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S.& P. 500 1,685.96 U 0.63 Media A former analyst is charged in con- SportsWednesday D Pages 11-15 Dow industrials 15,520.59 1.38 Gains for ABC nection with the SAC case. 3 Nasdaq composite 3,616.47 U 17.33 David Muir and his col- One More Day 10-yr. Treasury yield 2.61% U 0.01 leagues beat “NBC Nightly With sales picking up, Chrysler’s McNabb is among those The euro $1.3262 D 0.0002 News” last week. 5 net income rises 16 percent. 5 returning, and retiring. 11

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WEDNESDAY, JULY 31, 2013

Inequality JPMorgan Looks to Pay to Settle U.S. Inquiries Warrantless

By JESSICA SILVER-GREENBERG only $1.6 million. In America: and BEN PROTESS JPMorgan is bracing for an even larger Cellphone JPMorgan Chase is pulling out its penalty stemming from shoddy mortgage checkbook to help mend frayed relation- securities it sold to the government. In a Tracking The Data ships with the government. sign that JPMorgan is struggling to pla- But its new and conciliatory approach cate some authorities, people briefed on — a departure for the bank and its leader, the matter said, a housing regulator re- Is Upheld Is Sobering Jamie Dimon, who generally has taken a cently rejected an offer the bank made to hard line with the authorities — is yielding settle those claims. By SOMINI SENGUPTA The good news is that Presi- mixed results. Government officials, The bank is also quietly courting offi- dent Obama appears to have de- stung by the bank’s past displays of hu- cials from the Securities and Exchange In a significant victory for law cided to devote the rest of his bris, may drive up the price of settle- Commission, which is investigating the enforcement, a federal appeals presidency to trying to tackle the ments, or worse, resist the overtures alto- bank’s multibillion-dollar trading loss in court on Tuesday said that gov- forces behind the yawning ineq- gether. London last year, the people say. It is un- ernment authorities could ex- uities that have ham- The hefty payouts started on Tuesday clear whether the S.E.C. investigators are tract historical location data di- EDUARDO strung social and eco- when JPMorgan struck a $410 million set- receptive to JPMorgan’s advances. rectly from telecommunications nomic mobility, erod- tlement with the nation’s top energy reg- The bank’s new approach comes down, carriers without a search war- PORTER ing the living stand- ulator, which had accused the bank of de- at least in part, to dollars and cents. While rant. ards of the middle vising “manipulative schemes” to trans- the settlements are expensive, they pale The closely watched case, in ECONOMIC class. SCENE form “money-losing power plants into in comparison to the sort of legal bills that the United States Court of Ap- The bad news is powerful profit centers.” The agreement come with long — and embarrassing — le- peals for the Fifth Circuit, is the that he may not be up to the task. was a record fine for the Federal Energy gal battles. RICHARD DREW/ASSOCIATED PRESS first ruling that squarely address- Consider the ideas he outlined Regulatory Commission, whose most re- The conciliatory tack also reflects a Jamie Dimon of JPMorgan Chase is trying es the constitutionality of war- during his speech at Knox Col- cent settlement with a big bank totaled Continued on Page 4 to mend relationships with regulators. rantless searches of historical lo- lege last week. Some are old. cation data stored by cellphone Some are new. Some are good, service providers. Ruling 2 to 1, some less so. But the main prob- the court said a warrantless lem with the set is that the politi- search was “not per se unconsti- cally feasible — those that he ar- tutional” because location data ticulated with the most specifici- was “clearly a business record” ty — are the least likely to change and therefore not protected by the nation’s economic dynamics. the Fourth Amendment. Connecting the nation’s The ruling is likely to intensify schools to broadband is a good legislative efforts, already bub- idea. So is tweaking the tax code bling in Congress and in the to help ordinary Americans save states, to consider measures to for retirement. require warrants based on prob- Measured against what the able cause to obtain cellphone lo- president called “the forces that cation data. have conspired against the mid- The appeals court ruling dle class for decades,” however, sharply contrasts with a New they are less than overwhelming. Jersey State Supreme Court opin- The president’s most powerful ion in mid-July that said the po- proposals, by contrast — includ- lice required a warrant to track a ing investment in infrastructure, suspect’s whereabouts in real a higher minimum wage and uni- time. That decision relied on the New Jersey Constitution, where- as the ruling Tuesday in the Fifth Circuit was made on the basis of Inequities that the federal Constitution. The Supreme Court has yet to demand more than a weigh in on whether cellphone lo- cation data is protected by the president’s words. Constitution. The case, which was initially brought in Texas, is not expected to go to the Su- preme Court because it is “ex versal preschool for 4-year-olds — remain as unlikely as ever to Continued on Page 8 emerge from the nation’s parti- san divide. Many opponents simply reject Mr. Obama’s basic premise. Some researchers on the right of Trade Fight the political spectrum argue that inequality is not, in fact, gaping. Others contend that middle class Over Solar stagnation is a myth concocted FRED R. CONRAD/THE NEW YORK TIMES by the left to justify retro govern- Steven Donzinger won an $18 billion judgment against Chevron for fouling the environment in Ecuador. ment activism à la 1970s. Benefits After the president’s speech, the conservative blogger James Pethokoukis of the American En- A Bystander terprise Institute posted on Twit- An Avenger, on the Defensive ter: “I feel like I am in Middle- By DIANE CARDWELL earth hearing about return of Sauron.” The long-running trade con- Lawyer Who Beat Chevron in Ecuador Faces a Trial of His Own flicts over solar panels between The problem is that weaving China and the United States and modest policy proposals through By CLIFFORD KRAUSS Europe have sown dissatisfaction the tiny spaces allowed by the na- all around, leaving many manu- tion’s partisan stalemate is un- Steven R. Donziger — environmental hero or charla- facturers of solar materials com- likely to bear much fruit. A better tan, depending on whom you talk to — is one of the toughest plaining that the market is still strategy might be to articulate — lawyers around, or slightly crazy. unfair. forcefully — the nature of the Possibly both. But one country not involved in problem and build a political con- For the last two decades Mr. Donziger has been bat- the disputes has already bene- sensus that would ultimately lead tling the Chevron Corporation over an environmental disas- fited from them and, with Satur- to long-delayed changes to Amer- ter that happened in the jungles of Ecuador. Two years ago, day’s agreement between China ican society. he won an $18 billion case against the oil giant, the kind of and the European Union, stands It could go something like this: victory that most lawyers can only dream of. to benefit again: Taiwan. The United States remains But Chevron has yet to pay a penny of the award, and has turned the tables on him. Now, he is defending himself Last October, after finding that among the richest countries in Chinese companies were receiv- the world. National income per against a Chevron lawsuit charging that he masterminded a conspiracy to extort and defraud the corporation. The trial ing unfair government subsidies person trails only that of Norway, and selling their merchandise be- Luxembourg, Singapore, Switz- is scheduled for October. Across a table in his two-bedroom apartment on the RODRIGO BUENDIA/AGENCE FRANCE-PRESSE — GETTY IMAGES low the cost of production, the erland and Hong Kong. Yet de- United States imposed tariffs of spite its riches, in many areas the Upper West Side of Manhattan, Mr. Donziger for the first time in recent years spoke publicly about the personal tra- ous following among environmentalists. He and his sup- roughly 24 to 36 percent on im- United States looks surprisingly, porters say he is being vilified — potentially ruined — for ported Chinese panels. But the depressingly backward. vails that he says have engulfed him. He says shadowy men have trailed him. Watched his family. Sat in cars outside his unmasking Chevron’s questionable environmental record. ruling included a major loophole; Infant and maternal mortality Chevron, which is suing him and his associates for damages it applied only to panels made are the highest among advanced home. He had his apartment swept for bugs, but found noth- ing. that could reach billions of dollars, says he is simply a con from Chinese solar cells, the final nations. So is the mortality rate of artist. major components that are as- children under the age of 20. Life All of that might sound like the ravings of a Grade A It is a remarkable turn of events for Mr. Donziger, who sembled into finished modules. expectancy — at birth and at age conspiracy theorist. But Mr. Donziger, who played basket- ball with Barack Obama at Harvard Law School, has a seri- Continued on Page 2 Many manufacturers were 60 — is among the lowest. able to skirt the taxes by buying Teenage pregnancy rates are their cells elsewhere, mainly not only higher than in other rich from Taiwan. Continued on Page 9 This month, for instance, the Neo Solar Power Corporation, a leading cell manufacturer based in Taiwan, announced its sixth consecutive month of growth, Plan Aims to Enliven ’s Financial District, Long Called Soulless with a 74 percent increase in rev- enue in June over the month be- By GEORGI KANTCHEV than in anthropological practice. fore, in part because of increased production capacity since its Rather than the Parisian business hub PARIS — On Bastille Day 1989, when merger with another manufac- its founders described, it often seems more The Grande President François Mitterrand inaugurat- turer, DelSolar. like the isolated end of a spoke that has ed the , a 40-story postmod- Taiwanese producers, which Arche in La highlighted a crucial flaw in urban plan- ern bookend about three miles to the west have been able to command a 4- Défense, the ning — a concern with making architectur- business hub in of the Arc de Triomphe, it seemed its own to 5-cent per watt premium over form of triumph. al statements — rather than an affinity for Chinese-made cells, have been Paris, which crit- The ceremony celebrated a decade-long the people in and around the buildings. operating at fuller capacity and ics say has be- building boom at La Défense, the sprawl- When non-French planning experts as- have sold out inventory faster come an isolated ing array of office buildings long envi- sess La Défense, they say it shares the than the Chinese, said Shayle end of a spoke sioned as Paris’s answer to Lower Man- same problems as the Canary Wharf com- Kann, vice president of research that is discon- hattan or the City of London. plex in London, where developers have at GTM Research, which tracks nected from the But La Défense, begun during the presi- tried to supplant the City with Big Archi- clean-tech industries. And Hare- tecture and whose artificial origins may be rest of the city. dency of Charles de Gaulle in the late 1950s on, a solar cell and module manu- and built just west of Paris by bulldozing hard to overcome. The experts look more facturer in China, recently an- slums and paving over farmland, has al- favorably on the somewhat organic mix of nounced plans to build a large ways worked better in architectural theory Continued on Page 6 Continued on Page 8 AGNES DHERBEYS FOR THE INTERNATIONAL HERALD TRIBUNE Nxxx,2013-07-31,B,006,Bs-BW,E1

B6 N THE NEW YORK TIMES BUSINESS WEDNESDAY, JULY 31, 2013 SQUARE FEET

RECENT SALE A Plan to Reshape Paris’s Financial District With New Life million $4.3 From First Business Page 2639-2641 Jerome Avenue (between business and residential of Lower Man- West 192nd Street and West Kings- hattan, which has evolved over the last century. bridge Road) “La Défense has always suffered Fordham Manor, Bronx from a creative hypothermia,” said Woj- A local private investor has bought ciech Czaja, an Austrian architecture these two 1912 five-story, mixed-use critic. “It is a sad area because it is at- mospherically and emotionally per- walk-ups with a total of 42,230 square ceived as a business district only.” feet. The two buildings feature four The public agency that manages the stores and 38 apartments — 26 complex has hired an architectural firm three-bedrooms, 10 two-bedrooms to draft a new master plan in hopes of and two one-bedrooms. making the grandiose vision for La Défense a livable reality. It is difficult to BUYER: Timac Realty Company determine whether the plan can with- SELLER: 2639-2641 Jerome L.L.C. stand the headwinds of Europe’s con- BROKER: Amit Doshi, Besen & Associ- tinuing financial woes, and France’s lin- ates gering recession and an unemployment rate near 11 percent. But it would be wrong to call La RECENT LEASE Défense a business failure, because it is home to 1,500 head offices, including those of 15 of the world’s 50 largest com- panies. French corporations with their signature headquarters here include the oil and gas giant Total, the big bank Société Générale and Areva, a leading builder of nuclear power plants. And de- velopers continue to build. Critics have long derided the mixed

commercial, residential and retailing PHOTOGRAPHS BY AGNES DHERBEYS FOR THE INTERNATIONAL HERALD TRIBUNE complex, which covers 1.6 square kilo- La Défense can feel like a ghost town after 5 p.m. and on weekends, once the district’s office workers have left. meters, or 0.62 square miles, as dehu- SUZANNE DeCHILLO/THE NEW YORK TIMES manizing. While about 20,000 mainly low- and middle-income people live — for example, areas in the north along here, the vast central plaza can feel like the Seine and in the so-called inner rim a ghost town after 5 p.m. and on week- of Paris, which includes the district of $39/square foot ends, once most of the district’s 150,000 Saint-Denis, home of France’s national $490,698 approximate annual rent office workers have left by train, bus or stadium, the Stade de France. subway to more desirable parts of Paris Société Générale, which has 20,000 42 West 39th Street (between Avenue or its less surreal suburbs. employees at its La Défense headquar- ters, plans to transfer several thousand of the Americas and Fifth Avenue) “There is nothing good about living here,” said Carlin Pierre, 54, who works people to the eastern Paris suburb Fon- Manhattan at a waste disposal center in the district tenay-sous-Bois, where it is building a A boxing merchandiser and licenser, and resides in one of the Brutalist com- new business campus. established in 1910, has taken a 10- munal, rent-subsidized housing blocks “A lot of the towers in La Défense are tucked amid the high-rise office build- going to empty out as companies look to year, five-month lease for 12,582 ings. “Sure, it’s a nice area to come as a rationalize their usage of office space,” square feet on the third floor of this 18- tourist, or even to work,” Mr. Pierre said Alexis Motte, chief executive of story building. said, “but it’s terrible to live in La Mobilitis, a real estate advisory agency. TENANT: Everlast Worldwide Défense.” “The market in La Défense is clearly oversupplied.” TENANT BROKER: Jonathan Anapol, Alessandra Cianchetta, a partner at Prime Manhattan Realty AWP, the firm mapping the master plan, The vacancy rate in La Défense acknowledges the enormousness of her stands at 7.5 percent, compared with 3.3 LANDLORD: 42-52 West 39th Street task. “La Défense as a concept is a bit percent in the second quarter of 2008. L.L.C. obsolete,” Ms. Cianchetta said. “There The , a semicylindrical LANDLORD BROKER: David Levy, Adam & is no interaction, no hospitality here.” glass tower that formerly housed the Company Real Estate Vacancy rates at La Défense, long an French headquarters of I.B.M., is un- up-and-down indicator of the French A building site near the Grande Arche in La Défense, where three new, ar- dergoing a top-to-bottom renovation by economy, are once more on the rise. chitecturally ambitious office towers are under construction. its developer, Icade. But so far, Icade is FOR SALE Next to the Grande Arche is the site of struggling to find enough tenants for its what was to be a 71-story office tower, Stern said, it is rare to spot locals buy- the plaza, a pedestrian slab of some 30 reopening later this year, people in- , commissioned with much ing groceries in one of the complex’s hectares, or 74 acres, that acts as a roof volved in the market say. Icade declined $7.25million fanfare in 2008 to the French architect shopping malls or to see families with to underground shops, a bus terminal to comment. Jean Nouvel. It has been canceled. strollers on the weekends. and a hangarlike train and subway de- But some developers evidently think Still, three new, architecturally am- A confined office area can work in pot with none of the charm of most eventual success is simply a matter of 158 Rivington Street (between Suffolk bitious office towers are under con- timing. Consider , a some big American cities, but mostly Paris train stations. and Clinton Streets) struction at La Défense. And the re- project featuring a pair of towers because they are connected to the sur- Those who pass through each day, Manhattan cently financed Hermitage Plaza planned for the western bank of the rounding neighborhoods. Lower Man- but live elsewhere, often make their project on the Seine River at the east- Seine and designed by the British archi- hattan “has residential areas right at its peace with La Défense. This 7,452-square-foot Lower East ernmost edge of La Défense, if it opens tect Norman Foster. edge with streets threaded through to The master plan of AWP calls for a Side mixed-use six-story walk-up, gut- as planned in 2018, will include Europe’s “The idea is to create a Manhattan in the city itself,” Mr. Stern said. complete makeover of the transporta- renovated in the 1990s, has two retail tallest residential building. Some of the tion center, adding entertainment sites the French style in La Défense,” said spaces entirely occupied by Alife, a continued activity, of course, has to do Despite these misgivings, Mr. Stern’s Emin Iskenderov, a Russian developer firm was willing to take the commission to the public plaza and building foot- sneaker boutique. Above it are nine with the long lag between conceiving a bridges to connect the now largely iso- who secured a loan this year from Sber- free-market apartments — eight one- commercial real estate project and get- to design , a tower un- bank, which is based in Moscow, to der construction in a dense cluster of lated slab with the surrounding neigh- bedrooms and a two-bedroom pent- ting it built — a speculative roll of the borhoods. build the towers. dice that has paid little heed to shorter- high-rises on the northern edge of the The complex will be only a short walk house with a terrace. The building, on district. There are new business districts on the block of the Streit’s Matzoh factory, term considerations like France and Eu- the competitive metropolitan Paris of- from one of La Défense’s two subway rope’s current economic travails. “Carpe Diem is not just another aloof, stations. And it is near the Pont de also offers 2,151 square feet in air objectlike office building sitting on a po- fice market that real estate agents say “La Défense’s ambitions to create a are luring companies with lower prices Neuilly, a bridge that pedestrians can rights. new kind of urbanism have been disap- dium,” Mr. Stern said. “It is a dual- cross the river to reach the upscale oriented piece of connective tissue link- OWNER: 158 Rivington Property Inc. pointing,” said Robert A. M. Stern, the Paris suburb Neuilly-sur-Seine. ing the center of La Defénse with the BROKER: Michael DeCheser, Massey dean of the Yale School of Architecture ONLINE: VIEWS OF LA DÉFENSE It might feel more like part of Paris, in Knakal Realty Services and principal of his namesake firm. peripheral roads of ,” a mid- other words, than most of the rest of La Because “the residential areas are dle-class municipality. A slide show of the district, which Defénse does. too isolated in their own zones,” Mr. In any case, there are no tenants yet was conceived as an answer to “La Défense,” said Ms. Cianchetta, signed for Carpe Diem, which is to be Manhattan’s financial district, but is the master planner, “is like an iceberg ROSALIE R. RADOMSKY Catherine Chapman contributed report- completed in September. deserted after business hours. that is disconnected from the areas e-mail: [email protected] ing. A defining feature of La Défense is nytimes.com/businessday around it.”

Pentagon Is Buying 71 More F-35 Fighters, Home Prices Jumped 12.2% in May

WASHINGTON (AP) — Home higher and was the best reading And Is Getting Them a Little Bit Cheaper prices jumped 12.2 percent in since January 2008. May compared with a year earli- All 20 cities in a Despite the slight drop in July, By CHRISTOPHER DREW er, the biggest annual gain since closely watched index confidence remains well above The Defense Department on March 2006. The increase shows year-earlier levels. And consum- Tuesday announced an agree- the housing recovery is strength- showed improvement. ers are more optimistic about the ment in principle to buy 71 more ening. current job market. F-35 fighter jets from Lockheed The Standard & Poor’s/Case- “Over all, indications are that Martin at somewhat lower prices Shiller 20-city home price index proportion of overall sales. Fore- the economy is strengthening than last year. Pentagon officials released on Tuesday also surged closed homes are usually sold by and may even gain some mo- said they would pay 4 percent 2.4 percent in May from April. banks at low prices. mentum in the months ahead,” less for 36 of the radar-evading The month-over-month gain “Typical home values have ap- said Lynn Franco, an economist jets under the new orders and 8 nearly matched the 2.6 percent for the Conference Board. increase in April from March — preciated at roughly half this percent less than last year’s price Amna Asaf, an economist at the highest on record. pace for the past several months, for the other 35. Capital Economics, attributed the The price increases were wide- which is still very robust,” Ms. People briefed on the latest Gudell said. July drop in confidence to rising deal, which includes ancillary spread. All 20 cities showed gains Ms. Gudell said higher mort- gasoline prices. But she said the equipment, said it was worth in May from April and compared with a year earlier. gage rates and a probable in- confidence index remained at a more than $7 billion. After years crease in the number of homes level that was consistent with of delays and cost overruns, mil- Prices in Dallas and Denver reached the highest level on for sale in the coming months stronger growth in consumer itary officials have been under should slow the pace of price spending in the July-to-Septem- pressure to reduce the cost of records dating to 2000. That is the first time since the housing bust gains and stabilize the housing ber quarter. what is by far the Pentagon’s DARIN RUSSELL/LOCKHEED MARTIN, VIA REUTERS market. largest program, which could that any city has reached a Three F-35 Joint Strike Fighters (rear to front) AF-2, AF-3 and record high. The S.& P./Case-Shiller index Consumer Confidence cost $392 billion for more than AF-4, flying over Edwards Air Force Base in California. covers about half of American 2,400 planes. A separate report issued on Index measures attitudes toward Tuesday showed that Americans’ homes. It measures prices com- “There is still work to be done, the economy, 1985 = 100. ed. The Pentagon is building vari- confidence in the economy fell pared with those in January 2000 but these agreements are proof and creates a three-month mov- Lt. Gen. Bogdan sharply crit- ants of the plane for the Air only slightly in July but stayed 85 the cost arrow is moving in the close to a five-and-a-half-year ing average. The May figures are right direction,” said Lt. Gen. icized Lockheed Martin and his Force, the Navy and the Marines. Officials said that the costs had high, a sign that consumers the latest available. Christopher Bogdan, the pro- own staff after he took charge of eased for each customer under should continue to help drive Despite the recent gains, home gram’s executive officer. “We will the program last year. The rela- tionship “is the worst I’ve ever the new contracts. growth in the coming months. prices for much of the country continue to work with industry to seen, and I’ve been in some bad The new contracts also include Home values are rising as are still about 25 percent below 75 identify areas for savings in fu- ones,” he said. He was upset that the first F-35s for Australia, Italy more people are bidding on a rel- the peaks they reached in July ture production contracts.” it took more than a year to nego- and Norway, and a fourth F-35 for atively tight supply of houses for 2006. That is a major reason the The Defense Department said tiate the price of the fifth lot of Britain. sale. One concern is that rising supply of homes for sale remains the lower prices enabled it to buy the jets. Deliveries of jets in the sixth mortgage rates could slow home low, as many homeowners are all the planes it had planned in He sounded much more concil- batch will begin by mid-2014, with sales. But many economists say waiting to recoup their losses be- 65 what will be its sixth and seventh iatory on Tuesday, saying that deliveries in the seventh batch rates remain low by historical fore putting their houses on the purchase lots. That included sev- the two new contracts, which starting by mid-2015. standards and would need to rise market. eral jets that officials had feared were negotiated together in six All told, 10 nations have ex- much faster to halt the momen- Separately, the Conference might be slashed by automatic months, “represent a fair deal pressed interest in buying an ad- tum. Board, a private research group budget cuts under the seques- that is beneficial to the govern- ditional 700 planes. Svenja Gudell, senior econo- based in New York, said on Tues- 55 tration process. ment and Lockheed Martin.” He Aviation analysts have said mist at Zillow, a home price data day that its consumer confidence ’12 ’13 Officials said they would re- said the company and the gov- that the price of the jets must provider, said a big reason for the index dipped to 80.3 in July. That lease more detailed cost data ernment were working together continue to drop for Lockheed recent price gains was that fore- is down from a reading of 82.1 in Source: The Conference Board once the contracts were complet- now to lower costs. Martin to reach that sales target. closed homes made up a smaller June, which was revised slightly THE NEW YORK TIMES