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“These folks will turn uptrained and battle-hardened,” theofficial said.

This development has changedthe calculations of U.S. intelli-gence and diplomatic officialswho are trying to gauge how longSyrian President Bashar al-Assadwill remain in power. This devel-opment bolsters Mr. Assad “in a

PleaseturntopageA8

flict raises fresh U.S. concernsabout Hezbollah, a Tehran-backedgroup that is a member of Leba-non’s governing partnership andis deemed by the U.S. to be a ter-rorist organization. U.S. officialshave seen units of Hezbollahfighters emerging in differentparts of Syria with numbers rang-ing from 2,000 to 2,500 fighters,a U.S. official said.

Hezbollah fighters joined Syr-ian government forces in thesiege of a rebel-held town insidethe war-torn country on Monday,local residents said, deepeningthe Iran-backed group’s involve-ment in Syria’s civil war and rais-ing alarm among U.S. officials.

Israel tried to tamp down ten-sions in the region, meanwhile,one day after it launched its sec-ond recent attack on arms ship-ments inside Syria that intelli-gence experts say wereHezbollah-bound Iranian missiles.

The latest phase of Syria’s con-

CONTENTSBusiness Tech............ B4CFO Journal................. B7Corporate News B1-3,6Global Finance............ C3Health & Wellness D1-4Heard on Street..... C10

In the Markets........... C4Leisure & Arts............ D5Opinion.................. A15-17Sports......................... D6-8U.S. News................. A2-7Weather Watch........ B8World News......... A8-13

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Vital Signs

The greenback is risingagainst the yen, havingstrengthened 15% this yearamid loosened monetarypolicies by the Japanesecentral bank aimed at spur-ring economic growth. OneU.S. dollar now buys ¥99.33,near its recent high of¥99.78 a month ago. Aweaker yen helps Japanesemanufacturers by makingJapan-made products lessexpensive in the local cur-rencies of overseas markets.

Howmany yen one dollar buys

Source: ICAP

'09 '10 '11 '13'12’08

¥110

70

80

90

100

>

BofA agreed to pay MBIA$1.7 billion to settle a dis-

pute over soured mortgagesecurities, in the second-largest U.S. bank’s latest bidto reduce legal risks tied toits home-lending business. C1n The SEC charged Harris-burg, Pa., with securities fraudfor allegedly failing to dis-close information about thecity’s financial troubles. A1n J.P. Morgan has yet topersuade three of its largestshareholders to back it in acoming vote over whetherDimon should retain his dualrole of chairman and CEO. C1nThe S&P 500 notched a newhigh of 1617.50 in a mixed dayfor U.S. stocks. Tokyo sharessurged early Tuesday, withthe Nikkei topping 14000. C4n The Senate passed a mea-sure authorizing states tocompel online retailers tocollect sales tax, but the billfaces hurdles in the House. A4n A string of rulings in bigcases has left smartphonemakers that went on the offen-sive in the patent wars with lit-tle to show for their trouble. B1n Americans are finding itslightly easier to get a mort-gage, yet banks remain waryof would-be home buyers withweaker credit histories. A6n Adobe Systems has de-cided to get out of the pack-aged-software business andwill sell its biggest productsonly as online services. B1n The EU is poised to slapimport duties on solar-panelequipment made in China, amove that is likely to ignite amajor trade battle. B8n San Francisco sued Mon-ster Beverage, accusing thecompany of marketing itsenergy drinks to children de-spite alleged health risks. B1nTwo studies suggest a slow-down in health-spendinggrowth may reflect lastingchange due to shifts in how careis delivered and paid for. A4n The private-equity firmspurchasing BMC Softwarehave also discussed buyingCompuware and combiningthe two companies. B3n PG&E should pay $2.25 bil-lion in penalties for a deadly2010 pipeline blast in SanBruno, Calif., investigatorsand city officials said. A6n A California jewelry-storeowner agreed to plead guilty toa criminal charge in the insider-trading scandal that broughtdown a KPMG partner. C3

n Israel tried to ease tensionafter its bombing in Syria.“Hysteria is not necessary,”said an Israel army chief.The aim is to strike at Hez-bollah-bound arms ship-ments, not Syria, Israel said,as it took steps includingcanceling military exercisesnear the Lebanon border, toavoid provocation. A1, A4, A9NATO’s chief said chemicalweapons apparently wereused in Syria’s civil war butresponsibility is unclear.n Islamist protesters inBangladesh fought police fora second day, with 37 dead.More bodies were pulled fromthe garment-site collapse,where at least 650 died. A10n The Chinese governmenthas targeted U.S. governmentcomputer systems for intru-sion, the Pentagon said. A11n A friend of a Boston Mara-thon suspect was freed on bailas he awaits trial on chargesof lying to investigators. A2n A California court saidcities can ban storefront potshops in their borders. A6n Public housing could betransformed by a proposal toset time limits or work re-quirements on recipients. A1n The taxpayer cost forlegalizing 11 million illegalimmigrants would be at least$6.3 trillion over their life-times, said the conservativeHeritage Foundation. A4n The Western U.S. is brac-ing for fire season, after theseason’s first major wildfirehit Southern California. A3n New York police made51% fewer “stop and frisk”stops in 2013’s first quartercompared with 2012’s, amidcontroversy over the tactic.n Three Cleveland womenmissing for about a decadewere found alive. Threebrothers were arrested. A7n Researchers made bits ofhuman bone in a lab dishand transplanted them intomice, an early step towardreplacement-bone growth. A7n The FDA moved to tightenoversight of tanning beds. Itsaid that people younger than18 shouldn’t use them. B3n North Korea took twoMusudan missiles off launch-ready status and movedthem, U.S. officials said. A13n Died: Giulio Andreotti, 94,seven-time Italy prime minis-ter. A13 … William Johnson,94, made Illinois CentralRailroad a conglomerate. B6

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The Securities and ExchangeCommission has put local gov-ernment officials on notice thatit is closely monitoring the waythey describe their cities’ fiscalhealth, charging Harrisburg, Pa.,with securities fraud for alleg-edly failing to disclose informa-tion on its financial troubles.

Harrisburg agreed to settlethe charges without admitting ordenying the findings, and no finewas levied against it or city offi-cials. The SEC faulted Harrisburgfor allegedly making misleadingfinancial statements from 2009to 2011 outside its securities dis-closure documents related tobond offerings, including in thecity’s budget report and amayor’s state-of-the-city ad-dress.

It is the first time the regula-tor has brought such charges,and investors say other munici-palities could face sanctions forissuing incomplete or misleadinginformation about their finances.

As much as 20% of the nearly50,000 issuers of municipal debtin the U.S. don’t supply timelydisclosures after their bondshave been issued, according toanalyst estimates.

“This isn’t just Harrisburg,there are lots more issuers likeit,’’ said Laurence Gottlieb, chair-man and CEO of FundamentalAdvisors, a private-equity firmthat invests in distressed munici-pal debt.

The Pennsylvania capital hasbeen mired in debt for years. Itsfiscal woes stem largely fromyears of cost overruns related toa troubled incinerator project.The city of 49,500 was nearlypushed into bankruptcy in 2011.Republican Gov. Tom Corbett de-clared a state of fiscal emer-gency, and a state court ap-pointed a receiver to oversee thecity’s finances.

The SEC found that the city’s2009 budget misstated Harris-burg’s credit as being rated Aaaby Moody’s Investors Serviceeven though Moody’s had down-graded the city’s general obliga-tion rating to Baa1. The citydidn’t disclose a subsequentdowngrade by Moody’s in Febru-ary 2010 until March 2011.

The SEC also took issue withHarrisburg officials for doingwhat many public officials oftendo: Putting a good face on a dif-ficult situation. For example, in

Pleaseturntothenextpage

BY KRIS MAHERAND MICHAEL CORKERY

City HitBy SECFraudChargesHarrisburg’s PublicStatements Faulted

BySamDagher inHoshSeyedAli,Lebanon,and

JoshuaMitnick inTelAviv

Hezbollah Steps Up in SyriaAs IsraelTries toEaseTension

Deep in the president’s newbudget is a plan that could trans-form public housing in the nationby allowing housing authoritiesto increasingly set time limits orwork requirements for partici-pants.

Currently, government hous-ing benefits are generally openended. Unlike welfare—which hasa five-year limit—federal housingprograms allow low-incomeAmericans to receive rent vouch-ers or live in government com-plexes for decades.

The result is that people en-dure long waits to qualify for theprogram and sometimes cele-brate almost like lottery winners when they get theword. In New York City, the average person staysin public housing for 20.7 years.

But President Barack Obama’s fiscal year 2014budget calls for “substantial expansion” of a 1996demonstration project that allows select housing

authorities to set restrictions onresidents, or try other strategiesto promote self-sufficiency. Only39 housing authorities out of3,200 nationally have this powercurrently. Congressional approvalwas required for each one.

Housing agencies are lobbyingfor the expansion. They say thecurrent system doesn’t motivateresidents to become financiallyindependent and isn’t fair tothousands of impoverished rent-ers who need help now but mustwait years for assistance.

Directors of both the Houstonand Milwaukee housing authori-ties say they would likely addwork requirements for peoplegetting public assistance there.

Tenants with jobs would pay a higher share of therent, and the housing authorities would be able tohelp more people, they say. The Houston Housing

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BY JENNIFER LEVITZ

HousingAgencies Push to ImposeTime Limits,WorkRequirements

Lip Service: A Hair-Raising Procedure Grows Popular in Turkeyi i i

Mustache Transplants Attract Whisker-Challenged; Tourism Packages

ISTANBUL—Turkey’s economyis getting hairier, as a boomingmedical sector profits from agrowth spurt: mustache trans-plants.

Long favored as a destinationfor the follicly challenged, Tur-key’s cosmetic surgeons have foryears offered hair implants tothose who are balding on top.Now hair transplants for the faceare growing in popularity, cos-metic surgeons and tourismagencies say, with men from the

Middle East, Europe and Asiacoming to Istanbul seeking a vir-ile addition for the upper lip.

The procedure uses a tech-nique called follicle-hair extrac-tion, in which doctors removeclusters of hair from the morehirsute areas of the body andimplant them along the lip orcheeks to magnify a mustache orbeef-up a beard.

Performed under local anes-thetic, the surgery takes aroundfive hours and can cost up to$5,000, cosmetic surgeons say.Tourism agencies have begun of-

fering “transplant pack-ages” combining facial-hair operations with ashopping vacation inIstanbul or beachsideretreat on the Mediter-ranean coast.

Most customers areforeigners, according tosurgeons, as Turkey’semergence as a placefor facial-hair trans-plants comes as thenumber of Turks wear-ing mustaches has declinedsharply.

Selahattin Tulunayis one of the surgeonsprofiting from this be-whiskered boom. Fromhis surgery clinic in anupscale neighborhoodknown as Istanbul’sBeverly Hills, Dr. Tulu-nay started facial folli-cle transplants twoyears ago and nowsays he completes upto 60 such operationsa month.

“The mustache is making aPleaseturntopageA14

Ibrahim Tatlises

BY JOE PARKINSON

A Demand of Freedom for Jailed Protesters

MOSCOW OPPOSITION: Thousands of critics of Vladimir Putin’s presidency marked the anniversary ofclashes with police by calling for his ouster and for the release of political prisoners, shown on posters. A13

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*RequestedSource: Dept. Housing and Urban Development

The Wall Street Journal

Rising ExpenseBudget for public housing andHousing Choice Vouchers

$40

0

10

20

30

billion

'04 '06 '08 '10 '12 '14*

2014* $36.8B

Capital Journal: Obama is heldback by risks on Syria............... A4

As civil war escalates in Syria,new dangers for Israel.............. A9

One county’s experience with time limits............. A14

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