WSJE_February_4th.pdf

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Trial lawyers’ political donations

followed by shareholder suits

THE BIG READ 16-17

U.S. military may be giving

game away in Afghan surge

WORLD NEWS 10

VOL. XXVIII NO. 4

EUROPE

Thursday, February 4, 2010

europe.WSJ.com

Bomb kills U.S. soldiers and Pakistanis

EU supports

Greece’s plan

to lower debt

B Y A DAM C OHEN

A ND S EBASTIAN M OFFETT

Greece, though, remains

the euro zone’s most-troubled

spot. The country recorded a

budget deficit of nearly 13% of

gross domestic product in

2009, far above the European

Union’s 3% limit.

The commission, the EU’s

executive arm, accepted a

planned fiscal diet under

which the Greek government

has pledged to get its deficit

below the 3% threshold by

2012. But the commission

warned that further spending

curbs and new taxes might be

needed to fix the country’s

public finances.

“We know that the imple-

mentation of this program is

not easy … but we need to

support it” and monitor it

closely, economic affairs com-

missioner Joaquín Almunia

said at a news conference.

The commission is con-

cerned that Greece is relying

too heavily on fixes like com-

bating tax evasion, which

could take a long time to bear

fruit and have been unsuc-

cessful in the past.

On Tuesday, Greek Prime

Minister George Papandreou

outlined more-concrete mea-

sures that appeared to provide

some reassurance, saying he

would freeze public-sector

wages and impose higher fuel

taxes. Researchers at Athens-

based Eurobank EFG said

these moves would yield €1.2

billion ($1.67 billion) in addi-

tional savings and revenue

this year.

The plan drew complaints

from the umbrella public-sec-

tor union Adedy; on Wednes-

day, the union confirmed

plans for a previously an-

nounced 24-hour strike on

Feb. 10.

“These measures won’t be

the last,” Adedy President

Spyros Papaspyros said. “Par-

ticipation in the strike and in

the demonstrations for next

Wednesday will be decisive.”

Still, many Greeks have

come to accept the need for a

period of relative austerity.

Please turn to page 4

Residents try to free schoolgirls trapped by a bomb that killed at least three U.S. soldiers and five

Pakistanis in Lower Dir in the North West Frontier province on Wednesday. See article on page 9.

BRUSSELS—The European

Commission on Wednesday

put Greece under more pres-

sure to slash its deficit, saying

the country should have one

month to spell out its budget

program for the year.

The tough talk on the euro

zone’s weakest nation briefly

helped to shore up the Greek

government-bond market, but

gains evaporated later in the

day amid worries over other

wobbling economies in the 16-

nation currency union. The

Athens stock market ended

the day nearly 2% lower.

Portugal’s government-

bond market weakened, and

Spain’s was off as well. Portu-

gal on Wednesday saw low de-

mand in a Treasury bill auc-

tion and sold fewer securities

than expected. The cost of in-

suring Portuguese debt

against default hit a record.

Spain increased its budget-

deficit forecast for 2010.

The Quirk

CEO goal: heal France Télécom

IBM’s

Fastest

Server

B Y R UTH B ENDER

AND M AX C OLCHESTER

on a cost-cutting program at

the company. In an attempt to

draw a line under the contro-

versy, France Télécom has

hastened a management re-

shuffle that includes Mr. Rich-

ard stepping in as CEO much

earlier than expected. The

France Télécom board is due

to approve his designation

later this month, and Mr. Ri-

chard plans to unveil a man-

agement team by March 15.

France Télécom’s restruc-

turing efforts have caused

“trauma, suffering and much

worse,” Mr. Richard said in

the interview.

To boost staff morale and

garner union support, he said

he plans to keep job numbers

at France Télécom’s 102,000-

strong domestic operations

stable this year. He also hopes

to keep branch closures at the

company to “a minimum.” The

company employs 186,000

people world-wide.

Mr. Richard, the 48-year-

old former chief of staff at the

French Finance Ministry, said

the group will announce a

long-awaited plan for the roll-

out of a high-speed broad-

band network in France in the

coming days.

The roll-out is part of Mr.

Richard’s plan to keep invest-

ing in domestic mobile and

broadband networks.

“We won’t have the money

to do everything but I think

we have the means to fund

our core priorities,” Mr. Rich-

ard said. “We are not looking

for mega-deals across bor-

ders,” he added.

France Télécom was priva-

tized in 1997 but the French

state still has a 27% stake in

the company.

SPARC

Server

PARIS— France Télécom ’s

chief executive in-waiting

Stephane Richard plans to

make rebuilding bruised em-

ployee morale in the wake of

several destabilizing suicides

a top priority when he takes

the helm of the company next

month.

In an interview, Mr. Rich-

ard also said he saw opportu-

nities for the former French

state monopoly to deepen its

presence in Europe through

joint ventures—though he

ruled out major acquisitions

in the near future. Expansion

in emerging markets also re-

mained a key focus, he added.

France Télécom has come

under heavy public and gov-

ernment scrutiny recently

over a spate of employee sui-

cides that unions have blamed

Seal heart, anyone? Canada

prepares Arctic outpost for

G-7 meeting Page 33

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Gordon Brown’s cynical

electoral ploy. Page 14

France Télécom faces social,

financial tensions ................... 21

Thursday, February 4, 2010

THE WALL STREET JOURNAL.

BUSINESS WATCH

iii

Appliances

iii

Financial services

joined the company last year, and

Chairman Roger Carr also said

they were resigning.

iii

Media

Swiss francs ($7.4 billion) as ex-

penses tied to the takeover of U.S.

biotech firm Genentech weighed

down the bottom line, but brisk

sales of Tamiflu and cancer medi-

cines drove revenue 7.5% higher.

Dec. 31, following large losses a

year earlier in the trough of the

global recession. But in what may

be a pointer for earnings at

Sharp’s Japanese electronics

peers, the company left un-

changed its outlook for a slender

net profit in the year ending

March, as sluggish consumer

spending in the U.S. and Europe

continues to offset growing de-

mand in China.

iii

Telecommunications

n Electrolux , the Sweden-based

maker of fridges, dishwashers and

vacuum cleaners, swung to a

fourth-quarter net profit 664 mil-

lion Swedish kronor (about $90

million) thanks to lower costs, but

gave a downbeat forecast for the

new year, saying it doesn’t see in-

dications of a strong recovery.

n Lazard swung to a surprise

fourth-quarter loss of $142.4 mil-

lion on a surge in compensation

tied to changes in pay policies.

But the New York boutique invest-

ment bank said financial-advisory

and asset-management business

continued to improve.

n Pearson said it bought Medley

Global Advisors as it seeks to

make its Financial Times unit less

reliant on depressed advertising

markets and bolster its offerings

to financial-services professionals.

New York-based MGA is an ad-

viser to investment banks, hedge

funds and asset managers and

provides research and analysis on

economic policies.

n IDC , the U.S.-listed financial-

data provider majority-owned by

Pearson, invited interested parties

to submit first-round bids next

week, people familiar with the

matter said. Pearson said last

month that IDC’s board is con-

ducting a “preliminary review of

strategic alternatives” for the

company, which has a market

value of about $2.7 billion.

n Pfizer ’s fourth-quarter earnings

more than doubled to $767 million

from a year-earlier result that was

curbed by a legal settlement,

while the acquisition of Wyeth

helped push sales up 34%.

n AIG is moving forward with a

plan to accelerate bonuses to em-

ployees of its financial-products

division after they agreed to a

$20 million reduction in $195 mil-

lion of previously promised

awards. Separately, the U.S. in-

surer named as its new general

counsel Thomas Russo, 66, the

former chief legal officer of Leh-

man Brothers through its collapse

and subsequent bankruptcy.

n Whirlpool , the world’s largest

appliance maker by revenue, said

its fourth-quarter earnings more

than doubled to $95 million on

cost cuts and rising sales in North

America, and predicted that U.S.

home-appliance sales would rise

for the first time in five years.

iii

Autos

n GlaxoSmithKline signed an ex-

clusive license agreement with

Apeiron Biologics to acquire the

Austrian biotech company’s rights

to an early-stage lung-disease

drug in a deal valued at up to

€239 million ($335 million).

iii

Retail

n France Télécom ’s new chief ex-

ecutive in-waiting, Stéphane Rich-

ard, said he plans to make re-

building bruised employee morale

in the wake of a spate of suicides

a top priority when he takes the

helm of the company next month.

Richard also said he saw opportu-

nities for the former French state

monopoly to deepen its presence

in Europe through joint ventures,

though he ruled out any major ac-

quisitions in the near future.

n Deutsche Telekom ’s plan to

combine its struggling U.K. T-Mo-

bile unit with France Télécom’s

Orange faced another hurdle after

Britain’s competition watchdog

said it wants to review the pro-

posed joint venture because it is

concerned the tie-up will signifi-

cantly threaten competition.

n Toyota ’s burgeoning crisis hit

the shores of Japan as the coun-

try’s transportation ministry

asked the embattled car maker to

investigate 14 complaints it had

received related to the newest

Prius hybrid model, the best-sell-

ing car in the country last year.

n Ray LaHood , the U.S. transpor-

tation secretary, said he wants to

talk directly with Toyota Chief Ex-

ecutive Akio Toyoda about the

safety concerns involving Toyota

cars and the company’s handling

of those issues. Some safety advo-

cates have questioned why U.S.

regulators didn’t push Toyota to

recall vehicles sooner in the face

of consumer complaints going

back six years.

n ABN Amro ’s former Chief Exec-

utive Rijkman Groenink said the

€71 billion (about $99 billion) hos-

tile takeover of the Dutch bank by

a consortium of RBS, Santander

and Fortis—the largest ever in the

financial sector—was bizarre and

irresponsible. Groenink said he

should have resigned at the time

to show his disapproval of the

deal, which later turned sour.

n Abercrombie & Fitch , the one-

time star of U.S. teen retail, has

yet to show signs of recovery,

raising questions about its grip on

teen style. The company, seller of

$40 T-shirts and $90 jeans,

posted a 19% decline in December

sales at stores open at least a

year, even with uncharacteristi-

cally high levels of discounting.

iii

Technology

n Time Warner posted better-

than-expected fourth-quarter

earnings of $627 million as the it

saw strength from its film and

networks businesses. The media

giant had a hefty net loss a year

earlier, weighed down by write-

downs. Strong results from both

Time Warner and News Corp. are

an early sign that pressures on

the media industry may be easing.

n Japanese lenders Shinsei Bank

and Aozora Bank’s merger talks

are stalling over issues such as

strategy and capitalization of the

combined bank, complicating a

key aim of their U.S. private-eq-

uity backers. Talks could slip past

an October deadline.

iii

Food

n Italy’s government is forging

ahead with plans to extend TV-

broadcasting regulations to Web

sites that host videos, marking

one of the most sweeping at-

tempts by a Western government

to tighten control over the use of

video on the Internet. The draft

decree, expected to take effect

this month, would force sites such

as Google’s YouTube to operate

more like traditional TV broad-

casters within Italian borders.

n Telenor , a Norwegian telecoms

company, and Russia’s Alfa Group

won Russian government approval

to pool their Russian and Ukrai-

nian holdings, ending a long cor-

porate war. Under an deal to set

up a new New York-listed com-

pany, Vimpelcom, Telenor and

Alfa will merge their holdings in

Vimpel Communications, a big

Russian mobile operator, and

Ukraine’s Kyivstar.

n AOL swung to a fourth-quarter

profit of $1.4 million but saw sub-

scription and advertising declines

that underscore the challenges

ahead for the newly independent

company. AOL, long an Internet

access company, is trying to rede-

fine itself as an ad-supported me-

dia enterprise since its split from

media conglomerate Time Warner.

iii

Pharmaceuticals

n Honda and Mitsubishi reported

improved earnings for the fiscal

third quarter, further brightening

the outlook for Japanese auto

makers despite the troubles plagu-

ing Toyota. Honda said net profit

grew sharply in the quarter ended

Dec. 31 to 134.63 billion yen

(about $1.5 billion) as cost cuts

and sales growth in Asian markets

offset the yen’s strength.

n Mitsubishi , the maker of the

Outlander and Pajero sport-utility

vehicles, posted earnings of 10.7

billion yen (about $120 million),

its first profit in five quarters,

helped by lower expenses and a

focus on sales promotion.

n At Cadbury , three top officials

said they would step down, after

the U.K.-based confectioner’s

shareholders approved Kraft’s of-

fer to acquire the company. Todd

Stitzer is leaving his post as chief

executive, following a 27-year ca-

reer at the company. Chief Finan-

cial Officer Andrew Bonfield, who

WSJ.com

n Sharp said resurgent sales of

liquid-crystal-display televisions

helped it to bounce back to a net

profit of 9.1 billion yen (about

$100 million) in the quarter ended

To read more about these items,

and for all the latest breaking

news,gotoWSJ.com/Business

n Roche reported a 13% decline in

2009 net profit to 7.78 billion

In France, strike by railway workers disrupts travel

n Scania posted better-than-ex-

pected earnings of 822 million

Swedish kronor (about $115 mil-

lion) for the fourth quarter, down

46% from a year earlier. The

Swedish company said it saw

signs of stability as orders for its

trucks and buses jumped sharply.

iii

Aviation

n Garuda plans a $300 million

initial public offering this year,

putting the much-delayed IPO by

the Indonesian state-owned car-

rier back on track. Garuda’s plans

to list shares have been postponed

in recent years because of debt

problems and safety concerns fol-

lowing a string of fatal crashes.

iii

Energy

n Ofgem , the U.K. gas and elec-

tricity regulator, said the coun-

try’s deregulated energy market,

the most liberalized in Europe,

should be reined in so Britain can

attract the billions of pounds in

investment necessary to ensure an

adequate power supply and meet

tough climate-change targets. The

move portends what could be a

big shift in U.K. energy policy.

Commuters run to catch a train at Gare Saint Lazare in Paris during a nationwide strike by SNCF workers. French railway employees have called a 24-hour strike

to protest a new reorganization plan that could result in job cuts. High-speed TGV trains saw significant disruptions to service. Eurostar trains weren’t affected.

Thursday, February 4, 2010

THE WALL STREET JOURNAL.

NEWS

Auction record is set

B Y K ELLY C ROW

over the telephone through Philip

Hook, senior director of Sotheby’s

European operations, and chose to

remain anonymous. The nearly-two-

meter-tall bronze depicts a wiry

man in midstride. Giacometti,

known for his haunting sculptures

of blank-faced everymen, cast the

work 60 years ago as part of a com-

mission to plant several of his

bronze figures on Chase Manhattan

Bank’s Pine Street plaza.

The price breaks the existing

$104.2 record, set six years ago at

Sotheby’s, for Pablo Picasso’s 1906

portrait “Boy with a Pipe,” whose

buyer remains unknown.

The Giacometti piece’s stunning

climb might be attributed to two

factors: its size and the artist’s pop-

ularity among international buyers.

His nearly three-meter-tall figure of

a woman, “Big Standing Woman II,”

sold at Christie’s in May 2008 for

$27.4 million. Dealers say his over-

sized sculptures of men are more

coveted. “Walking Man I” is three

times taller than “Toppling Man,”

which Sotheby’s sold in November

for $19.3 million. Sotheby’s had

priced this work to sell for between

£12 million and £18 million.

Alberto Giacometti’s 1960 sculp-

ture of a spindly man, “Walking Man

I,” sold for £65 million ($104.3 mil-

lion) at a London auction at So-

theby’s, shattering the record price

for a work of art at auction and con-

firming the art market’s resurgence.

In a tense contest at the com-

pany’s Bond Street salesroom, bid-

ding began at £12 million and then

escalated, with roughly 10 bidders

vying for it.

The winner, who pays the final

bid plus Sotheby’s commission, bid

‘Femme Couchee’ by Henri Matisse also sold for £4.4 million

Belfast leader

returns to post

after scandal

B Y G UY C HAZAN

Peter Robinson, leader of the

main pro-British party in Northern

Ireland, returned to his duties as

first minister of the province

Wednesday, saying an inquiry had

cleared him of wrongdoing in a

scandal involving his wife.

Mr. Robinson, head of the Demo-

cratic Unionist Party, temporarily

stepped aside as leader of Northern

Ireland on Jan. 11, saying he wanted

to clear his name after a BBC report

accused him of acting improperly by

failing to report his wife’s question-

able financial dealings to parliamen-

tary authorities.

His return comes with Northern

Ireland’s power-sharing government

in crisis. The DUP and its partner in

the administration, the Catholic

Sinn Fein, are deadlocked over when

control of policing and justice

should shift from London to Bel-

fast—a key element of the process

of devolving power to the province.

British Prime Minister Gordon

Brown and his Irish counterpart

Brian Cowen have both sought to

mediate in the dispute, and both

sides say progress has been made in

marathon talks, though sticking

points remain. Mr. Robinson, as DUP

leader, has taken part in the talks,

so his formal return to the govern-

ment doesn’t necessarily herald a

breakthrough in the talks.

The scandal followed a BBC re-

port that Mr. Robinson’s wife, Iris,

60 years old, had helped procure a

loan for a cafe owned by her then-

lover, Kirk McCambley, now 21. Ms.

Robinson, who was a member of the

U.K. Parliament and the Northern

Ireland Assembly, didn’t declare the

loan in Parliament’s register of

members’ interests.

Ms. Robinson and Mr. McCamb-

ley haven’t disputed the BBC report,

which was produced with Mr.

McCambley’s cooperation.

The BBC claimed the first minis-

ter acted improperly by failing to

report the loan to the authorities

when he learned of it in December

2008. Mr. Robinson called the alle-

gation “unfounded and mischie-

vous” and sought an opinion from

the Departmental Solicitor’s Office,

which provides legal services to

government departments in North-

ern Ireland. The agency commis-

sioned an independent barrister to

investigate.

Mr. Robinson said the lawyer’s

view was that he hadn’t breached

any of the codes of conduct or prin-

ciples of public life governing politi-

cians in the province.

The journey of a star, captured in a flash.

Annie’s studio. New York.

Follow Annie Leibovitz and Mikhail Baryshnikov at louisvuittonjourneys.com

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Thursday, February 4, 2010

THE WALL STREET JOURNAL.

THE QUIRK

Canada preps outpost for G-7

Arctic activities include dog sledding, but some delegations and suppliers can’t help wondering: why Iqaluit?

B Y P HRED D VORAK

Iqaluit, Nunavut

says. “Here, that’s a normal thing.”

Some of the proposed activities

have raised eyebrows among at-

tendees. Mr. Flaherty, the finance

minister, is hoping to take his fellow

ministers and central-bank gover-

nors dog sledding on Friday. At

least one delegate, German Finance

Minister Wolfgang Schaeuble, who

uses a wheelchair, won’t participate,

aides say.

The question, whispered among

some delegations and suppliers, is:

Why Iqaluit? “I don’t know who put

the G-7 up there,” says Steven Doug-

las, the Washington, D.C.-based

manager at Cellhire USA LLC, who’s

assembling a phone-rental system

for the meeting because the area

lacks coverage for popular GSM cell-

phones. “All communications are

piped in through satellite.”

Canada chose Iqaluit over the

likes of Montreal and Calgary in

part to showcase the “pristine

beauty” of its vast north and bring

the G-7 back to its roots as an inti-

mate, informal gathering, Mr. Fla-

herty said. (When Russia attends,

the meetings are called the G-8.)

“It’ll give us a chance to showcase

who we are,’ says Nunavut Premier

Eva Aariak.

The meeting will also underscore

Canada’s ambitions as an arctic

power. As global warming thaws

waterways such as the Northwest

Passage through the Arctic Ocean,

one-time dreams of northern ship-

ping routes are becoming possi-

ble. Canada has claimed sovereignty

over much of the Northwest Pas-

sage, a claim that is disputed by the

U.S. Canada has also announced

plans for more arctic outposts.

These ambitions will meet cold,

hard reality when finance chiefs

from the U.S., Europe and Japan don

complimentary “G-7” parkas and

settle into sealskin-backed chairs to

discuss bank reform and aid to

Haiti.

But Iqaluit’s challenges extend

well beyond this weekend’s visit by

finance chiefs. Growth exploded af-

ter Nunavut became a territory in

1999, requiring new administrators,

roads and cars for its capital. Traf-

fic, for example, comes up at just

about every public-planning meet-

ing. Usually, drivers in Iqaluit can

travel the 4.8 kilometers from one

Seven finance ministers of-

ten are forgettable. Cana-

dian Finance Minister Jim Flaherty

claims that Friday’s G-7 gathering

will be different. “They’ll remember

Iqaluit,” Mr. Flaherty says.

Capital of the newest Canadian

territory of Nunavut, Iqaluit lies on

an inlet in the southeast corner of

vast, barren Baffin Island, about 320

kilometers south of the Arctic Cir-

cle. The largely Inuit population that

lives here was once nomadic, follow-

ing seal and caribou across the fro-

zen terrain. With a population of

7,000, Iqaluit (pronounced ee-KA-

loo-it) today is known as a cold-

weather testing center for jet mak-

ers such as Boeing Co. It has one

main traffic intersection and tem-

peratures that can dip to 40 degrees

below zero in February.

Canada’s Finance Department,

the organizer of the G-7 event, has

been limited in the activities it

could plan. There are only 300 hotel

rooms in town. And because some

500 guests, including ministers, se-

curity and media are expected, some

will have to sleep in dorm rooms.

With a dearth of limousines in

Iqaluit, ministers will use the 15

rental cars available from the town’s

single car-rental agency. After those

are full, school buses will ferry

around attendees further down the

diplomatic food chain.

Because there are no roads lead-

ing to Iqaluit—it was little more

than an airstrip for decades—all at-

tendees, equipment and vehicles will

have to fly or be flown in. Boats can

approach only when seas thaw

in the summer and early fall.

Security handlers have been

prepping locals for the onslaught of

international dignitaries. If a resi-

dent is armed and driving a snow-

mobile, he shouldn’t approach en-

tourages “in an aggressive manner,”

advises Sgt. Jimmy Akavak, spokes-

man for the Royal Canadian

Mounted Police, noting that

many locals regularly head out of

town to hunt seals and caribou.

“It’s not all the time you see

people on a Ski-Doo with a rifle on

their back,”

A polar-bear skin in front of an Iqaluit

house, above, and a boat beached for

the winter, below. City planner

Michèle Bertol, right, shows off an

aerial map. The city has about 20

kilometers of paved roads and one

main intersection, called Four Corners,

to the left of Ms. Bertol’s finger.

Sgt. Akavak

end of the city to the other in 10

minutes.

But three times each week-

day—before offices open at 8:30

a.m., at lunchtime and after offices

close at 5 p.m.—Iqaluit’s residents

hit the city’s few roads en masse,

choking the town’s intersection of

note. Cars back up 20 or 30 deep

at Four Corners’ four-way stop sign,

clogging everything from the Road

to Nowhere to the north to Tundra

Valley in the southeast.

A stoplight would ease matters,

but with only 700 taxpayers, Iqaluit

would have a hard time funding the

$500,000 purchase. From street

signs to backhoes, everything has to

be shipped up from the south, at

tremendous cost. Building more

roads might take the load off the

main road, but the city can’t build

on ground that will turn watery dur-

ing summer, says Michèle Bertol,

Iqaluit’s city-planning director.

Complicating the traffic are

snowmobiles. Some Iqaluit residents

complain drivers don’t always obey

traffic rules.

Residents are anxious to see how

the dignitaries respond to Satur-

day’s traditional Inuit feast, which

has muskox, caribou and seal on the

menu—some of it served raw. Seals

are particularly sensitive: Canada

has the largest seal-hunting opera-

tions in the world. However, the Eu-

ropean Union voted last year to ban

seal products to protest commercial

seal hunting. Canada, in turn, has

protested the ban.

Sealing is a significant part of

Inuit culture, says Premier Aariak.

“It is something that is very impor-

tant to us, and we want the whole

world to know it.’’ The territorial

government will offer G-7 visitors

sealskin mittens and vests to wear,

should they choose.

The issue became an interna-

tional cause célèbre last May when

Canada’s governor general, Mi-

chaelle Jean, ate raw seal heart at

an Inuit community festival to show

her solidarity with traditional seal

hunters. The gesture outraged some

European anti-seal-hunt activists.

EU officials point out that the EU

ban exempts Inuit sealing, a tradi-

tional activity done on a much

smaller scale. European animal-

rights activists have no problem

with the finance czars eating Inuit-

procured seal or sitting on Inuit-

cured sealskin, says Adrian Hiel, a

spokesman for the International

Fund for Animal Welfare.

As for France’s delegation, they

don’t mind. The French “eat any-

thing that moves,’’ says an official

close to Finance Minister Christine

Lagarde. The minister, a vegetarian,

has to leave before the dinner, the

official adds.

M EETINGS of the Group of

Thursday, February 4, 2010

THE WALL STREET JOURNAL.

EUROPE NEWS

Switzerland freezes

freed Duvalier assets

B Y D EBORAH B ALL

helped return millions of dollars sto-

len by dictators in Nigeria and the

Philippines to national coffers.

In the wake of the announcement

of the court’s decision, the Swiss

government froze the money. It is

working to quickly pass a law that

would make it easier for Swiss au-

thorities to return money to coun-

tries where dictators have been de-

posed. It hopes to apply the law

retroactively to the Haitian funds.

“The government would like to

avoid the Swiss financial center

serving as a haven for illegally ac-

quired assets,” it said.

“We assume that this money

doesn’t belong to the Duvalier fam-

ily,” said Eveline Widmer-Schlumpf,

the Swiss justice minister. “We have

blocked the money again today to

prevent it from going somewhere

that it shouldn’t for political rea-

sons. We hope this money finally

goes back to the country.”

Switzerland is battling to reha-

bilitate its image, following a bruis-

ing battle with the U.S. over secret

accounts held by U.S. taxpayers and

hidden from the Internal Revenue

Service. The German government is

considering using stolen bank data

to pursue tax dodgers who have ac-

counts in Switzerland.

ZURICH—The Swiss government,

fending off a public-relations disas-

ter, froze at least $4.6 million held

in Swiss bank accounts rather than

comply with a court order to return

the money to the family of Haiti’s

former leader, Jean-Claude Duvalier.

On Jan. 11, the day before a dev-

astating earthquake struck Haiti,

Switzerland’s Supreme Court re-

versed a lower court’s decision that

would have handed over the money

to aid organizations. In 1986, the

Haitian government lodged a re-

quest to recover the money, charg-

ing that Mr. Duvalier stole it from

public funds before he was ousted

that year. However, Switzerland pur-

sues requests from foreign govern-

ments to return cash only when that

government is pursuing a criminal

investigation of its own as well.

In 2002, the Swiss government

froze the money in accounts linked

to Mr. Duvalier and family members.

In 2007, a Swiss court approved the

Swiss government’s plan to hand the

money over to aid organizations

working in the impoverished nation

as a way around handing the funds

back to Mr. Duvalier.

But the Supreme Court ruled that

the decision to give the money to

aid groups didn’t stand because the

statute of limitations on any crimes

Mr. Duvalier may have committed

expired in 2001. Mr. Duvalier is be-

lieved to be living in France. Mr. Du-

valier’s lawyer in Geneva, Guy Reber,

who filed the appeal, couldn’t be

reached for comment.

The decision was made public

Wednesday, leaving the Swiss gov-

ernment in a bind. While Switzer-

land’s bank-secrecy laws made it for

decades a favorite place for foreign

dictators to stash money, that

changed more than a decade ago

when the government passed a se-

ries of laws requiring the banks to

know the source of funds being de-

posited. Since then, the country has

Haiti’s former leader, Jean-Claude Duvalier, at a news conference in 1980.

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France refuses

nationality

due to veiling

Associated Press

PARIS—French Prime Minister

François Fillon says he will sign a

decree denying French nationality

to a man who acknowledged forcing

his French wife to wear a burqa-

style veil over her face.

Mr. Fillon says French law allows

authorities to refuse nationality ap-

plications from those who don’t re-

spect the country’s values. Mr. Fil-

lon was speaking Wednesday on

Europe-1 radio.

A day earlier, French Immigra-

tion Minister Eric Besson said he

had signed a decree that would deny

the unidentified man’s application

on the ground that he rejected secu-

larism and gender equality.

France is currently considering

whether to ban face-covering Mus-

lim veils. A parliamentary panel has

said they should be banned in public

services, including mass transport

and hospitals.

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