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* * * * * * TUESDAY, MAY 20, 2014 ~ VOL. CCLXIII NO. 117 WSJ.com HHHH $2 .00

The Justice Department in-dicted five Chinese military offic-ers, alleging they hacked U.S.companies’ computers to stealtrade secrets, a major escalationin the fight between the super-powers over economic espionage.

The indictment, unsealedMonday, marks the first time theU.S. government has publicly ac-cused employees of a foreignpower with cybercrimes againstAmerican firms. It also marksthe most extensive formal allega-tions by the government of thekind of hacking that corporationshave long complained about, butuntil now have rarely acknowl-edged.

Among those named as vic-tims in the document are brandnames from America’s industrialheartland, including U.S. SteelCorp., Westinghouse Electric Co.and Alcoa Inc.

U.S. officials said other casesrelating to China are being pre-pared. In addition, alleged hack-ers in Russia are likely to becharged soon, according to peo-ple familiar with the govern-ment’s investigations. U.S. agen-cies have also been investigatingincidents with possible ties toIran and Syria, these people say.

It is unlikely the suspects willever be brought to trial, sincethere is no extradition treatywith China. Yet in naming thefive, and providing details in a48-page indictment, the Obamaadministration is ratcheting upthe political and diplomatic coststo China and others if they usecomputers to steal secrets or at-tack U.S. interests.

“This case should serve as awake-up call to the seriousnessof the continuing cyberthreat,”Attorney General Eric Holdersaid.

The move drew an angry re-sponse from China’s ForeignMinistry. On Tuesday, China’s of-ficial Xinhua news agency saidthe ministry had summoned Max

Baucus, the U.S. ambassador, tolodge “a solemn representationwith the U.S. side” over the mat-ter.

In a written statement earlieron the ministry’s website, spokes-man Qin Gang said China is sus-pending participation in a U.S.-China working group on

cybersecurity. Mr. Qin called theallegations groundless and de-manded their withdrawal. “ThisU.S. move, which is based on fab-ricated facts, grossly violates thebasic norms governing interna-tional relations and jeopardizesChina-U.S. cooperation and mu-

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TODAY IN PERSONAL JOURNAL

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What’sNews

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World-Widen The Justice Departmentindicted five Chinese militaryofficials for hacking U.S. firms’trade secrets. China called theallegations groundless. A1, A6n Thailand’s army declaredmartial law, a move it said wasaimed at curbing the country’ssometimes violent politicalconflict but wasn’t a coup. A8n The Kremlin said Putin or-dered Russian troops to pullback fromUkraine’s border. TheU.S. and NATO voiced skepti-cism about the latest claim. A9n An Iraqi coalition led byPrime Minister Maliki wonthe most seats in the coun-try’s first parliamentary elec-tion since U.S. troops left. A7nLibyanmilitias began liningup behind rival camps as a ren-egade general challenged Isla-mists who dominate politics.A7n Libya is seeking interna-tional help in capturing an ex-Gadhafi aide accused of embez-zlement and other crimes. A7n An Egyptian-born clericwas convicted of 11 terrorismcharges by a U.S. jury, likelystrengthening the argumentfor trials in civilian courts. A3nNorthern California is morelikely to face multiple damag-ing earthquakes than one ma-jor temblor, a study says. A3n China evacuated thousandsmore of its citizens fromVietnam after riots sparkedby a territorial dispute. A8n A U.S. judge struck downOregon’s gay-marriage ban,calling it unconstitutional. A5nDied: GordonWillis, 82,cinematographer for the “God-father” and other film classics.

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Credit Suisse admitted itconspired to aid tax eva-

sion and agreed to pay $2.6billion to settle a probe bythe Justice Department. A1nAT&T canwalk away fromits proposed DirecTV deal if thesatellite-TV firm can’t renewits “Sunday Ticket”NFL offer-ing, AT&T said in a filing. B1nU.S. prosecutors chargedthe creators of Blackshadessoftware, allegedly used byhackers to spy via webcamsand steal financial data. B1nAstraZeneca rejectedwhatPfizer said was its final in-creased bid, sending shares inthe U.K. drug firm plunging. B3n J.P. Morgan CEO Dimonhas told investors he wants tostay with the bank for asmany as five more years. C1n U.S. stocks posted gainsas tech and small-cap sharesrecovered. The Dow rose20.55 points to 16511.86. C4n Some 10million Americanswere underwater on theirmortgages at the end of thefirst quarter, a report said. A2nU.S. authorities are prob-ing possible ties between bit-coin exchanges and the onlinedrug bazaar Silk Road. C3nThe Supreme Court ruledthe copyright holder for a 1963screenplay can pursue claimsover the film “Raging Bull.” B3n Investors have been pullingmoney out of exchange-tradedfunds backed by bank loans. C1n Foreign investment in Af-rica will hit a record $80 bil-lion in 2014, with the U.S., U.K.and France in the lead. A14

Business&Finance

In Europe, Politicians BustNew Moves to Lure Young Voters

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Parties Try Rap Battle, Selfies,Dance Video to Boost Election Turnout

BRUSSELS—The EuropeanUnion has an election problem:Voters don’t know or careenough to go to the polls andelect their di-rect represen-tatives in Brus-sels. In aneffort to woothem back,politicians aretrying somenew moves.

In the run-up to Europeanelections thisweek, mem-bers of the Eu-ropean Parlia-ment havetested their policies in a rap bat-tle and joined in with the latestInternet craze—creating theirown version of Pharrell Williams’

“Happy” music video. The politi-cians’ version, which also fea-tures professional dancers and anudist, is aimed at getting youngpeople to vote.

The Party of European Social-ists wants supporters to tweet

“selfies” withits top candi-date MartinSchulz, abearded be-spectacled Ger-man, coiningthe hashtag#schulzie. TheAlliance of Lib-erals & Demo-crats in Europepromised a daywith its topcandidate, for-mer Belgian

Prime Minister Guy Verhofstadt,for the best “EU selfie.”

Meanwhile, in a separate ef-PleaseturntopageA10

BY GABRIELE STEINHAUSERAND FRANCES ROBINSON

Dekay

HUMAITÁ, Brazil—On a muggy February day,police made a grisly find on an Indian reservationin Brazil’s Amazon: the bodies of three men lastseen driving toward the reserve on the Trans-Ama-zon highway, the massive road Brazil bulldozeddeep into the rain forest in the 1970s.

The discovery added grim clues to a murder casethat has pitted the Amazon settler town of Humaitáagainst the Tenharim Indian reservation 80 milesto the east. Police charged six Tenharim Indians

this month with murder—charges the six have de-nied as they await trial. In Humaitá, where two ofthe victims lived, police say locals rioted and setfires at an Indian health clinic and aid agency.There is ominous talk, locals say, of more violence.

The triple murder exposes a troubling legacy ofthe Amazon’s signature road. Four decades afterBrazil plowed a rutted red-clay track some 2,500miles into its vast rain forest interior, the Trans-Amazon remains a source of tension between thesettlers who came with it, and the Indians who

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BY JOHN LYONS

ROAD TO CONFLICT

Amazon Murder MysteryRaises Tensions in Brazil

500 miles

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Humaitá

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AMAZONASSTATE

AMAZONASSTATE Trans-Amazon

highway

The Wall Street Journal

Large investors are rushinginto the riskiest corporate bonds,frustrated by low interest rateson safer investments and con-vinced that even companies withshaky finances are in little dan-ger of default.

One sign of that rush: Inves-tors have been buying up corpo-rate bonds with a triple-C rating,a grade that analysts and inves-tors consider highly speculative.

That buying is driving upprices on those bonds and push-ing down their yields, which thismonth fell to 8.187% on a closelywatched Bank of America MerrillLynch index—the lowest level onrecord. Yields fall when pricesrise.

Demand for those and otherbonds rated below investmentgrade—so-called junk bonds—is

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BY TOM LAURICELLAAND KATY BURNE

ChasingYield,InvestorsPlow IntoRiskier Bonds

WASHINGTON—Credit SuisseGroup AG became the first finan-cial institution in more than a de-cade to plead guilty to a crimeMonday when the Swiss bank ad-mitted it conspired to aid tax eva-sion and agreed to pay $2.6 bil-lion to settle a long-running probeby the U.S. Justice Department.

Attorney General Eric Holder,

in announcing the charges, saidthe bank engaged in an “extensiveand wide-ranging” scheme to helpwealthy Americans hide assets.

The criminal charge filed Mon-day in federal court outlined adecadeslong, concerted attemptby Credit Suisse to “knowinglyand willfully” help thousands ofU.S. clients open accounts andconceal their “assets and incomefrom the IRS.” Mr. Holder saidthe bank destroyed account re-cords sent to the U.S. for clientreview, concealed transactionsand “failed to take even the mostbasic steps to ensure compliancewith tax laws.”

Even after a U.S. crackdownon Swiss accounts in 2008 ledCredit Suisse and rival UBS AGto tighten restrictions on thekinds of services they wouldprovide to American customers,they continued to take steps thathindered investigators, the filingsaid. Credit Suisse didn’t con-duct a thorough inventory of theaccounts its managers oversaw,and some managers helped cli-ents move their assets to otheroffshore banks so they would re-main hidden to the U.S., accord-

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By Andrew Grossman,John Letzing

and Devlin Barrett

Big BankPleadsGuilty inCriminalTax Case

A poster shows the five Chinese men the U.S. charged with economic espionage and trade secret theft.

FBI

BY DEVLIN BARRETTAND SIOBHAN GORMAN

Chinese Charged inU.S.HacksJustice Department Indicts Military Officers, Escalating Fight Over Spying

Cyberwar’s Fronts Pittsburgh-area industrial

companies targeted.............. A6 Alcoa breach relied on simple

phishing scam.......................... A6 Prosecutors charge creators

of Blackshades software.... B1

Getty

Images

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