC started work As smaller refiners consoli- “Upstream at some point is expected to be the biggest rector, John Abbott, told ana- Sources: the company (profit); International on a massive petrochemical date, the world’s major oil was not making money,” said driver of oil demand growth in lysts in March. “We are Energy Agency (refining margins) complex in Pennsylvania—its companies are promising that Tufan Erginbilgic, head of BP’s the coming decades. adjusting our offer to meet THE WALL STREET JOURNAL. first big new plant in the U.S. investment in their so-called refining and retail arm. That Gas stations, too, are prom- this new demand.”

card issuers—American Ex- corporate tax rates also Mercator Advisory Group CARD press Co., Capital One Finan- helped. Inc. Mercator projects that Profit Push cial Corp., Citigroup Inc., Still, returns remain largely card returns will fall in 2018 Return on assets at large card issuers* Discover Financial Services unchanged—and in some cases to 3.5% due to losses and chal- ContinuedfrompageB1 and Synchrony Financial— down—from about 2½ years lenges cutting further costs. 4% Co. Credit cards became an generated a median return of ago when the Fed began rais- Stocks of card companies appealing loan category for 2.1% on their assets for com- ing rates. “Rising rates [are] a have reflected the concern, 3 banks in the wake of the last mon shareholders in the first mixed blessing for the card is- with Discover shares up 0.7% 1Q 2.1% recession. Card balances in- quarter, up from 2% a year suers at this point,” said Brian this year, and Synchrony Fi- 2 creased at an accelerating earlier but down from 2.6% Foran, analyst at Autonomous nancial, the largest U.S. store pace in recent years, reaching two years ago, according to Research. Companies aren’t credit-card issuer by purchase 1 a 7% year-over-year growth analysis by Autonomous Re- getting the full benefit of the volume, down 10%, compared rate early last year. Total bal- search. The recent peak was higher rates because while in- with a 4% gain in the KBW 0 ances exceeded $1.03 tril- 3.7% in the second quarter of terest charges on cards are Nasdaq Bank Index. 2010 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 lion in January, the highest on 2011, according to an industry rising, so are the interest rates Credit-card losses have record, according to the Fed- analysis by Autonomous at the card issuers are having to pay been mostly rising over the Average net charge-off rate, large card issuers† eral Reserve. time. bank customers for their on- past two years after hovering 10% But that coincided with an “The industry was at an un- line deposit accounts. around near-record lows. The 8 increase in loan losses from sustainable high…so coming Some analysts predict average net charge-off rate— historically low levels, as down is expected,” David that profitability will keep fall- the share of outstanding debt 6 Highest since 2Q 2013 banks set aside more money Nelms, Discover’s chief execu- ing, though it remains signifi- that issuers wrote off as a 1Q 3.5% for future write-offs. They also tive, said in an interview. cantly higher than many other loss—for eight of the largest 4 tightened their underwriting The pickup in returns for banking products. Credit cards credit-card issuers reached a 2 standards, resulting in slowing most banks in the first quarter delivered a projected 3.8% re- nearly five-year high of 3.46% growth. was primarily the result of turn on assets to 14 large in the first quarter, according 0 Card-balance growth in tighter underwriting, which banks highly concentrated in to Fitch Ratings. The increases 2010 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Marchwasup4.8%froma helped slow the rate of loan- the card business last year, have become worrisome indi- *Based on median returns for common shareholders year earlier, compared with a loss increases and the amount compared with an overall cators for some shareholders †Includes American Express, Bank of America, Capital One, 6.1% increase in March 2017 of money banks are setting 1.35% projected return for all of consumers’ inability to pay Citigroup, Discover, JPMorgan Chase, U.S. Bancorp and Wells Fargo from the year-ago period. aside for future losses. U.S. commercial banks, according debts at a time when unem- Sources: Autonomous Research (return); Five of the largest credit- tax-law changes that lowered to payments consulting firm ployment is low. Fitch Ratings (charge off) THE WALL STREET JOURNAL.

ADVERTISEMENT Fox Sets Leaders After Sale The Marketplace To advertise: 800-366-3975 or WSJ.com/classifieds BY AISHA AL-MUSLIM tional media businesses. arations to potentially pursue a In December, Disney said it hostile, all-cash bid for the 21st Century Fox has named agreed to purchase the bulk of same assets, people familiar NOTICE OF SALE the new leaders of what would Fox for $52.4 billion, marking with the matter say. Before the continue as an independent Fox the possible end of an era for Disney deal was reached, Com-           & &+"&!2#6 3%- "0  &                  && &&" 3  "0      enterprise if its pending deal to Executive Chairman Rupert cast had submitted an offer for             & &- 0 ) 0 %+ "    sell much of the company to Murdoch and his family, which the Fox assets that was 16%               &" &! 0 0$  &      !!"#" $%$ &&   '( (  "   & &+  0$  &  "   Walt Disney Co. closes. have a 39% voting interest in higher than Disney’s, but Fox & %)*+  $  % ,      & " &0+ 0%$    "    -.! ) .  ,  "    &! ""!#)+ 0%$ "   "   Lachlan Murdoch will serve Fox. Lachlan Murdoch currently turned it down partly over " &+ %$ "  ,      &+ "2* 0%$ "0-  "     &&& )  % ,   "!    &+ .  %  &"   as chairman and chief execu- serves as executive co-chair- fears that it wouldn’t pass  &!+)/"   0" % ,  ! "    ""/" %$  % +    tive of the so-called New Fox, man of 21st Century Fox and muster with antitrust regula- ! &!++"   "$) %! ,       ""*2 %$ & %  !   + &1 )2 ! % ,  & +&"   & ""&"61 . "  &  +   while Rupert Murdoch will executive co-chairman of News tors, according to a regulatory  &3 )2 ") %! ,  &     ""&"6 . "    !!+    !/ )2 40  ,  &   " ""&"6- . "  "  "" +  serve as co-chairman, 21st Cen- Corp. 21st Century Fox and filing last month and people fa-  +"-4 %$ &  ,  & !    +!/ .0  & &    & &"+)% -0$  %& ,  "     +!3 .0 "   "   tury Fox said Wednesday. Its fi- Journal parent News Corp miliar with the situation.  &&/4! -.) " % ,      ! ""&04 .0 "-%      " &&/ -.) " %" ,  & &   + !&5 77%$  %  "   nance chief, John Nallen, would share common ownership. The new Fox would feature  &!-1 3 %   ,      " &&08 7 "# &  ++   take a broader role as the com- The all-stock Disney deal in- such assets as Fox News Chan-  &! 3 %  #&  ,  "    " +-/!   "204 %     ! ""5#" %$ " %" ,  & !   " "+4 + %)  %!  "   pany’s chief operating officer. volves the sale of the Twenti- nel, Fox Business Network, Fox + "&$ % &.) % ,  & +&   "& 26!  ) "5        "+*#+ %% "2%) " ,      " %"    ! !   The Wall Street Journal last eth Century Fox TV and film Broadcasting Co., Fox Sports,  &"6. .)0$ &"  ,  &    "" 2&   "   &+    !"$+ )0$ "  ,   "   " !&!3.!  .) &     week had reported the ex- studio, cable networks such as Fox Television Stations Group & && " 7 "  ,      " !&"!3  ) 0 &  !   pected roles for Lachlan Mur- FX and National Geographic, and sports cable networks FS1,  !!"& $%$ 03  ,  & "   "! !&"+%!  )        "+ !&%%+ 60    +                   !&%0)" 60 "7$& %+  +   doch and Mr. Nallen, citing international businesses includ- FS2, Fox Deportes and Big Ten     !  " #$  !!"6. $%$ "0  " "   people familiar with the matter. ing Fox’s 39% stake in Euro- Network. “The new Fox will be-           !!"1.! $%$ "   !    "3%*&  0 0! %     & !!" &+ $%$ 0- &  "   It also reported that 21st Cen- pean pay-television company gin as the only media company  "3 1+  0 "0 %      ++")- 2% 0 %  &   & "  0 0" % " +   #'9  ):: %:(:;( ) ( <: = = $< :(9 = .> 19 tury Fox Chief Executive James Sky PLC, and a stake in the solely focused on the domestic  0 ) 0  !    % ( $,? ):( .:(: ??':( ( ? '::' :? ,? @< " / ) 0& % !    A$,?BC >  '( ,'(; ?: ? = ':( ' ::   ;  < $,? Murdoch, Lachlan’s younger streaming business Hulu. market; focused on what Amer-  4 ) "0   !+   $< ) :: @:? D( <(C >  == :( ? < $,? ><,  6! )  & %  !   ',? ?(:(?  'E(:(? F??    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H,: D   ?:,? :(   :( '? = :( (E? ?(  !&1+ )2$ " % " +   :( :( )(D (:  ;( '(:' #:E )>   /== 0 :( ! .& )2 )      : : '> J '9?': '  I< :(J '9?': ' + &-! )2 40 %&     ?'E <( : @C "!"! =:'?  : @C "!+  Borrowing Benchmarks | WSJ.com/bonds  +0" )2 40 % &    : : ??  "" E?  E(, 2? )$ !!    &!4 )2   %  +!   $< $,? ? :,<K : ?,'< ?: ? = < $,? ?  : E?:   ?  +"-) %$    !   H, : ':  :>   ?L @C  ?' < ?'E  ? (  Money Rates May 16, 2018 & +"-)8+ %$ " & &    ,'<:?? = < : E  (D ?', @< A) :: BC   ?  <?  &.%" --% "--  + "&   >< > ?( :( :; <: < : ,'<:?(; = < >( :'',( " & --% -- % "    = (E?( :( ( >< : E>  < ? ,(  ?:  = :( = ?,'< Key annual interest rates paid to borrow or lend money in U.S. and international markets. Rates below are a  &"33 -0  -  "   :??? @C  E= <: :'< 'D': = < ?',   ? :? : ;(  &"30 -0  - " "   ?, ?:(:  < ==' <: ?,'< ?', <:? ( ( ;? ,(  < guide to general levels but don’t always represent actual transactions. ! &"+-& -0$ ) %!  +   ',? ' = +&& :? :(  :( : (  ?? = ( E :( + &"+ -0$ ")  " "   = < E?(? = ?: ' @C  ?' : :(  =,?  ;E :( >::( Week —52-WEEK— Week —52-WEEK— & &&/) -.) "& %  !   @< <:( :?   C :( @EC  ? ?,'< < :(?  '( (? ( Inflation Latest ago High Low Latest ago High Low & &+"&!2#*+ 3%- "0  ! &+   '(('( >< :( ?,'< ?:  :? < $,? ? ('??:  : E?:  April index Chg From (%) 2.49438 2.51813 2.52375 1.39906 level March '18 April '17 Treasury bill auction Six month One year 2.76148 2.77094 2.78031 1.69511 BANKRUPTCIES BUSINESS OPPORTUNITIES TRAVEL 4 weeks 1.655 1.660 1.720 0.695 U.S. consumer price index 13 weeks 1.890 1.840 1.890 0.905 Euro Libor 250.546 0.40 2.5 All items 26 weeks 2.035 2.000 2.035 1.020 One month -0.398 -0.401 -0.397 -0.420 257.025 0.16 2.1          Save Up To 60% Core Three month -0.352 -0.353 -0.351 -0.389           Secondary market -0.313 -0.317 -0.274 -0.339      First & Business International rates Six month One year -0.233 -0.243 -0.144 -0.263      INTERNATIONAL Fannie Mae  Week 52-Week      Major Airlines, Corporate Travel 30-year mortgage yields Euro interbank offered rate (Euribor) Latest ago High Low           !" # Never Fly Coach Again! 4.288 4.244 4.288 3.253 -0.371 -0.371 -0.366 -0.374  $%& '   www.cooktravel.net 30 days One month  ()&& ( 4.317 4.273 4.317 3.281 Three month -0.326 -0.327 -0.325 -0.332 (800) 435-8776 Prime rates 60 days       Six month -0.272 -0.269 -0.250 -0.279 *   +    ' U.S. 4.75 4.75 4.75 4.00 Other short-term rates One year -0.188 -0.189 -0.129 -0.194       Canada 3.45 3.45 3.45 2.70              !"  #   $  %!& ' 1.475 1.475 1.475 1.475 Japan Week 52-Week Value 52-Week Latest Traded High Low             (   #  Latest high low                  )  *+, %( -. Policy Rates ago        DTCC GCF Repo Index Euro zone 0.00 0.00 0.00 0.00 ,  - +  (  ,   Call money Treasury 1.789 34.040 2.068 0.791 &(&.&(/ ' */   0  /  $  1/ 2       THE Switzerland 0.50 0.50 0.50 0.50 3.50 3.50 3.50 2.75 1.803 96.810 1.971 0.794 3  * 4/ 0'   3  04 (/ &  ( Britain 0.50 0.50 0.50 0.25 MBS  04 (/ &    04 (/ &    04      MARKETPLACE 1.50 1.50 1.50 (/ & 5  ( - 4 , 4 ./   '  ( Australia 1.50 Commercial paper (AA financial) Open Implied $  1* 2 & 4&6 / & '   0 & Settle Change Interest Rate 0 (   3      &   & 0 &   ADVERTISE TODAY Overnight repurchase 90 days 2.17 2.19 2.31 1.04   *6&6  )   3  *  &  DTCC GCF Repo Index Futures *. 0 &( 0  / &( 3  (& ' 0/ 3 U.S. 1.84 1.78 2.18 0.76 Libor */& ( 3 ( 0  3 & (   &   Treasury May 98.208 -0.005 1163 1.793 1.92851 1.93875 1.00356 7 ) &3) & */   (     U.S. government rates One month 1.93500 Treasury Jun 98.040 unch. 732 1.960 ) & ) 04* 4/ 0'890)  :/ 0 ' (800) 366-3975 Three month 2.32563 2.35575 2.36906 1.17172 Treasury Jly 97.925 unch. 464 2.075 3  3/  &0 3   3     7 (   Discount      !"#$ $ %& %'() $* +'' ,-   For more information visit: ;&  /*90 & 1:/ 3    &02 ( www.earn11.com 2.25 2.25 2.25 1.50 Notes on data: '/  ) 0) '  */&  ) &3 &0 * wsj.com/classifieds U.S. prime rate is the base rate on corporate loans posted by at least 70% of the 10 largest U.S. banks, ) &&6 ((   /)* ( ) & (( up to Federal funds and is effective March 22, 2018. Other prime rates aren’t directly comparable; lending practices vary &  *(' 3  ) & ,       (  EARN 11% 3 *90 &6   (&6   / < ) &  INVESTING IN 1st MORTGAGES Effective rate 1.7300 1.7300 1.7300 0.8600 widely by location; Discount rate is effective March 22, 2018. DTCC GCF Repo Index is Depository Trust & Clearing Corp.'s weighted average for overnight trades in applicable CUSIPs. Value traded is in .   (   &  /( '  ' " = # Short Term, High Yield, Low LTV. High 1.9500 1.9500 1.9500 1.0625 (   &6    (     3 Secure & Great Monthly Income. billions of U.S. dollars. Federal-funds rates are Tullett Prebon rates as of 5:30 p.m. ET. Futures on the  /( ' %/  = # © 2018 Dow Jones & Company, Inc. Low 1.6900 1.6800 1.7100 0.7500 DTCC GCF Repo Index are traded on NYSE Liffe US.  (  ' > = # Call 800-359-1111 All Rights Reserved. Bid 1.6800 1.6800 1.7200 0.8200 Sources: Federal Reserve; Bureau of Labor Statistics; DTCC; SIX Financial Information; Offer 1.7200 1.7200 1.7400 0.8300 Tullett Prebon Information, Ltd. .

B10 | Thursday, May 17, 2018 **** THE WALL STREET JOURNAL. BANKING & FINANCE SEC Says Court Ruling Hurts Investors

Regulator hasn’t been Wednesday. Now, under the the early part of the past de- has given up since the Kokesh what we as Congress can do to amount since at least 2009, court’s decision, the SEC has cade. A lower court ruled in decision. Mr. Peikin said the insure that bad actors aren’t according to Cornerstone Re- able to collect more only five years to sue bad ac- 2005 that Mr. Kokesh should $800 million tally stems from able to profit from their mis- search, an economic consult- than $800 million in tors after a fraud occurs. pay $34.9 million in disgorge- enforcement cases that are in behavior and their fraudulent ing firm. “We can’t reach back be- ment, an amount his attorneys litigation or have been settled actions?” said Rep. Bill Huiz- Cornerstone reported this penalties from firms yond five years and pull argued was excessive because since the court’s ruling. enga (R., Mich.), who is chair- week that the SEC’s highest money out of the pocket of the SEC could reach back only Congress could change the man of the subcommittee that settlement with a public com- BY DAVE MICHAELS wrongdoers and return it to five years to calculate fines. law to give the SEC more time met on Wednesday. Rep. Caro- pany in 2018 was $14 million, investors,” SEC enforcement The SEC argued that dis- to file charges against people lyn Maloney (D., N.Y.) also by far the lowest amount in WASHINGTON—U.S. securi- co-director Steven Peikin told gorgement, or forfeiting ill- and firms suspected of de- raised the prospect of giving any half-year of its data set, ties regulators haven’t been a panel of the House Financial gotten gains, wasn’t a penalty frauding investors. The SEC the SEC more time. which covers the past eight able to get more than $800 Services Committee. “This is because the money goes to has been aided by an abun- “Absent an extension of the years. million in disgorgement of ill- going to have a significant im- pay back harmed investors. dance of whistleblower tips in statute of limitations, we’re The SEC officials told gotten gains since a 2017 Su- pact on the recovery we The Supreme Court, in a unan- recent years, but says it some- going to live with this,” Mr. House lawmakers that penalty preme Court case limited the achieve for investors.” imous opinion, decided that times still discovers well-con- Peikin said. “But there will be totals aren’t the best measure time they have to recover The Supreme Court case, disgorgement is a penalty and cealed frauds too late. cases where there is ongoing of their caseload. Stephanie funds for harmed investors. Kokesh v. SEC, focused on an thus subject to a five-year Two of the committee’s top fraud for years and we don’t Avakian, the co-director of The amount is a meaningful SEC investigation of Charles statute of limitations that cov- Republican and Democratic discover it until some of that SEC enforcement, said a better percentage of the total fines Kokesh, an executive accused ers such fines. members appeared open to money is out of our reach.” gauge is whether the regulator that the Securities and Ex- of stealing money from thou- Republicans and Democrats writing legislation to extend The SEC obtained fines recoups money for victimized change Commission imposes sands of small investors who on the House panel appeared the statute of limitations for against public companies to- investors and succeeds in ex- on wrongdoers, a top SEC offi- put cash into funds that he taken back by the magnitude seeking disgorgement. taling $65 million during the pelling bad actors from the fi- cial told House lawmakers managed during the 1990s and of disgorgement that the SEC “What I want to know…is first half of 2018, the lowest nancial industry. Fintech Firm Circle’s Equity Valuation Soars

BY TELIS DEMOS firm Blockchain Capital and Tusk Ventures, as well as A digital-currency startup more money from existing in- backed by Goldman Sachs vestors IDG Capital, Breyer Group Inc. is now worth about Capital, General Catalyst, Ac- $3 billion after a new fund- cel and Digital Currency raising round. Group. Goldman wasn’t among Circle Internet Financial the new round’s investors. Ltd. disclosed the new valua- Five-year-old Circle’s first tion Tuesday, which made it product was designed for buy- one of the most highly valued ing bitcoin and moving tradi- financial-technology startups tional money between individ- in the U.S. uals by using bitcoin as a The increase in the Boston- medium of exchange. But in based trading firm’s value, the past year, its other busi- more than seven times the ness, facilitating big trades of level achieved at a prior fund- digital currencies, has surged raising in 2016, stems from in volume and revenue. the recent explosion of inter- That desk, called Circle est in bitcoin and other so- Trade, says it has traded about

MICHAEL BUCHER/THE WALL STREET JOURNAL called digital assets. $4 billion in the past month, The cryptocurrency-obsessed surged to 8,300, carrying a sense that this was the dot-com boom from the late 1990s all over again. Indeed, despite a 40% de- handling trades from institu- cline this year, bitcoin is still tions, companies and wealthy making fortunes for compa- individuals, Circle said. The nies that deal in the volatile company has said it generated Crypto Enthusiasts Mob Conference currency. In particular, it $250 million in revenue from shows how some of the big- November to January. BY ALISON SIDER AND BEN EISEN big money in bitcoin. gest winners from last year’s By one measure, Circle is SEC Launches Site lators say are red flags, includ- “We thought it would be a 1,375% surge in bitcoin, which the most valuable U.S. crypto- Seth Kaye, a pink-haired de- To Combat Scams ing celebrity endorsements and cheeky way of getting our was bested by other tokens in- currency startup. Its $3 billion signer, arrived in New York for guaranteed returns on invest- name out there,” said Greg cluding ether, may be the ser- equity valuation surpasses the Consensus crypto confer- ment. The mock token sale in- Dwyer, a spokesman for the vice firms that have formed to that of Coinbase, which raised ence this week, hoping that cludes a “white paper” to ex- virtual exchange BitMEX, facilitate cryptocurrency trad- money at a $1.6 billion valua- someone would talk to him Washington wants you to plain the fake project, which is which rented the cars and said ing and investment. tion late last year, according about his idea to fund solar know what a cryptocurrency styled as a partnership with the move was a spoof on the Those firms include Coin- to Dow Jones VentureSource. projects with a digital currency. scam looks like, so regulators the travel industry. HoweyCoin obsession with Lambos. base Inc., the most popular Circle is one of a handful of What he found was a mix of made one up. will be the “coin of the realm” “Some of my friends are consumer bitcoin wallet, and so-called over-the-counter “cool techie people” and The Securities and Ex- for travel, the paper says. millionaires now, but they’re Bitmain Technologies Ltd., a market makers who augment “greedy assholes”—though he change Commission, an 84- Regulators say investors down to earth,” said Codey Chinese builder of computer the smaller-value trades on ex- did eventually run into some- year-old agency not known for should be suspicious of token Vargas of his compatriots who chips for digital-currency changes, alongside such firms one who might help along his its digital communications sales that offer discounts to were early crypto investors. transactions that is leading the as Cumberland Mining. project. savvy, on Wednesday launched early buyers. The HoweyCoin Mr. Vargas was talking to peo- $110 million investment round As part of the funding, Bit- The price of a bitcoin has a website that touts a fake ini- site advertises tiers of dis- ple about a TV show he was in Circle announced Tuesday. main also will join Circle’s new dropped more than 50% since tial coin offering, an unregu- counts, including a “double 25% working on called Sharkchain, The fundraising, one of the project to launch new digital December, but enthusiasm for lated way of raising funds that discount” for buyers who in- a play on Blockchain, the tech- largest ever among crypto- coins that can be exchanged cryptocurrencies and related has raised more than $12 bil- vest by June 1. nology that underpins bitcoin. startups, also includes new in- for a fixed amount of tradi- projects has hardly been lion. The SEC says many ICOs People who click on the At the end of the days, the vestments by venture-capital tional, or fiat, currency. dented, judging by the throngs are probably fraudulent, with “Buy Coins Now!” link are crypto crowd lined up behind that descended on the New bad guys evading investor pro- taken to an SEC webpage that velvet-rope lines around Man- York Hilton, where the fourth tections and selling digital to- says: “If you responded to an hattan to get into after-parties. New Crypto King annual conference took place. kens that turn out to be investment offer like this, you Some invites were hard to get: Large U.S. crypto/blockchain private fundraisings Bankers and accountants worthless for the buyers. could have been scammed— Greg Rempe, who provides found their way into the mix. The SEC’s fake token, HoweyCoins are completely tech services for blockchain Circle 2018 $110 million And of course, there were “HoweyCoin,” plays up many of fake!” companies, said he didn’t make droves of people pitching ini- the features of ICOs that regu- —Dave Michaels the cut for one event because R3 2017 107 tial coin offerings, a means of he didn’t meet the minimum Coinbase 2017 100 raising money by issuing digi- investment threshold. tal tokens that has attracted didn’t seem to deter the crypto- healthy dose of glitz and sense Bankers and other tradi- Coinbase 2014 80 heavy scrutiny from regulators. obsessed—8,300 people at- that this was the dot-com boom tional business people got the Circle As the conference opened tended, up from 2,700 last year. from the late 1990s all over cold shoulder, with many in 2016 60 Monday, lines snaked through All three floors were wall-to- again. One booth hocked “crypto the crypto world viewing them Digital Asset 2016 60 the Hilton; some participants wall people, with sessions such jewelry,” including an $8,700 as graybeards. Uphold said they waited as long as two as “Boosting Blockchain To- gold Super Bowl-size ring with “They don’t want to talk to 2018 58 hours to get in. Tickets started gether” and “Brands, Seals and the bitcoin logo. Outside, three me,” said Ville Sointu, a Ripple 2016 55 at $1,000, but some paid as Crypto Collectibles.” Lamborghinis hugged the curb, banker from Finland who had much $3,000 at the door. That Throughout, there was a a symbol for those who made flown in for the conference. Source: Dow Jones VentureSource THE WALL STREET JOURNAL.

Trojan, chief executive of BJ’s The Russell 2000 had ral- SMALL Restaurants Inc. said on the lied after the Nov. 8, 2016, firm’s April earnings call. election and in the period “This is helping improve res- leading to the passage of the ContinuedfrompageB1 taurant traffic everywhere, tax cuts late last year, only to ing regulations and we’re and we are a key beneficiary.” give up its gains as investors reducing taxes, [small busi- BJ’s shares are 44% higher for moved back into the stocks of ness] managers are going to the year. fast-growing multinational feel more confident,” said A measure of confidence companies, especially those in Randy Gwirtzman, a co-man- among small-business owners the technology sector. ager of Baron Discovery Fund, edged up in April to remain Small-cap-focused funds saw a $226 million fund that fo- near records, buoyed by opti- some of their biggest monthly cuses on small-cap companies. mism around consumer spend- inflows in years in late 2016 “We really think this environ- ing, lower taxes and strong and early 2017, only to then ment can continue, and valua- earnings, according to a sur- suffer 14 straight months of tions for companies aren’t out vey from the conservative- outflows through April, accord- of the ordinary in terms of be- leaning National Federation of ing to Morningstar Inc. data. ing overly expensive.” Independent Business. Any signs of a slowdown in Smaller publicly traded “Consumers are confident the U.S. economy, which has companies broke away from in the U.S. economy, and tax appeared to gather momentum the broader market in March reform has added a layer of following a slow start to the and pushed higher, even as optimism this year: Consum- year, could once again lift mul- bouts of volatility related to ers were more prevalent at tinationals past their smaller fears of protectionist trade boat shows and they were not peers, analysts say. policies and missteps by tech- lookers, they were buyers,” But for now, many are feel-

nology companies caused the MINTAHA NESLIHAN EROGLU/ANADOLU/GETTYJack IMAGES Springer, chief executive ing optimistic, citing the tail- S&P 500 to slide. Consumers at boat shows ‘were not lookers, they were buyers,’ says Malibu Boats CEO Jack Springer. of Malibu Boats Inc., said on winds from tax cuts and stron- One reason why small caps the company’s May earnings ger consumer spending. withstood the turmoil: Inves- search note last month. U.S. and the rest of the world start of the spring despite a call. Shares of Malibu Boats Outflows among small-cap tors have bet that continuing “When you think about has also contributed to the run-up in gasoline prices. Signs are up 47% for the year. funds appear to be easing, too, skirmishes over trade policy what’s going on with trade rally in small caps, whose for- of strength among consumers Not all analysts are con- with redemptions totaling just between the U.S. and China, and tariffs, small caps tend to tunes are more closely tied have boosted the fortunes of vinced that small caps can $128.4 million in April, the among other nations, are less be much more domestically than multinationals to fluctua- smaller businesses, especially sustain their rally. With inves- weakest in more than a year, likely to dent profits among oriented, so they would be less tions in the U.S. economy. given household spending ac- tors becoming increasingly after investors put nearly $770 domestic firms. The S&P 500 affected,” said Sameer Sa- Broad measures of the U.S. counts for more than two- bullish, small caps could run million into growth-focused gets about 30% of its revenue mana, global equity and tech- economy continue to show thirds of U.S. economic output. in danger of becoming a small-cap funds, according to from outside the U.S., com- nical strategist at Wells Fargo signs of expansion, with Com- “Middle-income consumers crowded trade, something Morningstar. pared with 21% for the Russell Investment Institute. merce Department data on are finally starting to spend at that outperforms the broader “Small caps will basically 2000, according to a Bank of The recent divergence in Tuesday showing Americans rates we would expect in an market until it suffers a sud- go as the economy goes,” said America Merrill Lynch re- growth outlooks between the ramped up spending at the economic recovery,” Gregory den reversal. Wells Fargo’s Mr. Samana. .

THE WALL STREET JOURNAL. **** Thursday, May 17, 2018 | B11 MARKETS Oil Supply Hits Three-Year Low Treasury Yields Glut of the past few years has evaporated Maintain as production cuts took hold, IEA says Elevation

BY CHRISTOPHER ALESSI BY AKANE OTANI

Commercial oil stocks in in- Treasury prices inched dustrialized economies have lower following a mixed batch fallen to their lowest level in of economic data, driving the three years, the International yield on the 10- Energy Agency said Wednes- CREDIT year note to a day, in the latest sign that the MARKETS fresh multiyear global supply glut has been high. mopped up and the market re- The yield on balanced. the 10-year Treasury settled at In its monthly oil market 3.093% on Wednesday, com- report, the IEA said commer- pared with 3.082% Tuesday, cial oil invento- remaining at its highest clos- ENERGY ries for the Or- ing level since July 2011. MARKETS ganization for Bond yields, which rise as Economic Coop- prices fall, struggled for direc- eration and De- tion overnight as North Korea velopment countries declined threatened to pull out of a in March by 26.8 million bar- June summit and amid con- rels month on month to 2.819 cerns that a new antiestablish- billion barrels. That is 1 mil- ment government in Italy lion barrels below the latest could raise the chances of the five-year average metric country leaving the euro.

widely used by oil-market par- ANDREY RUDAKOV/BLOOMBERG NEWS Signs of geopolitical uncer- ticipants to assess the rebal- The International Energy Agency lowered its global oil-demand forecast for 2018 to 1.4 million barrels a day from 1.5 million barrels. tainty helped drum up some ancing process. demand for Treasurys, al- The IEA suggested the though analysts warned bonds drawdown in stocks was evi- Crude Prices Keep U.S. oil prices is spurring a Below the Mark would likely remain under dence that efforts led by the Marching Higher wave of exports of U.S. crude. The Organization for Economic Cooperation and pressure in the absence of sig- Organization of the Petroleum Oil was shipped abroad at a Development countries' crude inventories have nificantly weaker U.S. eco- Exporting Countries to cut rate of 2.56 million barrels a fallen below their five-year average. nomic data. crude output had succeeded in day last week, according to EIA Economic reports were clearing up excess global sup- U.S. crude prices settled up data. But pipeline bottlenecks OECD stocks, amount above or below five-year average mixed Wednesday, showing ply that has weighed on the oil 18 cents, or 0.3%, at $71.49 a are keeping some oil from Crude and other natural-gas liquids Refined petroleum U.S. housing starts falling market since late 2014. barrel on the New York Mer- reaching the Gulf Coast. 250 million barrels more than expected in April, OPEC and 10 producers out- cantile Exchange. Brent, the “The local market flooded but industrial output—reflect- side the oil cartel, including global benchmark, rose 85 but not the balance of the 200 ing everything produced by Russia, have been holding back cents, or 1.1%, to $79.28 barrel world,” said John Kilduff, found- factories, mines and utilities— 150 crude production by roughly on ICE Futures Europe. ing partner at Again Capital. rising for a third straight 1.8 million barrels a day since Oil prices have climbed Members of OPEC have 100 month. the start of last year. The more than 18% this year, pledged to ramp up production “The recovery in residential agreement, which was ex- boosted by production cuts by if needed. However, for now, it 50 housing construction remains tended in November, is set to major producers tightening is “business as usual” as the 0 an incomplete story with dan- expire at the end of this year. supplies and increased geopo- cartel continues to adhere to ger signs on the horizon from “For the first time since litical tensions amid rising un- its agreement to cut supplies, –50 higher interest rates,” wrote 2014, OECD stocks were below ease in the Middle East. said Stephen Brennock, an ana- Chris Rupkey, chief financial the five-year average metric The nearly $8-a-barrel dif- lyst at brokerage PVM. –100 economist at MUFG. And the widely cited to measure the ference between global and —Sarah McFarlane 2014 ’15 ’16 ’17 ’18 data on industrial output came success of the OPEC/non- Source: International Energy Agency THE WALL STREET JOURNAL. with a caveat, too, with in- OPEC” agreement, the re- creases in mining production, ported noted. Since the OPEC result of production outages in meaning world oil demand back of strong compliance Iran exports around 2.4 mil- driven by rising oil prices, be- accord was implemented, Venezuela, according to the should average 99.2 million with the OPEC-led plan. lion barrels a day of crude, ac- hind much of the move, Mr. OECD stocks have declined by IEA. barrels a day in 2018. The IEA The market also has been cording to the IEA. The U.S. is Rupkey said. 233 million barrels, the agency However, the Paris-based attributed the downward revi- bolstered by geopolitical risk set to reimpose economic Together, the data provided added. organization lowered its sion mainly to higher oil to supply. President Donald sanctions on OPEC member investors few reasons to make OPEC crude output fell global oil-demand forecast for prices. Trump’s decision earlier this Iran, which will frustrate the big moves following Tuesday’s month on month in April by this year to 1.4 million barrels Crude prices climbed by month to pull the U.S. out of OPEC members’ oil output and selloff, which had marked the 130,000 barrels a day to 31.65 a day from a previous estimate more than 50% in the second the Iran nuclear deal sent oil further reduce global oil sup- biggest one-day advance in the million barrels a day, mainly a of 1.5 million barrels a day, half of last year, largely on the prices above 3½-year highs. plies. 10-year yield since March 2017. Dollar Is at Stocks Get a Boost From Retailer Rebound Highest vs. BY AMRITH RAMKUMAR Euro in 2018 AND DAVID HODARI Higher Ground The SPDR S&P Retail ETF has risen in four straight sessions to its U.S. stocks climbed, lifted highest level since January. BY DANIEL KRUGER by gains in shares of retailers despite worries about tighter $50 The dollar rose versus the financial conditions and geo- euro amid concerns about a political tensions. Jan. 22 $48.91 new coalition government in It- Investors have been con- 48 aly, while edging broadly lower cerned recently about rising as the pace of rising bond inflation and interest rates May 16 yields moderated and cooled pushing up $46.95 demand for the currency. WEDNESDAY’S borrowing 46 The WSJ Dollar Index, MARKETS costs, but which measures the currency some ana- against a basket of 16 others, lysts ex- declined less than 0.1% to pect strong earnings and eco- 44 86.87, ending a two-session nomic data to buoy stocks. streak of gains. Still, the index Corporate earnings are in- is at its second-highest closing creasing at their fastest pace 42 level this year. in years, and some expect a January February March April May The dollar rose 0.3% against wave of share buybacks to also LAURA BUCKMAN/BLOOMBERG NEWS the euro to $1.1807, its highest fuel indexes. Target was among the S&P 500’s best performers, gaining 2.9%. Source: FactSet THE WALL STREET JOURNAL. late New York level against the Although the yield on the unified currency since Dec. 18. 10-year Treasury note has hit Jones Industrial Averaged rose in the most recent quarter and More investors now are an- at a speed that’s too difficult The dollar’s rise relative to its highest level since 2011, 62.52 points, or 0.3%, to lifted its targets for fiscal ticipating three additional to deal with,” said Jeff Garden, the euro was fueled by con- some analysts don’t think that 24768.93. The blue-chip index 2018. Federal Reserve interest-rate senior research analyst and cerns about the formation of a mark is high enough to hurt remains 6.9% off its record hit Other retailers such as Tar- increases this year compared portfolio manager at Lido Ad- new governing coalition in It- stocks in the long run. in January. The S&P 500 get and L Brands were also with the central bank’s previ- visors. “This has been coming aly. Two Italian antiestablish- “We don’t believe that added 11.01 points, or 0.4%, to among the S&P 500’s best per- ous projection of two. Higher for a long time.” ment parties are seeking to those specific levels dictate 2722.46, with nine of its 11 formers, rising 2.9% and 2.6%, rates tend to push up borrow- Elsewhere, the Stoxx Eu- set up a coalition government the end of this expansion; it’s sectors rising, and the tech- respectively. ing costs and Treasury yields, rope 600 edged up 0.2%, with that investors worry could in- justthemarketshavetoget oriented Nasdaq Composite Rosy retail sales data Tues- making stocks less attractive the index’s basic resources and crease the chances of the comfortable and adjust to a climbed 46.67 points, or 0.6%, day also have supported con- to some investors. technology sectors among the country exiting from the euro. higher rates regime,” said Mi- to 7398.30. sumer stocks and expectations Still, some investors think best performers. “The dollar rally is running chael Hans, chief investment Macy’s shares surged $3.24, forrobustgrowthintheU.S., markets can withstand higher Early Thursday, Japan’s a little out of steam,” said Erik officer of Clarfeld Financial or 11%, to $33.17, after the de- though the figures also reig- rates as long as the Fed sticks Nikkei Stock Average rose Nelson, a currency strategist Advisors. partment-store chain exceeded nited worries about higher in- with its gradual pace of tight- 0.47%, and the Shanghai Com- at Wells Fargo Securities. On Wednesday, the Dow same-store sales expectations terest rates. ening. “I don’t think it’s been posite Index was down 0.02%. Italian Bonds, Bank Shares Drop on Worries of a Euro Exit

BY MIKE BIRD Central Bank to write off €250 draft was out of date and de- UniCredit, Banca Mediola- Concerns Climb billion ($296 billion) of gov- tails had changed significantly, num and Banco BPM each Italy's government-bond yields moved more sharply Political uncertainty re- ernment debt. and that more recent discus- down between 4% and 5.4%. upward against their German peers, with the biggest turned to Italy as investors The market “was running sions didn’t put Italy’s mem- “With a public debt of 130% daily increase in spreads since the U.K's EU referendum. dumped Italian bonds and under the understanding that bership in the common cur- of GDP, it remains quite a risk, bank stocks, worried that a 5 Star had dropped its anti- rency into question. especially with these parties, Spread between 10-year Italian and German government-bond yields new antiestablishment govern- euro rhetoric. The document But bond investors took because they won’t step for- 1.50 percentage points ment has increased chances of [on Tuesday] was a cold note, with spreads between 10- ward with reforms. They might the country’s exit from the euro. shower in that regard,” year Italian and German gov- even step back,” said Fabrizio 1.45 On Sunday, the populist 5 said Giada Giani, Italian econ- ernment bonds rising from 1.28 Quirighetti, co-head of multias- Star Movement and anti-immi- omist at Citigroup. percentage points in late trad- set at SYZ Asset Management. gration League party reached “Even discussing the idea of ing Tuesday to as high as 1.5 Yet Italian stocks have out- 1.40 a broad agreement for a new a parallel currency or figuring points Wednesday. The move performed their European government. Tuesday, Huff- out a coordinated exit from represents the largest single- peers and government-bond 1.35 ington Post Italia posted the monetary union, the very day increase in the spread spreads are still below their a draft government pro- fact that it’s put in a docu- since the U.K. vote to leave the levels at the end of 2017. 1.30 gram that proposed the intro- ment suggests there are very European Union in June 2016. Before the election, ana- duction of procedures within strong forces pushing in that TheFTSEMIB,Italy’slysts had judged the prospect 1.25 the eurozone to allow coun- direction,” she added. benchmark equity index, of a coalition of antiestablish- 6 a.m.7 8 9 10 11 noon 1 2 3 4 tries to quit the euro and said The 5 Star Movement and dropped 2.3% Wednesday. Ma- ment parties to be a remote Source: Tradeweb Note: Through 4 p.m. in London THE WALL STREET JOURNAL. they would ask the European League on Wednesday said the jor banks led the decline, with yet concerning one. .

B12 | Thursday, May 17, 2018 **** THE WALL STREET JOURNAL. MARKETS Argentina’s Woes Trip Up Big Investors

BY JULIE WERNAU Returns for stock funds that invested heavily in Argentina have plunged in the past month. they did so in Argentina near AND IRA IOSEBASHVILI the end of last year, following capital-market overhauls and 10% How many Argentine pesos MSCI Argentina Index Argentina’s central bank Argentina’s ailing currency midterm elections that reaf- and stock market are pound- one U.S. dollar buys key policy rate firmed support for Mr. Macri. ing funds managed by some Many of these investors of the world’s biggest inves- 14 Argentine pesos 4500 50% also were betting that MSCI tors, including Fidelity In- would elevate Argentina to its vestments, T. Rowe Price Emerging Markets Index, 4000 40 Group Inc. and Morgan Stan- 16 which includes more ad- ley, reversing some of the vanced developing countries outsize gains they enjoyed 18 3500 30 and would likely bring more last year. money into Argentine stocks These investment firms of- 5 from investment firms that ten own Argentine stocks 20 3000 20 follow the index. Those new through specialized funds inflows caused the country’s that invest in some of the proportion of the MSCI Fron- world’s least developed coun- 22 2500 10 tier Markets Index to balloon tries, known as frontier mar- to 24% last year, as stocks Scale inverted to show kets, or through Latin Ameri- weakening peso surged. can funds. Because 24 2000 0 Now, some dedicated fron- Argentina’s stocks represent 2017 ’18 2017 ’18 2016 ’17 ’18 tier managers say, the more about 19% of the MSCI Fron- opportunistic investors are tier Markets Index, even 0 fleeing as quickly as they money managers that have came in. positions at less than the in- “They don’t follow the dex weighting still have sig- LOSSES OR GAINS* country closely enough and nificant exposure to the coun- Frontier markets funds now they’re panicking,” said try’s stocks and have taken a at T. Rowe Price, Morgan Oliver Bell, a frontier-markets beating. Stanley and Ashmore portfolio manager at T. Rowe Frontier markets funds at Eaton Vance Group have 16% or more Price, who has 20% of his T. Rowe Price, Morgan Stanley Emerging markets of their portfolios in portfolio in Argentina stocks. and Ashmore Group PLC have Argentine stocks Many investors have been 16% or more of their portfo- –5 spooked by a series of emer- lios in Argentine stocks, ac- gency interest-rate increases cording to Morningstar data. that began last month, as Ar- Their funds have suffered de- Wasatch Ashmore Group gentina’s central bank has Frontier clines between 5% and 8% Frontier moved rates up to 40%. over the past month, Morn- BlackRock Emerging markets and Latin T. Rowe Price Argentina said last week Latin America ingstar said. Emerging mar- America-focused stock funds at Frontier that it is in negotiations with kets and Latin America-fo- Fidelity, BlackRock and Eaton Vance the International Monetary cused stock funds at Fidelity, have 4% or more of their holdings Morgan Stanley Fund for an emergency loan Fidelity Frontier BlackRock Inc. and Eaton Latin America in Argentine stocks. to shore up its finances, as Vance Corp. are also down the country faces looming in- –10 between 2.5% and 5%, in large 0% 5 10 15 20 flation and a possible slow- part because of their holdings down in growth. PERCENTAGE EXPOSURE TO ARGENTINA STOCKS in Argentina stocks. “The country is doing ev- The Argentine peso’s sud- Note: Data for 238 funds with exposure to Argentine stocks *Between April 17 and May 15, 2018, in base currency erything right,” Fidelity’s Mr. den collapse this year seemed Sources: Morningstar (funds); Tullet Prebon (currency); Thomson Reuters (MSCI); Argentina’s central bank (rate) Ana Rivas/THE WALL STREET JOURNAL. Pruett said, adding there has to catch even longtime inves- been a “crisis of confidence tors off guard. then, but is still down 17% was having trouble refinanc- last year, when investor opti- debt sale for a developing that’s weighing on the cur- “We went into a meeting, since late April, when the ing this debt would further mism surged with the new, country. Last year, the gov- rency.” the peso was down 1%, we country began intervening in rattle investor sentiment and business-friendly government ernment sold 100-year bonds With 4% of assets invested come out and the peso is currency markets. punish Argentina’s financial led by President Mauricio with a yield of only 7.9%. in Argentina, his fund has down 5%,” said William Pru- Many investors decided to markets. The government said Macri. The country’s stock market fallen more than 7% over the ett, portfolio manager for the sell before the central bank late Tuesday that 100% of the Argentina resolved a 15- rose 77% in 2017, while local- past month. Mr. Pruett said Fidelity Latin America Fund. tried to roll over about $30 expiring debt was successfully year-long dispute with credi- currency bonds offered yields he hasn’t changed his expo- The dollar rose nearly 9% billion in short-term, peso-de- covered. tors in 2016 and returned to of about 20%. sure to the country because against the Argentine cur- nominated securities known Many of the big investment markets with a $16.5 billion Those returns attracted in- he believes the administration rency on Monday. The peso as Lebacs on Tuesday, as any firms increased their bets on bond offering, which at the vestors who didn’t normally is making the right moves to has rebounded a bit since signs that the government Argentina’s stocks and bonds time was the largest-ever invest in frontier markets but stabilize the selloff. HEARD ON THE STREET Email: [email protected] FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard Emerging Markets’ Weakest Links Macy’s Results Are a

Who’s next? The fear of product. sanctions this year and is Miracle on 34th Street contagion is stalking emerg- Those two countries’ vul- Standing Out down 7.5% against the dollar. ing markets again, but Ar- nerability has been exacer- Current-account deficit as a Notably, however, it has re- Macy’s was brimming with new concept stores like gentina and Turkey have put bated by domestic policy share of gross domestic product, bounded from its lows and is with optimism when it re- Macy’s Backstage, its off- themselves in the firing line missteps, especially on mon- 2018 forecast slightly up against the dollar ported results for the end of price business. Yet it was while others have distanced etary policy. Turkey faces a in May even as clouds have 2017: It had recorded posi- also driven by Macy’s deci- themselves from it. credibility challenge, with Turkey 5.4% gathered over emerging mar- tive sales growth for the sion to shift its “Friends & The shakeout in emerging President Recep Tayyip Er- kets, helped by surging oil first time in three years. Yet, Family” sale from the second markets sparked by the “ta- dogan saying he would seek Argentina 5.1 prices. That, in turn, may with the shares up 18% so far quarter to the first. Same- per tantrum” of 2013 put the to exert greater influence on South Africa 2.9 weigh on the deficits of this year, skepticism store sales increased 4.2% spotlight on countries with monetary policy, which has crude importers. And then abounded. Analysts at Mor- for the quarter. relatively wide current-ac- sent the lira to a record low. India 2.3 there is politics, a potential gan Stanley and Deutsche If one strips out the pro- count deficits. The turmoil But many other nations Indonesia 1.9 worry for investors in Brazil Bank put out bleak notes motional sale, though, same- that has hit some vulnerable have narrower current-ac- and Mexico, where elections warning of declining sales store sales would have risen countries as U.S. rates have count deficits than in the Mexico 1.9 are looming. and limited upside. only about 1.7%, according to risen started with similar past, having taken account of A further rise in the dollar Macy’s has done it again, Macy’s. Brazil 1.6 weak links, but there are what happened in 2013. and U.S. Treasury yields— though, reporting first-quar- That is still slightly better fewer immediately obvious Their currencies are under Source: International Monetary Fund with the 10-year yield now ter earnings that smashed than analysts’ expectations follow-on targets. less pressure this time. THE WALL STREET JOURNAL. decisively above 3%—will expectations. of a 1.4% increase, but it sug- Right now, the spotlight is South Africa, for instance, put more pressure on emerg- It posted earnings per gests that Macy’s may strug- on Argentina, where the ran a current-account deficit given up its gains against ing markets in general. For share of 48 cents compared gle to maintain its momen- peso has fallen more than of 5.9% of GDP in 2013 on the dollar this year but is now, though, Turkey and Ar- with a consensus estimate of tum in the sales-free second 23% against the dollar this the IMF’s numbers and the down only 0.5% in May. In gentina are being singled out 37 cents as measured by quarter. year and the country is seek- rand fell around 20% against Latin America, current-ac- because they are different FactSet and revenue that The company isn’t sitting ing support from the Inter- the dollar that year. But the count deficits for Mexico and from other emerging-market rose 3.6% to $5.5 billion, ex- still as it bets on new ven- national Monetary Fund, and forecast deficit for 2018 is Brazil are forecast at less nations. Investors are right ceeding the estimate of $5.4 tures. It wants to bring Turkey, where the lira has substantially narrower, at than 2% of GDP in 2018. to be nervous that these are billion. Macy’s Backstage to the fallen more than 15%. Both 2.9%, and there is enthusi- Deficits aren’t the only the first cracks in a broader The strong quarter has West Coast and it recently stand out for having current- asm around the political and thing for investors to worry crisis, but contagion may be prompted the retailer to bought Story, a New York account deficits estimated by economic change that new about, of course. Russia runs an issue only for those with raise its outlook for 2018. concept store. Macy’s also the IMF in 2018 at more President Cyril Ramaphosa a surplus, but the ruble has pre-existing conditions. Macy’s now expects earnings has a new brand experience than 5% of gross domestic may bring; the rand has been battered by new U.S. —Richard Barley for the year between $3.75 officer in Story’s founder and and $3.95 a share, 5% more CEO, Rachel Shechtman. The than 2017 and a 20-cent in- focus on innovation and agil- crease over its previous 2018 ity is smart. outlook. The shares rose by As the recently flounder- More Drug-Price Drama Is on the Way nearly 11% Wednesday. ing retailer keeps raising its The retailer’s momentum outlook, though, it also risks The next leg of the Trump ting involved. “We know that der pressure. reflects Macy’s healthier in- creating expectations it can’t administration’s plan to Sticker Shock certain brand-name manu- Investors should recall ventory and willingness to meet. lower the cost of drug prices Annual Revlimid sales facturers are abusing the that the surging Nasdaq Bio- experiment—for instance, —Elizabeth Winkler could get ugly for investors. system by blocking access to technology Index plunged by As soon as Thursday, the $12 billion samples, and hiding behind nearly 40% from its July Food and Drug Administra- 9 FDA’s rules when they do it,” 2015 peak when price-goug- OVERHEARD tion plans to publish a data- Health and Human Services ing headlines begat promises base of complaint letters 6 Secretary Alex Azar said in a from politicians to crack from generic-drug companies 3 speech on Monday. down on the sector. At issue “Beginning our journey to company’s business practices in to the agency alleging anti- He said the agency has re- was pricing practices from rebuild trust with society” the U.S., Greece and Korea. competitive activities from 0 ceived more than 150 com- companies like Turing Phar- aren’t words investors want to Novartis says it is on the branded pharmaceutical 2010 ’15 ’20 plaints from generic manu- maceuticals and Valeant hear from a company they case. The company plans to roll companies. Note: 2018-20 are analyst projections facturers regarding Pharmaceuticals interna- own. out a new professional prac- At issue are FDA rules un- Source: FactSet challenges accessing drug tional, which weren’t even in Novartis told its sharehold- tices policy and an independent der a program called REMS, samples. the index. ers just that Wednesday in its ethics board. The company also which often call for limited For example, Mylan sued While the FDA doesn’t This time, the biotech in- investor day presentation. The plans “deployment of big data distribution of drugs to pro- Celgene for allegedly have the authority to halt dex is roughly flat so far this company highlighted “select analytics system for compli- tect against possible safety thwarting efforts to develop this practice entirely absent year, which should cushion ongoing issues” like the contro- ance monitoring.” issues. Generic-drug compa- a generic version of blood new legislation, that is false any blow from new scrutiny. versial payments to Essential Missing from the slide deck, nies have long contended cancer drug Revlimid back in comfort for investors in the Still, with midterm elec- Consultants, the firm of Mi- however, was the biggest news that branded companies 2014. Mylan alleged that owners of the patents. The tions looming in the fall, in- chael Cohen, Donald Trump’s of the day: Novartis announced game the rules to withhold those tactics helped stave off likelihood of congressional vestors shouldn’t be sur- personal lawyer, as well as its general counsel plans to re- sufficient samples needed to cheaper competitors. action only needs to increase prised if a sequel is in store. other investigations into the tire on June 1. develop cheaper alternatives. Now regulators are get- for stock prices to come un- —Charley Grant