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* * * * * * MONDAY, DECEMBER 29, 2014 ~ VOL. CCLXIV NO. 152 WSJ.com HHHH $3 .00

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CONTENTSAhead of the Tape.. C1Corporate News B2,3,6Global Finance............ C3Heard on the Street C6Law Journal................. B5Markets Dashboard C4

Media............................... B4Moving the Market C2Opinion.................. A13-15Sports.............................. B8U.S. News................. A2-6Weather Watch........ B7World News.......... A8-11

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What’sNews

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World-Widen Search teams scouredthe seas near Indonesiain search of a lost AirAsiaflight. Indonesian authoritiessaid the plane is suspectedto be on the sea floor. A1n The disappearance couldrefocus attention on severallongstanding safety issuesthat have figured into com-mercial-aircraft crashes. A10n U.S.-led forces formallyended their combat missionin Afghanistan—though some18,000 troops, many of themAmerican, will remain. A8n Rescuers hurried to savehundreds of passengers froma ferry that caught fire offthe west coast of Greece. A11n Greece faces a third voteMonday to select a president,as the coalition governmentneeds to muster 12 parliamen-tary votes for its candidate.n About 35,000 Detroit-areahomes are delinquent on citytaxes, which could lead toforeclosures and auctions. A6n New York’s police com-missioner began to lay out astrategy for addressing therift between the city’s policeforce and its mayor. A3n Shots were fired at twoFlorida sheriff’s deputieswho were monitoring trafficfrom a church parking lot. A3n Despite a mild winter sofar, road-salt supplies thatwere wiped out last winterare still being replenished. A3n An SEC rule designed tolimit conflicts of interest instate contracting has be-come less effective amid therise of super PACs. A4

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Retailers are starting topare back promotions,increasingly offering theirclearance sales only to bar-gain-hunting customers. B1n “The Interview”mademore than $15 million onlineand $2.8 million in theatersover the weekend, Sony said.The company also revived itsPlayStation Network on Sat-urday after it was attacked. B1n “The Hobbit” topped thebox office again as Hollywoodended a weak year. B4n Some of the biggest pri-vate-equity firms are givingup their claim to certainfees, facing pressure frominvestors and regulators. A1n Investors have yankedmore than $5 billion this yearout of the biggest “liquid-alternative” mutual fund. C1n Regulators are workingto patch a loophole that letsbrokers who are barred fromsecurities sell insurance andother financial products. C1n Japan’s Abe approved a$29.17 billion stimulus pack-age in an attempt to reversethe nation’s recession. A11n U.S. municipal bonds areexpected to continue theirrally into next year, havingoutperformed corporate andgovernment debt in 2014. C2n Copper prices sit at theirlowest level in 41/2 years asinvestors aren’t impressedwith China’s attempt tostoke its economy. C6n Audi plans to acceleratespending on new models,technology and productionover the next five years. B3

Business&Finance

Facing pressure from inves-tors and heightened scrutinyfrom federal regulators, some ofthe largest private-equity firmsare giving up their claim to feesthat generated hundreds of mil-lions of dollars for them overthe years.

The investment firms usuallycollect the fees from companiesthey buy for providing servicessuch as consulting, serving as di-rectors and helping them maketheir own acquisitions. Insteadof keeping some of the money,the buyout firms, in new fundsthey are raising, will now passthe fees on in full to investors inthe funds.

The payouts being reim-bursed, known in the industry astransaction and monitoring fees,have provided many private-eq-uity firms with a steady incomestream augmenting their shareof investment gains on deals,which remain the key source ofprofits from their buyout funds.Private-equity firms buy compa-nies using a combination of cashraised from investors and bor-rowed money with the aim ofimproving the companies’ valueand selling for a profit a fewyears down the line.

Buyout firms often receivetransaction fees from a companyafter completing a takeover andfor other deal activities, andmonitoring fees for consultingand other work while holdingthe investment.

The turnabout by managersincluding Blackstone Group LP,KKR & Co. and TPG represents asignificant concession in the face

Pleaseturntothenextpage

BY MIKE SPECTORAND MARK MAREMONT

Fees GetLeanerOnPrivateEquity

JAKARTA, Indonesia—Searchteams scoured waters off Indo-nesia’s coast Monday after anAirAsia jetliner with 162 peopleon board vanished in a thicket ofstorm clouds the day before, kin-dling much of the same fear asthe disappearance of Malaysia’sFlight 370 only months earlier.

The plane, which had beenbound for Singapore, lost con-tact with air-traffic control lessthan an hour after takeoff fromSurabaya, Indonesia, early Sun-day shortly after requesting toclimb to a higher altitude to

avoid bad weather, officials said.Indonesia’s search authority

on Monday said its preliminaryassessment was that the plane is“at the bottom of the sea,”though it expanded the searcharea to include waters farthernorth and some land over the is-land of Borneo.

Officials said they hadn’t de-tected any signal from the air-craft’s emergency locator trans-mitters.

Ships and aircraft were de-ployed from across SoutheastAsia to hunt for the plane afterit disappeared. But as night fellmore than 10 hours later, notrace had been found. The

search resumed at dawn Mon-day.

As distraught family membersof passengers gathered at air-ports in Surabaya and Singaporeto await any information aboutloved ones, the scenes of an-guish were reminiscent of those

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BY I MADE SENTANAAND GAURAV RAGHUVANSHI

Missing Jet Rekindles FearsHunt for Vanished AirAsia Plane Resumes After a Day of Search Yields No Trace

European

Presspho

toAgency

Clinton inUphill FightFor White,Rural Vote

DEVALLS BLUFF, Ark.—White,working-class voters in easternArkansas for years backed Dem-ocratic candidates, among themBill Clinton and outgoing Gov.Mike Beebe, but have movedsharply toward Republicans inrecent elections.

Now, as the 2016 electiontakes shape, some of HillaryClinton’s allies are trumpetingher potential as a presidentialcandidate to bring these votersback to the Democratic Partyand to run competitively in ahandful of states, including Ar-kansas, that have spurned Presi-dent Barack Obama.

But even here, where Mrs.Clinton was the state’s first lady,many voters say they view herwith the same leeriness they doMr. Obama and other nationalDemocrats. That points to a sig-nificant question should Mrs.Clinton run: whether enoughsuch voters can separate herfrom the national party manyhave grown to dislike.

“I’m mad at the DemocraticParty, and I don’t see Hillarychanging that,” said EddieCiganek, a 61-year-old farmerwho serves on Prairie County’sgoverning board and who hasvoted Democrat at times. “Herthinking isn’t going to be veryfar off from President Obama’sthinking, and I don’t thinkthey’re moving the country inthe right direction.”

Occasional Democratic voterJohnny Watkins, 64, wearing alight-blue work shirt after finish-ing his shift at the county land-fill, said of Mrs. Clinton: “I don’tthink she has any concernsabout us.”

Working-class voters havePleaseturntopageA4

BY BETH REINHARD

The European Union has a rep-utation for being an institutionalmaze. It doesn’t help that itsbuildings often turn out to be ac-tual labyrinths, stranding lawmak-ers, lobbyists and journalists ontheir way tomeetings—andsometimes totheir own offices.“I get lost all thetime,” says FabioDe Masi, a mem-ber of the Euro-pean Parliamentrepresenting Ger-many’s Left party.

A few weeks after he waselected in May, Mr. De Masi losthis way in the Parliament’s head-quarters in Strasbourg, where del-egates spend a week every month.

The building’s confusing layout,which from the top looks like asliced-up mushroom with a glass-and-steel Tower of Babel stuck inthe middle, has been known to re-

duce visitors and employees totears.

“I was about to start crying,because you have a hundred ap-pointments,” says Mr. De Masi, re-calling how he had to call his as-sistants and describe the color ofthe walls and shape of the corri-dors in the hope that they could

figure out wherehe was.

“It was like Iwas five and gotlost at the swim-ming pool,” saysthe 34-year-old,admitting that hestill isn’t surewhether his

Strasbourg office is on the thirdor the fifth floor.

Conceived by French architec-ture firm Architecture-Studio andcompleted in 1999, the buildingfeatures overlaying hangingbridges and two spiral staircaseswrapped into each other.

The disorienting effect proba-bly wasn’t an accident. “Our

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BY GABRIELE STEINHAUSERAND FRANCES ROBINSON

A Visit to the European ParliamentLeaves Many Amazed and Confused

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Disorienting Layout at Buildings MakesPoliticians Late, Near Tears; Floor 5½

European Parliament sign

An Afghan Combat Mission Ends

Reuters

Relatives at the airport in Surabaya, Indonesia, on Monday awaited news of an AirAsia plane that vanished Sunday on a flight to Singapore.

STILL VIGILANT: A U.S. soldier stands at an Afghan army guard postSunday, even as a U.S.-led coalition formally ended its combat mission.U.S. troops will still have a limited role in counterterrorism fighting. A8

TODAY IN MARKETPLACE

A Year of Subtle SellingSPORTS Jason Gay on 2014’s Highs and Lows

EllenDeG

eneres/A

ssociatedPress

I N D O N E S I A

S INGAPORE

CH I N A

AUST RA L I A

AirAsia flightlost contactat 6:18 a.m.*

Scheduled route

Surabaya*Local time

Sources: AirAsia Indonesia;Flightradar24

The Wall Street Journal

500 miles

Since leaving Somalia in the 1990s, MusaHaji Mohamed Ganjab has been a landlord andentrepreneur and served as a representative ofthe Somali government, which the U.S. is back-ing to fight the jihadist group al-Shabaab.

He also has ordered that arms intended forSomalia’s government be delivered instead toan al-Shabaab commander, a confidentialUnited Nations report alleges.

This is just one of the discussions, the re-port says, that Mr. Ganjab has had about ille-gally arming groups in Somalia, including thegovernment.

The report shows the complexity of thestruggle against extremism in Somalia, a coun-

SHELL GAME

Murky Arms Traffic Plagues Somalia

try that is a U.S. national-security concern be-cause of its local al Qaeda-linked group. Al-Shabaab recently launched two attacks justacross the border in Kenya in which it slaugh-tered all non-Muslims, including killing 36 ata quarry-worker camp early this month andmore than two dozen in an attack on a bus inNovember. On Christmas Day, it attacked anAfrican Union base in Mogadishu, killing threesoldiers.

President Barack Obama has cited Amer-

ica’s antiterrorism approach in Somalia as anexample of how to battle Islamic State in Iraqand Syria, a strategy combining U.S. air powerwith supporting local ground forces. The confi-dential U.N. report—now in the hands of theSecurity Council, and reviewed by The WallStreet Journal—shows how murky relation-ships among politicians, clans and militia lead-ers can complicate the effort. For example,South African security officials were involvedin some of the discussions Mr. Ganjab hadabout arming Somali factions, according to

PleaseturntopageA12

By Justin Scheck,Margaret Cokerand Joe Lauria

Top terror suspect is arrested in Somalia.... A12

AirAsia Flight 8501 Budget airline transformed

travel in region.................. A10 The safety record of the

Airbus A320....................... A10 For the latest news, go to

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