Ayaan Hirsi Ali
BUSINESS & TECH. | B1
OPINION | A15
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TUESDAY, JUNE 14, 2016 ~ VOL. CCLXVII NO. 138
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Business & Finance
icrosoft is buying
LinkedIn for $26.2 billion, its biggest deal ever,
as CEO Nadella seeks to revitalize the company. A1, B1
fund alleged in court that
Goldman took advantage of
its lack of sophistication to
draw it into losing trades. C1
U.S. firms that cut their
tax bills after moving offshore, including Medtronic
and Aon, still enjoy perks
from the government. B1
The Supreme Court made
it easier for patent holders
to win more financial damages from copycats. B1
PwC is in talks with regulators to resolve a dispute on
whether the firm is too close to
some mutual-fund clients. C1
Apple unveiled changes
to its operating systems
and opened its services to
outside developers. B4
The suspect in the Orlando massacre is an example of a threat that has vexed
the FBI: terrorists living in
the U.S. whose self-radicalization is hard to spot. The
agency defended its handling of two previous probes
involving the man. A1, A6-8
Trump suggested that
Obama may be sympathetic
to radical Islamists that he
said inspired the gunman. He
also attacked the president
and Clinton for what he said
are lax immigration laws. A1
Clinton denounced “inflammatory anti-Muslim
rhetoric” and pushed for
an assault-weapon ban. A4
The Supreme Court
struck down Puerto Rico’s
effort to restructure its
public utility debts. A2
findings suggest that the
plane wasn’t brought down
by an abrupt blast. A9
NATO’s head said military spending by Europe and
Canada is set to rise 1.5%, or
$3 billion, this year. A11
North Korean hackers
stole wing designs for a U.S.
jet fighter and photos of spyplane parts, Seoul said. A10
Uganda plans to withdraw troops involved in operations against the Lord’s
Resistance Army rebels. A9
Shanghai police blamed
an airport blast on a worker
with gambling debts who
had warned of suicide. A10
Business News B2-3,6
CFO Journal............. B7
Election 2016......... A4
Global Finance........ C3
Heard on Street.... C8
In the Markets....... C4
Terror in Orlando.... A6-8
U.S. News............. A2-3
World News...... A9-11
s Copyright 2016 Dow Jones &
Company. All Rights Reserved
Flags at the Washington Monument were at half staff on Monday to honor those killed in the Orlando, Fla., shootings.
Gunman Dropped Hints
Of Terror Attack to Come
The threat that has
consumed the agency:
is hard to identify
BY DEVLIN BARRETT
AND DAN FROSCH
An aviation panel
reached a preliminary accord on proposed airlinecybersecurity standards. B3
BY JAY GREENE
The gunman authorities say
massacred 49 people at an Orlando nightclub had proclaimed
he wanted to be a martyr, trav-
BY BETH REINHARD
AND REID J. EPSTEIN
Trump suggested Monday that
President Barack Obama may
be sympathetic to radical Islamists he said inspired the gunman in this weekend’s Orlando,
Fla., nightclub attack, alleging
in a television interview the
president “doesn’t get it or he
gets it better than anybody understands.”
In an address in New Hampshire Monday afternoon, Mr.
Trump used a broad brush to
attack both the president and
presumptive Democratic presidential nominee Hillary Clinton
for what he claims are lax immigration laws that contributed to the Florida attack that
killed 49 people.
“The bottom line is that the
Please see TRUMP page A4
Clinton urges ban on sales of
certain guns................................ A4
eled to Saudi Arabia and
alarmed co-workers with claims
of links to extremists—troubling
hints of a homegrown terrorist
but not enough to lead the Federal Bureau of Investigation to
conclude he was a clear threat.
FBI Director James Comey,
disclosing new details of Omar
Mateen’s background Monday,
said Mr. Mateen took trips to
Saudi Arabia in 2011 and the following year, though Saudi and
U.S. investigations found noth-
The growing possibility that
the U.K. might leave the European Union shook markets
globally on Monday, reflecting
broad concern that next week’s
referendum could slow down
the world’s economy.
Polls suggest that momentum is growing for a vote on
June 23 for Britain to leave the
EU, spurring concerns about a
prolonged stretch of uncertainty that could damage economic growth and trigger
losses in financial markets.
Stocks slumped, Japan’s yen
ized, he said, at least in part on
the internet and had no apparent interactions with overseas
terrorist groups, links that can
alert law enforcement to radicalization.
Mr. Comey defended the
FBI’s handling of two previous
probes involving the 29-yearold Orlando-nightclub terror
suspect, saying there are no indications agents missed clues
that could have prevented the
Please see FBI page A7
Authorities Weigh Deadly
Risks in Hostage Dilemma
broke down a fence that enclosed the patio of Pulse
around 2:15 a.m. Sunday as
Ivory McNeal slipped from his
hiding place behind the potted
plants. “Please don’t shoot!” he
By Arian CampoFlores, Cameron
Minutes earlier, a man identified by authorities as Omar
Mateen had exchanged gunfire
with the uniformed police officer stationed at the club to
gain entrance. “All the music
stopped immediately,” said Mr.
McNeal, who was standing
near the main bar. “The gunshots just kept going, kept going…people starting to fall on
the ground, people running.”
More police arrived and
traded shots with Mr. Mateen,
forcing him to halt his deadly
rampage and retreat into one
of the nightclub’s bathrooms.
As ‘Brexit’ Gains Favor,
Global Markets Swoon
BY RIVA GOLD
Mr. Mateen is an example of
precisely the threat that has
vexed the agency in recent
years: terrorists living in the
U.S. whose self-radicalization is
hard to spot. Despite the actions
that led the FBI to scrutinize
Mr. Mateen, investigators found
nothing that compelled them to
“This is exactly what we’ve
been talking about,’’ said Mr.
Comey. Mr. Mateen was radical-
to the floor,
I lost him’
Cory Richards, whose
Rios Jr., was killed
in the attack
TERROR IN ORLANDO
There he held four or five hostages, Orlando Police Chief
John Mina said. Another 15 to
20 people were hiding in another bathroom. By then, dozens of dead and injured covered the floor of the gay
In the hours that followed,
authorities tried negotiating
with the gunman, who threatened the hostages and hinted
of carrying explosives. They
had to weigh the risk to officers and captives in a forced
entry against the needs of the
injured and the risk of giving
the attacker more time to kill.
“If you have a case where a
person is ready to die, wants to
die, then it makes an enormous
challenge for negotiations to be
effective,” said Gary Noesner,
the former chief negotiator for
the Federal Bureau of Investigation, now retired.
Dozens of clubgoers, including many injured, were brought
to safety while the gunman
was holed up in the bathroom,
Mr. Mina said.
That was around the time
Mr. Mateen made his 911 calls
to declare his allegiance to Islamic State.
Mr. McNeal, 28 years old,
said he got to Pulse around
midnight with two friends,
passing, as usual, an officer
posted out front. For the next
Please see CLUB page A6
Apple Lets Outsiders In
surged and bond yields tumbled to fresh lows in a broad
flight to safety.
Monday’s biggest losses
were in Asia, where major
stock indexes dropped 3.2% in
Shanghai and 3.5% in Japan. In
the U.S., the S&P 500 dropped
0.8% and the yield on the 10year U.S. Treasury note
slumped to 1.616%, its lowest
since December 2012.
The decline continued early
Tuesday, with Japan’s Nikkei
Please see BREXIT page A12
Vote on U.K. exit from EU
splits London elite................... C1
MICHAEL SHORT/BLOOMBERG NEWS
Global stock markets
slumped, the Japanese yen
surged and bond yields slid
on the possibility that the
U.K. might leave the EU. A1
Private investment in
China has slowed, a report
said, contributing to a 3.2%
drop in Shanghai shares. A10
U.S. stocks fell following
steep declines in Europe
and Asia. The Dow shed
132.86 points to 17732.48. C4
Big Bet on
ANDREW LAMBERSON FOR THE WSJ
UPDATES: Apple revealed changes to its four operating systems,
and emphasized a new willingness to allow non-Apple developers
to add features to its most widely used services, including Siri. B4
Microsoft Corp. snapped up
LinkedIn Corp. for $26.2 billion
in the largest acquisition in its
history, betting the professional
social network can rev up the
tech titan’s software offerings
despite recent struggles by both
The deal is Chief Executive
Satya Nadella’s latest effort to
revitalize Microsoft, which was
viewed not long ago as left behind by shifts in technology. Mr.
Nadella hopes the deal will open
new horizons for Microsoft’s Office suite as well as LinkedIn,
both of which have saturated
their markets, and generally bolster Microsoft’s revenue and
Mr. Nadella said today’s work
is split between tools workers
use to get their jobs done, such
as Microsoft’s Office programs,
and professional networks that
connect workers. The deal, he
said, aims to weave those two
“It’s really the coming together of the professional cloud
and the professional network,”
Mr. Nadella said in an interview
For instance, connecting Office directly to LinkedIn could
help attendees of meetings learn
more about one another directly
from invitations in their calendars. Sales representatives using
Microsoft’s Dynamics software
for managing customer relationships could pick up useful tidbits
of background on potential customers from LinkedIn data.
Microsoft also sees opportunities in Lynda.com, a channel
for training videos that LinkedIn
bought for $1.5 billion last year.
Microsoft will be able to offer
Lynda’s videos inside its own
software, such as Excel spreadsheets.
Mr. Nadella also talked about
giving its Cortana digital assistant access to data from
As for LinkedIn, the deal offers hope to renew decelerating
growth as well as an exit for
Please see DEAL page A12
Deal aims to refresh
LinkedIn’s profile....................... B1
A Texas Town
Goes Huge on
Then backs off as
BY LUKAS I. ALPERT
SPUR, Texas—Nearly two
years ago, this town of cotton
farmers and cattle ranchers in
the rolling plains of West Texas
declared itself the tiny house
capital of America.
The hope was to reverse a
long population decline by luring devotees of the growing
movement of eco-conscious, doit-yourself builders who like to
live in very small houses. Town
officials thought their official
proclamation and elimination of
nearly all building restrictions
would attract the kind of adorable abodes featured on television shows like HGTV’s “Tiny
Some newcomers had other
ideas. In the town of about
1,000 residents located 75 miles
east of Lubbock, talk soon began to surface about plans to
build yurts, straw dwellings and
even underground dugouts resembling something out of
Please see TINY page A12
THE WALL STREET JOURNAL.
A2 | Tuesday, June 14, 2016
Court Blocks Puerto Rico
BY JESS BRAVIN
With 2 Suns Found
JOE RAEDLE/GETTY IMAGES
A k o yA S p e c i A l e d i t i o n 8 x 9 m m
18” c u lt u r e d p e A r l n e c k l A c e A n d m At c h i n g
8 m m S t u d e A r r i n g S S e t i n 18 k w h i t e g o l d .
Supreme Court on Monday struck
down Puerto Rico’s effort to
restructure its public utility
debts, increasing pressure on
Congress to finish work on
pending legislation to help the
U.S. territory address its growing debt crisis.
The court’s 5-2 decision
said Congress, in prior legislation on municipal bankruptcies, didn’t give Puerto Rico
the ability to enact its own
bankruptcy process. The ruling
eliminated the slim chance the
territory could write its own
bankruptcy plan, leaving Congress as the only plausible way
to avoid a disorderly restructuring of Puerto Rico debt.
The island is about $70 billion in debt and has missed
The U.S. House passed a bipartisan bill last week to create a debt-restructuring process for the territory, which
would be overseen by a sevenmember federal board. No federal funds would be spent on
the plan, which awaits action
in the Senate. President Barack
Obama supports the bill.
A spokesman for the Puerto
Rico government had no immediate comment.
“We are grateful for the Supreme Court’s careful consideration of the case, and are
pleased that we now can put
this litigation behind us,” said
Matthew D. McGill, who represents bondholders Franklin Resources Inc. and Oppenheimer
Holdings Inc. as well as an investment adviser, Blue Mountain Capital Management LLC.
The Supreme Court struck down a law allowing Puerto Rico to
restructure its public utility debts. Above, a street in San Juan.
The bondholders hold approximately $1.56 billion in
bonds issued by the Puerto
Rico Electric Power Authority.
The case highlights the island’s unusual status within
the U.S. federal structure.
Congress excluded the territory from authorization it provided U.S. municipalities to restructure their debts under
chapter 9 of the federal bankruptcy code. Puerto Rico interpreted its omission as implicitly providing it with the
authority to address the issue
on its own, and the territorial
legislature enacted a law allowing several public agencies
and utilities to discharge most
of their debts despite creditors’ objections.
Justice Clarence Thomas,
writing for the majority, said
Puerto Rico misread the bank-
At least 1,191 people have
been killed in Islamic Stateaffiliated or inspired attacks
outside Syria and Iraq since
the beginning of 2015. In
some editions Monday, a
chart accompanying the continuation of a Page One article about the Orlando shootings omitted attacks claimed
by the group in Belgium on
March 26, 2016, and Istanbul
on March 19, 2016. It also incorrectly included an attack
in Bamako, Mali. A correct
version of the chart can be
seen at WSJ.com/Corrections.
Etihad Airways owns a
49% stake in Alitalia SpA,
while a group of Italian shareholders has a 51% stake
through the holding company
CAI. A Business & Tech article
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ruptcy code, which he said denied Puerto Rico the power to
authorize its local governments to take advantage of
debt-relief provisions available
to states. “The plain text of the
Bankruptcy Code begins and
ends our analysis,” he wrote,
joined by Chief Justice John
Roberts and Justices Anthony
Kennedy, Stephen Breyer and
Justices Sonia Sotomayor
and Ruth Bader Ginsburg dissented, citing other code provisions. “The government and
people of Puerto Rico should
not have to wait for possible
congressional action to avert
the consequences of unreliable
electricity, transportation, and
safe water,” Justice Sotomayor
wrote in the dissent.
Justice Samuel Alito recused himself from the case.
Astronomers say they have
discovered the largest planet to
date that orbits two suns.
The newfound world, about
the size of the planet Jupiter, is
3,700 light-years from Earth. A
light-year is nearly 6 trillion
It was detected by a team led
by NASA and San Diego State
University using the planet-hunting Kepler telescope. The discovery was announced Monday during a meeting of the American
Astronomical Society in San Diego.
Although the planet is in the
habitable zone—where water
that is essential to life can be
liquid—it isn’t a good candidate
to support life because it is so
big, scientists said.
Creator of Beehive
Hairdo Dies at 98
Margaret Vinci Heldt, who became a hairstyling celebrity after
she created the beehive hairdo in
1960, has died at age 98.
The beehive—a tall, conical
hairstyle—became a phenomenon in the 1960s and evolved
into a style worn for decades as
Hollywood starlets walked red
Ms. Heldt created it at the request of a magazine that published images of the style in February 1960 and named it for its
resemblance to the shape of a
Monday about changes at Alitalia incorrectly said Etihad is
the controlling shareholder of
the Italian carrier.
Walgreen Co. has formally
ended an alliance with Theranos Inc. In some editions
Monday, a Page One What’s
News summary incorrectly
said the drugstore operator
had ended a reliance with
The name of Jaybridge
Robotics Inc. was incorrectly
given as Jaybird Robotics in a
Business & Tech article Monday about the battle for autoindustry talent.
China Life Insurance Co.
previously invested in Uber
Technologies Inc.’s global
business. A Business News article Monday about China Life
investing in Didi Chuxing
Technology Co. incorrectly
said the insurer had invested
in Uber’s China affiliate,
The first name of Calvin
Printer, a spokesman for Dr.
Reddy’s Laboratories, was
omitted in a Business Watch
item Monday about the Indian drugmaker agreeing to
buy eight drugs from Israel’s
Teva Pharmaceutical Industries Ltd.
This summer will mark the
100th anniversary of mail
boat service in Lake Geneva,
Wis. The caption of a photo
accompanying a U.S. News article Saturday about the mail
boat’s couriers incorrectly
said the image showed the
100th annual tryouts for
Readers can alert The Wall Street Journal to any errors in news articles by
emailing email@example.com or by calling 888-410-2667.
WELCOME TO OUR WORLD
Tuesday, June 14, 2016 | A3
ALS Patients, Defying Odds
©T&CO. 2016. DESIGNS ©PALOMA PICASSO
THE WALL STREET JOURNAL.
those who seem to
show improvement for
clues and treatments
BY AMY DOCKSER MARCUS
JUST THE THING
TO CELEBRATE DAD
Introducing Paloma’s Groove™
KIM CHERRY; MICHAEL MCDUFF (RIGHT)
Richard Bedlack has treated
more than 2,000 patients with
ALS, the neurological condition known as Lou Gehrig’s
disease. Almost without exception, his patients get worse
over time and eventually die.
Now, Dr. Bedlack, head of
Duke University’s ALS clinic, is
focusing on a different kind of
patient: someone who seems
to be getting better.
ALS, or amyotrophic lateral
sclerosis, progressively robs
people of the ability to move
their muscles and is fatal, usually within two to five years.
But in a small number of
cases—Dr. Bedlack says he has
verified 23 so far—patients report unexpectedly regaining
lost motor functions for at
least a year. Some attribute
their improvement to supplements or experimental therapies, but acknowledge they
can’t be certain why they
started to improve.
Dr. Bedlack believes that
studying these so-called “ALS
reversals” and trying to determine what, if anything, separates these individuals from
the overwhelming majority of
others may lead to new understanding of the disease and,
potentially, new therapies.
The effort to study people
who seem to defy medical
odds isn’t limited to ALS. The
Resilience Project, started in
2014, is examining genomes of
healthy individuals, trying to
find people who aren’t sick despite having gene mutations
that should cause disease.
For over a decade, a research consortium has followed “elite controllers,” people infected with HIV who
somehow naturally control the
virus without anti-retroviral
medications and don’t develop
AIDS. Studies of patients by
the International HIV Controllers Consortium and other
groups helped identify a genetic signature associated with
controllers, and experimental
therapies are being tested.
“At the beginning, HIV was
this incredible black box,” says
Bruce Walker, director of the
Ragon Institute of MGH, MIT
and Harvard, which operates
the HIV study. “The difficult
thing is, how do you turn other
people into elite controllers?”
Dr. Bedlack says he would
like to do the same for ALS.
Earlier this year, researchers, including Dr. Bedlack, published a paper in Neurology
based on a database of more
than 10,000 patients stripped
of any identifiable information
who are taking part in clinical
trials for ALS treatments.
The researchers found a
So-called ALS reversals include Michael McDuff, above, who couldn’t dress or feed himself in 2013
but now can swallow again and has gained weight, and Kim Cherry, below, whose function has
dramatically improved since his low point in 2012.
small subset—less than 1% of
patients in the database—they
consider ALS reversals, who
had significant improvement
and regained lost function for
a year or more.
Even if the numbers of patients are small, “I think they
are worth studying,” says
Merit Cudkowicz, director of
the ALS clinic at Massachusetts General Hospital in Boston and one of the authors of
the Neurology paper.
Dr. Bedlack says a number
of theories may explain ALS
reversals. Perhaps, he says,
these patients didn’t really
have ALS but an unknown
mimic syndrome. They might
have genetic traits that help
resist the disease. An environmental factor that helped drive
the disease could be removed,
he says, or an unusual treatment the patient tried worked.
To study the phenomenon,
Dr. Bedlack is running two programs. For his Study of ALS
Reversals, he is collecting verified cases of reversals. When
he hears of a case, Dr. Bedlack
gets in touch with the patient.
He asks to review medical records and speak to the doctor.
This summer he will start collecting blood samples of verified cases to be used for whole
genome sequencing and testing for any unusual antibodies.
One participant, Kim Cherry
of Boise, Idaho, was diagnosed
with ALS in 2011. His low point
was in 2012, but his function
has since sharply improved.
The 68-year-old says he tried a
variety of approaches, including treatment in a hyperbaric
oxygen tank and a gluten-free
diet. He thinks his reversal
may be due to a combination
of factors. “ALS is a puzzle,”
says his wife, Kay Cherry.
In cases where an unusual
treatment seems to be involved, Dr. Bedlack’s second
program—Replication of ALS
Reversals—is trying to reproduce the reversal using the patient’s regimen. The first such
trial, based on Michael McDuff,
a 64-year-old former machinist from Westport, Mass., has
enrolled 16 patients and is expected to enroll 34 more. Participants in the trial will report
PatientsLikeMe, a company
that aggregates and analyzes
Mr. McDuff says he first noticed weakness in his arms in
2010 and was diagnosed with
ALS. By spring 2013, he
couldn’t dress or feed himself.
At the suggestion of a friend,
he started taking a supplement
called lunasin—a protein
claimed to have potential
After three months, Mr.
McDuff and his wife noticed
improvements. Today, Mr.
McDuff can swallow again and
has gained weight. He is the
first to say he isn’t cured. But
now, “I have a better quality of
life,” he says.
Health Co-op Sues
To Block Federal Fees
BY STEPHANIE ARMOUR
Maryland’s health cooperative filed a lawsuit Monday
seeking to block the federal
government from requiring it
to pay more than $22 million
in fees for a program designed to cover insurance company shortfalls.
The lawsuit by Evergreen
Health Cooperative Inc. is the
latest twist in the saga of
health insurance co-ops set up
under the Affordable Care Act
to compete against larger, established insurers.
The co-ops were supposed
to help keep premiums down
by injecting competition into
the industry. Instead, 13 of 23
startups that launched successfully have since collapsed,
forcing more than 700,000
consumers to seek new insurance. A number of co-op officials have said they were hurt
by the federal program because of a formula it used to
spread out risk, which they say
hurts them while benefiting
large, already established insurance companies.
The Maryland co-op, in its
lawsuit filed in U.S. District
Court in Maryland, says the
formula—known as “risk adjustment”—is arbitrary and
unlawful. The Centers for
Medicare and Medicaid Services, which oversees the pro-
gram, declined to comment. Officials have previously
said the formula doesn’t discriminate against small insurers.
The program is designed to
spread risk by collecting
money from companies with
healthier populations and distributing it to those with older,
Co-ops have said the current formula is unfair because
they have small market share
and scant data on enrollees’
health status from prior years,
so it may appear that their
customers are healthier than
they really are.
“We’re doing this because it
will be a challenge to us. We
think it’s outrageous,” said Dr.
Peter Beilenson, chief executive of Evergreen Health, in an
interview. “It also impedes our
ability to grow. We need capital to grow.”
CMS held a forum in March
to hear from insurers, co-ops
and others in the industry
about their concerns with the
formula. The Obama administration plans to revise the riskadjustment formula, making
some changes that would go
into effect in 2017, with others
proposed for 2018. The new
formula could include consumers’ prescription-drug use as a
source of data on their health
status in the formula.
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A4 | Tuesday, June 14, 2016
THE WALL STREET JOURNAL.
Political Consequences of Attack Run High
GERALD F. SEIB
n one sense, the cost of
in America actually isn’t
all that high. In nearly 15
years since the 9/11 attacks,
95 Americans have been killed
attacks, according to
one count, including those
who died in
night club over the weekend.
By contrast, more than 35,000
died in fatal car accidents last
Yet any loss of human life
is traumatic, of course. The
economic and psychological
costs are high as well. And
the political consequences are
Like traffic deaths, the
costs of Islamist terror have
become woven into American
life. Orlando will make the
weaving just that much
tighter, even though it isn’t
clear, and probably never will
be, how much of this tragedy
was inspired by Islamist
groups and how much by antigay hatred. The difference this
time is that, thanks to the unfolding presidential campaign,
Americans will get to decide
what kind of approach they
want to confront this problem:
the tough guy or the cool head.
Though it is difficult to
quantify, there is little doubt
that the undercurrent of concern about Islamist terror has
helped contribute to the national mood of anxiety that
forms the backdrop for this
presidential campaign. The
broad theme that seems to run
through the feelings of many
Americans right now is loss of
control—inability to control
their economic fate, inability
to control the level of fairness
in society, inability to control
the country’s borders, inability
to control world affairs.
This is where an ongoing
fear of terror attacks fits in.
Americans are smart enough
to know the actual risk they
face of being the victim of a
terror attack inspired by Islamic State or other jihadist
groups is small. Yet the reminders that the risk is there
are constant and growing. Every trip through airport security, every pass through a
checkpoint to go to a baseball
game, every glimpse of an
Terrorism, Through a Political Prism
American voters see terrorism and national security as one of the
top priorities for the federal government to address. But Republicans
far more than Democrats rank it a top issue. Older voters more than
younger ones also put a high priority on addressing national security.
What should the top priority for the federal government be?
Ages 65 and over
The deﬁcit and
Source: WSJ/NBC News telephone poll of 1,000 registered voters conducted May 15–19;
full sample margin of error: +/- 3.1 pct. pts.
THE WALL STREET JOURNAL.
armed officer at a public
event where there previously
was none is a signal of the
threat. Now, as a result of Orlando, it is likely that added
security at the door of a night
club will be added to the list.
The fears this stepped-up
security generates are never
far from people’s minds. Last
month, when The Wall Street
Journal/NBC News poll asked
Americans to rank the top
priorities for the federal government, 26% listed job security and economic growth as
the top priority, but terrorism
and national security was just
behind at 21%.
Those two concerns actu-
ally are related, because there
is an actual economic cost to
both terrorism and fear of
terrorism. That cost includes
economic activity slowed or
interrupted by terror risks
and the rising cost of security
to prevent terror attacks. Calculating the precise cost is an
inexact science, but one organization, the Institute for
Economics and Peace, has estimated that in 2014 the
global economic costs of terrorism hit $52.9 billion.
That all leads to the political consequences, which the
Orlando shooting figures to
put into sharper relief as well.
The simple partisan impact of
fears of jihadists is mixed.
When voters were asked in the
April WSJ/NBC News survey
which party would do a better
job of dealing with ISIS in Iraq
and Syria, Republicans had a
19-point advantage: 43% said
the GOP would do the better
job, while 24% said Democrats.
ut the choice between
the presidential contenders of those two
parties is considerably more
complex. In that same survey,
37% gave likely Democratic
presidential nominee Hillary
Clinton good ratings for her
ability to handle an international crisis, while just 20%
gave presumptive GOP nomi-
nee Donald Trump good ratings. A whopping 64% gave
Mr. Trump poor ratings.
That’s a reflection that
these two candidates, more
than any other presidential
contenders in the era of terrorism, present starkly different profiles on this subject.
Mr. Trump offers no particular expertise on Islamic
threats or their foreign roots,
but offers a completely new attitude. On Sunday, he blew
past nuances, including exactly
how strong the links to Islam
were in the Orlando attack,
and moved straight to the action phase: We’re not tough
enough; we need to respond.
He takes the primal scream
many Americans have bottled
up and puts it on Twitter.
Mrs. Clinton, by contrast,
offers the cool head Americans have traditionally wanted
in a commander in chief. She
offered empathy for the victims and the hatred gays feel,
a reminder that the U.S. needs
“allies and partners” to win
the long war against Islamic
extremism, and, in her spokeswoman’s words, “a comprehensive plan to combat ISIS at
home and abroad.”
It’s a “comprehensive plan”
candidate versus a “bomb the
hell out of ISIS” one. Elections
are about choices, and this is
BY JANET HOOK
CLEVELAND—Democrat Hillary Clinton, in her first extended response to the massacre in Orlando, denounced
rhetoric” and pushed for
stricter gun laws, including the
reinstatement of a ban on the
sort of assault weapons used
by the Florida gunman.
“If the FBI is watching you
for suspected terrorists links,
you shouldn’t be able to just
go buy a gun,” she said here in
a reference to two prior antiterrorism investigations of
Omar Mateen, the shooter who
was killed Sunday by police.
Those probes were eventually
closed without action taken.
Her remarks Monday offered a sharp contrast to the
reaction of her likely Republican rival, Donald Trump. He
countered in Manchester, N.H.,
by blaming the weekend attack, in part, on lax immigration laws, and appeared to
broaden his pledge to ban
Muslims from entering the
country by including immigrants from any country “with
a proven history of terrorism
against the U.S., Europe or our
The dueling foreign-policy
speeches, on a day when both
candidates initially promised
to avoid the typical campaign
trail sniping, showed voters
just how differently each candidate would respond to the
kind of terror threat posed by
the lone gunman who killed at
least 49 people at a popular
gay nightclub in Orlando over
Mrs. Clinton avoided the
kind of harsh rhetoric that has
defined the early back-andforth between the presumptive
Democratic nominee and her
likely GOP rival. But she did
take some implicit swipes at
Mr. Trump and his angry, partisan response to the Orlando
shootings in a gay nightclub by
a Muslim American who swore
allegiance to ISIS. Among
other things, he has called on
President Barack Obama to resign and Mrs. Clinton to quit
Ban on Sales
Of Certain Guns
Democrat Hillary Clinton denounces ‘inflammatory anti-Muslim rhetoric’ while addressing the Orlando killings in Cleveland on Monday.
the presidential race.
Mrs. Clinton denounced “inflammatory anti-Muslim rhetoric” and politics of division
saying, “We are not a land of
winners and losers.” She contrasted the current political
climate with the bipartisan response in the days following
the Sept. 11, 2001, attacks,
when she was a U.S. senator
from New York, while New
York City’s mayor, the state’s
governor and the U.S. president were all Republicans.
“We did not attack each
other; we worked together,”
she said. “It is time to get back
to the spirit of those days.”
Mrs. Clinton promised that,
as president, she would beef
up counterterrorism measures
and make a top priority of
“identifying and stopping lone
operating on their own, often
with inspiration from ISIS.
She called for more resources for intelligence gathering and law enforcement at
home, and working with allies
to continue military attacks on
ISIS abroad. She angrily called
on the governments of Saudi
Arabia, Qatar and other U.S.
allies in the Middle East to
stop allowing their citizens to
But her most impassioned—
and well received—response
was to make a link between
stopping domestic terrorism
and imposing new restrictions
on guns. She renewed her call
to revive a federal ban on socalled assault weapons.
In his speech, Mr. Trump
attacked Mrs. Clinton’s push to
reinstate the long-lapsed ban.
Mrs. Clinton spoke as the
2016 campaign has been
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Continued from Page One
only reason the killer was in
America in the first place was
because we allowed his family
to come here,” Mr. Trump said
during his a speech here, referring to the New York-born
shooter, Omar Mateen, whose
parents emigrated to the U.S.
The presumptive Republican
nominee’s remarks on Fox
News earlier in the day mark
the latest escalation in his
yearslong campaign to paint
Mr. Obama as unqualified for
office, either by birth or by virtue of his leadership. Mr.
Trump spent much of Mr.
Obama’s first term in office alleging the president wasn’t a
natural-born U.S. citizen despite Mr. Obama’s official Hawaiian birth certificate.
“Look, we’re led by a man
that either is not tough, not
smart, or he’s got something
else in mind,” Mr. Trump said
on Fox News. “And the something else in mind—you know,
people can’t believe it. People
cannot, they cannot believe
that President Obama is acting
the way he acts and can’t even
mention the words ‘radical Islamic terrorism.’ There’s something going on. It’s inconceivable. There’s something going
His remarks drew a rebuke
from the White House. Press
secretary Josh Earnest said Mr.
Obama’s record on fighting Islamic State “speaks for itself”
and “includes a lot of dead ter-
TIMOTHY A. CLARY/AGENCE FRANCE-PRESSE/GETTY IMAGES
GOP candidate Donald Trump spoke in New Hampshire on Monday.
rorists,” as well as an international coalition to confront the
“This president has, time
and time again, sought to advance our interests, to
strengthen our alliances and,
where necessary, order our
military to take action to protect the American people. And
the president has done that in
a way that is smart, that is
tough and has made our country safer,” he said.
Clinton campaign manager
John Podesta also lashed out,
saying Mr. Trump’s speech “offered some disturbing insights
into the dangers of a Trump
White House. Nothing in his
rambling remarks came close
to resembling a real strategy
for fighting terrorists and
keeping our people safe.”
The sharp exchange suggests that Mr. Trump will take
aim during the campaign at
both Mrs. Clinton and Mr.
Obama, who has said he would
work hard to help get her
It also coincides with his
campaign’s attempts to reset
itself after spending a week defending—and revising—his accusation that a U.S.-born judge
of Mexican descent couldn’t
fairly oversee a lawsuit against
the presumptive GOP nominee
because of his proposal to
build a wall on the southern
Mr. Trump’s team also
banned the Washington Post
from covering its events on
Monday after charging that it
wrote a headline on his Fox
News interview that he
deemed unfair. His campaign
called it “a perfect example of
inaccurate coverage” by the
Washington Post Editor
Marty Baron said in a state-
shaken by the Orlando shootings, turning the focus to national-security issues, gun control and questions about which
candidate is better suited to be
commander-in-chief and to
combat terrorism at home and
Both Mrs. Clinton and Mr.
Trump reworked their campaign schedules to address the
The adjustment on both
sides was a reminder of how
abruptly the course of the
presidential campaign may yet
be altered by world events.
ment that the move “is nothing
less than a repudiation of the
role of a free and independent
press.” He said the Post will
continue to cover Mr. Trump
“as it has all along—honorably,
honestly, accurately, energetically, and unflinchingly.”
In addressing the Florida assault in New Hampshire, Mr.
Trump appeared to broaden
his pledge to ban Muslims
from entering the country by
including immigrants from any
country “with a proven history
of terrorism against the U.S.,
Europe or our allies.”
Mr. Obama and Mrs. Clinton—and some leading Republicans—have criticized such a
ban, saying it is counterproductive and feeds the recruitment pitches of terrorist
groups. In an Ohio speech, the
former secretary of state called
for more outreach to Islamic
communities and denounced
Mr. Trump said as president
he would suspend immigration
from any countries or regions
that could present a threat to
the U.S. And he warned that if
Americans “don’t get tough”
about the country’s immigration laws “we’re not going to
have our country anymore.”
Mr. Trump, who has been
widely accused of stoking ethnic and racial divisions
throughout his campaign, cast
his proposal to bar Muslim immigrants as an inclusive, AllAmerican effort to protect
women and people targeted for
their sexual orientation.
contributed to this article.
THE WALL STREET JOURNAL.
Tuesday, June 14, 2016 | A5
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THE WALL STREET JOURNAL.
TERROR IN ORLANDO
30, was a
captain in the
working as a
50, was the
He had been a
Rios Jr., of
25, was on
worked as a
aide and went
Remembering the Shooting Victims
BY KRIS MAHER
AND JENNIFER LEVITZ
Portraits of dozens of
the 49 victims of Sunday’s
massacre at a gay nightclub
in Orlando began to emerge
on Monday, as friends and
family members tried to
come to grips with the sudden violence that took their
loved one’s lives.
Many victims from across
the city’s thriving gay and
lesbian community were in
their 20s and 30s. A large
number were either from
Puerto Rico or had roots
there. Some were dancers,
or performers, while at least
one worked in the travel industry, another at Universal
The range of circumstances that brought people to the Pulse nightclub
only seemed to highlight
the randomness of the violence. One mother was
there with her 21-year-old
son. He survived, but she
A day after the killing,
many people who weren’t at
the club were trying to comprehend what had happened,
while others who had been
there struggled to describe
their last moments with
friends when, at about 2
a.m. on Sunday morning,
gunfire shattered the pulsing
music, transforming the club
into a bloody and chaotic
By Monday afternoon, the
city of Orlando had identified nearly all of the victims,
who ranged in age from 18
The victims included at
least one employee of the
club, Kimberly “KJ” Morris,
37, a former college-basketball player who started
working as a bouncer at
Pulse after moving to Orlando about two months ago.
Ms. Morris had played
basketball when she attended Post University in
Waterbury, Conn. After
that, she worked at a nightclub called Diva’s in Northhampton, Mass., where she
performed in drag as
“Daddy K.” She also had a
passion for mixed martial
“She called me and she
Continued from Page One
two hours, he drank and
danced during the nightclub’s
weekly Latin Night.
Joshua McGill, age 26, arrived about 11:45 p.m. He and a
friend had come to see their favorite bartender. “The night
was great, super authentic Latino music,” he said. They were
dancing near the bar by the patio exit, he said, “no drama, everyone was having a good
At last call, around 1:45
a.m., Mr. McGill and his friends
started to pay their tab. “Not
10 minutes later we all of a
sudden hear three loud bangs.
I’d never heard a gunshot before in person,” he said. The
group ducked out the patio
exit, climbed the patio fence,
and he hid in the parking lot.
Mr. McGill saw a man stumbling about, covered in blood.
“He clearly had two gunshot
wounds,” he said. He later
found a third wound in the
Crafted in gold & platinum
Your Anniversary Immortalized
In Roman Numerals
Family members leaving a senior citizens center on Monday after being notified about the fate of their loved ones.
Basketball Star’s Frantic Call After Being Shot: ‘Come Get Me, Daddy!’
The father of Akyra Monet
Murray, an 18-year-old victim of
the Pulse nightclub shooting,
said his daughter called him
screaming from the venue after
she was shot.
“She was screaming, ‘I’m
shot! I’m bleeding! I’m losing a
lot of blood! Come get me,
Daddy!’ ” Albert Murray said in
an interview Monday. “We
were racing to get her but we
never made it.”
Ms. Murray was a recent
graduate of West Catholic Preparatory High School in Philadelphia, where she was ranked
third in her class and a 1,000point scorer on the basketball
team, the school said.
The Murray family had arrived in Orlando on Friday for a
vacation and to celebrate
Akyra’s graduation, Mr. Murray
said. She went to the club,
which he said admits people 18
and up, with her cousin and a
friend, both of whom were in-
jured but survived.
He said Akyra had been
posting pictures on Snapchat
while having fun at the club,
and his wife had been following
along. He said the call from his
daughter came around 2 a.m.
He heard yelling in the background, and Akyra kept saying
she was bleeding. The cousin,
who was shot in the thigh,
“was texting my wife saying
that someone was shooting
and come now.”
He and his wife sped to the
club, about 35 minutes away. “I
can’t even begin to tell you
how I felt,” he said.
So many police surrounded
the club the family couldn’t get
close. They went to three or
four hospitals but couldn’t find
their daughter. They learned
Monday morning she had died.
“I’ve cried so much I can’t even
cry anymore,” Mr. Murray said.
and Jim Oberman
was so happy because she
was going to be working in
the gay community and be
around her people,” said
Starr Shelton, 35, Ms. Morris’s ex-girlfriend. “I know
that she probably died helping to get people out.”
Many victims were in
their early 20s, and just beginning to make their way in
Luis S. Vielma, 22, was an
emergency medical services
student at Seminole State
College, according to a state-
ment from the school. He
was among the victims who
weren’t gay, said his friend
Mr. Anderson said
Mr. Vielma loved his job
working at Universal Orlando, where he dressed as a
Gryffindor wizard and
helped put visitors onto a
ride called the Wizarding
World of Harry Potter.
“He really, really loved
his job,” said Mr. Anderson.
“Harry Potter” creator
J.K. Rowling was moved by
Mr. Vielma’s death and
posted a photo of him wearing a sweater vest and tie
and giving two thumbs up.
“Luis Vielma worked on
the Harry Potter ride at Universal. He was 22 years old.
I can’t stop crying,” the author said in a post on Twitter on Monday.
Franky Dejesus Velazquez, at 50, was the oldest
victim. Known by family and
friends as “Jimmy,” he had
been a professional dancer
who later worked selling
Like others, Mr. Velazquez made a last-minute decision to go to Pulse that
night after a friend invited
him, said Sara Lopez, 49, of
Casselberry, Fla. Ms. Lopez
said she had known Mr. Velazquez for about 30 years,
since they met as teens at a
birthday party in Puerto
A talented dancer, Mr. Velazquez had been a member
of the touring troupe Gibaro
De Puerto Rico. He traveled
Mr. McGill took off his shirt
and tied it to help stop the
bleeding. He helped the man
toward police, who had by then
cordoned off the club.
A police officer directed Mr.
McGill and the injured man to
a squad car.
“ ‘I’m going to need you to
lay down on your back, put him
on top of you. Hold him as
tight as you can,’ ” the officer
told Mr. McGill.
Mr. McGill said he lay in the
back of a squad car and held
the man in his arms to keep
him stable as they drove the
short distance to the hospital.
“Everything was going
pretty much in slow motion, so
what seemed like five minutes
seemed like forever and forever,” Mr. McGill said.
An ambulance from Orlando
Fire Department’s rescue unit 7
was the first to arrive at the
club, said Ron Glass, a department lieutenant. The ambulance crew was leaving a
nearby hospital when a police
officer directed them to Pulse.
They were later joined by more
than 70 emergency responders
who tended the injured.
Clubgoers barricaded in one
of the bathrooms sent texts
and photographs to law-enforcement
showed us some of what was
County Sheriff Jerry Demings.
His deputies headed to the
club, armed with Glock .45-caliber handguns and other weapons, after police issued a “signal 43.” calling for law
enforcement help. “That is the
ultimate call for backup,” said
the sheriff who also went to
How the Attacks Unfolded
Accounts from police and city ofﬁcials reconstruct the attack
on Pulse nightclub Sunday.
Main dance ﬂoor
set up outside
on the other
side of the
Wall where police
used armored vehicle
to create holes.
Police believe Mr. Mateen held several hostages in a
restroom. Approximately 15 to 20 people were hiding
in another restroom.
Around 2:00 a.m.
with an off-duty
ofﬁcers arrive and
enter the building,
gunﬁre with Mr.
retreats to a
Police enter the
and dozens’ of
Chief John Mina.
Around 5:00 a.m.
The shooter speaks
with 911 dispatcher,
pledges allegiance to
Islamic State and
prays in foreign
language. Police begin
Police attempt to breach the back
wall with an explosive device but
are unsuccessful. Using an
armored vehicle, they knock a hole
in the wall leading to the restroom
adjacent to where Mr. Mateen is
holed up. Hostages are able to exit
the building through the hole in
Mr. Mateen is killed by police
in a gunﬁght.
Sources: Orlando Police Department; City of Orlando
Mr. McNeal sent a text to a
friend who was still missing: “I
At about 2:40 a.m., Mr. McNeal heard back: “Omg. I love
you too,” the text said. The
man had been hiding in a bathroom stall for disabled people
along with about a dozen others. The friend later said he
had pried the toilet away from
the wall and squeezed behind
it to protect himself.
Police believed Mr. Mateen
was hiding in a bathroom with
hostages while a group of clubgoers hid in another bathroom.
Talks between crisis negotiators and Mr. Mateen yielded
little. “We were doing most of
the asking,” said Mr. Mina, the
police chief. There were growing concerns that Mr. Mateen
had explosives, possibly a
Around 5 a.m., “there was a
lot of conversation in the command post” that resulted in a
THE WALL STREET JOURNAL.
consensus that they should
breach the building, said Mr.
Demings, the sheriff.
“We wanted to get them out
before he would continue his
killing spree,” he said.
“Based on information that
we received from the suspect
and from the hostages and
people inside,” Mr. Mina said.
“We believed further loss of
life was imminent.”
Police tactical officers, aided
by a county hazardous device
to Spain, France, Germany
and other countries with the
group, according to Ms. Lopez. “He was an amazing
dancer,” she said.
Antonio Davon Brown
was a captain in the U.S.
Army Reserve from Melbourne, Fla. One of three
children, the 30-year-old
was working on his Ph.D.,
his mother Rosetta Evans
“He was only a few
months shy of becoming Dr.
Antonio Brown,” she said.
He could also be silly,
with a “wild sense of humor,” his mother said. “He
would lighten a room just
walking in it.”
For many family members and friends, such happy
memories stood in contrast
to the final harrowing moments inside the club early
A brief video clip posted
to Snapchat by Amanda
Alvear, 25, and replayed on
news sites Monday captured
the moments when the
One 30-year-old man sent
his mother panicked texts as
he hid in a bathroom where
the gunman had retreated.
He told his mother he loved
her. “He’s coming,” he wrote.
“I’m gonna die.”
Another man, 19, called
his mother, who told him to
hide in the bathroom. Both
Cory Richards broke
down crying Monday as he
recalled becoming separated
from his boyfriend, Enrique
Rios Jr., 25, who was killed
during the rampage.
“When everyone fell to
the floor, I lost him,” said
Mr. Richards, as he sobbed
and struggled to speak.
Mr. Rios, from a big family in Brooklyn, worked as a
home-health aide and went
The couple, from New
York City, had been dating
for four or five months, Mr.
Richards said. They had arrived in Orlando at 2:30 p.m.
Saturday, excited for their
first-ever vacation together.
“The simple fact is that
we came over here just to
have fun,” Mr. Richards said.
contributed to this article.
team, set off an explosive on
the club’s back wall, as well as
several diversionary devices in
the building, Mr. Demings said.
The explosion didn’t penetrate the wall completely, so
officers rammed the building
with a Bearcat armored vehicle, which broke open a large
hole. Mr. Mina said.
People still trapped in the
club then ran or were helped to
safety as the shooter came out
of the other bathroom and began firing, Mr. Demings said.
Police and sheriff’s deputies
returned fire and killed Mr.
Mateen, the sheriff said. “We
were able to rescue dozens and
dozens of people out of that
hole,” Mr. Mina said.
Responding to questions
about the hourslong delay before rushing the gunman, Mr.
Mina said Monday that officers
“saved many, many, many
Afterward, medical crews
entered the club. Cellphones
rang as the emergency responders looked for wounded,
Mr. Glass said. Helped by police, they carried out dozens of
injured people, Mr. Mina said.
The cellphones of victims
inside and outside the club
continued to ring Sunday as
representatives of the FBI and
the medical examiner’s office
made a final count of the dead.
“Those that responded to it
will remember that for the rest
of their lives,” Mr. Glass said.
“That’s why we’re working to
get the counseling going for responders so they have someone to talk to and get some of
this off their chest.”
contributed to this article.
ADREES LATIF/REUTERS; VICTIMS FROM LEFT: FACEBOOK/ASSOCIATED PRESS; FACEBOOK/REUTERS; STARR SHELTON; FACEBOOK/REUTERS; NANCY CASTILLO
Among those who died were a bouncer at the club and a theme-park ‘wizard’
THE WALL STREET JOURNAL.
Tuesday, June 14, 2016 | A7
* * * *
TERROR IN ORLANDO
PORT ST. LUCIE, Fla.—Security guard Omar Mateen
outwardly projected a life of
normalcy, working at a private, gated golf community on
Saturday afternoon and then
driving north to Orlando
where he massacred 49 people
at a gay nightclub.
By Josh Mitchell,
and Damian Paletta
New details are emerging
about Mr. Mateen, the 29year-old man that investigators say carried out the biggest mass shooting in U.S.
history. He apparently drew no
attention in his final days,
praying and working without
He was also in the midst of
buying two firearms, one a
semiautomatic rifle, that he
would take with him to Orlando, law-enforcement officials said.
He previously scouted out
nearby Walt Disney World for
a possible attack, suggesting
the plotting had been in place
for some time, according to
officials briefed on the investigation.
“That seems to be a normal
Continued from Page One
said the sheer volume of people
in the U.S. who have expressed
some interest in radicalism but
don't pose an obvious threat
creates enormous logistical
challenges for investigators trying to track them all.
“There’s probably a ton of
these guys in the U.S., and we
simply don’t have the resources
to put someone on them 24/7,”
said Deputy Chief Michael
Downing, who commands the
Los Angeles Police Department’s
Mr. Comey said FBI agents
are combing through every part
of the gunman’s life to see if
they missed anything in their
previous investigations and to
determine if there is something
they could be doing differently.
“Our work is very challenging.
We are looking for needles in a
nationwide haystack,” he told
reporters. “But we’re also called
upon to figure out which pieces
of hay might someday become
The FBI first investigated Mr.
Mateen in 2013 following complaints by co-workers at a Florida courthouse, where he
worked as a security guard, who
were alarmed by his claims he
had relatives in al Qaeda and
was a member of Hezbollah, Mr.
‘We are looking for
needles in a
said Mr. Comey.
He also claimed to have
known friends of the Tsarnaev
brothers, who bombed the Boston Marathon in 2013.
The FBI conducted surveillance, searched public and private records, and introduced informants to Mr. Mateen to see if
they could determine if he was
planning a crime. When agents
questioned him about the statements, Mr. Mateen said he had
made them in anger because he
thought his co-workers were
treating him unfairly.
The investigation found no
evidence to contradict his
claims, Mr. Comey said. At that
time, the FBI also probed Mr.
Mateen’s trips to Saudi Arabia.
That investigation led Mr.
Mateen’s name to be placed on a
terrorist watch list, meaning the
FBI would have been notified
had Mr. Mateen tried to buy a
firearm. His name was removed
after the investigation closed.
Months later, the FBI questioned Mr. Mateen again, because his name surfaced in a
probe of an American, Moner
Mohammad Abu-Salha, who
traveled to Syria and carried out
a suicide bombing. Investigators
determined the two knew each
other in passing but didn’t have
meaningful connections, Mr.
Comey said. “I don’t see anything in reviewing our work that
our agents should have done differently,” he said.
Islamic State and similar
groups have had difficulty carrying out large-scale assaults in
the U.S. But a shooting in San
Bernardino, Calif., last December
behavior, even when you think
of serial killers,” said Lorenzo
Vidino, director of the program on extremism at George
Washington University. “They
can do some of the most heinous acts and live a normal
life that gives no signs.”
Investigators are looking
into alleged violent outbursts
by Mr. Mateen in 2009, which
forced his young wife to flee
for safety. They also are scrubbing back through investigations they conducted into Mr.
Mateen in 2013 and 2014,
which ended up dissolving before they could pinpoint allegations that he might have
been sympathetic to terrorists.
People who knew him described patterns of erratic and
unpredictable behavior. He
had a friendly demeanor to
those who knew him casually,
but people who knew him well
saw volatile, even violent behavior.
On Friday night, Mr. Mateen showed up at the Islamic
Center of Fort Pierce alone to
pray, said Adel Nefzi, who
serves on the mosque’s board.
He was among dozens who
prayed during a special Ramadan service that started
shortly after 10 p.m. He left
was also carried out by apparently self-radicalized killers, and
security experts fear such lonewolf attacks will continue to unfold. That creates a particular
set of challenges for law enforcement trying to monitor potential
Hughes, deputy director of the
Program on Extremism at
George Washington University,
said the FBI must “triage” the
flood of potential terror-related
cases while balancing security
with rights. “You don’t want the
FBI forward leaning and encroaching on First Amendmentprotected activities, but they’re
also tasked with prevention and
investigation,” he said. “It’s a
difficult balancing act.”
Former agents described the
whether someone is dangerous.
Numerous variables must be
considered, they said, including
the prospect that someone who
files a complaint might have an
Bruce Hoffman, a terrorism
expert at Georgetown University, said agents must weigh
opaque factors such as the level
of extremist influences on someone and the importance of online statements.
Speaking with reporters, Mr.
Comey refused to mention Mr.
Mateen by name, saying he
didn’t want to feed any “twisted
notion of fame and glory” the
shooter may have had.
said federal agents are scrutinizing Mr. Mateen’s friends and
family to see if any aided in
some way, though Mr. Comey
declined to discuss that part of
The officials said that while
the investigation is in early
stages, Mr. Mateen’s motives appear to have been muddled, as
he was eager to proclaim loyalty
to groups on opposite sides.
In a 911 call during the attack,
he declared allegiance to Islamic
State and said he was acting out
of solidarity with Mr. Abu-Salha,
who was a bomber for the Nusra
Front. Those two groups actively oppose each other.
have said they are also examining the role antigay bias may
have played in the attack.
Nothing the FBI investigations into Mr. Mateen unearthed
would have prevented him from
buying guns in the days before
the nightclub shooting, Mr.
A U.S. official said investigators believe Mr. Mateen used
websites such as YouTube and
Facebook to learn about terrorist groups.
Critically, investigators haven’t found any evidence yet
that Mr. Mateen used online
chat rooms or encrypted smartphone apps to make direct contact with suspected militants or
networks of militants the U.S.
The absence of “derogatory
information” on Mr. Mateen in
either electronic or human-intelligence channels meant lawenforcement agencies had no
cause to suspect him in the
months before the attack, according to the official.
“If he had communicated
more,” the official said, “we
might have picked him up on
—Kate O’Keeffe, Tamara Audi
and Adam Entous
contributed to this article.
JOE CAVARETTA/ORLANDO SENTINEL/ASSOCIATED PRESS
Shooter’s Routine in Last Days Hid Clues
Seddique Mateen, the father of Omar Mateen, spoke to reporters
from his Port St. Lucie, Fla., home on Monday.
promptly after the prayer
ended 80 minutes later.
Hours later, Mr. Mateen was
working his shift as a guard at
the south entrance of PGA Village, a gated community of
houses and a golf course in
Port St. Lucie.
Brandon Spadaro, a resident there, recalled driving up
to the gate to enter at about
noon Saturday, but his clicker
didn’t work. Mr. Spadaro said
he backed up and drove toward the guest entrance, and
that Mr. Mateen opened the
gate for him.
He told Mr. Spadaro to take
his gate-opener to get it fixed.
“ ‘Take it to the back gate,
they’ll take care of it,’ ” Mr.
Spadaro, 35, recalled him saying. “He was totally fine.”
His shift ended at 3 p.m.,
giving him only a few hours
before he would have had to
begin the two-hour drive
northwest to Orlando.
Mr. Mateen was born to Afghan parents in New York in
1986. On Monday, Mr. Mateen’s father, Seddique Mateen, said in a Persian-language Facebook post that he
was “terribly saddened” by the
attack and that he had “no
idea” what caused it.
The family would move to
Florida when Omar was 5. He
graduated from high school in
2005 and got his associate’s
degree in criminal justice
technology the following year
from Indian River State College in Fort Pierce, according
to a spokesman.
In 2007, he started working
at G4S Secure Solutions, a
contractor for the PGA Village
A man in a G4S uniform
outside a nearby Chevron station on Monday said he knew
Mr. Mateen well, having
worked with him the past
The colleague described Mr.
Mateen as “a regular, happygo-lucky type of guy.” But he
said Mr. Mateen would often
In 2008, Mr. Mateen met
Sitora Yusufiy online, and they
would marry the following
year. She was from New Jersey, and they lived together in
Florida before he began abus-
ing her, family members said.
“They were only together
three or four months—that’s
it,” said a man identified as
Ms. Yusufiy’s father, from his
Edison, N.J., home.
“She was abused by him,”
the man said. “The cops were
called on him.”
The Port St. Lucie and Fort
Pierce police departments and
the St. Lucie County sheriff’s
office say they have no record
of significant incident reports
involving Mr. Mateen.
Efforts to reach Ms. Yusufiy
Mr. Mateen would later remarry and have a son, and he
continued working at G4S. He
also made two trips to Saudi
Arabia, suggesting his faith
had begun to play a more
prominent role in his life.
Within the past week or so,
Mr. Mateen bought a handgun
and a rifle, in separate purchases, from St. Lucie Shooting Center, roughly 3 miles
from his job site.
“He purchased two guns legally,” Ed Henson, owner of
the gun store, told reporters
Monday, noting that the purchases were about a week
apart. “He is familiar to me
vaguely,” Mr. Henson said.
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A8 | Tuesday, June 14, 2016
THE WALL STREET JOURNAL.
TERROR IN ORLANDO
A Punitive Line on Homosexuality Experts:
Many Muslim nations
have harshly antigay
laws, forcing people to
live under the radar
BY KAREN LEIGH
AND ASA FITCH
At least 10 predominantly
Muslim countries around the
world, some of them close U.S.
allies, have laws on the books
that set a punishment of death
for homosexuality. Among
those that don’t, Egypt has
conducted mass arrests of gay
men, and homosexuals can
face torture even in Lebanon,
the Arab world’s most liberal
A question now is how, or
whether, Islam’s posture toward homosexuality figured
in Omar Mateen’s killing of at
least 49 people at a gay
nightclub in Orlando after
claiming allegiance to Islamic
“God himself will give punishment to homosexuality. It
is not for people to decide,”
the shooter’s father, Seddique
Mateen, said Monday. His
words reflected a negative
stance toward homosexuality
that is deeply ingrained in
large parts of the Muslim
world—and in laws that purport to deliver that holy judgment.
In most Muslim societies,
the survival strategy for gay,
lesbian, bisexual and transgender communities has
been to stay below the radar.
Homosexuality isn’t recognized as an identity or lifestyle in Islam, and homosexual acts are forbidden,
though punishments vary
among the major schools of
While same-sex attraction
has historically been tolerated
in some Muslim societies, gay
Countries where homosexual acts are illegal
and in some cases punishable by death
Death penalty under Shariah law, and
implemented nationally or provincially
Death penalty under Shariah law,
but not known to be implemented
Same-sex acts illegal
A FG H A N I STA N
BY JIM CARLTON
AND JON KAMP
M A U R I TA N I A
PA K I STA N
U N I T E D A R A B E M I R AT E S
Q ATA R
Homosexual acts are legal in Indonesia,
with the exception of two provinces
Source: International Lesbian, Gay, Bisexual,
Trans and Intersex Association
THE WALL STREET JOURNAL.
sex has always been illegal because it occurs outside of
“In Islamic law, all sex outside a licit relationship is forbidden, so by definition you
cannot have a licit sexual relationship between two men
or two women,” said Jonathan Brown, an expert in Islamic law at Georgetown University.
Homosexuality is outlawed
across most of the Muslim
world, according to a recent
report by the International
Lesbian, Gay, Bisexual, Trans
and Intersex Association, with
a handful of exceptions such
as Bahrain and Mali.
In practice, however, countries rarely mete out the most
severe punishments, in part
because Shariah, or Islamic
law, sets a high standard of
proof—either a confession or
the testimony of four upstanding men who witnessed
Gay intercourse in Pakistan is punishable by life in
prison, though the government seldom sentences people, according to a 2015 report by the U.S. State
In Iran and Afghanistan,
homosexuality is banned, and
harsh penalties have been enforced against it. Iran executed three men in 2011 on
charges that included homosexual acts.
Afghan law penalizes homosexual relations with five
to 15 years in prison. A 2015
human rights report by the
State Department said police
routinely harass, detain and
use violence against gay people.
In Saudi Arabia, homosexuality can be punishable by
death, but there haven’t been
any such executions in the
country’s recent history. Com-
mitting or promoting homosexual acts in public is usually
punished by jail time, lashes
Islamic State and other extremist organizations are
known for an extreme hatred
of homosexuals. In the territory it controls in Syria and
Iraq, Islamic State has made
executions a hallmark of its
bloody reign. In one instance
reported by the activist group
Raqqa is Being Slaughtered
Silently, a blindfolded man
was thrown from the roof of a
two-story building in Iraq. He
survived the fall with critical
injuries and was subsequently
stoned to death in front of a
crowd of spectators, including
Regional governments are
increasingly balking as global
LGBT activism progresses,
said Neela Ghoshal, a researcher at Human Rights
“There seems to be this
fear that there’s a global
movement toward accepting
people, when of a lot of these
countries have posed themselves as defenders of the traditional family,” she said.
“They’re trying to prevent
significant actions at the
According to Human Rights
Watch, gay people struggle
even in Lebanon, where the
capital Beirut’s raucous club
scene includes gay bars.
Authorities in neighboring
Egypt have used criminal
charges, including “promoting
debauchery” and “contempt
of religion,” to make sweeping
arrests of gay men who
gather in private spaces, even
though no law exists explicitly
and Raja Abdulrahim
contributed to this article.
Orlando Forges Unity in the Wake of Attack
Florida city’s carefully maintained image as a familyfriendly destination took a severe blow over the weekend as
news spread around the globe
of a mass shooting that took
the lives of 49 people at a
But business leaders and
residents of the metro area,
which has surged to nearly 2.4
million people from just over
The use of an AR-15 during
the U.S.’s worst mass shooting
has brought the term “assault
weapon” back into the lexicon—
but there is much confusion
about the term. Here’s a primer:
What is an assault weapon?
The guns generally identified
as assault weapons are semiautomatic rifles that operate on the
same principles as semiautomatic handguns. According to the
Bureau of Alcohol, Tobacco, Firearms and Explosives, “semiautomatic rifle” means any repeating
rifle that uses a portion of the
energy of a firing cartridge to extract the fired cartridge case and
chamber the next round. It requires a separate pull of the trigger to fire each cartridge.
So what is the popular accepted
definition of an assault weapon?
Many of the firearms identified as assault weapons are
semiautomatic rifles that look
like weapons used by the military. A prominent example is
the AR-15 rifle.
And that’s what was under the
1994 assault-weapons law?
Yes and no. The now-expired
law named 19 models of firearms and also banned copies of
those models. The law also
outlawed guns that had the
ability to accept detachable
magazines and had at least
two military-style features,
such as flash suppressors at
the muzzle and pistol grips.
Would the Orlando gun have
been illegal under the ’94 law?
We don’t know. It would depend on whether it had military-style features.
And at Parliament House,
arguably the most prominent
gay nightclub in town, there is
a benefit being planned for
later in June to help both victims and the Pulse employees
who are now jobless.
The shooting at Pulse happened when the downtown
gay club was holding one of its
Latin-themed nights. Both Orlando’s gay and Hispanic communities have grown in recent
years and become woven into
the fabric of the city, say lo-
500,000 in 1970, note that the
most deadly shooting in U.S.
history may serve to bring the
community closer together.
Local businesses are moving to help support the victims
of the attack. At Guavate, a
restaurant in the city that caters to the sizable local Puerto
Rican community, management plans to contribute all
Tuesday and Wednesday to benefit victims of the attack and
cals, speaking to the city’s increasingly diverse profile.
In particular, the gay community’s rise has been tied to
the fact the theme-park industry is seen as LGBT-friendly,
Orlando is a rapidly changing community: The area’s
economic base has begun to
broaden well beyond theme
parks and the population has
increasingly started to welcome a range of groups, minority and otherwise.
“We are building a real,
true community, not just a
place for transients,” said Michael Perkins, executive director of the Orange County Regional History Center.
Mr. Perkins, himself a 30year Orlando resident, said the
response to the tragedy already from locals, who have
lined up in sizable numbers to
donate blood and put together
makeshift memorials, speaks
volumes. “Orlando is resilient,” he said.
Democrats Push to Tighten Gun Access
BY KRISTINA PETERSON
AND GARY FIELDS
mass shooting in Orlando, Fla.,
spurred Democrats to renew a
long-stalled effort to tighten
access to guns, injecting the
polarizing debate into the contests for the White House and
Senate Democrats on Monday said they would push for a
vote again as soon as this
week on legislation that would
give the Justice Department
authority to prevent a known
or suspected terrorist from
buying firearms or explosives
if authorities believe the
weapon could be used in connection with terrorism. Someone who meets that criterion
is likely to be on one of the
federal terrorism watch lists,
including the no-fly list.
presidential nominee Hillary
Clinton endorsed their effort,
saying it was “essential” to
stop terrorists from obtaining
It isn’t clear that the legislation would have been able to
prevent the Orlando shooter,
whom police identified as
Omar S. Mateen, from obtaining the weapons, including an
AR-15 semiautomatic rifle, he
used to kill 49 people and injure 53 others at a gay nightclub in the deadliest mass
shooting in U.S. history.
Senate Democrats said they
believed law-enforcement officials under this bill would
have had the authority to prevent Mr. Mateen from purchasing a gun.
The Federal Bureau of Investigation twice probed Mr.
Mateen in 2013 and 2014 over
hints of radical leanings before
closing those cases as inconclusive. FBI officials said Mr.
LUKE SHARRETT/BLOOMBERG NEWS
BY CHARLES PASSY
AR-15 rifles are displayed during the NRA’s annual meeting in Louisville, Ky., on May 20.
Mateen was on a federal watch
list, but was later removed.
Had he bought a gun while on
the watch list, law-enforcement officials would have
The measure stalled in the
Senate in an almost entirely
partisan 45-54 vote in December after the mass shooting in
San Bernardino, Calif.
Critics of the legislation
said at the time that the terrorism watch lists, including
the no-fly list, sweeps too
broadly and could prevent
law-abiding citizens from purchasing a firearm. The federal
government maintains several
databases of people suspected
of links to terrorism, including
a no-fly list barring certain individuals from boarding airplanes in the U.S.
John Velleco, director of
federal affairs at the Gun Owners of America, said the pro-
posals now being discussed
were fraught with problems.
“A person can be put on the
no-fly list without knowing it.
It is difficult to get off the list
once you’re on it, and there’s
no due process,” he said.
Senate Democrats said their
bill would enable anyone erroneously included on the list to
quickly appeal the decision.
Democrats said they expected Sunday’s massacre
would apply new pressure on
Republicans to reconsider
their stance on the legislation.
A half-dozen GOP senators
running for re-election in battleground states this year are
likely to face attacks from
Democratic challengers if they
oppose the measure.
Notably, Senate Democrats
didn’t immediately push for
banning “assault weapons,” or
semiautomatic rifles that operate on the same principles
as semiautomatic handguns.
Mrs. Clinton, however, renewed her call for reinstating
a 1994 ban. That law banned
certain semiautomatic weapons, including some AR-15
models. When the prohibition
expired in 2004, Congress,
then controlled by Republicans, didn’t renew it.
Recent efforts to reinstate
the ban have encountered opposition from Republicans,
some Democrats and gunrights groups. A proposal to
ban the manufacture and sale
of certain semiautomatic rifles
and ban high-capacity ammunition magazines was blocked
in a 40-60 vote in April 2013.
Republicans largely responded to the Orlando attacks by saying the U.S. must
be more assertive in thwarting
Islamic State militants.
—Reid J. Epstein
contributed to this article.
The attack at a gay nightclub in Orlando, Fla., highlights what law-enforcement
officials call security lapses at
many of the nation’s clubs and
With crowded dance floors
and often minimal security,
nightclubs make attractive targets for terrorists, experts
said. And unlike their European counterparts, U.S. nightclubs have had little experience with terror-inspired
violence and have been more
drunks or gang brawls.
Authorities say Omar S. Mateen exchanged gunfire outside
the Pulse nightclub early Sunday with an off-duty police officer working for the bar, then
continued shooting inside,
leaving 49 dead victims. The
owners of Pulse referred inquiries to a public-relations firm,
which didn’t return calls.
J.C. Diaz, executive director
of the Nightlife Association, a
Crowded clubs and
bars can make
attractive targets for
trade group for the nation’s
50,000 clubs and bars, said security varies widely, ranging
from a club in Atlanta that is
patrolled by a guard toting a
semiautomatic rifle to ones
that simply have a doorman.
But even with few resources, he said, clubs can better prepare for an attack by
teaching staff to fight back
with beer bottles, fire extinguishers or anything else they
can grab. The key, he said, is to
confront a shooter rather than
wait to be possibly shot.
Islamic State-backed attacks
on bars and entertainment
venues in Paris last November,
which left 130 dead, should
have been a wake-up call to
managers in the U.S. that similar attacks were headed here,
said Robert C. Smith, president
of Nightclub Security Consultants, a San Diego-based provider of bouncer training.
“If I want to be an active
shooter and I want to make a
name for myself, I am going to
go to a club that is unprepared,” Mr. Smith said.
Clubs can also serve as
symbols of Western lifestyles
and mores. Pulse, the location
of Sunday’s massacre, catered
mostly to the gay community;
the shooter’s father has said
he was angered by gay men expressing affection in public.
requires club security workers to
undergo terrorism training,
and even there it is only two
hours’ worth. Security consultants say the best defense
starts at the door, where doormen and other security should
be trained to intercept people
who seem bent on doing harm.
“There will be a different
look in the eyes—troublemakers who are just angry, or
someone who will have the intense, determined look,” said
Brian Allen, director of Gilbert,
Ariz.-based International Security Training LLC.
Some venues, like Echostage in Washington, D.C., have
extensive front-door security.
In addition to doormen, who
frisk and wave metal-detector
wands, the large club employs
off-duty police officers to stay
in front with uniforms and
marked vehicles, said Corey
Primus, urban marketing coordinator for an owner of the establishment. “I’m not going to
say it couldn’t happen, but the
likelihood of that happening is
a lot less,” Mr. Primus said.
Meanwhile, mosques around
the country, already on high
alert for retaliation since the
San Bernardino, Calif., terror
attack, are strengthening security as the community is in the
midst of the Ramadan holiday.
Nezar Hamze, regional operations director for the Council on American-Islamic Relations in Florida, sent an
“action alert” to mosques in
the state Sunday advising precautions including keeping the
lights on, reaching out to law
enforcement and stationing a
door greeter who can call 911 if
Tuesday, June 14, 2016 | A9
THE WALL STREET JOURNAL.
Yemen City Resets After al Qaeda Uganda
Residents say life was
both stable and brutal
under Islamists before
yearlong rule ended
But life in this port city under the yearlong rule of al
Qaeda in the Arabian Peninsula was also brutal: The militants detained and questioned
many with little justification,
and executed some deemed
unsympathetic to their views,
some residents said.
Just over a month after
AQAP fled an advancing Saudiled military offensive, a picture is emerging of how the
extremist group governed
what had been its crown jewel.
Unlike Islamic State, AQAP,
an affiliate of al Qaeda that
claimed responsibility for the
Charlie Hebdo shootings in
Paris last year, hasn’t made
territorial control its focus in
the seven years since its
founding in Yemen. This city
of 300,000 was the most populous territory al Qaeda had
Yet some residents here
said AQAP provided a level of
stability and engagement that
was lacking under previous
governments, an achievement
that will help it maintain loyal
allegiances on the ground despite its retreat.
Mohammad al-Katheeri, a
father of six, remembers how
when high winds lashed the
southern coast in November,
al Qaeda sprang into action.
“They took all measures
necessary to protect people—
they even evicted people at
risk, providing them with temporary housing,” he said.
AGENCE FRANCE-PRESSE/GETTY IMAGES
By Saleh al-Batati in Al
Mukalla, Yemen, and
Asa Fitch in Dubai
BY NICHOLAS BARIYO
STRINGER/AGENCE FRANCE-PRESSE/GETTY IMAGES
Whether residents in Al
Mukalla, Yemen, needed generators to keep the lights on
or shelter from an impending
cyclone, al Qaeda was often
ready to help.
Yemeni soldiers, left, stood guard in Al Mukalla after a suicide attack last month. At right, an AQAP banner denounces democracy.
“These measures weren’t
taken by the former government when we had floods in
AQAP moved in on Al Mukalla in April 2015 amid a
power vacuum created by a
now 14-month-old civil war
between Shiite Houthi rebels
and the internationally recognized government of President
Abed Rabbo Mansour Hadi.
The Saudi-led military coalition supports Mr. Hadi.
Residents said public services including electricity, water and waste disposal were
largely managed to their satisfaction under AQAP’s governance. Many said civil justice
was meted out fairly, and one
resident said numerous longstanding property disputes
AQAP had money to spend,
too, in the form of port and oil
revenue and an estimated
$100 million it looted from the
city’s central-bank branch.
“They managed to operate
the seaport and buy generators, to buy gas and diesel,”
said Ashraf al-Obthani, a 30year-old lawyer.
The extremist group cast its
retreat as a gesture to save
the city from more fighting.
But many residents said
they were happy to see AQAP
go. The closure of the city’s
only airport and the lack of
immigration services limited
travel. Schools were initially
closed because AQAP didn’t
accept having boys and girls in
the same institutions. The militants later relented.
“We were excited when
they decided to leave the city,”
said Najwa al-Sawmahi, a
mother of two who teaches
EgyptAir Finding Points Away From Sudden Blast
probing the crash of EgyptAir
Flight 804 said the plane
veered off course before plunging into the sea, suggesting an
abrupt in-flight explosion didn’t
bring down the aircraft.
The Airbus Group SE A320
plane bound for Cairo from
Paris deviated from its course
while flying at 37,000 feet,
first turning left before rolling
to the right and completing a
full circle, investigators said in
their latest update into the
May 19 crash, which killed all
66 people on board.
The finding confirms statements initially made by Greek
officials about the last seconds
of flight but initially rejected
by Egyptian authorities, who
suggested contact was lost
more abruptly. Investigators
have spent days going over all
available radar information to
reconcile the conflicting theses.
The finding does little to explain why the plane crashed
into the Mediterranean Sea. No
cause has been ruled out,
Egyptian officials have said.
The plane broadcast several
fault messages before all contact was lost, indicating possible smoke in the nose of the
aircraft. The messages alone
haven’t been sufficient to determine a likely cause of the
crash, investigators have said,
adding urgency to recovering
the black boxes that store
technical data and conversations in the cockpit.
English at a public school.
Ameer Ba Awdan, a journalist, was arrested after participating in a demonstration
against terrorism. He languished in an AQAP jail cell by
himself for seven months,
monitored by video camera.
Shortly before the Saudi-led
coalition entered the city, Mr.
Awdan was taken with other
prisoners to a beach. Some
were executed; he was released, along with some others. Mr. Awdan doesn’t know
“I was numb,” he said.
Life for women was particularly harsh. Several residents
described a case where a
woman accused an AQAP militant of rape. She was quickly
convicted of adultery and
stoned to death, they said.
There has been little indication that AQAP is trying to
move back into the port city.
Since the Saudi coalition retook Al Mukalla, Yemen’s
branch of Islamic State has
carried out two deadly attacks
targeting security forces. The
U.S. has deployed a small contingent of special forces to Al
Mukalla to advise the coalition
on maintaining control.
Ugandan military plans to
withdraw troops involved in
against the Lord’s Resistance
Army rebels in the Central African Republic, further complicating the manhunt for one of
Africa’s most infamous warlords, Joseph Kony.
Kampala plans to start
drawing down its 3,000-strong
force in a process that will be
completed by the end of the
year, Lt. Col. Paddy Ankunda, a
military spokesman, said in an
Col. Ankunda said the military operation has degraded
the militia’s capacity to attack
local communities, but said the
Ugandan government was frustrated by what he said was declining support from other
“We have achieved a lot in
this operation but we could
have done even better with
more support,” Col. Ankunda
said. “We have now taken a
firm decision to withdraw.”
A State Department official
praised Uganda’s involvement
in the mission and said the
U.S. would continue to work
with other countries affected
by the LRA.
“With U.S. support…the
Ugandan military has removed
four of the LRA’s top five most
senior and notorious commanders from the battlefield,”
the official said. “During that
time the number of people
killed by the LRA has dropped
by over 90%.”
It isn’t clear how much
the U.S. spent on the operations. A $5 million reward
Washington announced in 2013
for information about Mr.
Kony or his top commanders
remains in place.
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A10 | Tuesday, June 14, 2016
THE WALL STREET JOURNAL.
China Data Fuel Growth Worries
BY MARK MAGNIER
BEIJING—A slowdown in
private investment in China in
May overshadowed other,
more-upbeat economic data,
contributing to a 3.2% drop in
Shanghai shares Monday and
fueling concerns that growth in
the second quarter could be
weaker than in the first.
Several reports released
Monday suggested pockets of
relative strength in the world’s
second-largest economy. But
fixed-asset investment expanded by a weaker-than-expected annual clip of 9.6% in
the first five months of the
year, compared with 10.5%
growth through April. Even
worse, the private investment
portion grew by a mere 3.9% in
January-May, down from an already weak 5.2% in JanuaryApril.
A slowdown in private investment is particularly worrisome because it indicates that
companies are holding off
spending, signaling limited confidence in the future and denying the economy what is often
more effective and sustainable
investment than government
Sheng Laiyun, a spokesman
for the country’s National Bu-
Overall investment in China has
held up much better than private
China's ﬁxed-asset investment
BY JAMES T. AREDDY
Sources: CEIC Data; National Bureau of
reveal firms reluctant
to spend, indicating
THE WALL STREET JOURNAL.
Workers assembled rice snacks in a food-products factory in Jiaxing, in Zhejiang province, in June.
reau of Statistics, cited overcapacity and a difficulty in obtaining financing as reasons
private companies are reluctant
to invest, though he said
China’s economic fundamentals
remain sound. “The slowdown
in private investment shows
that economic growth momentum needs to be strengthened,”
The weak investment data
coincided with reports showing
property and auto sales still going strong, illustrating the
mixed picture in China’s economy, with the industrial sector
struggling while consumption
has remained a bright spot.
May retail spending held up,
despite the prospect of smaller
wage increases this year and
growing concern over unemployment,
“If you look at all the data
from May, you can pick and
choose and find industries doing well,” said IHS economist
Brian Jackson. “But if you’re
concerned about GDP, the figures from April and May pretty
much show the economy will
slow down from the 6.7% seen
in the first quarter.”
China’s property market continued to strengthen, though at
a slower pace than earlier this
year. Housing sales grew 53.4%
by value in the first five months
of 2016 compared with 61.4% in
the first four months as larger
cities tightened sales restric-
tions to rein in property prices.
The deceleration suggests the
market has peaked.
Despite recent strong property sales, Oriental Furniture
Co., which makes marble tables
and flooring at its factory in
Songyuan, a city in northeastern China, said it doesn’t expect
to invest much in 2016 given
the tepid outlook. Gao Junming,
the company’s general manager,
said he is looking at new product lines and more government
stimulus to boost the company’s prospects. “Hopefully
that will allow us to sell more,”
Consumer confidence in
China edged down in May over
April, according to the ANZ-Roy
Morgan China Consumer Confidence Index, as fewer respondents said they expected their
personal financial situation to
improve in the immediate future.
The weak May investment
data increased the chance that
Beijing will take more steps to
revive the economy to ensure it
hits its 2016 growth target of
6.5% to 7%. “Private investment
is difficult to boost very
quickly, so the response will
have to be largely from the government spending side,” said
Ding Shuang, an economist
with Standard Chartered (Hong
contributed to this article.
SEOUL—North Korean hackers stole wing designs for a U.S.
jet fighter and photos of parts
of spy planes from a South Korean company, according to authorities in Seoul, the latest in
a series of cyberattacks allegedly done by Pyongyang.
More than 40,000 documents related to the defense industry were stolen in attacks on
two companies that began in
2014 and were discovered earlier this year, the Korean National Police Agency said Monday.
One of the companies, Korean Air Lines Co., said it was
told by police its systems had
Among the documents allegedly stolen were wing designs
for an F-15 jet fighter and photos of parts of unmanned spy
planes, a spokesman for the
Korean Air makes aircraft
parts for South Korea’s military,
which flies F-15 jets, a model
originally built by McDonnell
Douglas Corp., which Boeing
Co. acquired in 1996.
A South Korean military official said the leak wasn’t of sensitive information, such as F-15
engines or electronic systems.
“The leak will likely have a negligible impact on national security,” the official said.
The police said that by detecting the breach they prevented what appeared to be the
start of a larger-scale cyberat-
Seoul Says North Korea Stole F-15 Designs
BY ALASTAIR GALE
AND KWANWOO JUN
South Korean police say hackers took jet fighter wing designs.
The attack originated from
an internet address based in
Pyongyang and used in a 2013
cyberattack that disabled the
computer systems of South Ko-
rean banks and TV stations, the
“North Korea turns out to
have been preparing for a long
time to try to launch a countrywide cyberattack,” the police
German Leader Goes to Beijing Amid Worries About Trade Hurdles
There was no immediate reaction from North Korea to
Monday’s announcement. It frequently denies involvement in
cyberattacks, but defectors and
outside experts say it has built
up its hacking abilities in recent
U.S. investigators believe a
unit of North Korea’s main spy
agency devoted to cyberwarfare
was behind a hacking attack on
Sony Pictures in 2014.
The latest incident also included the theft of around
2,000 files related to communications equipment in South Korea.
Earlier this year, South Korea said North Korea had tried
to attack computers that control transport systems.
HOW HWEE YOUNG/PRESS POOL
SEALING THE DEAL: German Chancellor Angela Merkel attended a signing ceremony in Beijing on Monday during a three-day trip to
China. The visit comes amid concerns among German firms about obstacles to doing business in the country. “It is important to have
a secure juridical environment,” she said during remarks with Chinese President Xi Jinping, according to the Associated Press.
Venezuela Oil Output Dropped Sharply in May
Venezuela registered its biggest monthly oil-production decline in a decade in May, according to data released Monday by
the Organization of the Petroleum Exporting Countries, signaling further trouble for a
country already enduring severe
The decline of 120,000 barrels a day, to 2.37 million barrels
a day, underscores the inability
of state energy company Petróleos de Venezuela SA to maintain oil-industry investments, as
the region’s largest petroleum
exporter suffers a debilitating
cash crunch, widespread food
shortages and civil unrest.
In recent months, major oil
services companies, including
Halliburton Co. and Schlumberger Ltd., said they were cutting back operations in Venezuela as the country struggles to
repay multibillion-dollar debts
“This is very surprising,” said
Francisco Monaldi, a Latin
American energy policy fellow at
Rice University in Houston, who
closely tracks Venezuela’s oil industry. “If you want to point to
the biggest problem, it is cash
flow, which for PdVSA now looks
worse than we had imagined.”
Venezuela, which relies on oil
for nearly all its income, is facing severe dollar shortages due
to low oil prices, as well as more
than a decade of profligate
spending under the ruling socialist government, which used
oil-sector money to fund social
programs. Oil output is far from
the 6 million barrels a day that
its officials have long targeted.
Monthly oil production has
fallen this much only once since
2003, when the country’s oil industry came to a standstill dur-
ing a devastating strike led by
PdVSA workers seeking the
ouster of then-President Hugo
The last time was in 2006,
said Gary Ross, head of global oil
at the consulting firm PIRA Energy Group, who added that the
drop-off may give leverage to
oil-field services companies that
are now in payment negotiations with Venezuela. “There’s
an urgency there now that
wasn’t there before this happened, because of the lost production,” Mr. Ross said.
contributed to this article.
SHANGHAI—Police on Monday blamed an airport blast
that left five people injured on
a migrant factory worker with
debts from online gambling
who had warned friends he
was about to embark on a suicide mission.
The Shanghai police quoted
a message that Zhou Xingbai
sent to a group chat saying
that he owed many people
money: “Preparing to do
something extremely crazy.
Will surely lose my life.”
Sunday’s explosion near the
check-in counters for several
Asian airlines at Shanghai Pudong International Airport left
four bystanders with minor injuries, including an unidentified
Philippine national, police said.
Police indicated that Mr.
Zhou was the most seriously
hurt person in the incident,
having slashed his own neck
with a knife after setting off
the blast. Police said Sunday
he was in critical condition
and gave no update on his
condition on Monday.
Disgruntled debtors have
been blamed for numerous
small attacks in China in recent years, including bus fires.
In 2013, a wheelchair-bound
man set off a small explosion
at Beijing Capital International
Airport that caused minimal
damage; he was said to be upset about his physical state.
Mr. Zhou’s crude weapon
consisted of beer bottles stuffed
with firecrackers, according to
police, who said the perpetrator
had thrown a homemade explosive device at the airline counter.
Monday’s statement identifying the suspect said that after Mr. Zhou graduated from
high school in his native Guizhou province a decade ago,
he worked in factories in various parts of the country.
The explosion delayed the
takeoff of some international
flights on Sunday but appeared to cause minimal disruption, according to local authorities and airline staff.
Authorities stepped up security at the airport departure
hall after the incident, according to photos posted online
and airline statements.
BY PAULO TREVISANI
BY KEJAL VYAS
AND TIMOTHY PUKO
bank inaugurated a new leader
to deal with an old challenge:
taming stubborn inflation
amid a shaky economy and political chaos.
In an hour-long ceremony
on Monday at the bank’s imposing building, private-sector
economist Ilan Goldfajn took
over the post from Alexandre
Tombini, and pledged to meet
the central bank’s 4.5% annual
inflation target, without giving
a timeframe. Mr. Goldfajn, 50,
will have to do it without raising interest rates, the standard
weapon for cooling inflation.
Brazil’s benchmark interest
rate, the Selic, already stands
at 14.25%, one of the highest
rates in the world. Increasing
rates further could be dangerous for an economy that contracted by 3.8% last year and
is expected to shrink as much
May data showed prices rising at a 9.3% annual pace.
“The current scenario is
challenging,” Mr. Goldfajn said
in his first speech in the job.
“It is important to manage expectations.”
His predecessor was an appointee of Brazil’s suspended
President Dilma Rousseff and
had held the job since January
2011. On his watch, Brazil
never once met its 4.5% inflation target, even as the economy slumped.
Mr. Goldfajn was appointed
by acting President Michel Temer, who will serve out Ms.
Rousseff’s term if she is
ousted. A U.S.-educated economist, for the past decade he led
the economic-research department at Itaú-Unibanco, Brazil’s
largest private-sector bank.
Inflation has defied the central bank, which has raised the
Selic 16 times since early 2013
only to see price increases
breach double digits late last
year and peak at 10.7% in January. The Selic has remained
at 14.25% since last July.
Monetary policy has been
undermined by government
spending. The budget gap
grew to 10.1% of gross domestic product by April, from 2.5%
in January 2011, when the leftist Ms. Rousseff was inaugurated and nominated Mr. Tombini to lead monetary policy.
“In the end, [Mr. Tombini]
never met the target…but the
government was focused on
spending,” said economist
José Carlos Oliveira, from the
University of Brasília. “There
was little the central bank
In a weekly survey of economists released Monday by
the central bank, the median
forecast for inflation in 2016
was 7.2%. On the other hand,
the same survey has consistently shown a stable 5.5%
forecast for next year, an indication that many economists
believe prices will lose steam
even if Mr. Goldfajn doesn’t
make many changes
“What is important now is
to regain credibility,” said Ignácio Crespo, an economist at
Guide Investimentos brokerage
firm in São Paulo, who doesn’t
see much room to start easing.
“I think he will only cut rates
later this year. Any surprises
will come on the hawkish side.”
Mr. Goldfajn insisted that
his goal was to reach the center of the target, using the
2.5%-to-6.5% tolerance range
only to absorb shocks.
“The goal is to fulfill the
target completely, eyeing its
central point,” he said. “There
is no sustainable economic
growth without stable inflation.”
THE WALL STREET JOURNAL.
* * * * * *
Tuesday, June 14, 2016 | A11
NY / NE
NATO Says Europe to Raise Defense Role
Alliance sees increase
in military spending,
plans force to deter
Senior Police Officer
A police commander was
stabbed to death late Monday
outside his home in a Paris suburb, officials said, and antiterrorism prosecutors were investigating the attack.
Soldiers constructed an amphibious bridge across the Vistula River during NATO exercises in Chelmno, Poland, on Monday.
of decrease slowed in 2013 and
U.S. political figures including President Barack Obama
and presumptive Republican
presidential nominee Donald
Trump have been increasingly
critical of European military
spending, saying the continent
must spend more on defense.
Douglas Lute, the U.S. ambassador to NATO, said the
other allies have “got the message” and are beginning to
“pay the price” of their own
The alliance will position a
The officer’s companion and
the assailant were later found
dead in the home when police
stormed it. The couple’s 3-yearold son was found alive in the
residence, officials said.
Islamic State’s Amaq news
agency cited an unnamed
“source” as saying a fighter for
the group had carried out the
attack. The group hasn't formally
claimed responsibility for the attack.
The off-duty police commander, who wasn't identified,
was stabbed outside his home
about 35 miles west of Paris, in
Magnanville, interior ministry
spokesman Pierre-Henry Brandet
The attacker then entered the
officer’s home and police commandos laid siege to the residence, storming it after a threehour standoff.
Mr. Brandet said the woman,
who was the commander’s companion and a fellow police
worker, was found dead, as was
The police couple’s son was
Officials said the attacker was
killed by police when they
stormed the residence. It was
unclear how the woman was
troops, in each of the Baltic
states and Poland for six-tonine-month rotations, he said,
in a move to deter Russian aggression.
Some U.S. military leaders
wanted the battalions to be
under the command of the
host nations, to make them
able to react faster and be
more closely integrated with
armed forces in each country.
But officials said alliance
control will help increase the
deterrence value of the force.
“The battalions which we
will have in the Baltic countries and Poland will be under
Death of Hostage
The Philippine military confirmed that extremist group Abu
Sayyaf has beheaded another
Canadian hostage after the
deadline to pay ransom lapsed.
The Philippine Army’s Western
Mindanao Command said police
recovered the severed head of
Canadian Robert Hall near the cathedral in Jolo, the same southern town where Abu Sayyaf left
the head of another Canadian
hostage, John Ridsdel, who was
killed in late April.
ROSLAN RAHMAN/AGENCE FRANCE-PRESSE/GETTY IMAGES
BRUSSELS—The head of the
North Atlantic Treaty Organization said new estimates
show military spending from
European countries and Canada is set to rise 1.5% this year,
an increase of $3 billion, which
he praised as a step in the
“After the end of the Cold
War there was a long decline
in military spending across European allies and Canada,”
Secretary-General Jens Stoltenberg said on Monday. “This
is real progress. After many
years going in the wrong direction, we are starting to go
in the right directions.”
Mr. Stoltenberg also said a
4,000-strong deterrent force to
be positioned on the alliance’s
eastern border will be under
alliance command and control.
NATO released the estimate
along with a final assessment
of 2015 spending, which
showed a 0.6% increase in military spending last year.
The small increases come
after long declines in military
spending. European and Canadian spending declined 2.4% in
2010, 2011 and 2012. The rate
TYTUS ZMIJEWSKI/EUROPEAN PRESSPHOTO AGENCY
BY JULIAN E. BARNES
NATO command; they will not
be under national command,”
Mr. Stoltenberg said.
NATO defense ministers are
set to approve the size and key
details of the multinational
force this week in Brussels.
The U.S., the U.K. and Germany are set to lead three of
the four battalions. Canada is
considering serving as the lead
nation for the fourth battalion,
officials have said.
Alliance diplomats said each
of those framework nations
will be bolstered by smaller
contributions to make the
forces multinational. France,
for instance, will contribute a
company—roughly 150 soldiers, to one of the battalions.
While details of the command have to be worked out,
alliance officials said NATO
will command the units both in
peacetime and moments of crisis. U.S. Army Gen. Curtis
Scaparrotti is the top NATO
Mr. Lute said no final decisions on where the U.S. battalion will come from have been
The battalion could come
from U.S.-based units, one of
the Army’s two European brigades or the rotational forces
the U.S. plans to send to Europe, Mr. Lute said.
The U.S. will also have to
decide whether to keep the
companies it currently has in
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A12 | Tuesday, June 14, 2016
THE WALL STREET JOURNAL.
FROM PAGE ONE
Continued from Page One
“Lord of the Rings.”
That was too much for the
tradition-minded folks of Spur.
In March, the town council
hired a building inspector and
passed an ordinance that requires designs to be submitted
Spur also stipulated that tiny
houses be connected to the
electrical grid, water supply and
sewer system. Before that, the
only rule was that houses on
wheels be put on concrete foundations because Spur is in tornado country.
“There are some people who
came here with the belief that
anything goes,” says Denise
Rosner, 62 years old, who is
originally from the Bronx borough of New York City and was
the second tiny house dweller
to arrive in Spur, where she
lives in a 440-square-foot, traditional-looking home.
The new rules have divided
Spur’s tiny house pioneers. “It
was a bait-and-switch,” says
Benjamin Garcia, 24, a web consultant. He moved to Spur in
November with plans to build a
house out of earth. “I was very
forthcoming about what I
wanted to build, and they said it
was fine, and then they didn’t.”
Mr. Garcia says he felt targeted because the temporary,
120-square-foot wooden shed
he built while preparing to
erect the earthen house had a
compost toilet, which is specifically barred by the new ordinance.
After unsuccessfully fighting
the ordinance, Mr. Garcia and
two other people bought a 15acre plot of land 4 miles outside
Spur, called Makerton, where
there will be no building restrictions.
Continued from Page One
shareholders after the stock
tumbled from a peak of $269 in
February 2015 to as low as
$101.11 last February.
Microsoft will pay $196 per
LinkedIn share, a 50% premium
to the social network’s closing
price on Friday. Both boards approved the deal, and Reid Hoffman, LinkedIn’s chairman and
controlling shareholder, supports the transaction. LinkedIn
Chief Executive Jeff Weiner will
keep his current job when the
deal closes, which the companies
expect to happen by the end of
The tie-up will also test Microsoft’s ability to meld a large
acquisition with its own operations. The Redmond, Wash.based company has struggled to
integrate previous purchases including Nokia Corp.’s handset
business and aQuantive Inc.,
costing shareholders billions of
dollars in the process.
The deal dwarfs other Microsoft acquisitions. Its next largest
deal, buying the Nokia handset
business, led to Microsoft taking
charges that exceeded the $9.4
billion price. That deal was or-
Continued from Page One
Stock Average off 1.5%.
The selling signified that the
market is now taking seriously
an issue that has been brushed
aside by many traders and
portfolio managers during a
sharp 2016 bounceback rally,
even as concerns about vote-related uncertainty vexed policy
Slowing economic growth
and fears of a market shock
stemming from an event such
as a “Brexit” vote have helped
keep Federal Reserve officials
from carrying out planned interest-rate increases in 2016.
Their restraint has helped push
U.S. stock indexes within range
of records despite many investors’ sense that the economy
remains soft and markets vulnerable to any upset of a delicate status quo.
“Right now, the U.K.’s decision is the headline that keeps
the Fed on hold, likely until
September,” said Jim Vogel,
head of interest-rate strategy
at FTN Financial. “At a minimum, they have to wait out the
vote and its immediate aftermath.”
Europe is especially vulnerable. Britain has been among the
best performing of the major
European economies in recent
years, and many economists
say a vote to leave the EU
would hit investment hard—
and possibly deliver a shock to
are made of recycled materials.
Some use solar panels or gather
rainwater. The main problem
for tiny house dwellers is that
zoning laws in most cities and
towns make it very difficult to
legally build such homes.
Dave Alsbury, 55, moved to
Spur three years ago and then
came up with the idea of turning the town into a tiny house
mecca. The technology entrepreneur doesn’t live in a tiny
Spur’s relaxed building codes
and low prices make it appealing to people looking for a place
to build a tiny house on land
they own. The recent laying of
an ultra-high-speed fiber internet cable in Spur has proven attractive to those who work online, meaning they don’t need to
be farmers or ranch hands to
earn a living in the area.
Mr. Alsbury says Spur
needed to impose some rules on
tiny houses once town officials
started hearing about the building plans of newcomers like Mr.
Garcia. “Benjamin has a lot of
big ideas, which are all great,
but they probably aren’t going
to work in a West Texas town,”
Mr. Alsbury says.
The dust-up hasn’t shaken
local interest in the tiny house
movement, and Spur is now
working to free up another 40
lots for sale. Each sale puts a
dormant property back on the
local tax rolls.
“A lot of these towns out
here are dying. These folks
coming in are educated, professional and seem like they really
have something to bring to the
community. They are like a ray
of sunshine on an otherwise
cloudy situation,” says Charlie
Morris, a retired federal agriculture inspector and Dickens
County, Texas, commissioner
who has lived in Spur for about
40 years. “What we don’t want
are anarchists or nudists.”
Carol Haefner and her dog on the porch of a ‘tiny house’ in Spur, Texas. The town is trying to lure
devotees of such homes to reverse a population decline, but new rules have divided its residents.
BRANDON THIBODEAUX FOR THE WALL STREET JOURNAL (PHOTOS)
Spur Mayor Steve Bland says
the tiny house movement has
been a lot to take in for the 107year-old town, where the biggest excitement usually comes
when the Spur Bulldogs highschool football team squares off
against its archrival, the Paducah Dragons.
“This is new for us,” Mr.
Bland says. “We understand as
it grows, we’ll have to grow
with it—you can’t stay stuck in
your ways—but we want things
to go slowly.” So far, Spur has
sold 60 abandoned lots for
roughly $500 apiece, and about
20 “tiny housers” are expected
to be moved in by the end of
The definition of what constitutes a tiny house varies
widely. The concept falls into
three rough categories: tiny
houses on wheels, which can
function like motor homes, tiny
houses on foundations, and
houses made of alternative
building materials, such as discarded shipping containers.
Tiny is relative, too. In Spur,
a tiny dwelling must be smaller
than 900 square feet, which
many New Yorkers would consider a spacious apartment.
Among tiny housers, a 500square-foot to 1,000-square-foot
house is typically called a
“small house,” while a 120square-foot to 500-square-foot
building is a “tiny house.” Anything smaller is deemed a “micro house.”
Most tiny houses fall somewhere around 300 square feet—
about one-third the size of a
swimming pool. The typical single-family U.S. home is 2,500
square feet. In Spur, the smallest house so far measures just
80 square feet.
Tiny homes are more affordable and ecologically friendly,
with lower heating and power
needs translating into a smaller
carbon footprint. Some houses
Hank Boerema, middle, decided to build his home on a plot of land outside Spur after the town
council passed an ordinance that requires house designs to be submitted for approval.
Hit and Miss
Microsoft’s top ﬁve acquisitions by date announced and deal value.
Deal value in billions
Deal for web
failed to meet
Microsoft hopes to
turn the consumer
calling service into a
turned into a bust,
leading to major
to be paying off.
THE WALL STREET JOURNAL.
Sources: Dealogic; the companies
chestrated in 2014 by Microsoft’s previous chief executive,
Microsoft’s prior efforts at
weaving social networking into
its productivity software haven’t
caught fire. In 2012, Microsoft
bought workplace chat service
Yammer Inc. for $1.2 billion, but
has seen rival products, such as
Slack, gain momentum.
“Sadly, history has shown
[synergies] are very difficult to
realize when two big companies
combine, especially to the extent
LinkedIn is remaining an independent fiefdom within the Miconsumption and growth overall.
Europe’s banks, meanwhile,
are struggling to shake off a
yearslong crisis and remain
vulnerable to financial turmoil.
Italian banks, for instance, are
bedeviled by bad loans and will
need sustained economic improvement to dig out from underneath them.
The Stoxx Europe 600 index
dropped 1.8%, wiping out all
gains since February. Shares of
European banks shed nearly
3%. Bank investors fear an exit
could disrupt the operations of
those that use London as a hub.
A polling barrage began late
Friday—well after Asian markets were closed for the weekend—with a survey that gave a
six-point lead to the “Leave”
camp. Two Sunday newspaper
polls each gave small edges to
different sides, and then three
polls Monday showed growing
support for “Leave.”
“Equity-market price action
makes one thing clear: The
Brexit vote will be a major
source of volatility,” said Nicholas Colas, chief market strategist at global brokerage Convergex.
Concerns about the impact
of the referendum have
helped trigger 18 consecutive
weeks of outflows from European equity funds and
weighed on the British pound.
Data from the U.S. Commodity Futures Trading Commission show investors are
increasingly placing bearish
bets against sterling. In the
deal aims to combine
social network offerings
with other services
aimed at businesses.
crosoft empire,” said Mitch Kapor,
Development Corp. and partner
of venture firm Kapor Capital.
Some business leaders look
forward to benefits from the tieup. Tech companies and their
customers “are looking for ways
to get even more out of social
media,” said Steve Phillips, chief
information officer of Avnet Inc.,
an electronics supplier that uses
Microsoft products including Office 365.
Mr. Nadella and Mr. Weiner
met at a Microsoft gathering of
CEOs a few years ago, and the
pair talked earlier this year about
working more closely, according
to a person familiar with the matter. That person said there was
“such a mind-meld” during those
discussions that the conversation
moved toward the possibility of
an acquisition. Mr. Hoffman was
also “actively” part of the takeover talks, which lasted a few
months, the person said.
Another source said that
Messrs. Nadella, Weiner and
Hoffman and Microsoft exec Qi
Lu, who worked with Mr. Weiner
at Yahoo Inc., met for dinner in
April to discuss potential scenar-
ios. Microsoft and LinkedIn leaders dined at Mr. Hoffman’s house
Sunday night, the person said.
The deal highlights Mr. Nadella’s bid to reshape Microsoft,
a little more than two years after taking the helm. Mr. Nadella,
who rose through Microsoft’s
ranks in its business applications
and server groups, has focused
much of the company’s efforts
on products and services for corporate customers.
As CEO, he has extended Microsoft’s software to platforms
that it doesn’t control, including
Android mobile phones and the
Linux desktop operating system.
And he has pushed to connect
Microsoft’s products to data
sources that can provide customers with timely, useful information, and to develop services
intended to anticipate information users want and actions
Growth has been a challenge
for both Office and LinkedIn. In
the quarter that ended March 31,
revenue at Microsoft’s productivity and business processes
unit, which includes Office, grew
by 1% to $6.5 billion. Office users
number 1.2 billion, the company
Growth at LinkedIn, which in
the first quarter claimed 105.5
million monthly active users of
Bond yields, the pound and bank shares slumped Monday in U.K. trading after polls fueled renewed
concerns that U.K. voters could back an exit from the European Union on June 23.
Yield on government bonds
Dollar vs. the British pound
Stoxx Europe 600 Banks index
10-year U.S. note
10-year British gilt
£1 buys $1.423
Sources: Tradeweb (gilt); Tullett Prebon (dollar vs. pound); WSJ Market Data Group (U.S. note and banks index)
week to June 7, asset managers increased their net short
position to 76,623 contracts.
That is up from 72,405 contracts a week earlier and its
highest level since early
And investors are starting
to worry that the impact of
Brexit could cross borders.
On Monday, the dominoes
fell onto Japan: A search for
safety drove investors into
the yen, which surged to its
highest levels against the
euro and pound since 2013.
The move erased all the yen’s
losses against the common
currency since the Bank of
Japan started its easing pro-
gram over three years ago.
The yen’s rise is bad news
for Japanese policy makers,
who have been trying to keep
it low to juice exports.
More broadly, Brexit could
inject uncertainty into Europe’s already-fragile political
union, which is struggling to
build consensus on economic
policy and migration.
The European Union “is ultimately one of the more successful partnerships of all
time—the thought of that
changing is destabilizing,”
said John DeClue, chief investment officer at the Private Client Reserve, U.S.
THE WALL STREET JOURNAL.
“People would start extrapolating to what else can happen in Europe if other countries leave,” Mr. DeClue said.
The British pound fell to a
two-month low against the
dollar at $1.4153 on Monday,
before recovering in New York
trading. Late in the New York
trading day, the pound was at
Skepticism toward European integration is rising
across the continent. A median of 51% across 10 member
countries surveyed have a favorable view of the EU, compared with 61% a year ago, according to a new study by the
its web and mobile apps, has decelerated in the past two years.
UBS Securities LLC analyst
Brent Thill estimates that
LinkedIn revenue will climb a bit
more than 25% in 2016, down
from more 35% growth in 2015
and more 45% growth in 2014.
Microsoft said it expects
LinkedIn, which will be part of
its productivity and business
processes segment, will have a
minimal negative impact—about
1%—on adjusted earnings for its
fiscal 2017 and 2018 years. The
deal is expected to add to Microsoft’s per-share earnings in 2019.
Following news of the acquisition, Moody’s Investors Service
said it would review Microsoft’s
triple-A credit rating for a potential downgrade.
Morgan Stanley served as Microsoft’s financial adviser to Microsoft, and LinkedIn was represented by Qatalyst Partners and
Allen & Co.
Analysts said a competing bid
from another tech company is
unlikely given the size of the
transaction. Credit Suisse analyst Stephen Ju also cited “the
lack of clear strategic fit” between LinkedIn and other major
and Deepa Seetharaman
contributed to this article.
Pew Research Center, while
70% of those surveyed said
they think it a U.K. exit would
be bad for the EU.
Europe’s periphery sold off
harder than the U.K.’s FTSE
100 index, which fell 1.2%.
Spain’s IBEX pulled back 2.2%,
Italy’s FTSE MIB index lost
2.9% and Greece’s Athex Composite fell 3.9%. Bond yields
rose in Greece, Italy, Portugal
“Global stocks probably
drop 5-10% in relatively short
order if there’s a Brexit,” said
Phil Orlando, chief equity
strategist at Federated Investors in New York.
around Britain’s future in Europe has helped boost assets
around the world perceived as
safe. Gold rose 0.9% to
$1,284.40 an ounce. The 10year Japanese government
bond hit an all-time low yield
of -0.161% on Monday, according to data from Tradeweb.
Yields move inversely to
Betting markets put the
chances of a vote to leave at
around a third—higher than it
has been in past weeks. Nonetheless, “the weight of money
being wagered on the outcome still implies that a Brexit would come as a big surprise and therefore cause
waves in the financial markets,” said Alex Holmes at
—Mike Bird, Jenny Gross
and Chao Deng contributed
to this article.
THE WALL STREET JOURNAL.
Tuesday, June 14, 2016 | A13
In the spring
of 2013 Barack Obama
speech of his
the subject of
wrong, as was
its thesis, as
were its predictions and recommendations. We are now
paying the price for this cascade of folly.
“Today, Osama bin Laden is
dead, and so are most of his
top lieutenants,” the president
boasted at the National Defense University, in Washington, D.C. “There have been no
large-scale attacks on the
United States, and our homeland is more secure.” The “future of terrorism,” he explained, consisted of “less
capable” al Qaeda affiliates,
“localized threats” against
Westerners in faraway places
such as Algeria, and homegrown killers like the Boston
discovers too late that
he cannot order the
tide of war to recede.
All of this suggested that it
was time to call it quits on
what Mr. Obama derided as “a
boundless ‘global war on terror.’ ” That meant sharply curtailing drone strikes, completing the withdrawal of U.S.
forces from Afghanistan, and
closing Guantanamo prison. It
meant renewing efforts “to
promote peace between Israelis
and Palestinians” and seeking
“transitions to democracy” in
Libya and Egypt. And it meant
working with Congress to repeal the 2001 Authorization for
President Canute and Orlando
Barack Obama in the Oval Office, June 13.
Use of Military Force (AUMF)
against al Qaeda.
“This war, like all wars,
must end,” he said. “That’s
what history advises. That’s
what our democracy demands.”
King Canute of legend
stood on an English shoreline
and ordered the tide to recede. President Canute stood
before a Beltway audience and
ordered the war to end. Neither tide nor war obeyed.
In 2010, al Qaeda in Iraq—
Islamic State’s predecessor—
was “dead on its feet,” as terrorism expert Michael Knights
told Congress. World-wide,
the U.S. government estimated
al Qaeda’s total strength at no
more than 4,000 fighters.
That was the result of George
W. Bush’s surge in Iraq, of Mr.
Obama’s own surge in Afghanistan, and of the aggressive
campaign of drone killings in
Pakistan and Yemen.
But then the Obama Doctrine kicked in. Between 2010
and 2013 the number of jihadists world-wide doubled, to
100,000, while the number of
jihadist groups rose by 58%,
according to a Rand Corp.
study. That was before ISIS
declared its caliphate.
Today, the U.S. government
estimates that ISIS can count
on as many as 25,000 fighters.
This is after a two-year campaign of airstrikes to destroy
the group. In Libya alone, U.S.
intelligence recently doubled
its estimate of ISIS fighters, to
as many as 6,000. Even “core”
al Qaeda is surging again in
its Afghan and Pakistani
heartland, thanks in part to
the military gains the Taliban
have made in the face of
Apologists for Mr. Obama
will rejoin that it’s unfair to
blame him for trends in terrorism, an argument that
would have more credibility if
he hadn’t been so eager to
take credit for those trends
only three years ago. The
same apologists also claim
that the U.S. cannot possibly
cure what ails the Middle
East, and that no law-enforcement agency can stop a lonewolf terrorist such as Omar
But these arguments fail.
The rise of ISIS was a predictable result of Mr. Obama’s abdication in Iraq and especially
Syria—a result Mr. Obama
himself foresaw in his 2013
speech. “We must strengthen
the opposition in Syria, while
isolating extremist elements,”
he said, “because the end of a
tyrant must not give way to
the tyranny of terrorism.”
Was the opposition strength-
ened? Were the extremists
As for lone wolves, one
study from last year cited 38
cases of “lone wolf” terrorism
between 1940 and 2001, another 12 during the eight
years of the Bush administration—and more than 50 since
The phenomenon is catching in part because ISIS is
canny at using the internet
and social media to attract
and activate recruits. But
what ISIS mainly does is give
aimless and insignificant
young men what most young
men secretly crave—a cause
worth dying for. When Mr.
Obama attempts to reassure
Americans by suggesting, as
he did Monday, that Mateen
was not part of “a larger
plot,” he demonstrates once
again that he doesn’t understand the enemy. ISIS, al
Qaeda and other jihadist
groups are not criminal conspiracies. They are a religious movement. No coordination is required for the
true believer to put his faith
It would require more humility than Mr. Obama is capable of mustering to admit
that what happened in Orlando is also a consequence of
his decisions—of allowing Iraq
and Syria to descend to chaos;
of pretending that we could
call off the war on terror because fighting it didn’t fit a
political narrative; of failing
to defeat ISIS swiftly and utterly; of refusing to recognize
the religious roots of terror;
of treating the massacre in
San Bernardino as an opportunity to lecture Americans
about Islamophobia, and Orlando as another argument for
This is the president’s record. His successor will have
to do better to avoid future
Orlandos. Will she?
Trump Plays the Radical Islam Card
“I have never
made but one
prayer to God,
a very short
one: ‘O Lord,
make my enemies ridicuMAIN
lous.’ And God
is Voltaire but
it could be
Donald Trump. Because in this
election year, the people who
most object to Mr. Trump appear to be doing the most to
boost his popularity. Their latest contribution comes as
America is still reeling from
the ISIS-inspired massacre at
an Orlando nightclub.
On Sunday morning, the nation awoke to the news that
nearly 50 innocent people had
been murdered by a gunman at
Pulse, a gay nightclub in
Orlando. Soon they would
learn the shooter was 29-yearold Omar Mateen, born in
America to parents of Afghan
In other words, a heavilyarmed man with Afghan parents and a Muslim name had
targeted a gay nightclub for
his bloody rampage. And yet
as the American people
watched those Sunday press
conferences on their TV sets,
they were treated to a parade
of officials, including the
obligatory imam, all reluctant
to connect the killer with anything suggesting Islam.
At 1:59 p.m. it was the president’s turn.
Though he did call the
slaughter at Pulse an “act of
terror,” anyone relying on
Barack Obama for a read of the
situation would have had no
idea that the killings at a Florida nightclub might have been
inspired by the same ideology
behind the forces still confronting American troops in
Afghanistan and Iraq.
Now ask yourself: Does this
undermine the Trump message
or fuel it?
On Monday, after a security
briefing, President Obama conceded the shooter was “inspired by various extremist information” online. His sole
reference to what this might
be was a line about the “perversions of Islam that you see
generated on the internet.”
found Mr. Trump repeating his
call for a temporary ban on
Muslims. Let’s stipulate this
call is all his critics say it is:
overly broad and not well
thought out, given, for example, that to defeat the Islamists making war on America
we will need the full assistance
both of Muslim nations and individual Muslims, not least
But Mr. Trump’s comments
are not received in a vacuum.
They come in the context of an
Obama administration and a
Hillary Clinton campaign that,
15 years after al Qaeda hijackers flew civilian airliners into
buildings in New York and
Washington, still have trouble
acknowledging radical Islam as
a motivating force.
At a Democratic presidential debate in November, Mrs.
Clinton was asked whether her
failure to use the phrase “radical Islam” was a sign she had a
weak policy. Back then she
ducked, but post-Orlando Mr.
Trump has successfully forced
the issue. So on Monday Mrs.
Clinton answered by declaring
she is “happy to say” either
“radical jihadism or “radical
But she added an inadvertently telling point: Those
pushing the language about
radical Islam, she suggested,
are trying to “demonize and
demagogue and declare war on
an entire religion.”
The GOP candidate
forces Hillary Clinton
to address language
she has avoided.
Mr. Trump, of course, has
found himself quite frequently
on the demonized end of the
stick. Only a month or so ago,
he was commonly likened to
Hitler. So it was no surprise
that on Sunday, even as the
bodies of the dead in Orlando
were still being removed, the
New Yorker posted a David
Remnick story with this headline: “Donald Trump’s Exploitation of Orlando.”
Notwithstanding Mr. Remnick’s claim that it “feels indecent on such a day to engage
these comments of Trump’s at
all,” the tone suggests it felt
pretty good. The particular indecency in question was a
Trump tweet saying the mass
murder in Orlando had proven
him right about the Islamist
threat to Americans.
Funny how no one finds it
indecent when Mr. Obama uses
a shooting to justify his call
for gun control. And where
was Mr. Remnick when Mrs.
Clinton tweeted that “Bernie
Sanders prioritized gun manufacturers’ rights over the parents of the children killed at
Leave aside that the term
“radical Islam” itself marks a
distinction between violent
jihadists and peaceful Muslims. The greater irony here is
that Mr. Trump and Mrs. Clinton may not be as far apart as
may appear on ISIS. Both emphasize an air war: While Mr.
Trump says he would bomb
ISIS oil fields, Mrs. Clinton
embraces the Obama fiction
that we can do the job with a
few Special Forces and a good
bombing campaign. Neither
addresses the hard truth that
defeating ISIS will require a
much greater U.S. commitment, probably including more
Even so, at least for now,
Mr. Trump benefits. His language on Muslims and the
Middle East may be crude and
unnuanced. But it’s not hard to
understand its popular appeal
when set against a president
and his secretary of state who
almost always invoke Islam
only when it’s time to lecture
their fellow citizens about
Mr. Trump often complains
about how unfairly he’s
treated by his critics. If he understood what folks such as
Mr. Remnick are doing for him,
he’d put them on the payroll.
Write to firstname.lastname@example.org.
Notable & Quotable: ‘The Parlance of Pilots’
From “The Parlance of Pilots,” by Mark Vanhoenacker, a
British Airways senior first
officer, for Aeon online, June 9:
Imagine a plane that flies
from London to Bangkok. The
pilots speak first to British
air-traffic controllers but, just
a few minutes after takeoff,
the British controllers hand
them over to Belgian or Dutch
ones, who soon pass them to
German controllers, and then
to Czech, to Hungarian, to
Romanian, to Turkish, to Iranian ones, and so on.
In flight, pilots are listening
not just to controllers, but also
to other pilots—Thai pilots re-
turning from Paris, Russian
pilots on their way to the
Maldives, and pretty much
every other conceivable combination of origin, destination,
flag and crew nationality. The
whole world is in the sky.
It’s hard to imagine a system more in need of a common language. And that language is English (or Englishderived Aeroese). When a
Venezuelan pilot speaks to a
New York air-traffic controller,
or when a pilot from Brooklyn
speaks to a controller in Caracas, they speak in English. It’s
something to marvel at, the
first time you fly to Tokyo, say,
and you hear an exchange be-
tween a Japanese pilot and a
Japanese air-traffic controller,
both speaking carefully in
Japanese-accented English. It’s
standardisation and globalisation by force of bare necessity,
by force of speed. . . .
When planes speak, they
speak English, and more often
than not with a male voice:
‘TRAFFIC, TRAFFIC’, to call
our attention to another airplane; ‘ONE HUNDRED’, among
other heights, as we come in
to land; ‘MONITOR RADAR
DISPLAY’ in certain weather
My favourite airplane vocalisation is the ‘DECIDE’ call,
which I first heard on that 747
flight from Tokyo to London,
when I was a wide-eyed and
wide-eared guest in the cockpit. The ‘DECIDE’ call comes
in a female, English-accented
voice (on the 747s that I fly)
that we hear as we reach the
altitude or height at which we
must either have sight of the
runway environment or break
off the approach. ‘DECIDE’,
the plane implores, a decision-making tool that I’ve
occasionally wondered about
turning into an app to be
deployed in meeting rooms in
the corporate world or academia. Career counsellors
might like it too—it certainly
worked for me.
BOOKSHELF | By Moira Hodgson
In the Darkroom
By Susan Faludi
(Metropolitan, 417 pages, $32)
n 2004 Susan Faludi, the Pulitzer Prize winning journalist
and feminist writer, was boxing up her notes from a book
she was writing about masculinity when she took a break
to check her email. “Dear Susan,” the note read, “I’ve got
some interesting news for you. I have decided that I have had
enough of impersonating a macho aggressive man that I have
never been inside.” That man was her 76-year-old father, who
was then living in Hungary. He’d just had a sex change operation in Thailand. “My photographer father still preferred the
image to the written word.” Ms. Faludi writes. “Attached to
the message was a series of snapshots.” Steven Faludi was
now Stefánie Faludi and she
wanted her daughter to tell
Stefánie and Susan were estranged; they had barely spoken in years when the author
received this email. The author’s father had been an “imperious patriarch” and “household
despot”—a man Ms. Faludi
feared, and whose aggression
must have played a pivotal role in
In this riveting book about a
very complicated subject, Ms. Faludi grapples with her feelings: “I
was preparing an indictment, amassing discovery for a trial. But somewhere along the line,
the prosecutor became a witness.” She does a remarkable job
tracking down the truth about her father, a person of multiple and contradictory identities. The book’s title, “In the
Darkroom,” has a double meaning. It refers to the job her father held altering images in a Manhattan photo lab and to the
dark, mysterious side of her father’s volatile personality.
Ms. Faludi grew up with few details about her father’s
early life. She knew that his birth name was István Friedman,
and that he was born and raised Jewish in Budapest, a child
of privilege whose family owned a villa and two luxurious
apartment buildings that were confiscated during the war.
István had survived the Nazi occupation as a teenager by
moving from one hiding place to another. In winter he’d seen
a frozen horse in the gutter and hacked off pieces to eat.
He’d also saved his parents lives, posing as a member of
the fascist Arrow Cross party with a purloined armband, hat
and an old army rifle, marching them at gunpoint out of a
house where they were being held for extermination. The accounts her father gave of those incidents, Ms. Faludi writes,
“were more snapshots than stories, visual shrapnel that rattled around in my childish imagination, devoid of narrative.”
Remarkably, after the war, her father changed Friedman to
Faludi, calling it “a good authentic Hungarian name.” And after moving to America in 1953, he married and had two children, changing his first name from István to Steven. He insisted the family celebrate Christmas and Easter.
István Friedman survived the Nazis. He moved
to America, changed his name, raised a family.
Five decades later, he changed his gender too.
The marriage was not a happy one. When Ms. Faludi was
17, after her parents separated, her father broke into the
house one night and attacked her mother’s boyfriend with a
Swiss army knife. He had planned his invasion and alibi so
meticulously that during the divorce proceedings he was
judged as the injured party.
Ms. Faludi unfolds her father’s story like the plot of a detective novel. “I had cast myself as a posse of one, tracking
my father’s many selves to their secret recesses,” she writes.
She interviews her father’s transgender friends in Hungary,
wades through stacks of files and photograph albums in her
house, and visits family relatives in Israel where she discovers more long-hidden information, including another daring
wartime rescue. “My father, whose accounts of wartime valor
I’d always suspected of inflation, was downplaying her courage.” She also learns that her grandparents were profoundly
neglectful of their only child: They hadn’t even bothered to
attend his bar mitzvah.
After the fall of Communism in 1989, Ms. Faludi’s father
made the decision to return to Hungary—a very odd choice
given its dark history and its continuing anti-Semitism, and
one that is never fully explained.
Ms. Faludi pays several visits to Stefánie in Budapest. She
wonders how she will be able to reconcile the brutal man
she’d known as a child with a person who now identifies as
“a complete woman.” As she waits for her father at the airport for the first time, Ms. Faludi wonders: “Did she think sex
reassignment surgery was a get-out-of-jail-free card, a quick
fix to a life of regret and recrimination?” When she spots the
familiar profile at the end of the queue, she notices that her
father’s hair, now henna-red, is her own and not a wig, and
that she’s wearing a gray flannel skirt, white high heels and
pearl stud earrings. Stefánie takes her white pocket book and
hangs it from a hook on the luggage cart. “My first thought,
and it shames me, was: no woman would do that,” Ms. Faludi
writes with typical candor.
On her visits to Budapest Ms. Faludi is horrified by highly
visible signs of anti-Semitism she sees, but Stefánie seems
blithely unconcerned by the threat before her eyes. On television they watch hordes of black-shirted supporters of the
Neo-Fascist Magyar Gárda parade before the news cameras
during a national election, their caps adorned with golden lions and red stripes not unlike those of the Nazi Arrow Cross.
Stefánie tells her daughter, “There’s no problem. It’s democracy in action.” Over dinner one evening Ms. Faludi asks
Stefánie which has been easier for her: “to be accepted as a
woman after being born a man, or to be accepted as a Magyar [Hungarian] after being born a Jew?”
“My father thought about it for a few moments, holding
her spoon before her like a hand mirror. ‘As a woman. Because I am a woman–with a birth certificate that says I’m a
woman. So I must be a woman.’” When Ms. Faludi asks her
father what “identity” means to her, Stefánie responds that
“‘it’s what society accepts for you. You have to behave in a
way that people accept, otherwise you have enemies. That’s
what I do—and I have no problems.’”
Stefánie died in May 2015 at age 87. Was her strange return to Budapest, a place hostile to Jews, gays and transgender people, more than anything an act of defiance? Ms. Faludi
never finds a clear answer.
Ms. Hodgson is the author of “It Seemed Like a Good
Idea at the Time: My Adventures in Life and Food.”
THE WALL STREET JOURNAL.
A14 | Tuesday, June 14, 2016
REVIEW & OUTLOOK
LETTERS TO THE EDITOR
America Deserves Better
What Cure for Foreign Students’ Cheating?
ven amid a terrorist massacre on the tured in havens across the Middle East.
scale of Orlando, the American people
Mrs. Clinton’s response—in TV appearances
are getting more reasons to justify their and then in a prepared speech in Cleveland—
unhappiness with the political
was mostly a stage-managed
Neither Trump nor
class. By which we mean the
walk through the aftermath of
day-after responses of Presi- Clinton are rising to the the Orlando massacre. More
dent Obama and the two prethan anything, she used the
Islamic State threat.
sumptive nominees, Donald
occasion as a political opporTrump and Hillary Clinton.
tunity to define her opponent
The American people deserve
as a divider and herself as a
a better strategy to defeat terrorism than they bipartisan unifier against “all those who hate.”
She mentioned as always that she has a “plan”
Mr. Obama appears to be doubling down on to fight Islamic State.
the evasions of the last eight years, as he tries
Earlier in the day, however, Mrs. Clinton did
to prove to the last day that he isn’t George say one good thing about defending the U.S. from
W. Bush. The killer of 49 people, Mr. Obama terrorist attack: “We have the resources, relasaid Monday, “appears” to have declared his tionships and experience to get it done.” That is
loyalty to Islamic State “at the last minute.” true, and that is the heart of the issue.
Meaning exactly what? Presumably on the
After Orlando, San Bernardino, Fort Hood,
Obama anti-terrorism scale of 1 to 10, we’re Paris and Brussels, the one question American
still not at 10 on his watch because the terror- voters need answered is which of these two canist slaughters in Orlando and San Bernardino didates will deploy the enormous intelligence
and military resources of the U.S., enlist its alMr. Trump’s remarks, on various TV shows lied relationships world-wide and use what it
and in a speech in New Hampshire Monday, already knows about terrorism to deter future
gave little evidence he has talked to anyone in atrocities on American soil. As of today, there
the intelligence or foreign-policy communities is little reason to think either candidate would
about the substantive details of addressing the deploy this existing U.S. strength.
threat. He suggested on TV that some of the OrMost striking about the post-Orlando relando club-goers should have had guns sponses of the two presumptive presidential
“strapped to their ankles.” Mr. Trump devoted candidates is how carefully political they were.
about 80% of his New Hampshire speech to re- With 49 Americans dead at a terrorist’s hand,
stating and defending his proposed ban on Mus- the moment calls for some sense of the candilim immigration, with the proviso that it would dates’ counter-strategies. But neither candidate
be “temporary,” once we can “perfectly screen appears willing to step outside his or her politithese people.”
cal comfort zones.
But Mr. Trump’s thoughts on what exactly
Mr. Trump, by his own admission Monday,
he would do to stop Islamic terrorism at its has been promoting a Muslim immigration ban
source in the Middle East weren’t much more for months. But beyond that, where is he going?
than a footnote. On the one hand, he rightly said Mrs. Clinton’s supporters keep whispering she’s
the goal must be to defeat Islamic terrorism by a closet hawk, willing to do more than Mr.
uniting the civilized world in the fight. But do- Obama has to end Islamic State’s destabilizaing what?
tion of the Middle East and Europe. So far, she’s
His sustained assault on U.S. involvement in left the impression that her policy would be
overthrowing Libya’s Moammar Gadhafi and Obama 2.0—more bombing, perhaps, but no
the “total disaster” of “nation-building” sug- real strategy to destroy ISIS.
gests Mr. Trump is more inclined to play to isoThe two presidential candidates sound like
lationist sentiments in the U.S. than discuss opponents in a college debate trying to score
military options for what even he calls the need rhetorical points. Mr. Trump keeps saying, “We
to “defeat Islamic terrorism.” An immigration must find out what is going on.” We know
policy by itself cannot end that threat.
what’s going on. We’ve known it since Islamic
Mr. Trump also made a great show Monday State rose to power during the Obama Presiof calling out Mrs. Clinton and President Obama dency. The American people have about five
for not saying the words “radical Islamic terror- months to be given a better idea than they have
ism.” Word matter but battle plans matter more now of what Donald Trump or Hillary Clinton
against a terrorist enemy whose violence is nur- will do about it.
Peru Keeps Driving Right
ore good news from Latin America, if
Peru’s large black market continues to be a
you can stand it. Center-right candi- drag on development because it can’t provide
date Pedro Pablo Kuczynski has won access to credit. Mr. Kuczynski, a former fiPeru’s presidential runoff
nance minister and successful
The Latin American
election. Can Peruvians export
investment banker, made this
whatever they’re drinking to
an issue in the campaign. He
Europe, or the U.S.?
argued that by cutting taxes
center-right reformer. and reducing the regulatory
Peru has been one of Latin
burden he could bring entreeconomies, with a falling povpreneurs into the formal econerty rate, but slower growth of late has not kept omy and boost government revenues. With
up with rising middle-class expectations. With- greater resources he promised to improve pubout deeper reforms, Peru’s capitalist revolution lic security and make running water available
to all Peruvians.
Mr. Kuczynski, known as PPK, arrives right
Mr. Kuczynski’s victory follows Argentina’s
on time, even if his margin was merely 40,000 turn away from Peronism in November, and
or so votes. Though his rival Keiko Fujimori lost Brazil’s tentative steps toward pro-growth ecoher bid to follow her father and former presi- nomics and cleaning up corruption. Let’s hope
dent Alberto Fujimori, her Popular Force Party he can keep the free-market momentum going
won 56% of congress versus 14% for Mr. Kuczyn- in Lima and show how a more open, transparent
ski’s party. Peruvians seem to prefer divided economy can spread prosperity to even the
poorest parts of the country.
LinkedIn and the Tech Valuation Boom
icrosoft’s Monday announcement that economy support high equity prices?
it’s buying LinkedIn for $26.2 billion
The stock gains of the Obama era are partly
raises important questions about the a reflection of the resilience of American busivalue of technology companess in a tough environment,
nies and stocks. The deal also Microsoft is paying $26 but they may also result in part
carries policy lessons.
from the Federal Reserve’s
billion for a moneyThe software giant is paymonetary exertions. Perhaps
ing $196 a share for the social- losing social-media site. Mr. Hoffman decided this is the
media firm, a 50% premium
time to sell near the top.
over Friday’s closing price.
It’s clear how government
Microsoft CEO Satya Nadella is shelling out policies are shaping the financing of the LinkedIn
roughly seven times LinkedIn’s annual reve- deal. As of March 31, Microsoft’s balance sheet
nues for a business that isn’t profitable and has held more than $105 billion in cash, cash equivaseen slowing growth despite its 433 million us- lents and short-term investments. You would
ers. LinkedIn allows these users to share rolo- think it would pay cash for LinkedIn.
dexes, seek job opportunities and learn about
But the U.S. has the industrialized world’s
industry issues. Most of LinkedIn’s revenue highest corporate income tax rate and insists
comes from businesses seeking to identify po- on taxing foreign profits when they return to
the U.S. So according to Microsoft’s most recent
In a note to employees, Mr. Nadella touted quarterly report, nearly $103 billion of the cash
“new experiences such as a LinkedIn newsfeed was held “by our foreign subsidiaries and would
that serves up articles based on the project be subject to material repatriation tax effects.”
you are working on and [Microsoft] Office sug- With the Fed still holding interest rates near
gesting an expert to connect with via LinkedIn zero, Microsoft plans to borrow most or all the
to help with a task you’re trying to complete.” cash to complete the purchase.
LinkedIn could also provide users of MicroAnother policy lesson is how a largely unsoft’s sales software with info on potential regulated tech industry has been able to drive
innovation and displace incumbents. Microsoft
Mr. Nadella has to take some risks because dominated the desktop computer era but now
Microsoft was late to embrace cloud computing must battle to maintain its business in the era
and has largely failed in the mobile arena. Per- of smartphones. LinkedIn and other social-mehaps the deal can keep Microsoft at the center dia companies are disrupting a host of indusof corporate life.
tries, much as Google has changed the landBut what about LinkedIn co-founder Reid scape of marketing and advertising.
Hoffman? The billionaire likely doesn’t have
Contrast these markets with the highly regany particular need for liquidity, yet he’s ac- ulated world of finance, in which a host of wellcepting a price 27% below LinkedIn’s February funded “fintech” companies struggle to chal2015 high. The nagging concern about this era’s lenge the giants of banking. Fortunately for Mr.
surging tech valuations is a subset of unease Nadella, the market will judge the wisdom of
about the stock market: Can a slow-growth his LinkedIn purchase, not politicians.
The Journal is covering an important and controversial issue that everyone avoids for fear of fueling racist
sentiments, but the numbers uncovered do show that cheating among international students in U.S. colleges is
a problem (“Foreign Students More
Likely to Cheat,” page one, June 6).
According to the California Budget
and Policy Center, state funding per
student at the University of California
System is now at a 30-year low. International student revenue helps balance budgets but creates a raft of new
problems for professors and international students alike. Dealing with
breaches of academic honesty is only
one of the more vexing ones.
Nobody is suggesting that all international students cheat. In large lecture courses, poorly paid teaching assistants are often on the front lines of
enforcement. Administrative denial
stems from fear of appearing racist or
antiforeigner. Unfortunately, this silence only makes the atmosphere
more toxic for international students.
It is time to have an objective discussion about how we can make the system work better for everyone involved, including domestic and
international students. In public universities, we have to confront the fact
that a new revenue stream brings with
it a set of new ethical, administrative
and pedagogical challenges.
PROF. CATHERINE LIU
What Americans perceive as cheating is perceived by Asians as a form of
respect. The Asian culture believes
that using a person’s words or ideas is
a way of demonstrating respect for
that person. Because China is a “highcontext” culture (everyone learns the
same ideas and quotes the same peo-
ple), they do not need to place quotations around a quote or to cite a
source because everyone knows who
said the original quote or whose idea
is being discussed. Asian students are
also taught through modeling and
memorizing. Repeating the same
words verbatim that they have read is
a sign of a good student.
Just providing warnings about plagiarism, which is what most universities do, doesn’t help these students
understand what plagiarism is. They
need to have a lesson in contrastive
cultures that specifically discusses
the differences between the Asian
idea of modeling and demonstrating
respect and the American concept of
plagiarism in order for them to understand the difference between what
they do and what is done in American
PROF. CAROLYN BOIARSKY
Purdue University Northwest
I am an engineering student at a
private university and my honest hard
work is undermined and devalued by
the immense amount of foreign cheating I have experienced firsthand. If
students are aware of cheating, it is
hard to believe professors are in the
dark. In essence, U.S. schools tolerate
the same practice of copying and foul
play that plagues American business
with foreign patent infringement and
industrial espionage. When we tolerate ethically questionable behavior in
school, we fast track individuals with
poor morals to steal American patents
and profit from others’ success.
School administrators must learn it’s
our country and our rules, and if students don’t play by them, there’s no
place for them in American academia.
La Grange Ill.
Progressive Media Creatives Get Their Reward
Peter M. Lenkov suggests (“The
FCC Hoists the Jolly Roger on Your
Cable Box,” op-ed, June 8) that the
only winners of set-top box unlocking
will be nefarious Silicon Valley Big
Tech, which, he claims, “will be free to
make money off your data, including
selling advertising based on shows
When consumers have choice, they
will be free to choose their set-top box
system based on criteria including privacy. Freedom to choose also provides
freedom to ensure one’s own privacy,
instead of trusting a web of “regulatory agreements and contracts that
every cable and satellite company has
negotiated with the networks that
own and distribute content.”
DANIEL F. BELIN
Internet businesses were running
on all cylinders of creativity, competition and growth before net-neutrality
rules were issued to regulate industry
practices. As Mr. Lenkov notes, similar
creative and competitive dynamics
were producing numerous alternatives
to watch content on TVs without cable
boxes, so the FCC’s regulatory overreach was a fix for a problem already
addressed by the marketplace.
Mr. Lenkov’s fellow Hollywood creatives have been instrumental in
blessing us with a political class that
is intent on regulating most aspects of
our lives. If 50% of the monetary reward for hard work can be taken by
Washington’s creatives because others
need the money more, policies that
lighten the wallets of Hollywood’s cre-
atives before they make outrageous
(by non-Hollywood standards)
amounts of money seem fair. Political
campaign donations by entertainment
industry creatives generally show
about a 10-to-1 edge for liberal candidates. Hollywood has the type of statist regime it wanted and paid for.
Washington’s hunger games now pit
Big Tech cronies against Hollywood
content cronies. What we are witnessing isn’t good for free-market competition and economic growth, but it is
St. Augustine, Fla.
Our neighborhood is served by
Time Warner Cable as well as Frontier. I think the FCC has the correct
idea to make universal cable boxes
available which can be purchased outright instead of as it is today when the
cost of the cable box or DVR is paid
for many times over by the cable subscriber. All the devices listed by Mr.
Lenkov, like Apple TV, Amazon Firestick, Roku, etc., won’t allow me to
connect to my cable company. I still
have to pay my monthly rental fee for
the cable-access box.
I did buy a universal modem to connect to the cable company, and the
savings of not having to rent it paid
for the modem in just over a year. We
all remember the telephone companies that forced their users to rent
telephones and the explosion of available, inexpensive devices once that
practice was stopped.
Maybe Our Massive Debt Really Is a Problem
Francis X. Cavanaugh (Letters,
June 3) tells us that worry about the
federal debt is “baseless” because
our children will “inherit the offsetting asset of the Treasury securities
issued to finance the debt. So the net
impact of the debt on future generations is zero.”
Is this the comedy hour? Our children will inherit bonds that they will
have to pay off. There is absolutely
no value to our children from those
bonds which will help them offset the
debt we are leaving them. No nation
can create wealth by borrowing and
Housing: The Canadians
Figured This Out Long Ago
spending money, and then saying to
future generations, “don’t worry, you
have bonds to offset the debt.”
It would be funny were it not so
RICHARD D. LAMM
Mr. Lamm was governor of Colorado 1975-87.
Mr. Cavanaugh argues that we
don’t need to worry about the level
of our foreign debt because maturing
debt and interest can easily be paid
by issuing new debt. Many Americans
have tried the same approach with
their credit cards and found their interest rates jumped to 29% almost
overnight. Even bankers understand
that when a company must borrow to
pay interest on its own debt, it’s time
to bring in the auditors.
Regarding Brian Lee Crowley and
Sean Speer’s “Canada’s Housing Lesson for the U.S.” (op-ed, June 3): Of
course it is sensible to encourage equity rather than debt. But debt is
more potent in boosting the profits of
Given their devastating fate, how
banks, and that appears to guide
could the Weimar Republic, Zimbamuch of U.S. economic policy.
bwe and Greece have gone so wrong?
DWIGHT K. OXLEY
Iceland is a member of the European
Economic Area but not the European
Union. The June 13 op-ed “Northern Europe’s Argentina Imitator” misstated
the country’s association.
Letters intended for publication should
be addressed to: The Editor, 1211 Avenue
of the Americas, New York, NY 10036,
or emailed to email@example.com. Please
include your city and state. All letters
are subject to editing, and unpublished
letters can be neither acknowledged nor
THE WALL STREET JOURNAL.
Tuesday, June 14, 2016 | A15
By Ayaan Hirsi Ali
he Orlando massacre is a
hideous reminder to Americans that homophobia is
an integral part of Islamic
extremism. That isn’t to
say that some people of other faiths
and ideologies aren’t hostile to members of the lesbian, gay, bisexual and
transgender, or LGBT, community.
Nor is to say that Islamic extremists
don’t target other minorities, in
addition to engaging in wholly
indiscriminate violence. But it is
important to establish why a man
like Omar Mateen could be motivated to murder 49 people in a gay
nightclub, interrupting the slaughter, as law-enforcement officials
reported, to dial 911, proclaim his
support for Islamic State and then
pray to Allah.
The rise of modern Islamic
extremism has worsened
I offer an explanation in the form
of four propositions.
1. Muslim homophobia is institutionalized. Islamic law as derived
from scripture, and as evolved over
several centuries, not only condemns but prescribes cruel and
unusual punishments for homosexuality.
2. Many Muslim-majority countries have laws that criminalize and
punish homosexuals in line with
3. It is thus not surprising that the
attitudes of Muslims in Muslim-majority countries are homophobic and
that many people from those countries take those attitudes with them
when they migrate to the West.
4. The rise of modern Islamic
extremism has worsened the intolerance toward homosexuality. Extremists don’t just commit violence
against LGBT people. They also
spread the prejudice globally by
preaching that homosexuality is a
disease and a crime.
Not all Muslims are homophobic.
Many are gay or lesbian themselves.
Some even have the courage to
venture into the gender fluidity that
the 21st century West has come to
recognize. But these LGBT Muslims
are running directly counter to their
In his 2006 book “Crime and
Punishment in Islamic Law,” the
Dutch scholar Rudolph Peters notes
that most schools of Islamic law
proscribe homosexuality. They differ
only on the mode of punishment.
“The Malikites, the Shiites and some
Shafi’ites and Hanbalites are of the
opinion that the penalty is death,
either by stoning (Malikites), the
sword (some Shafi’ites and Hanbalites) or, at the discretion of the
court, by killing the culprit in the
usual manner with a sword, stoning
him, throwing him from a (high)
wall or burning him (Shiites).”
Under Shariah—Islamic law—
those engaging in same-sex sexual
acts can be sentenced to death in
nearly a dozen countries or in large
areas of them: Iran, Saudi Arabia,
Yemen, Sudan, the northern states
of Nigeria, southern parts of Somalia, two provinces in Indonesia,
Islam’s Jihad Against Homosexuals
Near the Pulse nightclub in Orlando, Fla., after the mass shooting there, June 12.
Mauritania, Afghanistan, Qatar, the
United Arab Emirates. Death is also
the penalty in the territories in
northern Iraq and Syria controlled
Iran is notorious for hanging men
accused of homosexual behavior.
The Associated Press reports that
since 2014 ISIS has executed at least
30 people in Syria and Iraq for
being homosexual, including three
men who were dropped from the
top of a 100-foot building in Mosul
in June 2015.
No fewer than 40 out of 57 Muslim-majority countries or territories
have laws that criminalize homosexuality, prescribing punishments
ranging from fines and short jail
sentences to whippings and more
than 10 years in prison or death.
These countries’ laws against
Saluting the Flag and Something More
By Eric Metaxas
n June 14, 1973, Mrs. Saul, my
fifth-grade teacher at Beaver
Brook School in Danbury,
Conn., took the 12 of us in her class
outside to the flagpole to celebrate
Flag Day. It had been nearly 200
years since the same date in 1777
when the Revolutionary Congress adopted the Stars and Stripes as the
new country’s emblem. June 14 has
been designated as Flag Day ever
since—though it’s a sad certainty
that most Americans will pass the
day without noticing.
A neglected June 14 ritual
could use a revival, helping
foster a love for country,
this nation ‘born in liberty.’
Until entering Mrs. Saul’s class, I
had attended a Greek Orthodox parochial school in Queens, N.Y., so when
we went out to the flagpole I assumed this was something most
Americans did annually, and I’d just
been missing it. But I now realize
this was probably something that
Mrs. Saul—who was in her 70s—had
been doing since she became a
schoolteacher in the 1930s, and that
few Americans were doing it anymore.
By 1973, as the Vietnam War continued and Watergate unfolded, the
country had entered the era that
continues to this day, in which the
regnant narrative is more about what
America has done to repent of than
to celebrate. A ritual like honoring
the flag was on the way out.
Under the blue June sky we stood
in a circle around the flagpole and
then my trumpet teacher, Mr. Piccarello, pulled out his gleaming silver
cornet and played “My Country, ’Tis
of Thee,” as we sang along.
After that he played “Taps,” often
used at flag ceremonies. It was sonorous and solemn and beautiful. Those
moments over 40 years ago so
pricked my heart that I still think of
them with the deepest reverence.
We 11- and 12-year-olds understood that what we were doing was
somehow important, and that this
flag we were celebrating was more
than a red-white-and-blue banner. It
was a sacred symbol that pointed
toward something beyond itself, that
pointed to the thing it represented—
to America, the country we’d been
learning about, the nation “born in
liberty” and “dedicated to the proposition that all men are created equal.”
Without saying so, Mrs. Saul was
doing something profound: She was
teaching us to love our country. In
the process, we were being drawn
into the circle of all those celebrating that day, and into the larger
circle of those who had loved America throughout her history—and who
had been doing what Benjamin
Franklin in 1787 had said we must
do, or else.
The 82-year-old Franklin was
exiting Independence Hall in Philadelphia, where he and others had
just finished creating the Constitution—and our nation—when a certain Mrs. Powell confronted him.
“What have you given us, Dr. Franklin,” she asked pointedly, “a monarchy or a republic?”
Franklin’s response is famous: “A
republic, Madam—if you can keep it!”
Standing around that flagpole 43
years ago, we were doing our small
but vital part in “keeping” the republic. We were thus becoming Americans not in name only, but in our
hearts and minds. America is the
only nation not defined by ethnicity
or religion, but by an unprecedented
idea: liberty for all. So to truly be an
American one must understand that
idea, and must buy into it, and live it.
What we did that day was not
indoctrination into some nationalistic, tribalist cause—God forbid—but
an invitation to something noble and
true and eternal. We were being
connected to the “mystic chords of
memory” of which Lincoln spoke,
and to the sacrifices of all those who
had died for the country, and to
those still returning in coffins from
We were becoming part of something intended for everyone, but not
yet possessed by everyone. We were
being entrusted with the great privilege of maintaining the flame of liberty, that others beyond our shores
might see it and be drawn to it.
So, my dear fellow Americans, a
question: How well have we been
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“keeping” this wild and fragile and
unprecedented idea of a republic
born in liberty? Let me be the first to
admit: I’ve been sorely negligent. I
reckon I’ve got to make up for about
four decades of lost time. This Flag
Day, I’m getting started. I hope you’ll
Mr. Metaxas is the author of “If
You Can Keep It: The Forgotten
Promise of American Liberty,” just
out from Viking.
homosexuality align with the attitudes of the overwhelming majority
of their populations. In 2013 the
Pew Research Center surveyed the
beliefs of Muslims in 36 countries
with a significant Muslim population or majority, including asking
about their views of homosexuality.
In 33 out of the 36 countries, more
than 75% of those surveyed answered that homosexuality was
“morally wrong,” and in only three
did more than 10% of those surveyed believe that homosexuality
was “morally acceptable.”
In many Muslim-majority countries—including Afghanistan, where
Omar Mateen’s parents came from—
LGBT people face as much danger
from their families or vigilantes as
they do from the authorities.
Perhaps not surprisingly, Islamic
extremists condemn homosexuality
in the strongest possible terms. The
Middle East Media Research Institute reported in 2006 that when
Sheikh Yusuf al-Qaradawi, one of
the world’s leading Sunni clerics
and chairman of the European
Council for Fatwa and Research, was
asked how gay people should be
punished, he replied: “Some say we
should throw them from a high
place, like God did with the people
of Sodom. Some say we should burn
them, and so on. There is disagreement. . . . The important thing is to
treat this act as a crime.”
Such ideas travel. In 2009 Anjem
Choudary, an infamous London
imam and self-proclaimed “judge of
the Shariah Court of the U.K.,”
stated in a press conference that all
homosexuals should be stoned to
death. Here in the U.S., Muzammil
Siddiqi, former president of the
Islamic Society of North America,
has written: “Homosexuality is a
moral disorder. It is a moral disease,
a sin and corruption . . . No person
is born homosexual, just like no one
is born a thief, a liar or murderer.
People acquire these evil habits due
to a lack of proper guidance and
Farrokh Sekaleshfar, a Shiite
cleric educated in London, declared
of homosexuality in 2013: “Death is
the sentence. We know there’s nothing to be embarrassed about this.
Death is the sentence.” He was
speaking at the Husseini Islamic Center outside Orlando. Yes, Orlando. He
spoke there again in April.
These men express their hostility
toward the LGBT community only
verbally, but the Orlando attack was
hardly the first manifestation in the
U.S. of Islamist antigay violence.
During a New Year’s Eve celebration
in the first hours of 2014, Musab
Masmari tried to set fire to a gay
nightclub in Seattle; he is serving 10
years in prison on federal arson
charges. Law-enforcement officials
say that Ali Muhammad Brown, an
ISIS supporter who is now in prison
for armed robbery, also faces
charges for terrorism and four murders, including the 2014 execution
of two men in Seattle outside of a
Following the horrific attack in
Orlando, people as usual have been
rushing to judgment. President
Obama blames lax gun laws. Donald
Trump blames immigration. Neither
is right. There has been comparable
carnage in countries with strict gun
laws. The perpetrator in this case
was born in the United States. This is
not primarily about guns or immigration. It is about a deeply dangerous
ideology that is infiltrating American
society in the guise of religion.
Homophobia comes in many forms.
But none is more dangerous in our
time than the Islamic version.
Ms. Hirsi Ali, a fellow at the Harvard Kennedy School, is the author
of “Infidel” (Free Press, 2007) and
“Heretic: The Case for a Muslim Reformation” (HarperCollins, 2015).
EXXON’S CEO SAYS
FOSSIL FUELS ARE
AND SEA LEVELS.
WHY WON’T THE WALL STREET JOURNAL?
THE WALL STREET JOURNAL.
A16 | Tuesday, June 14, 2016
Cognitive inventory is here.
When a product is“hot,” how do you keep the right
styles and sizes in stock and ready for customers to
buy? To help reduce lost sales, major retailers can
use cognitive technology to look at structured data
like sales reports and unstructured data like tweets
and weather feeds. When your business thinks,
you can outthink.
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A Gig to Dig
Are the Yankees
Buyers or Sellers?
Making great guitars URBAN GARDNER | A18
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Tuesday, June 14, 2016 | A17
SPENCER PLATT/GETTY IMAGES
BY ERICA ORDEN
A couple paused Monday in front of the Stonewall Inn, a historic gay bar in Manhattan’s Greenwich Village, to remember the victims of the Orlando nightclub shooting.
Massacre Prompts Tears, Resolve
In Greenwich Village,
thousands assemble in
mourning and solidarity;
‘We will protect you’
A day after the mass shooting in Orlando, New Yorkers
expressed a mix of sadness, anger and resilience, and officials
moved to crank up security at
By Zolan Kanno-Youngs,
and Josh Dawsey
gay bars and other venues
across New York.
At an event billed as a vigil
for victims in the Orlando
nightclub shooting, thousands
of people filled the streets
Monday evening outside the
Stonewall Inn, the Greenwich
Village bar that was a launchpad for the gay-rights movement. The event had somber
moments but also played out
as a spirited political rally, with
speeches about gun control and
the rights of lesbian, gay, bisexual and transgender people.
With many waving rainbow
flags, the crowd—of all ages
but skewing young—chanted
“Gun control now,” “We are Orlando,” and “Love trumps
hate.” Many held signs bearing
names of gay and transgender
people killed in Orlando and
New York Gov. Andrew
Cuomo addressed the crowd
and quickly seized on the guncontrol theme.
“The senselessness of it is
staggering,” the governor said,
in reference to the shooting,
“the frustration as a society
that would allow a mad man to
buy an assault weapon has
gone on too long.”
“How many people have to
die before this federal government comes to its senses?” Mr.
Cuomo asked, as the crowd applauded.
The gathering at the Stonewall Inn was one of several vigils across the city as New Yorkers tried to come to grips with
the biggest mass shooting in
At the vigil, Mayor Bill de
Blasio urged Congress to pass
The mayor described the Orlando shooting as an attack on
“American values” and “New
York values,” and pledged to
the Latino, LGBT and Muslim
communities: “We will protect
Mr. de Blasio encouraged
New Yorkers to stand in solidarity. “We are all New Yorkers,
we are all Americans and, yes,
we are Orlando,” he said. “I say
this to people all over the
United States: Come to New
York for the Pride parade.”
Nube Cruz, a 28-year-old
tenant-rights advocate, was
handing out fliers calling attention to several acts of violence
against gay and transgender
people. The shooting in Or-
lando was “not a one-time
thing,” he said.
As the vigil drew near, hundreds arrived and jammed
Christopher Street outside the
Stonewall Inn. Signs read:
“#keepkissing,” “NO to homophobia, NO to islamophobia.”
Mytchell Mora, a 26-yearold activist, said he wasn’t interested in hearing about more
legislation from the political
speakers but was hoping for a
“broader conversation about
how homophobia and transphobia impacts our communiPlease see PRIDE page A18
More on the Orlando
shooting.................. A1, A4, A6-8
Newtown debates guns.....A19
It was mid-morning on
Tuesday, April 26, when New
York Gov. Andrew Cuomo heard
that the Westchester County
home of his longtime aide Joseph Percoco had just been
searched by federal agents.
That revelation would trigger anger and dismay among
the Democratic governor’s
staff, as well as resignation
threats and reconsideration of
the administration’s plans for
the immediate future. But perhaps the most pressing concern for many of them was
how to handle the fallout, because they knew the probe, led
by Manhattan U.S. Attorney
Preet Bharara’s office, was
likely to become public.
This account of how Mr.
Cuomo and his administration
learned of the investigation
and attempted to manage the
crisis is based on interviews
with more than a dozen people
involved in the process or
privy to it. It shows a governor
concerned about the repercussions for his administration
and his own reputation, and
struggling with how to distance himself from some of the
aide to Gov.
Cuomo, is being
In the hours after Mr. Percoco’s home was searched—
concurrent with searches of
the Maryland home and Washington, D.C., offices of Cuomo
ally Todd Howe—the governor’s administration began dePlease see PROBE page A18
In Queens, Art Rises From the Mist
BY ANDY BATTAGLIA
Mika Tajima with mist rising from her installation, ‘Meridian
(Gold),’ on view at Hunter’s Point South Park in Long Island City.
9 a.m. 66°
5 p.m. 80°
5:24 a.m./8:29 p.m.
N.Y. Sports Lineup
Pirates @ Mets
For N.Y. sports coverage, see A22
the while, the modulating colors serve as a measure of
sorts for human sentiment
across the globe.
“The price of gold is not attached to supply and demand
the way that most commodities are, but reflects feelings
about economic and geopolitical investment opportunities,”
Ms. Tajima said. “It’s an indicator of how people feel,
linked directly to things that
are happening. It’s very volatile.”
While she was installing the
work last week, prices were
being affected in real time, the
artist said, by matters including a terrorist bombing in
Turkey and a tepid U.S. jobs
report. Uncertainty sends certain investors to gold, raising
its price in ways that can be
clearly discerned—even by unwitting passersby.
“That’s very inviting,” said
Kai Collins, a young mother
strolling through the park
with her children. “I want to
be in the middle.”
“I would get into it now,”
said her friend Luise Christiano.
The monumental pink
square, finished in faux concrete, provides welcoming
bench space, and its interior is
lined with water-resistant teak
Please see ART page A20
The Tonys Afterparty?
Clearly, having the stamina rooms) where it was really
to do eight shows a week is happening was at the “Hamilalso an asset on the party cir- ton” party. The production
cuit, especially on a marathon threw an extremely big bash at
Tavern on the Green that was
This year’s felt espeactually less Tony fete
cially raucous, going well
and more like a “Haminto the middle of the
night. Blame it on “Hammitzvah.
Questlove took care
The Roundabout threw
of the D.J. duties,
an afterparty for “She MARSHALL which meant there was
Loves Me” at the Hard HEYMAN
a consistently packed
Rock Cafe. “School of
dance floor with a gold
Rock” took over Howl at
“Hamilton” star at the
the Moon on West 52nd Street top. Even Claire Danes and
to celebrate the Detroit drama Jesse Tyler Ferguson were enteacher Marilyn McCormick, thused enough to show off a
who received the Excellence in few steps.
Another feature at this
Theatre Education Tony. And
“The Color Purple” went to event was a green-screen
photo booth, where you could
Please see TONYS page A20
Of course, the room (or
ROY ROCHLIN/GETTY IMAGES
There is a new gold price
index in town: a mysterious
cloud of pink and blue mist
rising up by the riverside in
Long Island City, Queens.
The setting is Hunter’s
Point South Park, with a grand
view of Manhattan across the
water. The instrument: a temporary public artwork by the
sculptor Mika Tajima that
looks like a large square hot
tub and encourages viewers to
hop in or stand back and take
in the colored mist.
“You’re bathing in the price
of gold, basically, while facing
one of the biggest financial
centers in the world,” said the
Unveiled late last week,
“Meridian (Gold)” sprays atomized water into the air in
colors correlating to real-time
fluctuations in the price of
gold. Every two seconds, a
custom computer program
scrapes the internet for numbers—from markets in New
York, London, Zurich, Toronto
and Singapore—and adjusts a
color scale powered by LED
lights positioned inside the
square structure, below the
When magenta, the price of
gold is up; when aqua blue,
the trend has gone down. All
Another bash that drew an A-list crowd was DKC O&M’s annual Tony afterparty, at the Baccarat
Hotel. Composer Andrew Lloyd Webber, flanked by D.J.s AndrewAndrew, played a musical role.
A18 | Tuesday, June 14, 2016
THE WALL STREET JOURNAL.
Continued from page A17
veloping a plan. Engaged from
the start was criminal defense
attorney Elkan Abramowitz,
who represented the executive
chamber during the probe concerning the Moreland Commission to Investigate Public Corruption.
Attorneys for Messrs. Percoco and Howe didn’t respond
to requests for comment.
By Tuesday afternoon, Mr.
Cuomo had assembled a group
that the next day were huddled
at his Midtown Manhattan office, where they would remain
for two more days.
The group included a coterie
of outside advisers: his former
senior aide Steven M. Cohen,
former chief of staff Josh
Vlasto and former spokesman
Matt Wing. It also comprised
internal officials, such as chief
of staff Melissa DeRosa, Secretary to the Governor Bill Mulrow, counsel Alphonso David
a team to
the probe of a
ASSOCIATED PRESS (3); GETTY IMAGES
and longtime top aide Linda
The group considered hiring
its own investigator to probe
program of interest to federal
agents, the Buffalo Billion. During the discussion, questions
arose among some internal officials about the sort of confidentiality that might be expected from any investigator
the chamber might retain.
Both Messrs. Abramowitz
and Cohen, however, told members of the office that if they
hired such an investigator, that
person wouldn’t have attorneyclient privilege. The group
agreed to proceed.
Over the next 48 hours, the
administration began to curtail
some plans, including canceling
a conference for Mr. Cuomo’s
tax-incentive program Start-Up
NY, scheduled for May 5 in Albany. A Cuomo spokesman said
the cancellation wasn’t related
to the investigation.
By Thursday, the office had
decided on former prosecutor
Bart Schwartz as its choice for
an internal investigator.
Late Thursday, Mr. Cuomo’s
office received a subpoena
Andrew Cuomo’s allies and aides, from left, lobbyist Todd Howe,
Director of State Operations Jim Malatras, Secretary to the
Governor Bill Mulrow and defense attorney Elkan Abramowitz.
The gift that fits
Picking a Life’s Work That Really Jams
Career advice these days
runs something like this: Figure out what you love to do,
what makes time stand still,
and success will follow.
Ric McCurdy takes a
slightly more practical approach. “The best advice I
got was, ‘Take what you love
and make it your hobby.’
Then you’re not going to be
broke your whole life.”
However, his chosen
guitars in a
small workshop overlooking Hudson Street in
the rent,” he explained, his
tools neatly arrayed above
the workbench behind him.
“Making guitars feeds the
To survive as a guitar
maker in New York City,
“you’ve got to have a niche,”
Mr. McCurdy said. “My niche
is performance jazz guitars.”
His clients include jazz
great John Abercrombie and
Jimmy Vivino, who leads the
house band for the TBS show
“Conan,” as well as the Blue
Man Group and singer and
songwriter Kenny Loggins.
Mr. McCurdy’s initial acquaintance with the instrument came as a musician
playing bass in Southern California in the early 1980s.
Then one evening, a drunk at
one of his gigs emerged from
the men’s room shouting,
“You’re the musicians—the
toilets are overflowing.’”
“I broke like a twig,” Mr.
McCurdy confessed and told
himself, “I’m never playing
music for money again.”
Fortunately, a guitar that
he had made and was playing—he has been good with
his hands since his father
proudly displayed the cars,
boats and planes he made as
a child to their Connecticut
neighbors—attracted the attention of John Hawk.
“He’d made guitars for
Keith Richards,” Mr. McCurdy recalled.
Mr. Hawk needed an assistant and offered to pay
Mr. McCurdy and teach him
everything he knew.
Such generosity distinguishes the artisanal American guitar-making industry,
especially the New York
Continued from page A17
ties” and communities of color
On Sunday, Joseph Lozada
was already in tears when he
approached the entrance to
the Stonewall Inn.
Staring at the flowers left
outside of the historic gay bar
in tribute to those killed in a
The MySuit Gift Certificate
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madison @ 45th St • wall street • philadelphia • mysuit.com
The first name of architect
Rafael Viñoly was incorrectly
given as Ralph in a Property
article Monday about a lease
deal on Manhattan’s far West
BESS ADLER FOR THE WALL STREET JOURNAL (3)
from the U.S. attorney’s office
demanding reams of documents related to firms with
state contracts or business.
Many of the companies were
donors to the governor, and
most had some affiliation with
Messrs. Percoco or Howe.
On Friday morning, the governor’s office began to execute
its crisis-management strategy.
Two of Mr. Cuomo’s top aides,
Mr. David and Director of State
Operations Jim Malatras, called
Buffalo Billion-affiliated officials such as State University of
New York Polytechnic Institute
head Alain Kaloyeros to inform
them of the internal probe.
Minutes after 5 p.m. on Friday, the governor’s office issued statements by Messrs. David and Schwartz, and the
matter erupted not just onto
the public stage but within the
ranks of the administration,
where longtime staffers said
they were incensed that Mr.
Percoco might have undermined their office’s reputation.
Some were particularly upset to learn that Mr. Percoco
and his wife received tens of
thousands of dollars in outside
income while he worked as a
Cuomo aide and campaign
manager, since, they said, he
had been resistant to giving
staffers even meager raises.
The fallout continued. In
early May, Mr. Mulrow threatened to quit after the governor’s office didn’t publicly defend him when he was
identified as one of the people
named in the U.S. attorney’s
subpoena. Mr. Mulrow withdrew his threat later, and Mr.
David issued a statement defending him and others.
“Not defending Bill Mulrow
or any current employees was
never under consideration,”
the Cuomo spokesman said.
Mr. Malatras too has considered exiting. A former SUNY
official, Mr. Malatras has been
in talks to become president of
the arts and engineering school
Cooper Union and met with the
search committee May 23. Cooper Union declined to comment.
Throughout, Mr. Cuomo has
struggled to strike a balance
between his relationship to his
friend, Mr. Percoco, and his desire to distance himself from
“I can’t say to the people of
this state, ‘Don’t worry, nothing bad will ever happen,’” Mr.
Cuomo said last month. “What
I can say is, ‘If and when something happens, we will have
zero tolerance for any abuse.’”
—Rebecca Davis O’Brien
contributed to this article.
Ric McCurdy, top. Inside his Tribeca shop, above. The artisan at
work: ‘The thing that makes a guitar maker is drive,’ he said.
scene that Mr. McCurdy has
been a part of since he
moved into his shop in 1991.
An example is John Monteleone, a Long Island guitar
maker whose instruments
have been displayed at the
Metropolitan Museum of Art.
“He’ll take an hour out of his
day to help me with a technical problem nobody else
could help me with,” Mr. McCurdy said. “That’s the
And there’s a small shrine
in Mr. McCurdy’s workshop
to John D’Angelico, a guitar
maker who died in 1964. Mr.
McCurdy describes Mr. D’Angelico, who grew up in Little
Italy and had a shop on Kenmare Street, as “the Stradivarius of jazz guitars. They
sound like God made them.
They respond to the slightest
Mr. McCurdy, 60 years
pays the rent.
feeds the soul.’
mass shooting in Orlando, Mr.
Lozada said, “That could’ve
The 26-year-old Bronx resident said he had been to Pulse,
the gay nightclub where Omar
Mateen massacred dozens of
“You just go out for a night
of fun and you get killed,” Mr.
Lozada said. “Why does that
have to happen?”
On Sunday in Queens, organizers held a vigil to celebrate
unity with Muslims.
“In New York, we have good
relationships with the Muslim
community,” said Daniel
Dromm, a gay City Council
member who planned the
Queens event. “I don’t expect
anything like that. We have a
lot of gay Muslims in New
York and we don’t want to see
people pointing the finger at
Mr. de Blasio said on Monday there would be an increased police presence, specifically at LGBT sites.
Organizers of the city’s
Pride Week, which includes
marches and rallies and runs
June 19-26, said no events
would be canceled.
“The reason is simple,” according to a letter posted on
the website of NYC Pride, a
nonprofit organization that
plans the festivities. “We must
never let those who wish to silence us win.”
A map accompanying the
Open House article Saturday
incorrectly identified the
South Norwalk neighborhood
in Norwalk, Conn., as South
Readers can alert The Wall Street Journal to any errors in news articles by
emailing firstname.lastname@example.org or by calling 888-410-2667.
old, compared the process of
making a guitar to fitting a
client for a custom-made
suit. “Some are built like
lumberjacks and beat the
heck out of it. And some
play very lightly. So you
make the guitar to match the
Each guitar costs approximately $10,000 and takes
100 hours to make. Some
have beautiful inlaid work,
such as a guitar with the
Chrysler Building carved into
Then there are the ukuleles that Mr. McCurdy made
for his children, now 21 and
19. “My wife said, ‘Build the
kids a guitar so they have
something when you’re
gone.’ ” But he considered
ukes more fun. “George Harrison always traveled with
two in case he met someone
who wanted to jam.”
So Mr. McCurdy crafted
one for his son, with a skateboard trailing flames, and
another for his daughter, an
aspiring baker, featuring a
What distinguishes the
best guitar makers, for Mr.
McCurdy, isn’t necessarily a
way with wood or planing
tools. “It’s not skill. Skill
comes with repetition. The
thing that makes a guitar
maker is drive.”
The drive to make a hollow box ring like a bell. “Every piece of wood is different,” he explained as he
“tap-tuned” a guitar in progress, listening for the vibrations. The sound changed depending on whether he
tapped in the center or along
the edges of the wood. “You
can’t just measure and go. If
you build them all to the
same measurements, they
won’t sound good.”
Mr. McCurdy strummed a
few chords of the Beatles’
“Paperback Writer” and Jimi
Hendrix’s “The Wind Cries
Mary” on one of his guitars.
Both the instrument and
the musician sounded excellent. “If you can bring joy to
somebody’s life,” he said, “if
you can bring pleasure to
someone 100 years after my
children are gone, what more
do you want from life?”
Still, the shooting made
some New Yorkers hesitant
about the way they might
carry out their daily lives.
“There’s going to be some
trepidation,” said Lamar Dawson, a 30-year-old West Harlem resident who is originally
“You’re thinking now, do I
want to go out, do I want to go
to pride events? These clubs
are so packed with people.”
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York? Email us, along with
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Friday. Letters will be edited
for brevity and clarity. Please
include your city and state.
THE WALL STREET JOURNAL.
Tuesday, June 14, 2016 | A19
* * * *
N.J. Lawmakers Gun-Control Debate Flares
Raise to Gas Tax
TRENTON—A proposal by
New Jersey lawmakers to fund
$20 billion worth of transportation projects over the next
decade would enact sweeping
changes to the state’s tax
structure, including a 23-cent
increase in the gas tax and
elimination of the estate tax.
New Jersey’s transportation trust fund, which pays for
maintenance and repairs to
the state’s roads and bridges,
is deeply in debt and on track
to run out of money by July 1.
Gov. Chris Christie and other
Republicans have long said
they would resist raising the
gas tax without accompanying
‘I have to tell you I
think it would be
hard for anybody to
vote against this.’
On Monday, Mr. Christie
spoke critically of some aspects of the bipartisan proposal. He questioned part of
the plan that would double
state aid for local transportation projects to $400 million a
Mr. Christie described the
proposed municipal aid increase as lawmakers giving local officials “a payoff to protect their political backsides”
and indicated he would oppose that provision.
“Is it a proposal worthy of
consideration? Of course it
is,” he said. “But let me be
clear to you: If it’s not tax
fairness, I’m not signing it.”
A bipartisan group of senators detailed their plan to
shore up the transportation
fund during a news conference at the Statehouse Monday. Lawmakers said they
would introduce legislation
this week and hold hearings
on the proposal next week.
The state’s current 14.5cent a gallon gas tax covers
the transportation fund’s existing debt service, with no
money left over for new projects, lawmakers said. The
state has been subsidizing
transportation projects from
its general fund, with $546
million in sales-tax revenue
set aside in this year’s budget.
“Whose money is that?
New Jersey taxpayers’,” said
state Sen. Steven Oroho, a Republican from Sussex County.
Under the proposed plan,
the state’s general-fund contribution would be reduced,
with $200 million in annual
sales-tax revenue going to
Raising the state’s gas tax
to 37.5 cents a gallon would
keep the state’s gas prices
competitive, compared with
neighboring states, while
shifting some of the burden to
out-of-state drivers, Mr.
Oroho said. The gas tax would
generate about $1.4 billion in
annual revenue, an estimated
30% of which would be paid
by motorists from other
states, he said.
Sen. Jennifer Beck, a Republican from Monmouth
County, said in a statement
that she is steadfast in her
opposition to the proposed
gas tax increase. She has proposed an alternative plan that
would fund transportation
projects at $1.6 billion a year
through cuts to state employee benefits and consolidation of state transportation
Sal Risalvato, executive director of the New Jersey Gasoline, C-Store and Automotive
Association, an industry advocate, said he has fought
against gas-tax increases for
30 years but now believes it is
the only way to fix the transportation trust fund. He said
he doesn't think Ms. Beck’s
plan would work.
“The state is in a pickle and
I don’t have another solution
to offer,” Mr. Risalvato said.
Lawmakers have also proposed phasing out New Jersey’s estate tax. Under current
law, the state imposes a tax
on transferring the assets of
deceased residents if those assets are higher than $675,000,
the lowest threshold in the
country for this type of tax.
Under the proposed plan,
the threshold for taxing deceased residents’ assets would
gradually increase until the
tax is eliminated entirely in
The proposal would also
create a gross income-tax deduction for charitable contributions made to New Jerseybased organizations. The
annual deductions would be
limited to $500 in tax year
2017 and gradually increase to
$2,000 by 2020.
In total, the plan’s proposed tax cuts would cost $1
billion in annual state revenue
when fully implemented.
Senate President Steve
Sweeney, a Democrat, said he
thinks he can gather enough
support for the bills to override a gubernatorial veto, if
necessary. Mr. Oroho said he
believes Mr. Christie would ultimately back the proposal.
“Once the governor sees
the full impact of this—I have
to tell you I think it would be
hard for anybody to vote
against this,” Mr. Oroho said.
Democrats in the Assembly
proposed a similar plan on
Friday. Speaker Vincent Prieto, a Democrat from Hudson
County, said he would work
with Republicans and the Senate to send a bill to the governor by the end of the month.
Nearly two dozen people showed up Sunday in Newtown, Conn., to remember the Orlando victims.
tors are calling for more laws
that would only impact persons who actually obey the
laws of our society,” said Scott
Wilson, president of the Connecticut Citizens Defense
League, a gun-rights advocacy
group. “The individual who
perpetrated this mass shooting
broke numerous laws, and it is
bordering on insanity at this
point for those looking to score
political points over this incident to believe otherwise.”
Erica Lafferty Smegielski,
the daughter of Sandy Hook Elementary principal Dawn
Hochsprung, who was killed at
the school, said the Orlando
shooting on Sunday left her
“The toll that it takes every
time when something like this
happens, I honestly don’t even
have a word for it,” said Ms.
Smegielski, senior outreach associate at Everytown for Gun
Safety, which supports stronger gun laws. “It just brings
you back to that day.”
Ms. Smegielski said Congress should make background
checks mandatory for buying
guns and should ban those on
federal watch lists from purchasing firearms.
Other family members of
those killed at Sandy Hook Elementary have filed a wrongfuldeath lawsuit against the manufacturer of the rifle used in
the Sandy Hook shooting,
claiming it was liable for producing and selling a weapon
unfit for civilian use.
Josh Koskoff, an attorney
for the families, said the shooting in Orlando provided another example why civilians
shouldn’t be able to own
“It is the gold standard for
killing the enemy in battle, just
as it has become the gold standard for mass murder of innocent civilians,” Mr. Koskoff
Remington Arms Co., the
maker of the rifle used in the
shooting, has said those claims
are without merit and the federal Protection of Lawful Commerce in Arms Act doesn’t allow wrongful-death claims
such as the one filed by the
Sandy Hook families.
Confrontation in Westchester
ERIK MCGREGOR/ZUMA PRESS
BY KATE KING
The nightclub killings in Orlando, Fla., have reignited the
debate over federal gun laws in
Connecticut, where the 2012
shooting at Sandy Hook Elementary School still weighs
heavily on residents.
Police said they found a
handgun and AR-15-type assault rifle on the gunman, identified by police as Omar S. Mateen, who lawfully purchased
the weapons. The rifle was the
same type used at Sandy Hook
Elementary in Newtown, Conn.,
where 20 children and six adult
staff members were slain.
Connecticut U.S. Sens. Richard Blumenthal and Chris Murphy, both Democrats, along
with U.S. Rep. Elizabeth Esty, a
Democrat who represents Newtown, called for stronger federal gun laws Monday, including reinstating a federal ban on
so-called assault weapons and
banning people on federal
watch lists from buying guns.
Local advocacy groups Newtown Action Alliance and Connecticut Against Gun Violence
also renewed calls for the
“We in Connecticut felt a
special shock and horror at
this act of mass murder…,” Mr.
Blumenthal told reporters in
Hartford. “Prayers and platitudes are insufficient. There
must be action.”
Gun-rights advocates in
Connecticut, who opposed new
state gun laws that were instituted after the Sandy Hook Elementary shooting, said additional federal gun regulation
wouldn’t prevent future crimes.
“Once again our two sena-
PETER CASOLINO/ZUMA PRESS
BY JOSEPH DE AVILA
FACE-OFF: Protesters tried to halt construction on the Algonquin natural-gas pipeline project in Peekskill on Monday. Several were arrested.
Albany Session Nears a Quiet End
BY MIKE VILENSKY
A Valero station in Hoboken. State lawmakers are proposing to
raise New Jersey’s gas tax from 14.5 to 37.5 cents a gallon.
NEW YORK CITY
For Minor Offenses
Mayor Bill de Blasio on
Monday signed a package of
eight bills that reduce penalties
for littering, public urination
and other minor offenses.
The legislation, known as
the Criminal Justice Reform
Act, was pushed by City Council Speaker Melissa Mark-Viverito and other lawmakers as a
way to prevent nonviolent offenders from entering the criminal justice system.
The laws encourage police
officers to issue civil summons
instead of criminal ones for littering, public urination, violating parks rules, making unreasonable noise and other
Ms. Mark-Viverito, who negotiated terms of the legislation with New York Police
Commissioner William Bratton
for more than a year, said the
bills would prevent about
10,000 people from having a
The last days of New York’s
yearly legislative sessions are
typically stressful times, when
state lawmakers hash out lastminute deals on issues like
taxes and abortion rights. This
year, they are haggling over
whether to permit drinking before noon at Sunday brunch.
The session, which began in
January and is expected to
conclude Thursday, is poised to
end without much by way of
Gov. Andrew Cuomo listed
his priorities for the end of the
DNA Helps Convict
Man in 1995 Rape
A man identified by DNA evidence was convicted Monday of
raping a 25-year-old woman in
the West Village in 1995.
A Manhattan jury found Joseph Giardala, 46 years old,
guilty of rape, robbery, sodomy
and sexual abuse.
Prosecutors at the Manhattan
district attorney’s office said Mr.
Giardala robbed the woman at
knife point and then raped her
when she was walking home
from a movie theater on Jan. 23,
1995. An attorney for Mr. Giardala
couldn’t be reached for comment.
Mr. Giardala was identified
because a DNA profile in a na-
session in a news release on
Monday that his office said was
also sent to the state Legislature. The list includes mostly
topics of broad agreement:
fighting heroin addiction; increasing access to breast-cancer screening and treatment;
improving railroad safety; and
revising state alcohol laws.
Mr. Cuomo and legislative
leaders have already announced deals on the breastcancer measure and a law for
more frequent inspections of
Mr. Cuomo, a Democrat, also
included two controversial
ideas that have loomed over
the legislative session—“comprehensive ethics reform” and
countering the influence of
money in politics—but didn’t
go into detail.
Since the convictions last
year of two former New York
legislative leaders, Mr. Cuomo
and state lawmakers have
faced calls to overhaul state
Earlier in the session, Mr.
Cuomo proposed closing a legal
loophole that allows companies
to circumvent donation limits,
but Republican lawmakers have
been dismissive of the idea.
One ethics proposal appears
to take aim at New York City
Mayor Bill de Blasio. Mr.
strengthen disclosure requirements and other regulations
around independent expenditure committees, fundraising
arms that can receive big donations by remaining officially
autonomous from the person
Allies of Mr. de Blasio, a
Democratic foe of Mr. Cuomo’s,
are under investigation in connection with such a committee.
Mr. de Blasio and his allies
have denied wrongdoing.
tional database matched that
taken as evidence immediately
after the attack. He is scheduled
to be sentenced Aug. 3.
season and contributed a total of
$2.4 billion to the city’s economy.
That figure included $785.4 million spent by Lincoln Center’s 11
resident arts organizations and
an estimated $647.9 million of
indirect expenditures generated
by those groups, such as spending by employees and suppliers.
Also factored in: $1 billion in
estimated direct and indirect
spending by Lincoln Center tourists.
Monday that she is leaving in
July after four years in the post.
Her letter said she plans to
be superintendent of the New
York Military Academy, a private
boarding school in upstate.
Ms. Zhang was born and
raised in China before arriving in
the U.S. in 1985. She taught at
Rikers Island, among other posts,
before leading Stuyvesant, one
of eight specialized New York
City public schools that admits
students based on a score on a
The school has long been criticized for its lack of diversity,
and the city recently announced
plans to boost outreach and test
preparation for the entrance
Lincoln Center Draws
4.5 Million People
About 4.5 million people came
to Lincoln Center for the Performing Arts last year, with outof-town tourists spending nearly
$670 million beyond ticket costs
during their visits to New York
City, according to an economic
impact report the organization
The report said the performing-arts campus generated
15,802 jobs during the 2014-15
To Take Another Job
The principal of New York
City’s elite Stuyvesant High
School, Jie Zhang, announced
A20 | Tuesday, June 14, 2016
THE WALL STREET JOURNAL.
After Orlando, the Tonys Rescript
EVAN AGOSTINI/ASSOCIATED PRESS
As news broke Sunday
morning about the mass
shooting at a gay nightclub in
Orlando, Broadway made
swift adjustments for a show
that truly must go on: the
Ahead of the 8 p.m.
broadcast, speeches were
written and rewritten. Silver
ribbons were crafted into
pins. And by the end of the
day, messages of theaterworld inclusiveness became
an especially reassuring
theme within the Beacon
Theatre and on TV, where
viewership reached nearly 9
million, a level not seen in 15
years, according to early estimates.
At a news conference on
Sunday, New York Police Department officials said the
city would boost security at
sensitive sites, but didn’t cite
the Tony Awards specifically.
The Broadway League and
American Theatre Wing, copresenters of the awards, and
CBS, which broadcast the
show, all declined to comment about any security adjustments for the event.
On Sunday morning, a rehearsal for the Tony performance took place from 10 a.m.
until about 1:40 p.m., without
mention of the attack.
L-R: CHARLES SYKES/ASSOCIATED PRESS (2)
BY PIA CATTON
As police guarded the Beacon Theatre on Sunday, silver ribbons became symbols of
support and Frank Langella accepted his award with remarks revised for the occasion.
But the news was already
having an impact on the festivities: At 11:44 a.m., the
event’s organizers posted a
statement on the Tonys Facebook page saying they would
dedicate the night’s ceremony to those affected by
the Orlando shooting.
In the afternoon, William
Ivey Long, the costume designer who is also chairman
of the American Theatre
collaborators decided to
eliminate muskets from their
performance of “Yorktown,”
an imagined battle scene.
“Tonight is not a night we
want to see people dancing
with guns,” Mr. Miranda said.
He used the time between
the rehearsal and ceremony
to write the sonnet he performed as one of his acceptance speeches, which included the phrase “love is
Wing, led an effort in the
basement of the Beacon to
make 3,000 silver ribbons
that could be worn on lapels
as signs of support. On the
red carpet, he said, “We
wanted to open our arms and
Lin-Manuel Miranda, creator of “Hamilton,” said he
hadn’t heard the news until
after the rehearsal. That afternoon, Mr. Miranda and
love” and “love cannot be
killed or swept aside.”
“You can’t let that moment go by,” he said. “Theater doesn’t exist without the
Actor Frank Langella,
starring on Broadway in “The
Father,” rewrote his remarks
after his matinee performance. “Around 5:30 or 6, I
tore up the original speech,”
he said after winning for best
actor in a play. “I just
thought it should be some
reference to real life, as important as this is.”
At the opening of the
broadcast, Mr. Corden read a
statement written that day to
set the tone: “Your tragedy is
our tragedy. Theater is a
place where every race,
creed, sexuality and gender is
equal, is embraced and is
loved. Hate will never win.”
Costume designer Clint
Ramos, who won for his work
on “Eclipsed,” said he felt a
responsibility to mention the
Orlando shootings because,
as he put it, “the target was
an extended part of our community.”
His remarks spoke to how
healing the art form and its
participants can be: “The theater has been my savior in
the darkest, darkest of times
in my life.”
For his part, “Hamilton”
producer Jeffrey Seller reiterated the emotional imperative of going on with the
show. In 1996, he lost his
friend, playwright Jonathan
Larson, on the day of the
first off-Broadway preview of
Mr. Larson’s play “Rent.” As
Mr. Seller said: “The only
way to honor Jonathan was
to do ‘Rent.’ ”
contributed to this article.
T-B: VICTOR HUGO/PATRICK MCMULLAN AGENCY (2)
‘Hamilton’ Is Headed
To the London Stage
DJ Questlove kept the “Hamilton” party grooving after the
Tony Awards until well after 4
a.m. at Tavern on the Green, as
tweeted by actor Rory O’Malley,
the show’s new King George.
But things kicked up a notch
at 5 a.m. with the official details
of “Hamilton” in London: The
musical will open in October
2017 at the Victoria Palace Theatre, now undergoing a major
renovation. Theater owner Cameron Mackintosh, producer of
“Cats” and “Les Misérables,” will
join as a producer.
At the Baccarat Hotel, Ivo van
Hove, left, and Eleanor Lambert
and her mom, Diane Lane, below.
At the Plaza party, Jessica Lange, top right; Cynthia Erivo,
in purple; and Jalene Goodwin and Daveed Diggs, far right.
Continued from page A17
superimpose yourself in the
“Hamilton” poster art, with
the Schuyler sisters or as
King George. There were
white paper “Hamilton” sacks
to fill from jars of candy, including Swedish Fish, Hot Tamales and Sour Patch Kids.
Themed signature cocktails were comprised of many
ingredients we’ve never even
heard of. Among them: the
(Breuckelen 77, Campari, Dolin Dry and CioCiaro) and
“The Mind at Work” (Mount
Gay Black Barrel rum, allspice dram, demerara sugar,
And there was food—so
much food—from steak skewers to Mexican corn to grilled
watermelon to lobster tails to
not one, not two, but at least
three grilled cheese bars, including offerings with three
cheeses, ham and truffle oil.
Continued from page A17
wood of a variety often used
in Japanese spas.
The allusion is intentional.
Ms. Tajima said she thinks of a
spa as a place for contemplation: “It’s a place to commune
over things that can’t be quantified.”
The work was commissioned by SculptureCenter, an
arts institution founded in
1928 and located in Long Is-
The “Hamilton” party really committed to grilled
Glenn Close, Andrew Lloyd
Webber, Mariska Hargitay
and Jake Gyllenhaal were
among the luminaries here.
Mr. Gyllenhaal was especially
happy that a bit about sharing gum with host James
Corden and Sean Hayes went
over well during one of the
Tony broadcast intermissions.
“I’m glad it hit,” said Mr.
Mostly this was selfie central, with people basically
Miranda. Of course, Mr.
Miranda wanted to take some
photos of his own, like one of
his wife, Vanessa, with Marietta “Retta” Sirleaf (“Parks
and Recreation”), Michelle
Williams and Busy Phillips.
But when we left at 2 a.m.,
this party looked like it could
go well into the morning.
The main Tony gala, at the
Plaza, wasn't nearly as rowdy
as Tavern on the Green,
though it did
feature its own brand
of gawking, at folks like
Steve Martin, Martin Short,
Andrew Rannells, Lena Hall
(who is doing a stint at the
Carlyle this week), Patina
Miller, Sara Bareilles, Beth
Behrs, and Reed Birney and
Jayne Houdyshell, both
showing off their gleaming
land City since 2002. The selection was part of a new program at the center that
delegated the jury process to a
group of eight high-school students engaged as a panel of
Mary Ceruti, SculptureCenter’s executive director and
chief curator, found their
choice to be timely and multilayered.
“The value of gold is tied to
traders on the floor but also
how people in general are feeling about their lives and potential for the future,” Ms. Ce-
The first stop for most
guests here—beside the main
entry hall to pose for a few
photographs—is Luke’s Lobster for a lobster roll.
“I’m OK,” said Danielle
Brooks of “Orange is the New
Black” and “The Color Purple,” when faced with lobster-roll mania. “The line is
Otherwise, Adrienne Arsht
and William Ivey Long were
hanging out at Frannie’s
YoArt (she has her own froyo machine at home in Miami) and Mr. Corden went in
search of his somehow misplaced parents. Jane Krakowski tried to convince us
that, indeed, Mr. Corden is
actually driving when he
does those “Carpool Karaoke” segments.
“There are GoPros all over
the windshield,” explained
Ms. Krakowski, who added
the Broadway one was basically filmed around five relatively uncongested Midtown
The one rampant complaint at this year’s Plaza
party: The sushi bar was inexplicably closed.
The evening continued at
the Baccarat Hotel where the
public-relations firm DKC
O&M threw its annual Tony
party, which moved this year
from the Carlyle Hotel. A de
facto dance club called
“Disco Lloyd Webber” was
grooving on the second floor.
When we ventured in, however, the music wasn’t electropop versions of “Jesus
Christ Superstar” songs, let
alone from any other of his
Among those who seemed
perfectly happy to never
leave this party: Ivo van
Hove, Diane Lane, Victoria
Justice and Reeve Carney (in
very bell-bottomy bell bottoms), George C. Wolfe, Joe
Mantello, Sophie Okonedo,
Brian Stokes Mitchell, Elaine
Paige and lots of cast members from “The Humans,”
“Shuffle Along” and “Bright
“The Humans” playwright
Stephen Karam was the last
Tony winner to arrive—at 5
in the morning, by the way—
when the festivities had already moved up to the Baccarat suite on the 12th floor for
a singalong around a white
It’s a good thing Broadway
shows are typically dark on
ruti said. “In the park, you’re
enjoying this leisure activity in
a nice state of mind, but the
sculpture is also manifesting
this other platform of reality.”
Reactions to the piece at its
opening, held as the sun set
over Manhattan last Thursday,
“I thought maybe it was a
hot tub but looked inside and
saw colored lights,” said Judy
Harrison, a tourist from
“Is it meant to refresh people?” asked Valerie Medina, a
pre-med student visiting from
upstate. “I think the children
will get refreshed.”
Brian Dodson, a neighborhood local, imagined the
piece—which remains in place
until September—will be a feature for frequent summer visits to the park. “It clears my
head, and I’ll be enjoying the
mist now,” he said, before considering the causes behind the
“It will calm me,” Mr. Dodson added, “and stress me
Ms. Tajima welcomes the
mixed reactions. While mat-
ters of finance are thought to
be rational and programmatic,
she said, they can also be illogical and arbitrary.
“It’s absurd to think you
can actually quantify something like emotion,” the 40year-old Brooklyn-based artist
said. “What does that even
But numbers turn out to be
pretty good fodder for visual
“I like the idea,” Ms. Tajima
said, “of gold prices disappearing into the air and blurring into the sky.”
At this year’s Plaza
party, the sushi bar
After creating the musical
“School of Rock,” composer and
producer Andrew Lloyd Webber is
about to rock actual schools with
philanthropy. On Sunday, Mr.
Webber announced a $1.3 million
grant to support theater education in American public schools.
The program, in partnership
with the American Theatre
Wing, will have three main components: providing equipment
and materials for new and existing theater programs; funding
scholarships and summer study
for select students; and providing four-year partial university
“Hamilton” grossed $2 million
for the first time, hunting down
“The Lion King,” which was still
the top-grossing musical in the
week that ended Sunday, according to data provided by the
While the impact of Sunday’s
Tony broadcast is yet to come,
sales remain strong for “School of
Rock,” which grossed more than
$1 million last week, as did “Waitress,” which set a record at the
Brooks Atkinson Theatre. “Shuffle
Along” grossed $972,860, up
slightly from the week before.
THEO WARGO/GETTY IMAGES
SLAVEN VLASIC/GETTY IMAGES (3)
Lloyd Webber Makes
An Educational Grant
Andrew Lloyd Webber speaks
onstage during Sunday’s Tonys.
THE WALL STREET JOURNAL.
Tuesday, June 14, 2016 | A21
People in Places,
Images of Ocean,
Faces and Places
L. Parker Stephenson
764 Madison Ave.
Through July 16
Stephenson has up a group
show of six portrait photographers, each of whose entire career was in one locale. Disfarmer
(1884-1959) took all his portraits
in a custom-built studio on Main
Street in Heber Springs, Ark.
The studio let him carefully control his lighting, and he had a
talent for posing his subjects—
farmers, mechanics, servicemen,
and their families—that was
both natural and revealing. The
relationships between the family
members and the friends in the
six 5½-by-3½-inch prints are
also clear. For over three decades, Hiroh Kikai (b. 1945) has
been stopping people in the
Asakusa district of Tokyo and
asking them to pose against a
nearby temple wall. One of his
two pictures on display is “A
Man in a Coat He Said Was
Made From the Pelts of TwentyEight Raccoons” (1999); Mr.
Kikai’s titles are an important
part of his works.
Malick Sidibé (1935-2016)
worked around Bamako, the capital of Mali. Stephenson has five
groupings of pictures he took at
parties around town; the 3¼by-2¼ prints were numbered
and pasted on construction-paper sheets the photographer put
in his studio window so individuals could order their own copies.
Two examples of the incredibly
elaborate, ethnographically specific hairstyles photographed by
J.D. ‘Okhai Ojeikere (1930-2014),
a member of the Nigerian Arts
Council; three portraits by
Jacques Sonck (b.1949) from his
studio in Ghent, Belgium; and
four pictures by Sirkka-Liisa
L-R: HIROH KIKAI/L. PARKER STEPHENSON PHOTOGRAPHS; LÉONARD MISONNE/KEITH DE LELLIS GALLERY
ARTS & ENTERTAINMENT
Léonard Misonne, ‘On alume le jeux.’ Hiroh Kikai, ‘A Man in a Coat He Said Was Made From the Pelts of Twenty-Eight Raccoons,’ left.
Konttinen (b. 1948) taken in the
working-class neighborhood of
Byker in Newcastle-upon-Tyne in
northeastern England, complete
Chip Hooper: California’s
Pacific 2nd Set
Robert Mann Gallery
525 W. 26th St.
Through July 1
Chip Hooper (1962-2016)
might be mistaken for a Pictorialist; his pictures of large bodies
of water are noted for their soft
focus and atmospherics. But the
function of those elements is
not so much sentimentalism or
nostalgia as a nature-centered
mysticism. In this, he is like
Wynn Bullock, Minor White and,
for that matter, the 19th-century
painters of the Hudson River
School. Mr. Hooper was born in
Chicago, and when he began
photographing at an early age
Lake Michigan was his subject.
He subsequently took pictures
of many of the world’s oceans
using an 8-by-10-inch view camera; the large negative captures
a lot of detail, like the little ripples before and after the “Single
Wave, Pacific Ocean” (2010), as
well as subtle modulations of
tone at the distant horizon.
All 16 of the large-format
prints at Mann are of images of
the ocean taken from an elevation, so the horizon is important
to each. The water is generally
calm, as in “Jenner Grade, Pacific
Ocean” (2012), with the emphasis on the ocean’s incredible extent. A slow shutter speed, as in
“Fog, Black Point Beach, Pacific
Ocean” (2009), suggests timelessness. Important foreground
elements figure in several pictures: the seaweed in “Kelp, Pacific Ocean” (2012); rock outcroppings in “Surf Patterns #1,
Pacific Ocean” (2012) and “Arch
Rock, Pacific Ocean” (2012); a
dramatic coast in “Cliffs, Pacific
Ocean” (2012). “Moonlight, Hurricane Point, Pacific Ocean”
(2012) is virtually without features; we take it on faith that
there is water below and sky
Keith de Lellis Gallery
1045 Madison Ave.
Through July 15
Belgian photographer Léonard
Misonne (1870-1943), unlike his
contemporary Alfred Stieglitz,
never abandoned the sentimentalism and soft focus that were
the hallmarks of Pictorialism.
While he was famed and widely
exhibited in his day, Misonne’s
reputation suffered with the repudiation of his style by the
Modernists; the 32 prints at De
Lellis remind us why it was once
so admired. Misonne maintained,
“The subject is nothing, light is
all.” Nearly all the pictures are
backlit with a hazy sun, as if
seen in a reverie. A string of
girls walk along the shore in “La
brise” (1926), the weak sun reflected on the sea behind them.
It is lovely in a way we no longer seem capable of.
Like “Après la pluie” (1932),
many of the pictures were taken
after a rain, so light is reflected
on the cobblestone streets and
sidewalks; in that image a dramatic sky silhouettes the monumental statues atop an imposing
classical building. In “Mouton au
crèpuscule” (1908), it is a flock
of sheep whose fleeces are highlighted. In “Cumulus” (1928), it is
a rutted country road. Three girls
in smocks and straw hats stand
on a rickety footbridge over a
stream in “On alume le jeux”
(1924); the village behind them
recedes in a haze. It is so idyllic
it strains credulity that this
world existed in a Europe between two ferocious world wars.
Mr. Meyers writes on photography for the Journal. See
his photographs at www.williammeyersphotography.com.
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A22 | Tuesday, June 14, 2016
THE WALL STREET JOURNAL.
Mets Are Baseball’s Ultimate Road Warriors
It may be hard to recognize
the Mets right now. They’ve
been away for a long time.
BY ANDREW BEATON
It may be difficult to recognize
the Mets these days. After all, in
their past five games they’ve started
five players who didn’t begin the
season on the roster.
But there’s another reason the
Mets may seem unfamiliar as they
return to Citi Field for an eight-game
homestand: They’ve been away for a
long time. It isn’t that the Mets’ 10game road trip to Miami, Pittsburgh
and Milwaukee was that strange. In
fact, it may seem standard, since it
was already the third time this year
they have played three straight series on the road.
But it’s anything but standard. The
Mets have six road trips comprising
at least three series apiece this season, more than any other team in
baseball. The average across the
league is 3.7, according to Stats LLC.
“You just have to pack a little
heavier for road trips like this,” reliever Jerry Blevins said.
Mets players vary as to whether
they prefer to cluster their road trips
like this. Blevins, for one, prefers it. In
some instances it’s logical, like when
the team went on its West Coast trip
to San Diego, Los Angeles then Colorado. Playing all those teams in one
stretch beats making multiple flights
across the country.
Longer road trips may seem inevitable for teams based on one coast
or another; the only other teams
with six road trips at least three series long are the Arizona Diamondbacks and Washington Nationals. But
it’s also avoidable: The Dodgers and
Rockies only have two such road
trips in 2016. Meanwhile, the centrally located Minnesota Twins have
none of these long road trips all season. The Houston Astros only have
one. Then again, the Texas Rangers
have five, so there’s no real rationale
Matt Harvey and the Mets are
scheduled to play six road trips
comprising at least three series
apiece this season, more than
any other team in baseball.
KATHY WILLENS/ASSOCIATED PRESS
behind it. In fact, some teams used
to have four-series road trips, but
baseball has eliminated those in recent years, said Katy Feeney, Major
League Baseball’s vice president for
scheduling and club relations.
Creating baseball’s schedule is a
dreadfully difficult process because
of the various conflicts to be taken
into account. For instance, the league
must work it out so that the Mets
and Yankees are rarely at home at
the same time (they try to keep it under 10 games a year). And the Mets,
being across the street from the National Tennis Center, prefer to avoid
being at home for as much of the U.S.
Yankees Must Decide
To Be Buyers or Sellers
BY JARED DIAMOND
With Major League Baseball’s July
31 trade deadline starting to come
into view, the Yankees are approaching a crucial decision that will have
a significant impact beyond just this
season: Are they buyers or sellers?
It’s an uncommon question for
the Yankees to be asking. General
manager Brian Cashman has said
many times that he has a lifetime
dictum from ownership to pursue a
championship virtually at all costs, a
philosophy that doesn’t jibe with the
notion of rebuilding.
But this year, with the Yankees in
danger of finishing with a losing record for the first time since 1992,
Cashman might have to at least consider admitting defeat and turning
toward the future. And the next two
weeks could end up determining
which way he goes.
The Yankees, who at 31-32 sit 5 ½
games back in the American League
East, enter a critical stretch on
Tuesday. They will play their next 11
games against the Colorado Rockies
and Minnesota Twins, who entered
Monday’s action with a combined record of 49-76. Between now and July
7, they will play only four of their 21
games against opponents that cur-
rently have a winning record.
It is a golden opportunity to pick
up ground on the Boston Red Sox
and Baltimore Orioles, who kick off
a three-game series against each
other at Fenway Park on Tuesday. In
any case, it might their last shot to
prove that this team deserves a
chance to stay together and chase a
spot in the playoffs.
“You have to play yourself into
contention,” manager Joe Girardi
said. “You can’t just keep saying,
‘Well, we have next month,’ because
you’re starting to run out of months.”
The Yankees have made it this far
by beating up on weak opponents.
They are 17-9 against teams with
losing records and 14-23 against
teams that are .500 or better, which
bodes well for what’s on deck.
Either way, Girardi and his players
insist they don’t worry about the
schedule and refuse to comment
about the possibility of a fire-sale.
“I try not to get caught up into
that, honestly, because they’re bigleague ball clubs,” outfielder Carlos
Beltran said of the Twins and Rockies. “It doesn’t matter what the record says.”
Still, there’s no doubt the Yankees
have a few attractive pieces should
they commit to restocking their farm
Open tennis tournament as possible.
There are also smaller-level concerns
like concerts (Beyoncé performed at
Citi Field last week) that the scheduling office tries to accommodate.
“Nobody is ever happy,” Feeney
said. “What’s good for the players
may not be good for the business
Mets second baseman Neil Walker
said he prefers the long road swings
because it means longer periods at
home in between. When the players
are popping in and out of their home
city every week, it can be difficult
for home to feel like home.
“If you’re going to be out on the
road for six games, it’s like, well, we
might as well be out on the road for
nine,” he said.
The Mets’ first long road trip of
the season—from Cleveland to Philadelphia to Atlanta—was part of their
best stretch of the season. They
went 7-2 in those games, culminating with a sweep in Atlanta.
Their two more recent trips have
been less pretty. Their West Coast
swing ended with four straight
losses, including a sweep at the
hands of the Rockies. That trip also
got tricky when Steven Matz reported elbow pain and the Mets
opted to have him wait until they re-
turned home to see a doctor. Similarly, this more recent road trip had
an ugly conclusion with two straight
losses to Milwaukee and a hospital
stay for manager Terry Collins.
Curtis Granderson noted that the
biggest factor isn’t the length of the
road trip, but the timing of the
games. He said the trip to Colorado
was especially difficult because it
came after a night game in Los Angeles. So the team didn’t arrive in Denver until about 4 a.m. local time and
then had to play that night.
“Guys find their ways to get their
rest one way or another,” said
with the Seattle Mariners a few
It’s easy to fault the Yankees with
the benefit of hindsight, but it’s safe
to say they would be better off now
had they traded Cano. Perhaps the
Yankees have learned from that experience and would be more willing
to part with assets this time.
Then again, they hope they don’t
have to find out. That’s where the
next couple of weeks come in: If they
don’t take care of business against
the Rockies and Twins, Cashman
might have no choice but to wave
the white flag.
“When you go to places where
teams haven’t been playing well,
sometimes you put your guard down
and say, ‘We should go out there and
win these two games,’ and sometimes it doesn’t happen that way,”
Beltran said. “We have to make sure
that we approach them with intensity, and hopefully we’re capable of
doing things right.”
If the Yankees can’t climb
in the standings, they could
make Aroldis Chapman
available for a trade.
JIM MCISAAC/GETTY IMAGES
system at the expense of competing
in 2016. Beltran and closer Aroldis
Chapman are both free agents this
winter and certainly would fetch a
worthwhile return from a genuine
History suggests they won’t go
that route. At the trade deadline in
2013, the Yankees were 8 ½ games
behind in the division, but they declined to deal free-agent-to-be Robinson Cano. They wound up missing
the postseason, and Cano signed
Questions Follow Jets Out of Minicamp
BY JIM CHAIRUSMI
Everyone knows the most popular
F-word at the Jets’ practice facility
this off-season: Fitzpatrick. But with
the free-agent quarterback still unsigned, the Jets are doing their best
not to utter it at minicamp this week.
Anyway, there are more important
things to worry about during this final week of workouts before training
camp begins midsummer. Here’s a
look at what’s on the Jets’ minds.
The cast of ‘Thirtysomething.’
When the Jets open the regular season on Sept. 11 against the Bengals,
at least nine players in the projected
starting lineup will be over the age of
30. That includes several stars, including center Nick Mangold (32),
linebacker David Harris (32), receiver
Brandon Marshall (32), cornerback
Darrelle Revis (30) and running back
Matt Forte (30). It doesn’t include a
certain 33-year-old bearded quarterback who threw a franchise-record 31
touchdown passes in 2015. At 27
years and 75 days, the Jets were the
seventh-oldest team in the NFL at the
end of 2015, according to Stats LLC.
So head coach Todd Bowles is do-
ing what he can to ensure those guys
are still healthy come September.
Mangold, entering his 11th season,
hasn’t participated in 11-on-11 drills
during practices open to the media,
with Dakota Dozier taking snaps at
center instead. “He practices some
days, some days he [doesn’t],” Bowles
said of Mangold.
Marshall said the goal at his age is
to avoid overdoing it. “It’s all about
getting myself to a place where I’m
good in December and January,” he
said. “That’s what it’s about. That’s
Revis had off-season wrist surgery and the team hopes he’ll be
ready for training camp. “He’s working out right now,” Bowles said.
“He’ll be ready when he’s ready.”
At age 30, will the invincibility of
“Revis Island” start wearing off?
With Buster Skrine, Marcus Williams
(who had a team-high six interceptions in 2015) and former first-round
pick Dee Milliner on the roster, cornerback is among the deeper positions on the team.
Not so at linebacker, where there’s
an opportunity for younger players,
such as first-round pick Darron Lee
and third-round pick Jordan Jenkins,
Veteran center Nick Mangold has
participated sparingly in 11-on-11
drills during minicamp.
to make a big impression this week.
“Some young guys are getting the
chance to play and learn the system to
get schematically better,” Bowles said.
Where’s Mo? Defensive end Muhammad Wilkerson was spotted in
the locker room last week but declined to speak with reporters. The
sighting came as a bit of a surprise as
he remains in a contract standoff with
the team, but Bowles said Wilkerson
has been through the facility this
spring as he rehabs from a broken leg
he suffered in January. Both sides
have until July 15 to reach a longterm deal or Wilkerson will have to
play the season with the franchise tag
tender of $15.7 million.
Laying it on the Line. The Jets’
offensive line ranked 20th in passblocking and 28th in run-blocking last
season, according to Pro Football Focus. D’Brickashaw Ferguson’s retirement leaves a void that the team
hopes will be filled by Ryan Clady.
Clady, acquired from the Broncos for
a fifth-round pick earlier this month,
is a four-time Pro Bowler, but he’s
played sparingly in two of the past
three seasons due to knee and foot
MEL EVANS/ASSOCIATED PRESS
injuries. Clady has been taking reps in
team drills over the past two weeks
but still needs to shake off the rust
after missing the 2015 season.
“He was just rusty because he
hadn’t played,” Bowles said. “He’s getting better and he’s moving better.”
Marshall said the similarities between Ferguson and Clady are striking, both on and off the field. “They
don’t say much,” he said, “but they’re
always in the right place, know exactly what they’re doing. You can
count on them.
TECHNOLOGY B4 | WEATHER B7 | CROSSWORD B7
BUSINESS & TECH.
Deep Discounts Boost
Car Sales in China
MetLife’s Hele Navigates
AUTOS | B2
CFO JOURNAL | B7
© 2016 Dow Jones & Company. All Rights Reserved.
THE WALL STREET JOURNAL.
* * * **
Tuesday, June 14, 2016 | B1
Firms That Left U.S. Still Enjoy Perks
Some lawmakers say
the U.S. should
that move offshore
quarters outside the U.S. and
cutting their taxes. Still others
continue to receive U.S. government contracts.
Medtronic PLC, which
moved its address from Minnesota to Ireland in January
2015, sent executives on Commerce Department trade missions to Brazil in August and
to Peru in March of this year.
Ingersoll Rand PLC participated in a trade mission to
Turkey, years after it put its
address in Ireland. Aon PLC,
the insurance broker and human-resources firm that
moved from Chicago to London in April 2012, celebrated
its success in the Romanian
market at the U.S. Embassy in
BY RICHARD RUBIN
Companies that lowered
their tax bills after turning in
their American passports are
still finding perks from their
One company was celebrated at a U.S. embassy.
Some traveled the world with
U.S. officials, promoting products with the imprimatur of
the American government despite moving their legal head-
Bucharest later that year at a
reception hosted by the U.S.
Their cases show that outside the tax sphere, there is
little clarity about what it
means to be an American company, what benefits attend
that status and who is entitled
to enjoy them.
“If there are competing
companies that have maintained their U.S. tax status,
that are acting responsibly in
their taxpaying behavior, then
policy makers should be asking questions about why these
companies aren’t being promoted instead of the inverters,” said Matt Gardner, executive director of the Institute
on Taxation and Economic Policy, a group arguing against
regressive tax policies.
Legally, there are few differences among recently departed companies such as Aon
and Medtronic, longstanding
foreign companies such as Siemens AG and companies such
as Anheuser-Busch InBev NV,
created through a foreign
company’s purchase of a U.S.
firm. All have their headquarters outside the U.S. and significant employment, leadership and production inside;
they differ only in how they
got the foreign address.
U.S. lawmakers, particularly
Democrats, say the government should penalize compa-
nies that move offshore with
punitive taxes and limits on
Treasury Secretary Jack
Lew has called for renewed
“economic patriotism,” under
There is little
clarity about what it
means to be an
which the U.S. “should not be
providing support for corporations” that shift profits overseas to avoid paying their fair
share. Rep. Lloyd Doggett (D.,
Texas) said the companies
Attention Shoppers: Yoga in Aisle 3
Grocers offer fitness classes, facials, child care to lure consumers into stores and away from online rivals
BY HEATHER HADDON
The Supreme Court on Monday made it easier for patent
holders to win more financial
damages in court from copycats who use their inventions
The high court, in a unanimous opinion by Chief Justice
John Roberts, overturned a
specialized appellate court that
had adopted a hard-to-meet legal standard for winning punitive damages, even in cases
where the defendant’s patent
infringement was willful.
The chief justice said the standard was too rigid and “excludes
from discretionary punishment
many of the most culpable offenders, such as the wanton and
malicious pirate who intentionally
infringes another’s patent…for no
purpose other than to steal” the
patent holder’s business.
Federal law allows trial judges
to award enhanced infringement
damages to patent holders that
total three times the amount of
actual damages in a case. The
limits on awards
A ShopRite in Morristown, N.J., offers fitness classes, top, an indoor-outdoor seating area, lower right, and an oyster bar.
featured bank branches and dry
cleaners, but transforming
them into village-like destinations is a newer experiment.
Most enhanced stores appear
to be located in affluent suburbs and city neighborhoods—
where shoppers are more in-
clined to order groceries online
or meals from services such as
“It gives our stores that
hangout factor,” said Jeff Turnas, president of 365 by
Whole Foods Market, the grocer’s new smaller-store for-
mat that made its debut in the
Silver Lake section of Los Angeles last month.
Not everyone, however, is
sold on this idea.
“I’m pretty cautious on it,”
said Richard Vitaro, a director
in the consulting firm Alix-
Partners LLP’s consumerproducts practice. “There are
a lot of smart retailers out
there, and I’m not aware of
anyone who says, ‘let’s add 20
yoga studios.’ ”
Still, there is pressure to
Please see SHOP page B2
Deal Aims to Refresh LinkedIn’s Profile
BY DEEPA SEETHARAMAN
AND LAUREN WEBER
Microsoft Corp.’s $26.2 billion acquisition of LinkedIn
Corp. gives new life to a socialnetworking pioneer that has
built a huge user base of mostly
white-collar professionals but
has struggled to maintain its
prominence in a competitive
and fast-changing sector.
Since co-founder and Executive Chairman Reid Hoffman
initiated LinkedIn 13 years ago
by inviting 350 of his contacts
to join, the company has
grown to claim 433 million
members, including 105 million active monthly users.
It has become a central
place online for professionals
to network and learn about job
opportunities, making it enormously valuable for executive
recruiters and giving it a trove
of data that few other companies have. “LinkedIn’s growing
BY BRENT KENDALL
ANDREW LAMBERSON FOR THE WALL STREET JOURNAL (3)
HANOVER TOWNSHIP, N. J.—
Shoppers looking to pick up
milk and eggs may have other
reasons to spend time at their
local supermarket: yoga classes
or a spa treatment, perhaps.
Under growing pressure
from discounters and online
rivals, supermarkets are trying to transform themselves
into places where customers
might want to hang out
rather than just grabbing
groceries and heading home.
In Phoenix, a Fry’s Food
Stores outlet, part of a chain
owned by Kroger Co., features
a culinary school and a lounge
with leather couches perched
next to a wine bar. A Kroger
store in Hilton Head Island,
S.C., offers a cigar section to
complement its wine cellar
that stocks $600 bottles.
Whole Foods Market Inc.
has a putting green outside
its Augusta, Ga., location and
a spa offering peppermint
foot scrubs and facial waxing
in a Boston store.
A ShopRite store here in
Hanover Township, near New
York, runs a fitness studio
with yoga, barre and Zumba
classes and has a cosmetologist on weekends.
“You can’t do fitness online,” said John Sumas, chief
operating officer of Village Super Market Inc., a member of
the Wakefern Food Corp. cooperative that includes ShopRite.
“Getting a significant amount
of people to show up to a
building is a value in itself.”
Village Super Market’s operating income was $44 million in its last fiscal year, up
$30 million from fiscal 2014.
Ana Soriano, a 51-year-old
stay-at-home mom from Morris
Township, N.J., at first thought
the idea of exercise classes at
ShopRite was “weird.” Now
she’s a regular. “I finish my
classes, shop and come home
for the kids,” she said.
Supermarkets have long
“pervert our laws” and
shouldn’t be rewarded with
President Barack Obama labeled the companies “corporate deserters” whose decisions leave “you with the tab
to make up for what they’re
stashing offshore through
their evasive tax policies.”
Messrs. Obama and Lew followed their rhetoric with increasingly
rules—which stopped some
deals but haven’t changed the
fundamental forces driving
companies to pursue headquarters outside the U.S.
Definitions of inversion
vary, with common tax-press
Please see TAX page B2
database of more than 433
million ‘resumes’ is unlikely to
ever be replicated by another
company,” Cowen & Co analyst
Gregg Moskowitz said in a research note on Monday.
But users face ever greater
demands on their online time
from social-media rivals such
as Facebook Inc., which is also
building products for professionals such as Facebook at
Work. Recruiters still consider
LinkedIn an essential tool, but
some say its value has diminished recently, with potential
recruits using the platform
less often or replying infrequently to messages there.
A few years ago, “LinkedIn
was a great way to reach talent that we knew had live profiles, and that we could engage
with,” said Richard Eib, chief
executive at Xceli Global,
which specializes in hiring
technology professionals with
Salesforce.com expertise. Now,
On the List
Global technology M&A volume, year-to-date
Rest of globe
1995 ’97 ’99 ’01 ’03 ’05 ’07 ’09 ’11 ’13 ’15
with so many recruiters on
LinkedIn, response rates are
falling, he said. “We don’t see
the return on investment we
used to get.”
Note: Data excludes
THE WALL STREET JOURNAL.
LinkedIn’s $3 billion in revenue comes from its talent-solutions division, which helps
corporate recruiters identify
job candidates. The company
also generates cash from premium subscriptions and advertising.
Xceli spends $30,000 to
$40,000 annually on LinkedIn,
and Mr. Eib says he gets highquality leads there, but the
firm now relies more on Entelo Inc., one of a new generation of recruiting tools that
aggregates information from
across public websites and social media to automatically
create profiles for potential
hires. His No. 3 source is Twitter Inc.
Mr. Eib said the merger
with Microsoft may “rekindle
our interest” in LinkedIn, particularly if recruiters are given
new ways to connect with potential candidates. Without
clear advances, Mr. Eib said he
likely will scale back his
spending on LinkedIn.
“Before LinkedIn, the name
Please see LINKEDIN page B4
Supreme Court’s decision
stressed that judges should have
leeway to conclude that such
damages are appropriate.
The closely watched litigation had produced a split between the Obama administration, which supported the
availability of punitive damages,
and some top technology companies like Facebook Inc. and Alphabet Inc.’s Google, which said
strict limits on large damage
awards protected innovation
and deterred abusive suits alleging patent infringement.
Chief Justice Roberts acknowledged those concerns.
But he said they didn’t justify
the imposition of artificial limits on the ability of patent owners to receive additional money
in court when someone purposely trampled on their intellectual property rights.
The chief justice said judges
can strike a proper balance and
prevent lawsuit abuse by awarding larger monetary damages
only for “egregious cases of misconduct.” Courts shouldn’t issue
punitive damages in “garden variety” cases, he said.
The ruling, which came in a
pair of consolidated cases, was
a win for two companies that
alleged their rivals willfully
copied their products.
In one, medical-device maker
Stryker Corp. convinced a jury
that subsidiaries of rival Zimmer
Biomet Holdings Inc. willfully infringed Stryker patents on handheld devices used to clean
wounds. Jurors awarded Stryker
$70 million for lost profit. The
presiding judge, citing testimony
Please see PATENT page B6
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B2 | Tuesday, June 14, 2016
THE WALL STREET JOURNAL.
INDEX TO BUSINESSES
These indexes cite notable references to most parent companies and businesspeople
in today’s edition. Articles on regional page inserts aren’t cited in these indexes.
China Aviation Supplies
China Life Insurance .. A2
China Securities Finance
Citic Offshore Helicopter
Dividend & Income
Deloitte ....................... B3
Deloitte & Touche.......C2
Didi Chuxing Technology
FanDuel ....................... B3
Gap .............................. B3
Goldman Sachs ........... C1
Goldman Sachs Group C1
Enterprise ................. C4
Johnson & Johnson....B3
J.P. Morgan Chase......C3
Tata Power Renewable
Twitter ................... B1,C8
Waddell & Reed
Whole Foods Market..B1
Macy's ......................... C1
London Stock Exchange
INDEX TO PEOPLE
Berg, Eric .................... B7
Blass, David ................ C2
Gates, Bill ................... B4
Gong Xiaotao .............. C4
Cryan, John ................. C2
Sumas, John ............... B1
de Vaucleroy, Jacques B7
Dimon, James ............. C3
Evans Jr, Gerald W.....B6
Ferro, Michael W........B2
Kabbaj, Youssef .......... C2
In China, Car Deliveries Jump 11%
SHANGHAI—Growth in car
sales in China reached a fivemonth high in May as auto
makers launched new models
and dealers continued to offer
Car makers delivered a total of 1.79 million passenger
vehicles and minivans—to
dealers in the world’s largest
auto market last month, up
11% from a year earlier, government-backed China Association of Automobile Manufacturers said on Monday.
The performance compared
with a 6.5% year-over-year
gain in April, and a 6.8% increase in the first quarter.
May is traditionally one of
the year’s big sales months as
new car models start to arrive
at dealerships following the
country’s biggest motor show,
which this year took place in
Beijing in April.
According to Ways Consulting Co., a Chinese consulting
firm focused on the automotive industry, dealers offered
an average 10% discount on
cars in May, which was largely
unchanged from April.
Some of the macroeconomic
factors that had been a drag
on sales also seem to be fading, said analysts. Property
sales growth has started to
moderate after a spurt in the
first quarter and trade volumes on stocks fell for a second month in May. Rising
stock and housing markets had
diverted cash from car purchases. Meanwhile, gasoline
prices remain relatively low,
While the sales uptick is a
positive sign for the global
auto makers that depend on
China for growth, companies
remain cautious about a prolonged economic slowdown.
While shipments to dealers
gained 11% last month, auto
makers produced 5.5% more
cars in China compared with
the year-earlier period.
The trends are reflected in
dealer inventories. The latest
survey of China’s more than
20,000 dealers by the China
Automobile Dealers Association, a government-backed
trade group, showed that at
the end of April dealers on average had inventories equal to
1.54 months of sales, down
slightly from 1.55 months in
March. In China, analysts say
1.5 months of sales on lots is
the level at which dealers
should begin to be concerned
about high inventory.
The overall pace of sales
has been slowing after a decade of extraordinary gains for
Beijing has introduced a series of support measures. A
halving of the 10% purchase
tax on small-engine cars, coupled with favorable credit policies, helped boost sales since
the fourth quarter of last year.
Analysts have cautioned
Nadella, Satya ............ B4
unaware of any policies blocking foreign-domiciled companies from U.S. trade missions.
“We believe it’s in the U.S.
government’s interest to promote this country’s economic
benefits in other countries,” said
spokesman Fernando Vivanco
One of the earliest address
changes in the recent wave
was the move by Aon, which
the IRS said in 2013 allowed
the company to no longer be
considered a domestic corporation for tax purposes. Aon
executives said the change positioned it at a hub of the insurance industry as it prepared for global expansion.
In 2011, Aon’s final full year
as a U.S. company, it reported
a 27.3% global effective tax
rate. By 2015, that was down
The 2012 reception in Bucharest was organized by
Commerce officials and hosted
by then-Ambassador Mark
Gitenstein. Such events, for
which companies pay fees,
aren’t supposed to be held unless they are promoting U.S.
exports, according to the Commerce Department.
Mr. Gitenstein, who said he
was occupied then with political turmoil in Romania, didn’t
recall the event and was “totally unaware” Aon had moved
to the U.K. If he had known
the company’s status, he said,
he wouldn’t have agreed to go.
“We only looked out for
American companies,” Mr.
Gitenstein said. “If they were
not an American company, that
would have been a problem.”
Continued from the prior page
parlance including more companies than the formal tax
“The U.S. entity is out there
promoting things that are produced in the U.S. by U.S. workers, regardless of where their
share ownership is,” said Nancy
McLernon, president of the Organization for International Investment, a trade association of
foreign firms’ U.S. subsidiaries.
“So it’s a very slippery slope to
start taking away any participation in government programs
based on whether a company is
considered inverted or not, because of how easily legislators
could get this wrong.”
The Commerce Department
requires participants in trade
missions to list a U.S. state of
incorporation or registration.
They must show that products
they seek to export have substantial U.S. content. Subsidiaries of foreign companies are
“Our trade missions focus on
helping U.S. companies sell their
products and services abroad,”
a Commerce official said, adding that there are no plans to
change the eligibility criteria.
“We help U.S. firms promote
and sell their U.S. exports.”
Medtronic, which makes
medical devices, has more than
37,000 U.S. employees, nearly
half of its global total, and
does most of its research in the
U.S. The company said it was
Chinese shoppers checked out an Audi R8 supercar in a booth at the Beijing International Automotive Exhibition in Beijing in April.
WU HONG/EUROPEAN PRESSPHOTO AGENCY
Dr. Reddy's Laboratories
Medtronic moved its address from Minnesota to Ireland in 2015
after buying Covidien. Shown, Covidien’s Dublin office in 2014.
ANDREW LAMBERSON FOR THE WALL STREET JOURNAL
Alitalia ........................ A2
ShopRite has a daycare center at its store in Morristown, N.J., to help draw in customers.
Same-store sales for selected grocers
Continued from the prior page
try new approaches. First
quarter profits were weak for
nearly the entire grocery sector, and even trendy chains
such as Whole Foods are
struggling to differentiate
themselves as Wal-Mart
Stores Inc. and other big-box
retailers expand natural and
also face competition from
online grocery services such
as Amazon.com Inc.’s AmazonFresh. Jefferies Group
LLC estimated last month
that online grocery sales
could grow to 8% of grocery
sales in 2025 from 2.5% today. Moreover, there are
threats from European deepdiscount supermarkets such
as Aldi and Lidl as they expand their U.S. presence.
“Every executive I’ve
talked to has said this is the
most profound period of
THE WALL STREET JOURNAL.
Source: Jefferies Group LLC
grocery changes they’ve
seen. The competitive space
is much more intense,” Mr.
At Whole Foods’ 365
stores, outside vendors lease
space as part of a program to
offer novel foods and services. Thousands have applied to open in one of the 19
stores in nine states the Austin-based company has
signed leases for—all of
them targeting younger,
more price-conscious shoppers, Mr. Turnas said.
Ace Hardware has set up
shops within more than 100
grocery stores as part of a
push by the Illinois-company
into independent supermarkets
in the past three years. Grocers
pay a $5,000 fee and purchase
$5,000 of inventory to join the
hardware cooperative. They
must guarantee a certain level
of inventory at all times.
Some concepts have fizzled.
The Fry’s in Phoenix made its
debut in 2010 with a carwash
but discontinued that after it
didn’t catch on, a Kroger’s
spokesman said. The cooking
classes, by contrast, have doubled in size since the school
opened, and the store offers at
least a dozen sessions a week,
Village Super Market took
a risk three years ago when
it planned a nearly 80,000square-foot store in Hanover
Township, with more amenities than a standard ShopRite, Mr. Sumas said. It
cost $25 million to build, at
least 50% more than any previous grocery stores Village
Super Market has put up, he
The store features an oyster bar, a heated open-air dining space and 90 minutes of
free child care for shoppers,
Mr. Sumas said. The operating
profit margin is on par with
other stores in his chain of 29
supermarkets, but the volume
of business in the Hanover store is more brisk,
and its sales growth has been
one of the strongest relative
to comparable stores, Mr. Sumas said.
that the policy could have
threatening a stall in growth
after it expires this year.
In total, China’s combined
sales of passenger and commercial vehicles reached 2.1
million units in May, up 9.8%
from a year earlier, the auto
manufacturers’ group said.
SUVs continued to be the
brightest spot in the market,
with a year-over-year sales increase of 36% with 627,000
units sold, according to the
General Motors Co. and its
joint ventures delivered about
295,000 vehicles to Chinese
consumers last month, up 17%
from a year earlier, citing
strong demand for its SUVs.
Among others, Toyota Motor Corp. sold 102,900 cars, up
12% from a year earlier, Nissan
Motor Co. posted a 3.4% rise,
and luxury car maker BMW AG
said its China sales grew 7.1%.
BY EZEQUIEL MINAYA
Oaktree Capital Management, one of Tribune Publishing Co.’s largest stockholders,
demanded in a letter Monday
to examine the newspaper
publisher’s books to investigate if the board had violated
its duty by selling controlling
interest of the company to investor Michael W. Ferro Jr. at
an allegedly discounted price.
Oaktree previously has said
Tribune should engage in talks
with rival newspaper publisher Gannett Co., which in
April went public with its attempt to take over the company. Tribune has rebuffed
Gannett’s advances, saying
they undervalue the company.
A Tribune spokeswoman acknowledged receiving Oaktree’s letter and said Tribune
plans to respond to its request.
“We are not going to address the numerous mischaracterizations in Oaktree’s latest letter and will not be
distracted by their ongoing
campaign to distort the facts,”
she added in a statement.
In February, Tribune underwent a shake-up when Mr.
Ferro’s Merrick Media LLC
became the company’s largest
shareholder, buying 16.6% of
the company’s shares for
$44.4 million. Merrick paid
about $8.54 a share for its
Mr. Ferro became nonexecutive chairman that month
and within weeks had replaced
much of the company’s upper
management, including naming a new CEO.
In a letter addressed to
Tribune’s General Counsel Julie Xanders, Oaktree asserted
that “Mr. Ferro paid a belowmarket price for his stock in
the company, rather than a
premium reflecting his acquisition of control.”
Oaktree said it was seeking
to “investigate possible mismanagement and other violations of duty by Michael Ferro
and the company’s directors”
in the sale of shares to Merrick Media, the appointment
of Mr. Ferro and four associates to the board and the ruling out of a sale to Gannett.
THE WALL STREET JOURNAL.
Tuesday, June 14, 2016 | B3
* * * *
A panel of government and
aviation-industry experts has
reached a preliminary agreement on proposed cybersecurity
standards for airliners, including
the concept of cockpit alerts in
the event that critical safety systems are hacked, according to
people familiar with the matter.
Some of the recommendations, these people said, incorporate work already under
way to create an entirely new
category of automated inflight warnings—intended to
directly notify pilots if navigation signals are jammed or
corrupted. Such safeguards for
ubiquitous Global Positioning
System satellite broadcasts
aren’t widely available today,
and regulators typically don’t
mandate them on any aircraft.
But the proposals envision
computers would be
CHRISTOF STACHE/AGENCE FRANCE-PRESSE/GETTY IMAGES
that these and other provisions would be incorporated
into a broad package of future
cyberprotections and enhanced airworthiness requirements applying to new and existing aircraft. Commercial
and business planes certified
during the past several years
already feature some morestringent cyberprotections,
though the recommendations
are expected to go further.
The coming report will be
the most comprehensive move
yet to lay the groundwork for
global regulations combating
potential cyberattacks against
aviation. The advisory group is
expected to call for an array of
changes affecting airliners, business jets and even small, private
planes powered by propellers.
Without spelling out spe-
cific security measures or
technology, the recommendations are expected to urge
tighter restrictions for accessing ground-based maintenance
computers that routinely
transfer data on and off aircraft, according to people familiar with the details.
Stepped-up controls would extend beyond determining who
can log on to such networks.
Experts are considering additional safeguards for those
maintenance computers connected to the internet, which
pose greater intrusion risks.
In addition, the group favors enhanced efforts to ensure the integrity of software
used in laptops, called electronic flight bags, increasingly
used by pilots of commercial,
business and private planes.
The Federal Aviation Administration began the process
last summer amid escalating
concerns by plane makers and
regulators about the industry’s
vulnerability to hackers. There
has never been a verified inflight incident of unauthorized
access to airplane safety systems, but the topic of verifying incoming GPS signals is attracting more attention.
“The FAA and aviators are
worried, particularly in the
past 12 months, about spoofing of GPS,” which means
sending fake signals to navigation and flight-control computers on board planes, said
Matt Desch, chief executive of
Iridium Communications Inc.,
a commercial-satellite operator with aviation customers.
The FAA has instructed
panel members not to talk
publicly about their deliberations before an expected progress report during a U.S.-European safety conference in
Washington, D.C., that starts
Tuesday. An FAA spokeswoman didn’t respond to requests for comment.
contributed to this article.
The preliminary agreement would include new in-flight warnings.
LONDON—Airbus Group SE
will set up helicopter assembly
in China as part of a deal to
sell 100 light twin-engine choppers in the country.
The deal completes a letter
of intent signed last year for
an order valued at €700 million
($788 million), Airbus said
The pact is a boost for Airbus’s helicopter business,
which has been hurt by a
downturn in the oil and gas
market, one of the most lucrative segments for commercial
The April crash of a Super
Puma helicopter, in which all 13
people on board died, has also
cast a shadow over the aircraft-maker’s chopper unit. European regulators this month
have idled the fleet amid uncertainty about why the helicopter operated by CHC Group
The deal was signed during
a visit by German Chancellor
Angela Merkel to China.
“China is gearing up to be
the biggest market for helicop-
BY AUSTEN HUFFORD
McDonald’s Corp. is moving its headquarters to downtown Chicago from one of the
city’s suburbs, as more companies move into urban centers
to attract millennial talent.
The fast-food restaurant
chain will move its headquarters into the trendy West Loop
neighborhood of Chicago by
“This world-class environment will continue to drive
business momentum by getting us even closer to customers, encouraging innovation
and ensuring great talent is
excited about where they
work,” Chief Executive Steve
Companies like General
Electric Co., Weyerhaeuser
Co., and now, McDonald’s are
leaving behind their sprawling
suburban headquarters and
moving to urban high-rises to
appeal to the younger, metropolitan workforce. Young, educated and relatively high-earning workers are flocking to
The new home base will house a ‘Hamburger University’ location, like the one at its Oak Brook, Ill., complex.
many American cities at a rate
not seen since the U.S. Census
Bureau began tracking such
data in the 1970s.
“McDonald’s has identified
the keys to success to today’s
global market, talent, technology, and access to transporta-
FanDuel Inc. and DraftKings Inc. are in talks to
merge, according to a person
familiar with the matter, a potential deal that would result
in a single firm controlling
more than 95% of the embattled daily fantasy sports industry.
The two firms are rivals, offering essentially the same
product, and have come under
scrutiny in many states over the
legality of the business model.
The companies’ valuations
each topped $1 billion last
year when they were raising
money amid a frantic effort to
gain market share through giant advertising buys and billions in prize money.
The frenzy gave way to
scrutiny from state lawmakers
and attorneys general, several
of whom successfully got the
sites shut down in their states.
Those states included New
York, which had been the largest market for daily fantasy
It is possible the two companies won’t reach a deal, the
details of which are unknown.
Bloomberg previously reported the talks on Monday.
More than two dozen states
have been weighing legislation
tion networks,” Chicago Mayor
Rahm Emanuel said in a statement. “I’m proud to welcome
them to our dynamic city.”
The move is a return to the
Windy City for McDonald’s,
which had been based there
between 1955 and 1971. It is
currently based in the Chicago
suburb of Oak Brook, Ill.
The new Chicago headquarters will also house a “Hamburger University” location,
which provides training to
many of the company’s employees and franchise owners.
Big Firms Commit
To Equal-Pay Reviews
BY JANET ADAMY
BY SHARON TERLEP
on daily fantasy sports. Critics
say the games are based on
chance and amount to illegal
online gambling. The operators have said daily fantasy is
a game of skill and not akin to
In daily fantasy, people
draft virtual teams of professional athletes in daily and
weekly online contests in
which they compete against
each other based on the athletes’
The companies agreed in
March to bar New York residents from playing as part of a
settlement with the attorney
general’s office, which was
trying to force the companies
to stop accepting money from
New Yorkers and pay restitution to contestants who lost
money playing on the sites.
The sites could reopen if
New York lawmakers expressly
legalize daily fantasy-sports
contests. Otherwise, the companies’ paid contests will remain closed to New Yorkers
until an appeals hearing in
Investors in New Yorkbased FanDuel include privateequity firm KKR & Co.; Google
Capital, the internet company’s growth-equity fund;
and Comcast Corp. Bostonbased
roughly half of its money from
media companies and sports
League Baseball, the National
Hockey League and Madison
shore Helicopter Co. have
made the order for 100 H135
Delivery of the ordered helicopters are due to stretch over
a decade. The new assembly
facility is expected to begin operations in Qingdao in China’s
Shandong province in 2018.
It will be Airbus Helicopters
fourth final-assembly line outside of France and Germany.
Helicopters are assembled in
the U.S., Brazil and, starting
next year, in Romania.
McDonald’s Is Returning to Chicago
Fantasy Sports Sites
In Talks for Tie-Up
merger would create
95% of the industry
ters in years to come,” with
strong growth in government
services and civil applications
of such machines, said Norbert
Ducrot, the head of Airbus Helicopters in China and for the
North Asia region.
Airbus said it expected expansion of offshore wind farms
in China’s power industry to inflate demand for helicopters.
Airbus said a consortium
of China Aviation Supplies
Holding Co., Qingdao United
General Aviation Industrial Development Co. and CITIC Off-
BY ANDY PASZTOR
JASPER JUINEN/BLOOMBERG NEWS
Aviation Accord Airbus’s Helicopter Business Gets Boost From China Deal
Would Take Steps
FanDuel and DraftKings sought to gain market share with giant
ad buys. Above, guard Tim Quarterman during an NCAA game.
two dozen companies including Amazon.com Inc., PepsiCo
Inc. and Dow Chemical Co.
have signed a White House
pledge to conduct an annual
gender pay analysis aimed at
eliminating inequitable compensation, the Obama administration said Monday.
The 28 companies agreed to
review their hiring and promotion processes and embed
equal-pay efforts in other
workplace initiatives. The
companies also include Accenture PLC, American Airlines
Group Inc., Cisco Systems
Inc., Deloitte, Expedia Inc.,
Gap Inc., Johnson & Johnson,
L’Oréal USA and Staples Inc.,
the White House said.
“The pledge is to actually
take action,” said Tina Tchen,
executive director for the
White House’s Council on
Women and Girls.
The Labor Department also
is updating guidelines for federal contractors on protecting
against sex discrimination for
the first time since the 1970s.
The changes include adding
protections for transgender individuals.
The efforts are part of a
White House summit on
women and girls Tuesday that
is drawing thousands of people to Washington. The summit will frame President Barack Obama’s two terms as a
time of notable progress for
women because the president
expanded health-care coverage, signed a pay-equity bill
and campaigned against sexual
violence toward women,
among other things.
Officials will emphasize
that more progress needs to
be made to lift women economically and socially, playing
into one of presumptive Democratic presidential nominee
Hillary Clinton’s primary messages to voters this year.
Mr. Obama has made improving women’s financial
standing a key part of his
White House agenda, emphasizing in speeches that he
wants a fairer workplace for
his two daughters.
Economists and policy makers who support him say his
repeated calls for workplace
flexibility helped to drive a
‘The pledge is to
actually take action,’
said White House
official Tina Tchen.
wave of cultural change inside
Many Republicans say that
the administration’s moves to
expand health care and promote equal pay saddled employers with regulations that
work against women. “I don’t
think that they’ve made any
significant changes” to improve women’s financial
standing, said Rep. Marsha
Blackburn of Tennessee.