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* * * * * * WEDNESDAY, MARCH 12, 2014 ~ VOL. CCLXIII NO. 58 WSJ.com HHHH $2 .00

WASHINGTON—The chairmanof the Senate intelligence commit-tee levied an extraordinary bar-rage of criticism against the Cen-tral Intelligence Agency, saying itmay have violated the Constitu-tion and U.S. laws by spying on acongressional review early thisyear.

Sen. Dianne Feinstein (D., Ca-lif.) said in a speech from the Sen-ate floor that the CIA had con-ducted improper searches ofcommittee computers being usedby staff members. The CIA direc-tor quickly rebuffed that accusa-tion, saying a Justice Departmentreview would show no wrongdo-ing.

Nonetheless, the harsh critiquewas all the more stinging becauseit came from a Democratic leader

PleaseturntopageA6

By Siobhan Gorman,Kristina Peterson

and Dion Nissenbaum

LawmakerClaims CIASpied onSenateStaff

Nearly six years after the gov-ernment rescued Fannie Maeand Freddie Mac, top membersin the Senate and the WhiteHouse agreed on a framework towind down the mortgage giantsand overhaul the nation’s$10 trillion mortgage market.

The bipartisan proposal, com-ing just as the firms have begunto generate huge profits for the

Treasury, complicates the picturefor a host of deep-pocketed inves-tors who had bet that Fannie andFreddie would be restructured.

After initially holding up onthe news of the plan, Fannieshares fell 31% to $4.03 andFreddie stock slid 27% to $4.04.Certain classes of the firms’ pre-ferred stock, a form of senior eq-uity also held by big investors,saw only modest losses and re-mained near their highest levels

since the firms were taken over.The plan, by Senate Banking

Committee leaders Tim Johnson(D., S.D) and Mike Crapo (R.,Idaho), calls for replacing Fannieand Freddie with a new systemof federally insured mortgage se-curities in which private insurerswould be required to take initiallosses before any governmentguarantee would be triggered.

The agreement, which faces along road to approval, repre-

sents the most concrete step sofar to resolve the last majorpiece of unfinished businessfrom the 2008 financial collapse.

“It would be a huge step for-ward,” said Phillip Swagel, whowas an assistant secretary foreconomic policy under TreasurySecretary Henry Paulson, whooversaw the government’s sei-zure of the firms in 2008.

Even though top Democrats andRepublicans on the Senate panel

have reached an agreement, a fullSenate vote isn’t assured, andthere is even less certainty thatmembers in the House will goalong. There is deep unease amongHouse Republicans to maintaininga significant federal backstop forthe U.S. mortgage market.

Other hurdles: Congress will bePleaseturntothenextpage

BY NICK TIMIRAOS

Plan forMortgageGiantsTakes ShapeBipartisan Senate Proposal Envisions Home-Loan Market Without Fannie, Freddie; Firms’ Shares Fall

Eleven years ago, a shiny silver Boeing727 airliner took off from Luanda, Angola,and became one of the few commercial jet-liners to vanish and never be found.

Massive jet airplanes disappear more of-ten in fiction than in real life, but it doeshappen. In 1979, a Boeing 707 with six peo-ple aboard was lost in the Pacific Ocean af-ter leaving Tokyo. And dozens of smallerplanes have gone missing and never beenlocated.

The so-far fruitless search for MalaysiaAirlines Flight 370, which disappeared earlySaturday with 239 people aboard, is unprec-edented because of the plane’s size and be-cause the widebody Boeing 777 had been inradio and satellite contact with multiple lo-cations on the ground. It was also flying

when it lost contact over the sea in one ofthe world’s most densely populated regions,Southeast Asia, not over remote jungle oropen ocean.

Planes have fallen, never to be seenagain, from the earliest days of aviation.Others have been found only after lengthysearches or by chance decades later. Radar,satellites and other technology have becomepowerful aids in such situations.

But as Flight 370’s disappearance shows,technology still has limited reach in someswaths of the planet.

“The fact is that, in many parts of theworld…radar coverage is not complete,” saidDavid McMillan, Chairman of the FlightSafety Foundation and former head of Euro-control, Europe’s air-traffic coordinator.“It’s clearly an area for further improve-ment.”

In the same region in 2007, it took crews10 days to find the first pieces of an Indone-sian Boeing 737 that crashed in the sea nearSulawesi. Searchers needed 36 hours to lo-cate the first wreckage of Air France Flight447, which crashed over the Atlantic fiveyears ago with 228 people aboard.

“If a plane goes down in the ocean, it’svery difficult to find it,” said Richard B.Stone, a former president of the Interna-tional Society of Air Safety Investigators.

The Aviation Safety Network, a databasePleaseturntopageA8

BY DANIEL MICHAELS AND JON OSTROWER

TECHNOLOGY’S LIMITS

For Some Vanished Airplanes,The Mystery Is Never Solved

BEIJING—China’s top centralbanker put the country oncourse to free up interest rateson bank deposits within twoyears, an unprecedented movethat would force the nation’slenders to compete for custom-ers by offering the best terms.

Officials have said they hopethe shift, announced in a newsconference Tuesday, will putmoney in the pockets of ordinaryChinese savers, make the banksevaluate risks more carefully,and direct lending to privatelyowned firms that complain ofChina’s largest banks ignoringthem.

But the government move toinvigorate its lumbering, state-owned banking system doesn’t

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BY LINGLINGWEIAND BOB DAVIS

China to FreeInterest RatesAs It LoosensState’s Reins

Military personnel in a Singapore Air Force C130 transport plane searched for the missing Malaysia Airlines jet over the South China Sea on Tuesday.

Sing

aporePress/Re

uters

A federal agent who shows upunannounced at a building alonga Texas highway might be look-ing for any number of things: il-licit drugs or immigration viola-tions, say, or illegal firearms.

Or fluorescent lights.Which was what the

agent had in mind whowalked into the PerfectCuts salon in San Anto-nio last July. The lightswere violating commu-nications regulations.

The agent had usedsignal-tracking equip-ment to home in on theoffenders and told theowner, Ronald Bethany,that his lights emittedradio signals that interferedwith an AT&T Inc. cellphonetower.

That violated Federal Com-munications Commission rulesprotecting airwaves licensed to

AT&T, the agency determined.Mr. Bethany didn’t have a li-cense to operate on that fre-quency, the FCC agent told him,so his fixtures needed to go.

“I told them ‘OK, but who isgoing to pay for this?’ ” Mr.Bethany says. “I’ve got to use

the lights.”Interference can be

serious business. In2012, hedge-fund mogulPhilip Falcone’s wirelessventure, LightSquaredInc., filed for Chapter 11bankruptcy after theFCC determined itwould interfere withGPS signals.

The mixed signalsaren’t always soweighty. In recent years,

the FCC has issued warning let-ters directing people to stop op-erating cordless phones, televi-sion sets and wireless cameras.

Last June, an FCC letter to aPleaseturntopageA16

BY THOMAS GRYTA

That Doorbell Looks Innocent,But It May Be a Federal Offender

i i i

FCC Agents Track Rogue Radio WavesToAquariums, Bulbs, Blankets; $16,000Fines

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CONTENTSBusiness Tech............ B4Corporate News B1-3,5-8Global Finance............ C3Heard on Street...... C12In the Markets........... C4Leisure & Arts............ D5

Market Data................ C5Opinion.................. A17-19Property Report ....... C6Sports.............................. D6U.S. News................. A2-6Weather Watch........ B8World News......... A8-14

s Copyright 2014 Dow Jones & Company.All Rights Reserved

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What’sNews

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World-Widen Senate intelligence panelhead Feinstein claimed thatthe CIA spied on a congres-sional review. The agency re-buffed the accusation. A1n Obama’s job approval fellto 41% this month, the low-est rate of his presidency, ac-cording to a new Wall StreetJournal/NBC News poll. A4nA search for themissingMa-laysian airliner was cloudedby conflicting reports aboutwhether radar tracked the planehundreds ofmiles off course.A8n The U.S. and Europe arereadying sanctions to penalizeRussia for moving toward theannexation of Crimea. A10nOusted Ukrainian leaderYanukovych said a vote set forMay is illegal because he is thelegitimate president. A10n Some 4.2 million peoplehave enrolled in health plansvia government sites, leavingthe total well below targets. A6nRepublican David Jollywona Florida congressional race,dealing a blow to Democratsand energizing the GOP. A4nA Swedish journalistwasgunned down in Kabul as Af-ghanistan braced for insurgentattacks ahead of elections. A14n Libya’s parliament oustedthe primeminister, who hasstruggled with political riftsand pro-autonomymilitias. A14nAmilitary judge halted ageneral’s sex-assault court-mar-tial to let prosecutors and thedefense reach a plea deal.A6nTurkish police and protest-ers clashed following the deathof a teen who was struck by apolice tear-gas canister. A14

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Fannie and Freddie wouldbe replaced by a new sys-

tem of federally insured mort-gage securities under a bipar-tisan Senate overhaul plan. A1n China’s central bank an-nounced plans to relax ruleson bank-deposit interestrates within two years. A1n Federal prosecutors in NewYork are looking into GM’s han-dling of complaints about carswith flaws tied to 12 deaths. B3nObama is expected to ordera rule change requiring em-ployers to pay overtime to alarger number of workers.A2nUniCredit posted a $20.8billion loss as the Italian bankcleaned up its balance sheetahead of regulatory tests. C1nDisney executive Sweeneywill step down, adding clarity tothe CEO succession race andopening a powerful TV job. B3nDisney is in talks to buyMaker Studios, a producer ofonline videos aimed at teens.B2nPuerto Rico sold $3.5 billionof high-yield bonds, buyingtime for the fiscally strappedU.S. commonwealth. C1nU.S. stocks fell in light trad-ing. The Dow industrials lost67.43 points to 16351.25. C4n Tesla will stop selling carsin New Jersey after the staterefused to license the firm tosell directly to consumers. B1n Jos. A. Bank agreed to a$1.8 billion takeover by Men’sWearhouse, ending a battlebetween the suit retailers. B1nVornado is in talks to mergeits suburban shopping centerswith a California company. C1

Business&Finance

Mystery of Flight 370 Conflicting reports on radar.................... A8 Crowdsourcing the search....................... A8 Passport significance played down...... A9

Key Seat to GOP

FLORIDA WIN: David Jolly waselected to Congress in a race thattested arguments for November. A4

Heard on the Street: China’srevamp could be rocky............ C12

Heard on the Street: A glimpseof a Fannie-free future........... C12

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