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TODAY IN PERSONAL JOURNAL
PLUS The Push to Test Young Athletes’ Hearts
******
TUESDAY, JUNE 24, 2014 ~ VOL. CCLXIII NO. 146
DJIA 16937.26 g 9.82 0.1% NASDAQ 4368.68 À 0.01% NIKKEI 15369.28 À 0.1% STOXX 600 346.31 g 0.5%
i
Officials
AtEx-Im
BankFace
Probes
i
Business & Finance
n The Supreme Court gave
firms more leeway to fend off
securities-fraud suits and
separately gave a broad reading to a bank-fraud law. C1
n Dean Foods and Clorox
have been asked for information in an insider-trading probe
of Icahn and two others. A1
n House lawyers sought a
deal with the SEC to shield a
congressional aide who figures
in an insider-trading probe. C2
n Pension funds and university endowments missed out
on much of the stock rally after pushing to diversify. C1
n The Dow eased 9.82 points
to 16937.26. The S&P 500
shed 0.26 point to 1962.61. C4
n American Apparel’s CEO is
seeking arbitration to keep his
titles as president and CEO. B1
n Sales of existing homes
jumped 4.9% in May but remain shy of last year’s pace. A2
n Amazon and Warner Bros.
are close to resolving a moviedisc-pricing dispute. B4
n The Justice Department
plans more cases against financial firms in a probe of alleged scam transactions.C3
i
i
World-Wide
n Maliki pledged to begin
forming a new government on
July 1 as pressure grew for the
Iraqi president to step aside. A1
n Sunni rebels attacked a police convoy just 20 miles from
Baghdad, triggering a shootout
that left at least 81 dead. A8
n The U.S. can unleash a
drone strike on a U.S. citizen
abroad if he is plotting to attack Americans and can’t be
apprehended, a memo said. A2
n A VA watchdog played
down the effect of treatment
errors and appointment delays,
a special counsel alleged. A3
n Syria’s chemical weapons
have all been removed from
the country, a Hague-based
watchdog agency said. A9
n An Egyptian court sentenced three Al Jazeera journalists to prison on charges
they aided a terrorist group. A9
n The Obama administration
agreed to allow a White House
lawyer to testify at a House
hearing on lost IRS emails. A4
n The Afghan election chief
resigned but denied any involvement in an alleged
presidential-voting fraud. A9
n The Supreme Court said the
EPA can require greenhousegas controls on power plants
and other big polluters. A4
n Ukraine separatist leaders
agreed to join a governmentdeclared cease-fire. A10
n The FBI said a nationwide
crackdown on child prostitution yielded 281 arrests. A3
Iraqi Parties Pressure Maliki
Search for Alternative to Prime Minister Grows; He Pledges to Form New Government
BY JAY SOLOMON
AND MATT BRADLEY
BAGHDAD—Iraqi parties raised
pressure on Prime Minister Nouri
al-Maliki to step down, as the U.S.
said it drew pledges from the embattled leader and other top Iraqi
politicians to begin forming a
new government by July 1.
The Obama administration is
betting that a new more conciliatory leadership—with or without
Mr. Maliki—that unifies Iraq’s
CFOs: Upbeat about business,
but not about Washington.
CFO Network, C7-C11
In the Markets.............C4
Leisure & Arts.............D4
Opinion....................A13-15
Sports...........................D5-6
U.S. News...................A2-6
Weather Watch..........B6
World News...........A7-10
>
s Copyright 2014 Dow Jones & Company.
All Rights Reserved
sparring sectarian parties will
help neutralize the mounting
threat posed by Islamist insurgents in Iraq by undercutting
their political support.
U.S. and Iraqi officials met in
Baghdad on Monday as the Islamic State of Iraq and al-Sham,
or ISIS, made further alarming
advances across Iraq.
On Monday, the Sunni extremists launched an attack on a police convoy just 20 miles from
Baghdad’s center that left at
least 81 people dead, a day after
they captured nearly all of Iraq’s
remaining border crossings with
neighboring Jordan and Syria.
“This is clearly a moment
when the stakes for Iraq’s future
could not be clearer,” Secretary
of State John Kerry said after
meeting with Mr. Maliki in Baghdad. “[ISIS’s] campaign of terror,
their grotesque acts of violence
and repressive ideology pose a
grave danger to Iraq’s future.”
Mr. Kerry said President Ba-
OFF TARGET
Aides Rebelled After CEO
Tweaked ‘Tar-zhay’ Formula
BY PAUL ZIOBRO
AND SERENA NG
The big-box retailer was long
known for a “cheap chic” style
that drew shoppers looking to
Number of customer transactions,
Just days before Chief Execuspend $20 on everyday basics but
change from a year earlier
tive Gregg Steinhafel resigned
who left with $100 worth of “im0%
from Target Corp., a small group
pulse purchases”—items they
of senior executives huddled todidn’t expect to buy. The creative
gether to discuss ways to improve
force behind Target’s hip image
the flagging retailer’s fortunes.
was fueled by a freewheeling cor–2
Shortly after their gathering on
porate culture where executives
Target
May 2, executives delivered a
walked stores with board memmessage to the board: If Mr.
bers and managers had the latiWal-Mart
Steinhafel didn’t leave immeditude to make their own calls on
–4
ately, others would.
everything from product picks to
The following Monday, the
special promotions.
CEO was out. Several top manBut interviews with more than
–6
agers are now leading the Minnetwo dozen former and current
’13
’14
apolis company until a permanent
Target executives, managers and
Source: the companies
replacement is found.
vendors reveal a deep malaise
The Wall Street Journal
The sequence of events, acwithin a chain that, increasingly,
cording to people close to the sithad lost its way. Management beuation, was the climax of a tense
came mired in a new thicket of
narrative that had been playing out within Target’s bureaucracy. Creative leeway—once the DNA of the
top ranks—even before a massive credit-card data chain affectionately dubbed ‘Tar-zhay’—took a back
breach and a money-losing expansion into Canada seat to rigid performance metrics.
exposed serious weaknesses in the chain’s operaSome executives took their grievances to Target’s
Please turn to page A12
tions.
Stalled in the Aisles
rack Obama maintained the right
to strike ISIS targets at any time
now that the U.S. military moved
military assets into the region,
including U.S. aircraft carriers
stationed in the Persian Gulf.
Still, some U.S. officials were
skeptical that Mr. Maliki or other
Iraqi politicians would respect
Please turn to page A8
 Rebel attacks near Baghdad... A8
 Afghan election chief resigns
amid fraud claims........................ A9
i
i
BY SUSAN PULLIAM
MICHAEL ROTHFELD
AND
Federal authorities have
sought information from two
companies in connection with an
insider-trading probe examining
the activities of investor Carl
Icahn, sports bettor William T.
Walters and professional golfer
Phil Mickelson, according to people familiar with the matter.
Dean Foods Co., a Dallas-based
dairy and soy company, in recent
weeks received a subpoena from
criminal authorities ordering the
company to produce information,
said a person familiar with the
matter.
Clorox Co., a cleaning products
company, received a request for
After all, that’s why
you invest.
iShares Funds are
diversified, low cost
and tax efficient.
Fans Inflexible When It Comes to Health Levy; ‘Up-Dog, Breathe In’
WASHINGTON—Music
thumped through Freedom Plaza
one recent Monday as more than
100 spandex-clad figures held
warrior poses under the unforgiving noontime sun.
“How do you tax energy, energy that’s moving through—left
foot forward, step” the event’s MC
exhorted, mixing political commentary and yoga directions. “Not
taxing human beings for getting
healthy—hands down low, pushup, up-dog, breathe in!”
Yoga devotees revel in combining Zen-like calm and toughminded determination. That’s
bad news for the Washington,
its sales tax to include services
such as yoga instruction and gym
memberships. In response, yoga
aficionados have united with gym
owners, CrossFit trainers, cycling
instructors and acupuncturists to
unleash a no-holds-barred lobbying barrage.
“I think there’s a sense of easygoingness in the community,” said
Ian Mishalove, a co-owner of Flow
Yoga Center who attended the
demonstration. “But it doesn’t
mean that the community is filled
with a bunch of pushovers.”
The 5.75% levy, variously
known as the “Yoga Tax,” the
“Gym Tax” or, as fitness activists
prefer, the “Wellness Tax,” is one
Please turn to page A12
information from the Securities
and Exchange Commission in
2011 related to trading in the
company’s shares, according to a
person familiar with the matter.
Mr. Icahn also received a request
for information from the SEC
around that time.
The government investigation
began after Mr. Icahn accumulated a 9.1% stake in Clorox in
February 2011, said people
briefed on the probe. On July 15,
2011, he made a $10.2 billion offer
for Clorox that caused the stock
to jump. Investigators are looking
into whether Mr. Icahn tipped Mr.
Walters about his actions involving Clorox, the people said.
While Mr. Icahn never owned
Please turn to the next page
iShares Funds
can help you
keep more of
what you earn.
i
D.C., council.
Washington’s
government,
whose John A. Wilson Building is
a stone’s throw from the popular
protest spot, is trying to expand
The U.S. Export-Import Bank
has suspended or removed four
officials in recent months amid
investigations into allegations of
gifts and kickbacks, as well as attempts to steer federal contracts
to favored companies, several
people familiar with the matter
said.
One employee, Johnny Gutierrez, an official in the short-term
trade finance division, allegedly
accepted cash payments in exchange for trying to help a Florida company obtain U.S. government financing to export
construction equipment to Latin
America, according to a person
familiar with the inquiry. Mr. Gutierrez was escorted from the ExIm Bank building in April, said
two people familiar with the
matter.
Mr. Gutierrez’s lawyer, Douglas McNabb, confirmed his client
had been placed on leave after
an investigation by the agency’s
inspector general, but he
wouldn’t comment on details of
the investigation. Mr. Gutierrez
couldn’t be reached for comment.
Of the four employees, Mr.
Gutierrez’s responsibilities were
most central to the agency’s core
mission of financing exports.
Two of the others are being investigated over allegations of
improperly awarding contracts
to help run the agency; the third
is being investigated over allegations of accepting gifts on behalf
of a company seeking financing,
according to people familiar with
the matter. The identities of the
Please turn to page A4
U.S. Seeks Data in Inquiry
Tied to Dean Foods, Clorox
Washington Plan to Tax Yoga Leads to Political Posturing
BY MICHELLE HACKMAN
Journal Report
CONTENTS
Business Tech..............B5
Corporate News.....B2-4
CFO Journal..................B6
Global Finance.............C3
Health & Wellness D1-3
Heard on Street.......C14
OLD GUARD: Two of the longest-serving members of Congress—Republican Sen. Thad Cochran, left, of Mississippi and Democratic Rep. Charles
Rangel, right, of New York—face primary elections on Tuesday that could end their political careers. See WSJ.com for full coverage.
Composite
i
BY DAMIAN PALETTA
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P2JW175000-6-A00100-1--------XA
n Seven auto makers said
they would recall vehicles
equipped with Takata air
bags that could explode under certain circumstances. B1
Tim Isbell/The Sun Herald/Associated Press (Cochran); Darren Ornitz/Reuters (Rangel)
T
he Ex-Im Bank has suspended or removed four
officials in recent months
amid probes into allegations
of gifts and kickbacks. A1
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