By ADAM ENTOUS

BAGHDAD—Visiting U.S. Defense Secretary Leon Panetta delivered a blunt message to the Iraqi government, which has frustrated the Pentagon by deliberating for months about whether to ask the U.S. to keep some of its troops in the country beyond Dec. 31: “Dammit, make a decision.”

Mr. Panetta, speaking Monday to American troops in Baghdad, also stepped up public pressure on Iraq to do more to stem attacks on U.S. troops by Iran-backed Iraqi militias, saying the U.S. would “push the Iraqis to take on the responsibility” but would also “do what we have to do unilaterally” to protect American lives.

“We’re going to take this on, straight on,” he said, without offering any specifics.

View Full Image

Associated Press

U.S. Secretary of Defense Leon Panetta delivers remarks to the troops during his visit to Camp Victory in Baghdad, Iraq.

Mr. Panetta’s first war-zone tour as Pentagon chief has been punctuated by frequent moments of remarkable candor, as well as by some statements that the defense secretary himself or his spokesman sought to clarify or retract soon after Mr. Panetta said them. During the meeting with American troops, Mr. Panetta appeared to reprise a contentious argument used by senior members of the Bush administration to justify the 2003 invasion of Iraq.

“The reason you guys are here is because on 9-11 the United States got attacked and 3,000… innocent human beings got killed because of al Qaeda, and we’ve been fighting, you know, as a result of that,” Mr. Panetta said in response to a question from one soldier.

Assertions about Iraq’s ties to al Qaeda in the run-up to the 2003 invasion have been widely dismissed, and Mr. Panetta and his spokesman said after his remarks to the troops that the secretary wasn’t trying to advance that rationale.

“I wasn’t saying, you know, the invasion, or going into the issues or justification of that,” Mr. Panetta told reporters later. “It was more the fact that we really had to deal with al Qaeda here, and they developed a presence here and that tied into it.”

Douglas Wilson, assistant secretary of defense for public affairs, called Mr. Panetta “a plain-spoken secretary,” and said Mr. Panetta’s main point was that U.S. “troops are here today” because al Qaeda still has a presence in the country and the U.S. was determined to crush the group.

“I don’t think he’s going down that rabbit hole,” Mr. Wilson said. “I don’t think that he is getting into the arguments of 2002 and 2003. He’s dealing with the security situation that our country faces today… and he’s dealing with it in a very plain-spoken way.”

The confusion over what Mr. Panetta meant followed similar incidents in Afghanistan, which he visited over the weekend. There, Mr. Panetta made statements, which aides subsequently sought to clarify or retract, about how many troops would remain in Afghanistan through the end of 2014. Mr. Panetta said 70,000 would remain but Mr. Wilson said he misspoke.

He also said the “primary effort” of the military mission in Libya is to “bring down the regime” of Col. Moammar Gadhafi. The United Nations resolution authorizing the use of force in Libya specifies that the intention is to protect civilians from Col. Gadhafi’s forces, not to topple the longtime dictator.

Mr. Panetta’s blunt talk about Iraq’s delay in asking some U.S. troops to stay in the country after Dec. 31 reflects Pentagon concerns that Baghdad will wait until the last minute to decide. Time is of the essence for the Pentagon because it needs time to redirect forces and equipment if they will be staying in Iraq.

In keeping with a U.S.-Iraqi agreement, the Pentagon plans to withdraw the 46,000 U.S. troops it currently has in Iraq by the end of December unless the Iraqi government formally asks for some to remain longer to assist with security and training. U.S. officials say preliminary talks have centered on keeping about 10,000 American troops in Iraq beyond this year.

Mr. Panetta commended the Iraqis and the government of Prime Minister Nouri al-Maliki for the hard work of fostering democratic institutions since the fall of longtime dictator Saddam Hussein.

At the same time, Mr. Panetta said the sometimes slow-moving decision-making process in Iraq can be “frustrating” for the U.S., which has also been waiting for the appointment of a new Iraqi defense minister.

“I’d like things to move a lot faster here, frankly, in terms of the decision-making process. I’d like them to make the decision, you know: Do they want us to stay? Don’t they want us to stay? Do they want to have, you know, a minister of defense or don’t they want to get a minister of defense?” Mr. Panetta said. “But dammit, make a decision.”

Gen. Lloyd Austin, the commander of U.S. forces in Iraq, stopped short of demanding a decision on whether troops will stay in the country. But he said in a question-and-answer session with reporters after Mr. Panetta made his remarks that time was of the essence. He said it will be increasingly difficult and costly the longer Baghdad waits to decide. Cost, he said, was an important favor because of U.S. budget woes.

“It’s evident to everyone that when you get into the October-November timeframe, you’re really taking things apart that are very difficult to put back together,” he said.

Write to Adam Entous at adam.entous@wsj.com

By ADAM ENTOUS

BAGHDAD—Visiting U.S. Defense Secretary Leon Panetta delivered a blunt message to the Iraqi government, which has frustrated the Pentagon by deliberating for months about whether to ask the U.S. to keep some of its troops in the country beyond Dec. 31: “Dammit, make a decision.”

Mr. Panetta, speaking Monday to American troops in Baghdad, also stepped up public pressure on Iraq to do more to stem attacks on U.S. troops by Iran-backed Iraqi militias, saying the U.S. would “push the Iraqis to take on the responsibility” but would also “do what we have to do unilaterally” to protect American lives.

“We’re going to take this on, straight on,” he said, without offering any specifics.

View Full Image

Associated Press

U.S. Secretary of Defense Leon Panetta delivers remarks to the troops during his visit to Camp Victory in Baghdad, Iraq.

Mr. Panetta’s first war-zone tour as Pentagon chief has been punctuated by frequent moments of remarkable candor, as well as by some statements that the defense secretary himself or his spokesman sought to clarify or retract soon after Mr. Panetta said them. During the meeting with American troops, Mr. Panetta appeared to reprise a contentious argument used by senior members of the Bush administration to justify the 2003 invasion of Iraq.

“The reason you guys are here is because on 9-11 the United States got attacked and 3,000… innocent human beings got killed because of al Qaeda, and we’ve been fighting, you know, as a result of that,” Mr. Panetta said in response to a question from one soldier.

Assertions about Iraq’s ties to al Qaeda in the run-up to the 2003 invasion have been widely dismissed, and Mr. Panetta and his spokesman said after his remarks to the troops that the secretary wasn’t trying to advance that rationale.

“I wasn’t saying, you know, the invasion, or going into the issues or justification of that,” Mr. Panetta told reporters later. “It was more the fact that we really had to deal with al Qaeda here, and they developed a presence here and that tied into it.”

Douglas Wilson, assistant secretary of defense for public affairs, called Mr. Panetta “a plain-spoken secretary,” and said Mr. Panetta’s main point was that U.S. “troops are here today” because al Qaeda still has a presence in the country and the U.S. was determined to crush the group.

“I don’t think he’s going down that rabbit hole,” Mr. Wilson said. “I don’t think that he is getting into the arguments of 2002 and 2003. He’s dealing with the security situation that our country faces today… and he’s dealing with it in a very plain-spoken way.”

The confusion over what Mr. Panetta meant followed similar incidents in Afghanistan, which he visited over the weekend. There, Mr. Panetta made statements, which aides subsequently sought to clarify or retract, about how many troops would remain in Afghanistan through the end of 2014. Mr. Panetta said 70,000 would remain but Mr. Wilson said he misspoke.

He also said the “primary effort” of the military mission in Libya is to “bring down the regime” of Col. Moammar Gadhafi. The United Nations resolution authorizing the use of force in Libya specifies that the intention is to protect civilians from Col. Gadhafi’s forces, not to topple the longtime dictator.

Mr. Panetta’s blunt talk about Iraq’s delay in asking some U.S. troops to stay in the country after Dec. 31 reflects Pentagon concerns that Baghdad will wait until the last minute to decide. Time is of the essence for the Pentagon because it needs time to redirect forces and equipment if they will be staying in Iraq.

In keeping with a U.S.-Iraqi agreement, the Pentagon plans to withdraw the 46,000 U.S. troops it currently has in Iraq by the end of December unless the Iraqi government formally asks for some to remain longer to assist with security and training. U.S. officials say preliminary talks have centered on keeping about 10,000 American troops in Iraq beyond this year.

Mr. Panetta commended the Iraqis and the government of Prime Minister Nouri al-Maliki for the hard work of fostering democratic institutions since the fall of longtime dictator Saddam Hussein.

At the same time, Mr. Panetta said the sometimes slow-moving decision-making process in Iraq can be “frustrating” for the U.S., which has also been waiting for the appointment of a new Iraqi defense minister.

“I’d like things to move a lot faster here, frankly, in terms of the decision-making process. I’d like them to make the decision, you know: Do they want us to stay? Don’t they want us to stay? Do they want to have, you know, a minister of defense or don’t they want to get a minister of defense?” Mr. Panetta said. “But dammit, make a decision.”

Gen. Lloyd Austin, the commander of U.S. forces in Iraq, stopped short of demanding a decision on whether troops will stay in the country. But he said in a question-and-answer session with reporters after Mr. Panetta made his remarks that time was of the essence. He said it will be increasingly difficult and costly the longer Baghdad waits to decide. Cost, he said, was an important favor because of U.S. budget woes.

“It’s evident to everyone that when you get into the October-November timeframe, you’re really taking things apart that are very difficult to put back together,” he said.

Write to Adam Entous at adam.entous@wsj.com

By ADAM ENTOUS

BAGHDAD—Visiting Defense Secretary Leon Panetta, speaking to American troops on Monday, bluntly voiced frustration with the Iraqi government’s delay in deciding whether to ask the U.S. to keep some of its forces in the country beyond Dec. 31, saying, “Dammit, make a decision.”

He also stepped up public pressure on Iraq to do more to stem attacks by Iranian-backed militia on U.S. troops, saying the U.S. would “push the Iraqis to take on the responsibility” but would also “do what we have to do unilaterally” to protect American lives. “We’re going to take this on, straight on,” he said, without offering any specifics.

View Full Image

Associated Press

U.S. Secretary of Defense Leon Panetta delivers remarks to the troops during his visit to Camp Victory in Baghdad, Iraq.

Mr. Panetta’s first war-zone tour as Pentagon chief has been punctuated by frequent moments of remarkable candor, as well as by some statements that the defense secretary himself or his spokesman sought to clarify or retract soon after Mr. Panetta said them. During a meeting with American troops in Baghdad Monday, Mr. Panetta appeared to reprise a contentious argument used by senior members of the Bush administration to justify the 2003 invasion of Iraq.

“The reason you guys are here is because on 9-11 the United States got attacked and 3,000 … innocent human beings got killed because of al Qaeda, and we’ve been fighting, you know, as a result of that,” Mr. Panetta said in response to a question from one soldier.

Assertions about Iraq’s ties to al Qaeda in the run-up to the 2003 invasion have been widely dismissed, and Mr. Panetta and his spokesman said after his remarks to the troops that the secretary was not trying to advance that rationale.

“I wasn’t saying, you know, the invasion, or going into the issues or justification of that,” Mr. Panetta told reporters later. “It was more the fact that we really had to deal with al Qaeda here, and they developed a presence here and that tied into it.”

Douglas Wilson, assistant secretary of defense for public affairs and a Pentagon spokesman, called Mr. Panetta “a plain-spoken secretary,” and said Mr. Panetta’s main point was that U.S. “troops are here today” because al Qaeda still has a presence in the country and the U.S. was determined to crush the group.

“I don’t think he’s going down that rabbit hole,” Mr. Wilson said. “I don’t think that he is getting into the arguments of 2002 and 2003. He’s dealing with the security situation that our country faces today … and he’s dealing with it in a very plain-spoken way.”

The confusion over what Mr. Panetta meant followed similar incidents in Afghanistan, which he visited over the weekend. There, Mr. Panetta made statements, which aides subsequently sought to clarify or retract, about how many troops would remain in Afghanistan through the end of 2014 (Mr. Panetta said 70,000 would remain but Mr. Wilson said he misspoke) and about the goal of the military mission in Libya (Mr. Panetta said “the primary effort there is to bring down the regime of Gadhafi.”)

Mr. Panetta’s blunt talk about Iraq’s delay in asking some U.S. troops to stay in the country after Dec. 31 reflects Pentagon concerns that Baghdad will wait until the last minute to decide. Time is of the essence for the Pentagon because it needs time to redirect forces and equipment if they will be staying in Iraq.

In keeping with a U.S.-Iraqi agreement, the Pentagon plans to withdraw the 46,000 U.S. troops it currently has in Iraq by the end of December unless the Iraqi government formally asks for some to remain longer to assist with security and training. U.S. officials say preliminary talks have centered on keeping about 10,000 American troops in Iraq beyond this year.

Mr. Panetta commended the Iraqis and the government of Prime Minister Nouri al-Maliki for the hard work of fostering democratic institutions since the fall of longtime dictator Saddam Hussein.

At the same time, Mr. Panetta said the sometimes slow-moving decision-making process in Iraq can be “frustrating” for the U.S., which has also been waiting for the appointment of a new Iraqi defense minister.

“I’d like things to move a lot faster here, frankly, in terms of the decision-making process. I’d like them to make the decision, you know, do they want us to stay? Don’t they want us to stay? Do they want to have—you know—a minister of defense or don’t they want to get a minister of defense,” Mr. Panetta said. “But dammit, make a decision.”

Lt. Gen. Lloyd Austin, the commander of U.S. forces in Iraq, stopped short of demanding a decision on whether troops will stay in the country. But Lt. Gen. Austin, in a question-and-answer session with reporters after Mr. Panetta made his remarks, said time was important. He said it will be increasingly difficult and costly the longer Baghdad waits to decide. Cost, he said, was an important factor because of U.S. budget woes.

“It’s evident to everyone that when you get into the October-November timeframe, you’re really taking things apart that are very difficult to put back together,” he said.

Write to Adam Entous at adam.entous@wsj.com

By SOPHIA HOLLANDER

On Sept. 12, 2011, when the public is allowed to step onto the World Trade Center site for the first time in 10 years, the approach will be more pedestrian than poignant.

Visitors will pass through police screening gates and walk past barriers designed to prevent bombs from tearing through the site again. But this sobering reintroduction to the World Trade Center site is perhaps a fitting transition from the past decade—when the public’s last direct experience of the site was a morning of terror—to a new era.

Philip Montgomery for The Wall Street Journal

Water pours through the north memorial pool at Ground Zero.

As visitors emerge from the screening, they will encounter a sweep of trees that one day will rise to form a canopy filtering light and sound. As they approach the footprints of the towers destroyed during the Sept. 11, 2001, terrorist attacks, rushing water will mute the sounds of the surrounding city. They will find voids where the buildings once stood, an emptiness now filled with waterfalls.

The Wall Street Journal recently toured the site with architect Michael Arad and the president and CEO of the National Sept. 11 Memorial Museum, Joe Daniels.

Even though the opening is only two months away, the site remains primarily a construction zone. More than 500 neon-clad workers are racing to make the 10th-anniversary deadline; on Monday, the public can begin reserving time slots for visits.

The challenges to arriving at this moment have been legion: logistical, emotional, political. At several points, as costs swelled past $1 billion and donations withered, there were questions about whether the memorial would be built at all.

But as the 10th anniversary approached, people realized “it is not up to anybody on this project whether the world is going to check in on us,” Mr. Daniels said. “That got everybody motivated.”

Costs were shaved, down to $700 million for capital construction. Donors were re-invigorated as Mayor Michael Bloomberg personally took charge of the fund-raising effort.

Questions linger over what happens after the opening: Annual operating costs could be as high as $60 million and as of yet there is no identified funding source. Officials are considering charging for access to the museum, which will open a year later, and are pursuing federal contributions.

Ten years after the attack on the World Trade Center, the memorial to the victims is finally set to open. WSJ’s Sophia Hollander took a look around as organizers raced to finish.

“What we’re not going to do under any circumstances is let this place fall into disrepair,” Mr. Daniels said.

But those are problems for another day. On Sept. 12, the public will encounter a moving public space, threaded with hidden stories.

As visitors stare at the names of the 2,983 people who died in the attacks in 2001 and 1993, they can wonder about the invisible connections between them. Although the names appear to be scattered randomly around the rims of the pools, they have been grouped to reflect relationships among friends, families and colleagues, as requested by families.

Mr. Arad hopes to provide some kind of guide for visitors to hear their stories. “It’s hard to confront statistically close to 3,000 dead, but when you hear the story of one family, one friend, that’s something that we can all relate to,” he said.

There is meaning to be found in subtle details—such as the way the waterfalls begin as individual strands of water before merging into a single sheet midway through the descent.

“That’s quite poetic and appropriate in this context,” Mr. Arad said.

The pools, trees and pathways are reflected in unexpected corners and surfaces around the site—including the glass-clad towers rising at the edges.

Unlike monuments in battlefields or along the National Mall, this eight-acre site is embedded within one of the country’s densest commercial districts.

“This is an urban ruin, the walls of which will be defined by the buildings that surround it,” Mr. Arad said.

It is one of the many tensions animating the memorial: how to provide a quiet space for reflection apart from the city even while restoring life to a site that has been quarantined from the public for nearly a decade.

People may come alone to mourn—but some will also come to feel less alone, an experience that motivated Mr. Arad.

After the attacks, he remembers volunteering to donate blood and finding a line snaking around the block; he saw a policeman struggling to erect a barricade along First Avenue and hurried to help. “You just wanted to be—to find something to do that could make things better,” he said.

He began sketching a memorial: two large holes “torn” in the surface of the Hudson River, with water rushing continuously into the voids.

“How would you deal with an errant kayaker?” he asked rhetorically, with a slight smile. “That had not been resolved.”

The image of water rushing into voids stayed with him.

When the Lower Manhattan Development Corp. announced a design competition for the official memorial in 2003, Mr. Arad was among more than 5,200 peoples who submitted proposals.

His design quickly emerged as a favorite, recalled Paula Berry, the lone 9/11 family member on the 13-person jury. The panel winnowed the choices down to two favorites, each representing a strikingly different vision.

One drew viewers to look upward into the sky, evoking light and hope, she said. Mr. Arad’s design pulled eyes down into the pits left by the towers.

It “was the glass half empty,” she said. “Michael’s was very, very clearly not pulling any punches. It was meant to actually mark the tragedy and the magnitude of that event.”

On a recent afternoon, Mr. Arad sat at his desk and brought up the initial rough sketches on his computer. He grinned.

“It’s kind of funny to see these sketches,” he said, “and think that little squiggle is now an acre of empty space in Lower Manhattan.”

He said he always intended the site to include spaces for elements of mourning and of moving ahead. But, he said, “I struggled to find the right balance.”

Mr. Arad worked with Peter Walker, a landscape designer, who added in more than 400 trees to the original barren design. Over the years, in sometimes contentious collaborations with other stakeholders, they crafted, refined and reformed the plans.

As the site comes together, everyone is watching anxiously to see if reality matches their polished renderings.

“You just don’t know until you see it,” said Mr. Daniels. He worried over the fountains.

“I thought, ‘There’s fountains all over the place,’” he said. “I’m always wondering, ‘Will the scale of these fountains express the power that the architect was hoping?’”

He is starting to get his answer.

The massive pools, each stretching about a full acre, dominate the site. As you step closer and peer into the void, cascading water mutes even the hammering, blaring and booms of the construction site.

“People are going to remember that sound,” Ms. Berry said.

The names, etched into dark bronze, glint gold in the sun; at night, an internal light will make them blaze. On certain days, rainbows have arched out of the voids, sparked by the interplay of water and sunlight; at other times, the pools have reflected their own image in the pit’s granite walls, creating a series of shadow memorials.

“These are happy discoveries you can’t take credit for as a designer,” Mr. Arad said.

Where the twin towers once rose into the sky is a deep gash in the landscape, now preserved.

“The design, unlike most places in New York, is about emptiness and nothingness,” Mr. Arad said. But “it’s an emptiness that’s full of meaning, the same way that a moment of silence is filled with intention.”

Despite years of tweaks, concessions and compromising among the sometimes-warring constituents, Mr. Arad said the final design reflects the original vision—something he finds a welcome relief.

“It could so easily have turned out differently,” he said. “When you’re dealing with emptiness and nothing and silence and simplicity, it takes very little to overwhelm that—yet we still have that deafening silence.”

By MICHAEL ROTHFELD, ASHBY JONES and DIONNE SEARCEY

Legal experts say prosecutors have mounted cases with witnesses who suffer credibility issues similar to the accuser of former International Monetary Fund chief Dominique Strauss-Kahn.

View Full Image

Associated Press

Dominique Strauss-Kahn, left, being escorted in New York last week.

The 32-year-old Guinean immigrant maintains she was sexually attacked but has admitted lying to authorities about other matters, according to prosecutors. Attorneys for Mr. Strauss-Kahn say charges should be dropped.

In mob and insider-trading cases, for example, people who have pleaded guilty to serious felonies or have told lies, have often testified successfully for prosecutors. The 1992 testimony of Sammy Gravano, a one-time mafia underboss, helped convict John Gotti, the head of the Gambino crime family, even though Mr. Gravano wasn’t considered entirely trustworthy.

Jurors can accept that someone can lie about one thing and tell the truth about another, legal experts say. The main challenge in this case would be to distinguish between the maid’s overall credibility and the veracity of her statements about the incident.

“Credibility issues often exist. That doesn’t mean the prosecutor automatically drops the case,” said Gerald Shargel, a top criminal defense lawyer in New York. “Weighing the strengths of a case is not singularly focused on credibility problems. The case is like mosaic. You have to look at everything.”

Compared to most sexual-assault cases, some legal experts say that there is already enough evidence based on what has been disclosed publicly to take the case to trial and let a jury decide whether the incident at New York’s Sofitel hotel suite 2806 on May 14 was forced—as she alleges—or consensual—as he claims.

There is physical evidence to support her account, prosecutors say. She “from day one has described the sexual assault many times,” and done so consistently, her lawyer, Kenneth Thompson, has said. Mr. Strauss-Khan, 62 years old, has pleaded not guilty.

“We have more here than we have in most sex crimes,” said Assistant District Attorney Joan Iluzzi-Orbon, one of the prosecutors in the case, in a recent interview with The Wall Street Journal. “The period of time that this happened is completely consistent with what she told us happened.”

Benjamin Brafman, a lawyer for Mr. Strauss-Kahn, has called the revelations about his accuser the “first step to what we believe will be full exoneration.”

Some advocates for women and crime victims say prosecutors should pursue the case if there is any reason to believe the maid’s story about the incident, pointing out that prosecutors routinely use witnesses with questionable backgrounds.

“People lie on asylum applications—they sometimes have a lot of pressing financial incentive to do so,” according to Deborah Denno, a law professor at Fordham University and a criminal-law expert. It has “nothing to do” with the May incident and “and some of the other lies were about incidents that happened long, long ago.”

Other lawyers say the fact that she initially said she was hiding in a hallway when she had actually resumed cleaning rooms could see by a jury as an effort by her to seem scared and traumatized when she wasn’t.

But key hurdles exist in this case, legal experts said. She told a gripping account of a past gang rape to seasoned prosecutors who believed her, then backtracked and admitted it was a lie, according to law-enforcement officials. It could be difficult to convince jurors that she was telling the truth about the sexual incident in this case, people close to the investigation said.

The ongoing investigation into the sexual-assault accusations against Mr. Strauss-Kahn could unearth evidence in the coming days that definitively convinces prosecutors whether a crime was committed or not.

After raising concerns about the credibility of the maid who made the allegations against Mr. Strauss-Kahn, investigators are continuing to dig further into her background and personal relationships, according to people familiar with the situation.

Relations appear to have broken down between prosecutors and Mr. Thompson, the maid’s attorney. He has called for District Attorney Cyrus Vance Jr., to be replaced with a special prosecutor on the case.

Mr. Thompson didn’t comment Sunday. A spokeswoman for prosecutors declined to comment as did Mr. Brafman.

Some advocates for women and crime victims say prosecutors should pursue the case if there is any reason to believe the maid’s story about the incident, pointing out that prosecutors routinely use witnesses with questionable backgrounds.

In any trial, Mr. Strauss-Kahn’s defense lawyers would be able to cross-examine the maid about a string of false statements she made. They would likely try to bring up the tearful—and phony—account of being gang raped in Guinea that was told to prosecutors, to show that she is able to convincingly tell false stories.

They would likely discuss a phone call she had with an Arizona inmate, in which law-enforcement officials have said she told him she expected to profit from the incident because Mr. Strauss-Kahn was wealthy. They would likely bring up a series of transactions in which they have said tens of thousands of dollars were deposited into her bank account by different men.

“I’d pay to see a lawyer of Ben Brafman’s caliber cross-examine her,” said Paul Shechtman, a criminal-defense lawyer in New York and former federal and state prosecutor. “It wouldn’t be pretty.”

Proceeding on a high-profile case on shaky testimony could also set back the cause of sex-crimes prosecutions, some legal experts say. In 2006, a woman accused members of the Duke University lacrosse team of raping her. The case crumbled after it appeared the accuser had lied, and the charges were dropped. The lead prosecutor in the case was eventually disbarred for his actions in the case.

Write to Michael Rothfeld at michael.rothfeld@wsj.com, Ashby Jones at ashby.jones@wsj.com and Dionne Searcey at dionne.searcey@wsj.com

By PETER LOFTUS

Joan Langbord, who still works in the Philadelphia jewelry shop started by her late father, a Depression-era coin dealer, found her gold treasure in a family safe-deposit box in 2003—ten Double Eagle gold coins dated 1933,

The Double Eagles—with a face value of $20—were minted but never released, prompting a similar coin owned by someone else to fetch $7.6 million at a Sotheby’s auction the year before Ms. Langbord’s discovery.

Associated Press

1933 Double Eagle $20 gold coin

When the family handed over the ten Double Eagles to the U.S. government for authentication, they hoped their find would be worth millions of dollars.

Mint officials confirmed the coins were legitimate—and among the rarest, according to collectors—then confiscated what they said was U.S. property. Now the Langbord’s are fighting back in federal court.

The government claims Ms. Langbord’s father, Israel Switt, who died in 1990, must have obtained the coins illegally.

The 1933 Double Eagles were never released by the government and were ordered melted back into bars amid President Franklin D. Roosevelt’s efforts to combat gold hoarding during the Great Depression.

“This is a crime the government has been waiting to put to rest for 70 years,” Assistant U.S. Attorney Jacqueline Romero told jurors in opening statements at a trial last week.

Ms. Langbord and her sons Roy and David, grandsons of the coin dealer, say federal attorneys have no proof they coins were obtained illegally.

“Mint records don’t show how the coins left,” their lawyer, Barry Berke, told jurors. “It is the government’s burden to prove they were stolen.”

The U.S. Mint’s Philadelphia factory made nearly 450,000 of the coins dated 1933. In coin vernacular, which dubs a $10 coin an “Eagle,” they were known as Double Eagles. Etched onto opposing sides of the coins are a soaring eagle and liberty figure resembling a Greek goddess. It was designed by sculptor August Saint-Gaudensin the early 1900s at the behest of President Theodore Roosevelt, who wanted to beautify American coins.

But the 1933 coins were never circulated because a newly inaugurated President Franklin Delano Roosevelt issued an order prohibiting the release of gold from the Mint. It was part of an effort to rescue the banking system, which was endangered by people withdrawing gold at an alarming rate.

The Langbord’s case is being closely watched by collectors because it involves some of the most prized coinage in the world.

“These coins were legendary,” said Robert W. Hoge, curator of North American coins and currency with the American Numismatic Society. Their scarcity, design and historical provenance all have contributed to their value, he said.

Underscoring that value, the Mint displayed the 10 coins at a coin-collector conference in Denver in 2006, after they were submitted by the Langbords. They’ve since been stored at the U.S. Bullion Depository in Fort Knox, Ky.

The bulk of 1933 Double Eagles were eventually melted into gold bars by 1937. None of the coins was legally issued to the public, according to the government; two were sent to the Smithsonian in Washington for its coin collection and 20 were sent for testing and destroyed.

Nevertheless, other coins have surfaced. In 1944, the U.S. Treasury Department issued an export license for a 1933 Double Eagle purchased by King Farouk of Egypt for his collection, according to court records. In the 1990s, a British collector tried to sell what he claimed to be the King Farouk Double Eagle in New York.

The U.S., which maintains that the original export license to King Farouk was a mistake, tried to block the British dealer’s sale. After six years of litigation, the U.S. and the dealer agreed to auction off the King Farouk coin and split the proceeds. That single coin sold to an unidentified buyer for $7.6 million at a Sotheby’s auction in 2002, a record for a public coin auction.

In the 1940s, the U.S. Secret Service, whose duties include protecting the nation’s money supply as well as government leaders, investigated appearances of other 1933 Double Eagles after one was listed for public auction. The agency traced at least nine such coins back to Mr. Switt, who eventually admitted he had sold them around 1937, according to court documents.

A faded copy of Mr. Switt’s 1944 sworn statement to the Secret Service is among the documents being presented at the current trial. “… I do not remember when, where or from whom I purchased them, as they were received by me in collections with other coins at different times,” Mr. Switt wrote. He did write, however, that he didn’t get them directly from the U.S. Mint or its employees.

The Secret Service wanted to prosecute Mr. Switt for theft of U.S. property, according to the government, but the statute of limitations had expired. The government eventually recovered at least nine of the coins believed to have been sold by Mr. Switt and destroyed them.

The government believes Mr. Switt obtained the coins from a former Mint cashier who had exclusive access to the 1933 batch.

Members of the Langbord family declined to comment outside the courtroom.

Mr. Berke said it was illegal for the government to take the coins without going through legal forfeiture proceedings. He also said the government wouldn’t even have known about the 10 coins if the Langbord family hadn’t voluntarily notified the Mint.

If the coins ever become available for sale, they would probably sell for at least $1 million apiece, numismatic experts said.

On Friday, jurors heard from a witness called by the government, David Tripp, the former head of Sotheby’s coin department who wrote a book about the 1933 Double Eagles published in 2004. Mr. Tripp walked jurors through copies of Mint records from the 1930s which he says show that none of the 1933 batch made it out to the public as legal tender.

The trial is expected to last two to three weeks.

Write to Peter Loftus at peter.loftus@dowjones.com

By JEFFREY BALL

Gary Vann pines for the days when he could put the pedal to the metal in his 18-wheeler and hurtle down empty stretches of highway at 100 miles per hour. “You talk about fun, man,” the 34-year-old Tennessean said.

View Full Image

Jeffrey Ball/The Wall Street Journal

Doug Andersen shows the ‘black box’ that transmits his truck’s location and speed to the dispatch center.

That was in the late 1990s, when Mr. Vann was a rookie truck driver and oil was cheap. Now, with diesel at close to $4 a gallon, trucking companies are moving to cap soaring fuel bills by tapping the brakes on their drivers.

Several big companies have tweaked the computerized governors on their trucks’ engines in recent months, dialing down the top speed. Mr. Vann’s employer, Titan Transfer LLC, cut it to 65 mph from 70 mph. Titan also drops extra cash on drivers who know how to get the best fuel economy out of their rigs, and puts extra pressure on the leadfoot.

Terry Kelley, another Titan driver, is about to pop a gasket. He is averaging about five miles per gallon in his truck, far below the seven mpg Titan has told its drivers it wants them to eke from their machines. “They called and chewed me out about it today,” he said one recent morning.

Under the sterner governor, Mr. Kelley said, he covers less blacktop, crimping his take-home pay, since truckers are paid by the mile.

“It’s like trying to eat a french fry with a hand over your mouth,” he said. “It’s not going to work.”

To truckers across the U.S., the new controls—the industry’s latest attempt to wring better economy from its fleets—spell the end of a romantic age, powered by cheap diesel, when drivers could do pretty much as they pleased on the open road. Gone are the days of open-throttled hauling made famous by “Smokey and the Bandit,” the 1977 movie starring a suave Burt Reynolds, in which a tractor-trailer shreds the speed limit on a cross-country beer run.

At highway speeds, every decline of five mph improves an 18-wheeler’s fuel economy by about half a mile per gallon. Titan spends roughly $24 million a year on diesel and expects “huge” savings from the five-mph cut in its trucks’ top speed, said Tommy Hodges, the company’s chairman, who declined to give specific numbers.

Mr. Hodges said Titan was trying to teach its drivers to cruise, as much as possible, at a steady speed instead of constantly speeding up and then slowing down, which slurps fuel. The ideal, he said, is to drive “like there’s an egg under the accelerator.”

It’s a good thing John Gilbert didn’t have an egg under his accelerator in the 1970s. Back then, he often high-tailed it from Los Angeles to Baltimore at an average speed of 80 mph. Mr. Gilbert, now 69, would cross the country in three days, not the five his company gave him for the trip. That gave him two days to relax at home in Baltimore, with his bosses none the wiser.

The low-tech tools of the trade were catnip to rogue truckers. The CB radio helped drivers skirt speed traps. Faced with federal rules limiting the number of hours they could drive in a day, truckers kept written logs—sometimes several versions of them—to hide illegally long days from authorities’ prying eyes.

“I used to have three log books,” recalled trucker Terry Johnston, 52. “You could run anywhere you wanted to.”

Today, a driver’s every move is electronically recorded and relayed back to the dispatch center, where supervisors pick the data apart. Key to the system is a gadget some drivers liken to Big Brother: a black box in the cab that’s wired to a satellite dish near the roof and beams all the juicy details back to the company in real time: the truck’s location, its speed—even what gear it’s in, as trucker Doug Andersen learned the hard way last month.

Mr. Andersen, whose truck is governed at a maximum of 65 mph, was cruising downhill on Interstate 15, heading from California to Utah, when he slipped his rig into what truckers call “Georgia overdrive,” a guerrilla move to override an engine’s governor. He shifted the moving truck into neutral, letting gravity speed it up. When the speedometer neared 80 mph, the legal speed limit on that stretch of road, a red light flashed on the gray, tablet-size computer wired into the truck’s dashboard.

Snagged by his superiors, who call the move dangerous because it makes an 18-wheeler hard to control, Mr. Andersen pulled his truck over and called the dispatcher for his tongue-lashing.

“They said, ‘That’s a no-no. You can get fired for that,’ ” recalled Mr. Andersen, a lanky 54-year-old from Utah whose khaki baseball cap sports the American flag.

Sometimes the very computers that the trucking companies use to enforce more efficient driving can contribute to burning more diesel. On a recent steamy day at a truck stop in Dallas, driver Randy Murray spent about two hours sitting in his parked rig, the engine idling to keep the air conditioner running. He was waiting for orders to pick up 44,000 pounds of Coca-Cola to haul to Florida.

The alternative to running the engine, he said, was to “sit here in a 100-degree truck and sweat to death.” He could have shut off the engine and waited in the air-conditioned truck stop, but he said he wouldn’t have been able to see when the computer in the cab told him to get moving.

Safety advocates say slowing down 18-wheelers saves lives as well as fuel. Some drivers agree it reduces crashes. “Some of the stuff I did when I was younger scares me,” said Mr. Gilbert, the trucker who used to speed from coast to coast in three days. Now he’s content to cruise at 65 mph.

Other truckers argue that slower trucks cause more wrecks, because cars whose drivers are furious about the lumbering 18-wheelers whip around them.

Since the trucking company he works for recently trimmed its rigs’ top speed to 64 mph from 68 mph, driver Nolan Newcomb has noticed more car drivers greeting him with a universal hand signal he calls “No. 1.” To illustrate, the 52-year-old, whose girth and white beard make him look a little like Santa Claus, stuck out his middle finger.

Write to Jeffrey Ball at jeffrey.ball@wsj.com

By ARIAN CAMPO-FLORES

Zuma Press

A marker shows the farthest point the shoreline receded to in a 2001 drought.

PALM BEACH, Fla.—A record dry season left West Palm Beach, Fla., with just 22 days worth of fresh water last month, prompting new rules restricting residents to once-a-week watering schedules for lawns and plants.

But with a 2.6-acre estate in neighboring Palm Beach that features a 37,000-square-foot home, a pool and lush tropical landscaping, Terry Allen Kramer is accustomed to using more than 120 times the amount of water consumed by the average customer in the region.

And she isn’t alone.

Some of her neighbors in this tony island enclave—whose water is supplied by West Palm Beach—use more than one million gallons of water a month to keep their properties green.

Top 5 Water Users in Palm Beach

View Slideshow

Pictometry

• 
  
  More photos and interactive graphics
  
  

That disparity has drawn calls for a water-pricing arrangement that includes surcharges, at least while drought conditions last, and has spawned tension between the tract-home crowd and the more affluent.

“People living on a 19-acre estate can afford to pay a lot more for their water,” said Drew Martin, who has a seat on the Palm Beach Soil and Water Conservation District. “If they were paying significantly higher expenses, it would encourage them to be more efficient.”

“The excess water usage is not for the grass,” said Ms. Kramer, a theater producer and heiress of Charles Allen, who co-founded investment bank Allen Co. “I do have guests. I do have 19 bathrooms.”

Though her property consumed more than 13 million gallons of water from June 2010 to May 2011—the most of any Palm Beach resident, according to an analysis of residential water bills by the Palm Beach Post—she said she didn’t plan to reduce her usage. The town should invest in a desalination plant, she said, which would ensure that “there’s enough water for everyone.”

View Full Image

Zuma Press

West Palm Beach code enforcement officer Carlos Maldonado last month.

After enduring the most parched October-to-June dry season on record, parts of eastern Palm Beach County are suffering “exceptional” drought conditions, the highest classification, according to the National Drought Mitigation Center. As a result, officials in West Palm Beach tapped an emergency wellfield, bought water from the county and obtained permission to draw off a reservoir owned by the South Florida Water Management District.

They also limited landscape irrigation, which accounts for roughly half of total water consumption, to one day a week for all utility customers, including those in Palm Beach.

Yet there is no cap on the volume of water a resident can consume and no surcharge for excessive usage.

Given the need to conserve, some residents ask why the owners of large estates are allowed to continue soaking up as much water as they want. “It’s appalling,” said Cecily Hangen, who has kept her water use in check by cutting back on laundry and planting native species in her garden. “They should be fined.”

Code enforcers in Palm Beach have been cracking down on violators of the watering restrictions. Since April 1, the town has issued 283 written warnings and 116 citations, according to code-enforcement manager Raychel Houston. Among those warned were Ms. Kramer; John L. Thornton, a former president of Goldman Sachs; and Stephen Schwarzman, co-founder of the Blackstone Group. Mr. Thornton also received a $125 citation.

Mr. Thornton didn’t return calls seeking comment. A spokesman for Mr. Schwarzman said the house had been fully compliant with watering restrictions since the warning and that his contractor expects a “major reduction” in usage through checking for leaks, among other things.

Some residents argue that officials should crack down more vigorously. “If you’ve got a water bill that high, the county needs to cut your water off,” said Louise Fargason, adding that she no longer hoses down her yard.

West Palm Beach leaders have shied away from criticizing Palm Beach estate owners and say there are no plans to change the pricing scheme. “We don’t want to isolate anybody,” said Pat Painter, watershed manager for West Palm Beach. “Collectively, we’re all culpable.”

The Palm Beach Civic Association has been encouraging homeowners to invest in more efficient irrigation systems, said Garrison Lickle, a director of the group and a board member of the Everglades Foundation, which advocates on water management issues.

In the past few weeks, bouts of rainfall have provided some relief to the area. But climatologists say the region needs to be drenched by several tropical storms to close the water deficit.

“People are already asking, ‘Can I start watering more?’ ” said Mr. Painter. “We’re trying to say, ‘If it rains this week, that’s your one day a week. Take it as a gift.’ “

By JARED A. FAVOLE

WASHINGTON – President Barack Obama said Saturday that despite broad differences, he and Republicans agree on “some of the big things,” including that the end goal of the deficit talks is to solve the country’s fiscal woes.

“We agree that after a decade of racking up deficits and debt, we finally need to get our fiscal house in order. We agree that to do that, both sides are going to have to step outside their comfort zones and make some political sacrifices,” Mr. Obama said in his weekly radio address to the nation.

Mr. Obama has been stuck in an increasingly partisan debate with Republicans about how to slash the country’s deficit and raise the U.S.’s borrowing limit. He is meeting with congressional leaders on Sunday to discuss cutting the deficit–a meeting that reflects the urgency of the U.S. economic situation.

President Obama calls on both parties to come together to find a balanced approach to deficit reduction. Video courtesy whitehouse.gov via NewsCore.

The U.S. will begin to default on its debt by Aug. 2 if Congress doesn’t increase the U.S. borrowing limit. Mr. Obama said earlier in the week that if the borrowing limit isn’t raised, the consequences could cause the U.S. economy to slip back into recession.

The main sticking point in the debate is over spending on entitlement programs and taxes. The White House and many Democrats want to end a series of tax breaks for oil companies and the wealthy. Republicans have said they are against measures that would raise taxes while the economy is on shaky footing.

Republicans used their weekly radio address Saturday to discuss the disappointing jobs report from Friday. Rep. Cathy McMorris Rodgers (R., Wash.) asked “Where are the jobs?”

“It’s the only question worth asking after yesterday’s unemployment report. Our economy is actually creating fewer jobs month-to-month right now,” she said. The economy added 18,000 jobs in June, a fraction of the 125,000 expected by economists.

Ms. Rodgers said uncertainty is holding the economy back. “Whether it’s uncertainty about our overwhelming debt, uncertainty about energy prices, or uncertainty about all the burdensome mandates coming down from Washington, small business owners are pleading for government to just get out of the way,” she said.

By MATTHEW FUTTERMAN And ADITI KINKHABWALA

NFL owners and players are hammering out an agreement that would end their four-month-old labor dispute in the coming days, in a move that would save the upcoming football season and put the $9.4 billion business back on track.

Sports Labor Disputes

Take a look back

View Interactive

The two camps have been holding regular and detailed meetings in New York City to resolve the lockout, and are expected to continue meeting in the coming days. They’re fighting over how to divide the league’s revenue. Differences remain, but both sides have made concessions on player compensation.

“We are committed to our current discussions and reaching a fair agreement that will benefit all parties for years to come, and allow for a full 2011 season,” the two camps said in a joint statement Friday.

The sides, led by National Football League Commissioner Roger Goodell and players’ association head DeMaurice Smith, continue to haggle over how much money the players will receive.

Under the prior agreement, the owners took $1 billion of league revenue for themselves, then shared nearly 60% of the rest with the players. Owners have wanted to cut the players’ share, and players resisted.

Players would likely see a slight drop in the percentage they get of $9.4 billion in overall revenues this season under a new arrangement being negotiated, said people familiar with the matter. But with the league projecting substantial growth, the gross player compensation is unlikely to drop.

Players are also pushing the owners to agree for the first time to spend a minimum dollar amount on player salaries. That way, the owners share a smaller portion of revenue with the players, but the players’ actual compensation wouldn’t decrease.

Agreement on the structure of a new system has put the two sides closer to a deal than they have been since talks began more than two years ago, the people familiar with the talks say. Still, the details of the agreement, including a new salary scale for drafted rookies, need to be fully worked out.

The clock is ticking. The first pre-season game is scheduled for Aug. 7. Ideally, teams want two weeks to prepare for that game, and an additional week to sign free agents before training camps open, though it’s possible training camps and free agency could begin simultaneously.

If the pre-season is missed, NFL owners are expected to lose hundreds of millions of dollars by Sept. 1.

Friday, a federal appeals court ruled to keep the NFL lockout in place, giving the owners a minor, if expected, victory in their battle, which has taken place both in the courts and at the bargaining table.

But the owners win was only partial, because the players didn’t lose their right to decertify, a move the league had asked the court to rule a sham. The players back in March voted to decertify as a union, a legal move to allow the players to sue the NFL on antitrust grounds.

Friday’s ruling, from the Eighth U.S. Circuit Court of Appeals in St. Louis, comes after that same court twice granted a stay of the April 25 decision by U.S. District Judge Susan Nelson. Judge Nelson’s ruling temporarily lifted the lockout before the appellate court rulings allowed the owners to put it back in place.

Write to Matthew Futterman at matthew.futterman@wsj.com and Aditi Kinkhabwala at aditi.kinkhabwala@wsj.com

By DIONNE SEARCEY And MICHAEL ROTHFELD

A growing rift between prosecutors and a lawyer representing the woman who accused former International Monetary Fund chief Dominique Strauss-Kahn of sexual assault could stall investigators seeking further details about her background and personal relationships, according to a person familiar with the matter and legal experts.

Manhattan District Attorney Cyrus Vance Jr. and his team are trying to decide how to proceed after they themselves raised questions about the credibility of the accuser, a maid at New York’s Sofitel hotel who claims Mr. Strauss-Kahn assaulted her in his suite in May.

The most serious charge carries a potential penalty of 25 years in prison. The 62-year-old Mr. Strauss-Kahn, who had been a contender for the French presidency, has pleaded not guilty.

Kenneth Thompson, a lawyer for the woman, a 32-year-old Guinean immigrant, has said that her mistakes notwithstanding, she “from day one has described that sexual assault many times,” and done so consistently.

Part of Mr. Vance’s decision likely will rely on further investigation of, among other things, the woman’s ties to a man incarcerated in Arizona and transactions involving tens of thousands of dollars deposited to an account in the woman’s name made by men in different states, according to people familiar with the situation.

“They’ll be pulling phone records, conducting witness interviews, looking into her finances,” the person who described the rift said. “There are a lot of things that take a fair amount of time.”

The relationship between prosecutors and the accuser’s attorney appears to have soured since the credibility issues arose. Earlier this week, Mr. Thompson demanded in a letter to Mr. Vance that he recuse his office from the case, blaming it for leaks to the media to “undermine her charges against Mr. Strauss-Kahn.” He said New Yorkers “have a right to a fair and impartial prosecution of such an important case.”

A spokeswoman for Mr. Vance said no decision has been made on how to proceed and that the investigation is continuing. Mr. Thompson, through a spokesman, declined to comment.

Relations started to fray in the early part of the investigation. Prosecutors were alerted to the accuser’s credibility issues three weeks after the alleged attack. Mr. Thompson had called to say his client wanted to describe inaccuracies in her political-asylum application, according to Mr. Thompson and the prosecution team.

Mr. Thompson has said prosecutors yelled at his client when he allowed her to be interviewed outside his presence in early June. Prosecutors said their behavior toward her was appropriate. After that, Mr. Thompson wouldn’t allow the woman to be interviewed again until June 28, a law-enforcement official said.

Prosecutors’ inability to interview a witness on a continuing basis, especially in a so-called one-witness case like this one, is a “major impediment” to a prosecution, said Harry Sandick, a white-collar defense lawyer in New York and former federal prosecutor.

“You can’t evaluate her credibility, you can’t get her side of the story,” Mr. Sandick added. “If you’re her lawyer, you’re essentially making it hard for the prosecution to vet out the things you’ve asked them to keep an open mind about.”

Meanwhile, French prosecutors have launched a preliminary investigation into attempted rape accusations made by a French novelist, Tristane Banon, against Mr. Strauss-Kahn, an official at the Paris prosecutors’ office said Friday. Through his lawyer, Mr. Strauss-Kahn has said he considered Ms. Banon’s account of the 2003 meeting “a figment of her imagination.” Ms. Banon maintains that Mr. Strauss-Kahn attempted to rape her, according to her lawyer.

—Ashby Jones and David Gauthier-Villars contributed to this article.

Write to Dionne Searcey at dionne.searcey@wsj.com and Michael Rothfeld at michael.rothfeld@wsj.com

Fruit vendor MD Ali can hardly keep up with the demand for bananas. As soon as he frees a bunch from its plastic wrapper, crazed commuters at the corner of 35th and Sixth grab for his 35-cent specials. Most buy more than one—Mr. Ali offers a bulk discount—and some admit to scarfing three a day. Alexis Hanczaryk, who was whisking a bunch to her office in the Fashion District, says she stops for bananas several times a week because she needs the potassium: “I’m a runner.”

View Full Image

Julie Platner for The Wall Street Journal

Joe Palumbo at wholesaler Top Banana in the Bronx.

Aren’t we all. Some say New York runs on ambition or greed. Wrong! The Big Apple runs on bananas. Not only are bananas half the price of rival fruits, and half the mess (assuming you eat the skin), they’re the only reliable characters in the produce section. Buying a peach these days is a game of Russian roulette: You don’t know if you’ll bite into paradise or your worst nightmare. But the banana never lies.

No wonder New Yorkers down an estimated 600 million bananas a year. Midtown, especially, bristles with more bananas than an equatorial plantation. In an effort to lure office workers, even the doughnut-cart guy and the Duane Reade sell bananas. The curbside produce vendors, who occupy just about every block, say they sell 400 bananas a day.

If you ate a few bananas last week, you probably enjoyed the fruits of Top Banana, one of the city’s dozen-odd banana wholesalers. Every morning before dawn, trucks from supermarkets, green grocers and restaurants pull up to the Top Banana dock at the Terminal Market in Hunts Point and place their orders at the outfit’s yellow booth. Operations Manager Darek Kuras maintains an elaborate records system: He staples each cash payment to the order and puts it in his pocket. Altogether, Top Banana sells nearly two million bananas a week. Mr. Kuras says he can help himself to free bananas, but he seldom indulges: “I can’t look at them anymore.”

Top Banana’s top banana, Joe Palumbo, who employs a wife and two kids in his 28-man operation, says he still enjoys bananas, as do his Pomeranian and two golden retrievers. “Dogs love bananas,” he says. His desk is adorned with stuffed bananas and monkeys, and his grand conference table is topped with a plastic banana centerpiece.

View Full Image

Rob Bennett for The Wall Street Journal

Fruit vendor MD Ali at his cart on 35th Street near Sixth Avenue.

But the banana business is no bowl of cherries. When Mr. Palumbo’s fruit arrives off the boat from Costa Rica, it’s a deep shade of green. He maintains 18 ripening rooms—cooled to about 60 degrees—where cartons of bananas stacked 20 feet high are bathed in ethylene gas to hasten their maturity. Mr. Palumbo tries to provide bananas that meet retailer preference—a semigreen stage 3 or 4, in industry parlance—but attempts to predict demand are fruitless. When you’ve got green bananas, everyone wants them ripe. And when you’ve got ripe bananas, “Everyone wants ‘em green,” he says.

And forget the big profits that come with high-end produce. Whole Foods buyer Rich Thorpe, who sources all kinds of exotic varieties, says bananas are generally cheap because they’re the ultimate commodity fruit. Most supermarkets carry just one kind—the ubiquitous Cavendish—and there’s little to distinguish one from the next.

Thanks to high fuel rates, wholesale banana prices are relatively high this summer: 45 cents a pound. But every retailer has its own banana strategy. The street vendors, who pay about 50 cents a pound for bananas delivered curbside, earn roughly 15 cents’ profit on a 35-cent banana. Big chains like Trader Joe’s sell for as little as 49 cents a pound—it’s a loss leader to get folks in the store. Chinatown green grocers, which sell overstock fruit, offer even better deals. Then there’s Starbucks, which charges a buck a banana. Does a stiff price guarantee a better fruit? The barista at my local café doesn’t think so. He constantly sends customers down the street, where bananas sell three for a dollar. “No one seems to care,” he sighs.

Well, I care. I bought bananas from eight stores in Brooklyn and Manhattan and conducted a blind taste test with two banana-crazed co-workers. Should it be any surprise, in this city of savage injustice, that the worst-rated banana was one of the most expensive? This little brown monstrosity, which split open on its way to the office and unleashed a putrid banana pulp, cost $1.19 a pound at a deli on Court Street. I felt like a monkey for overpaying. Banana experts say that once a banana gets speckled, the wholesale price plummets—you can’t give them away.

Fellow losers included the 35-cent street-cart banana (“mushy, too many strings”), a high-price Chiquita from a Brooklyn gourmet market (“tastes like baby food”) and a midprice Ecuadorian import from a Korean green grocer with a chalky texture. Everyone had high hopes for the organic entry from Whole Foods (99 cents a pound). It was deemed the most beautiful, and scored high points in the personality category. But the taste? “Like a dirty potato.” The banana was also from Ecuador, which, according to Mr. Palumbo, produces a tougher fruit, “a piece of wood.”

The two top-rated bananas—a Dole Banana from Met Food and the Whole Foods “conventional” banana, with its feel-good “fair trade” label—were both reasonably priced at 79 cents a pound. And the Starbucks dollar banana? A distant third, not worth the money. (Turns out my local barista was right. Starbucks didn’t respond to multiple calls for comment.)

But all this research, it turns out, was likely for naught. Asked about his store’s hit-and-miss showing in our test, Mr. Thorpe of Whole Foods says it’s impossible to judge a purveyor on one banana, because most stores churn their sources. “The banana you get today may not be the banana you get tomorrow,” he says. Truer words were never said.

—Ms. Kadet, who writes the “Tough Customer” column

for SmartMoney magazine, can be reached at anne.kadet@dowjones.com

By HANNAH KARP

Getty Images

Ohio State football players celebrate their January Sugar Bowl win, one of the victories now vacated.

Ohio State University is vacating all of its football program’s 2010 wins, as well as its Sugar Bowl victory over Arkansas in January 2011, in the wake of a scandal that cost head coach Jim Tressel his job.

The move was part of a formal response to the National Collegiate Athletic Association’s official notice of allegations to the school in April, after discovering Mr. Tressel failed to report that some star players had swapped memorabilia for cash and tattoos.

Other steps included changing Mr. Tressel’s resignation to a retirement, self-imposing a two-year probation and suspending five players for the first five games of next season.

Mr. Tressel said in a statement that he was thankful for the opportunity to retire, thereby collecting the salary and benefits owed him through June 30. He added that he would remain a Buckeye “forever,” continuing to cooperate with and assist the school in the future.

Former star quarterback Terrelle Pryor was also suspended but left school to pursue a job in the National Football League after Mr. Tressel resigned in May.

In a statement, Ohio State athletic director Gene Smith said, “We are taking a very hard look on our own at all aspects of our athletic programs to identify and implement improvements designed to ensure that we uphold the highest ideals of honor and integrity. Throughout the entire process since we discovered possible infractions, Ohio State has consistently acted to investigate any allegation, self-report its findings to the NCAA, communicate transparently about its findings, and take necessary remediation steps.”

But the question remains whether these penalties are sufficiently tough. Ohio State came under fire this winter for its relatively tepid initial response to the crisis, in which it suspended Mr. Tressel for two games and slapped him with a $250,000 fine, which has since been waived. A university spokeswoman declined to comment on the reason for the waiver.

One weapon the NCAA has in its arsenal is restricting schools’ television appearances.

In its April letter to Ohio State, the NCAA requested a review of the school’s obligations concerning live telecasts of games for the next three seasons. The TV revenue generated by a major football program generally helps to subsidize a school’s less profitable sports like golf and swimming.

Gerry DiNardo, a former head coach at Louisiana State, Vanderbilt and Indiana universities, said he thought Ohio State’s response was appropriate based on the disclosures of wrongdoing to date, though he added that “future penalties,” such as revoking scholarships, are generally “more effective than vacating wins.”

“If nothing else has come out, I think this is fair. But do I think this is over? No I don’t think this is over,” said Mr. DiNardo, an analyst for the Big Ten Network. “The NCAA still has to respond, and if the NCAA does more, I might be OK with that.”

Former Ohio State quarterback Stanley Jackson said he thought his alma mater’s response may have been too harsh.

“I’m not sure we had to vacate the Sugar Bowl victory—the NCAA knew what the players had done at that point and still allowed them to play,” said Mr. Jackson, now a color analyst for Ohio State games.

But, he added, “there’s always a consequence to your action, and we had a handful of guys that made some poor decisions.”

The university said it will have no further comment on specific allegations.

Write to Hannah Karp at hannah.karp@dowjones.com

By SUSAN GREGORY THOMAS

Stephen Webster

Gen-X’s quest for perfect nests drove us to take out more home equity loans and to spend more on remodeling, per capita, than any generation before it, according to Harvard’s Joint Center for Housing Studies.

Every generation has its life-defining moments. If you want to find out what it was for a member of the Greatest Generation, you ask: “Where were you on D-Day?” For baby boomers, the questions are: “Where were you when Kennedy was shot?” or “What were you doing when Nixon resigned?”

Every generation has its defining moment. For Generation X, it could be: “When did your parents get divorced?”
Susan Gregory Thomas, author of the memoir “In Spite of Everything,” explains what she sees as the long-term repercussions on marriage and parenting.

For much of my generation—Generation X, born between 1965 and 1980—there is only one question: “When did your parents get divorced?” Our lives have been framed by the answer. Ask us. We remember everything.

When my dad left in the spring of 1981 and moved five states away with his executive assistant and her four kids, the world as I had known it came to an end. In my 12-year-old eyes, my mother, formerly a regal, erudite figure, was transformed into a phantom in a sweaty nightgown and matted hair, howling on the floor of our gray-carpeted playroom. My brother, a sweet, goofy boy, grew into a sad, glowering giant, barricaded in his room with dark graphic novels and computer games.

I spent the rest of middle and high school getting into trouble in suburban Philadelphia: chain-smoking, doing drugs, getting kicked out of schools, spending a good part of my senior year in a psychiatric ward. Whenever I saw my father, which was rarely, he grew more and more to embody Darth Vader: a brutal machine encasing raw human guts.

Growing up, my brother and I were often left to our own devices, members of the giant flock of migrant latchkey kids in the 1970s and ’80s. Our suburb was littered with sad-eyed, bruised nomads, who wandered back and forth between used-record shops to the sheds behind the train station where they got high and then trudged off, back and forth from their mothers’ houses during the week to their fathers’ apartments every other weekend.

The divorced parents of a boy I knew in high school installed him in his own apartment because neither of them wanted him at home. Naturally, we all descended on his place after school—sometimes during school—to drink and do drugs. He was always wasted, no matter what time we arrived. A few years ago, a friend told me that she had learned that he had drunk himself to death by age 30.

View Full Image

“Whatever happens, we’re never going to get divorced.” Over the course of 16 years, I said that often to my husband, especially after our children were born. Apparently, much of my generation feels at least roughly the same way: Divorce rates, which peaked around 1980, are now at their lowest level since 1970. In fact, the often-cited statistic that half of all marriages end in divorce was true only in the 1970s—in other words, our parents’ marriages.

Not ours. According to U.S. Census data released this May, 77% of couples who married since 1990 have reached their 10-year anniversaries. We’re also marrying later in life, if at all. The average marrying age in 1950 was 23 for men and 20 for women; in 2009, it was 28 for men and 26 for women.

Before we get married, we like to know what our daily relationship with a partner will be like. Are we good roommates? A 2007 study published by the National Bureau of Economic Research showed that, among those entering first marriages in the early 2000s, nearly 60% had previously cohabited with their future spouses. According to the U.S. government’s 2002 National Survey of Fertility Growth, 34% of couples who move in together have announced publicly that marriage is in the future; 36% felt “almost certain” that they’d get hitched, while 46% said there was “a pretty good chance” or “a 50-50 chance.”

I believed that I had married my best friend as fervently as I believed that I’d never get divorced. No marital scenario, I told myself, could become so bleak or hopeless as to compel me to embed my children in the torture of a split family. And I wasn’t the only one with strong personal reasons to make this commitment. According to a 2004 marketing study about generational differences, my age cohort “went through its all-important, formative years as one of the least parented, least nurtured generations in U.S. history.” Census data show that almost half of us come from split families; 40% were latch-key kids.

People my parents’ age say things like: “Of course you’d feel devastated by divorce, honey—it was a horrible, disorienting time for you as a child! Of course you wouldn’t want it for yourself and your family, but sometimes it’s better for everyone that parents part ways; everyone is happier.”

Such sentiments bring to mind a set of statistics in “Generations” by William Strauss and Neil Howe that has stuck with me: In 1962, half of all adult women believed that parents in bad marriages should stay together for the children’s sake; by 1980, only one in five felt that way. “Four-fifths of [those] divorced adults profess to being happier afterward,” the authors write, “but a majority of their children feel otherwise.”

20th Century Fox

Many Generation X parents are all too familiar with the brutal court fights of their parents, and today, ‘friendly divorces’ are increasingly common. Here, Kathleen Turner and Michael Douglas in 1989′s ‘The War of the Roses.’

But a majority of their children feel otherwise. There is something intolerable about that clause. I can’t help feeling that every divorce, in its way, is a re-enactment of “Medea”: the wailing, murderously bereft mother; the cold father protecting his pristine, new family; the children: dead.

When I had my first child at 32, I went into therapy for a while to sort through, among other things, just why the world—as open and wonderful as it had become with my child’s presence—had also become more treacherous than I ever could have imagined. It wasn’t until my daughter was a few months old that it dawned on me that when the pediatricians and child-care books referred to “separation anxiety,” they were referring to the baby’s psyche, not to mine.

The thought of placing her in someone else’s care sent waves of pure, white fear whipping up my spine. It occurred to me that perhaps my own origins had something to do with what a freak show I was. After hearing about my background for some time, my distinguished therapist made an announcement: “You,” she said, “are a war orphan.”

Orphans as parents—that’s not a bad way to understand Generation X parents. Having grown up without stable homes, we pour everything that we have into giving our children just that, no matter how many sacrifices it involves. Indeed, Gen-X’s quest for perfect nests drove us to take out more home equity loans and to spend more on remodeling, per capita, than any generation before it, according to Harvard’s Joint Center for Housing Studies.

Marketing surveys reveal that Generation X mothers don’t seek parenting advice from their own moms. Why would we take counsel from the very people who, in our view, flubbed it all up? Instead, says the research, we depend on the people who actually raised us, albeit wolf-pack style: our friends.

To allow our own marriages to end in divorce is to live out our worst childhood fears. More horrifying, it is to inflict the unthinkable on what we most love and want to protect: our children. It is like slashing open our own wounds and turning the knife on our babies. To consider it is unbearable.

My husband and I were as obvious as points on a graph in a Generation X marriage study. We were together for nearly eight years before we got married, and even though statistics show that divorce rates are 48% higher for those who have lived together previously, we paid no heed.

We also paid no heed to his Catholic parents, who comprised one of the rare reassuringly unified couples I’d ever met, when they warned us that we should wait until we were married to live together. As they put it, being pals and roommates is different from being husband and wife. How bizarrely old-fashioned and sexist! We didn’t need anything so naïve or retro as “marriage.” Please. We were best friends.

Sociologists, anthropologists and other cultural observers tell us that members of Generation X are more emotionally invested in our spouses than previous generations were. We are best friends; our marriages are genuine partnerships. Many studies have found that Generation X family men help around the house a good deal more than their forefathers. We depend on each other and work together.

Adultery is far more devastating for us than it was for our parents or grandparents. A 2003 study by the late psychologist Shirley Glass found that the mores of sexual infidelity are undergoing a profound change. The traditional standard for men—love is love and sex is sex—is dying out. Increasingly, men and women develop serious emotional attachments with their would-be lovers long before they commit adultery. As a result, she found, infidelity today is much more likely to lead to divorce.

View Full Image

Everett Collection

In ‘Kramer vs. Kkramer’ (1979) young Billy is caught in a custody battle.

Call us helicopter parents, call us neurotically attached, but those of us who survived the wreckage of split families were determined never to inflict such wounds on our children. We knew better. We were doing everything differently, and the fundamental premise was simple: “Kids come first” meant that we would not divorce.

But marriages do dissolve, even among those determined never to let it happen. After nine years, my husband and I had become wretched, passive-aggressive roommates. I had given up trying to do anything in the kitchen and had not washed a dish in a year. My husband had not been able to “find time” to read the book I had written. We rarely spoke, except about logistics. We hadn’t slept in the same room for at least two years, a side effect of the nighttime musical bed routine that parents of so many young children play in semiconsciousness for years on end.

Yet I never considered divorce. It never even entered my mind. I was grateful that my babies had a perfect father, for our family meals, for the stability of our home, for neighborhood play dates.

But then, one evening, I found myself where I vowed I’d never be: miserable, in tears, telling my husband that we were like siblings who couldn’t stand each other rather than a couple, and listening as my husband said he felt as though we had never really been a couple and regretted that we hadn’t split up a decade earlier. “I’m done,” he said. It was as if a cosmic force had been unleashed; the awful finality of it roared in like an enormous black cloud blotting out the sky, over every inch of the world. It was done.

That was four years ago. Even now, I still wonder every day if there was something that I—we—could have done differently. Like many of my cohort, the circumstances of my upbringing led me to believe that I had made exactly the right choices by doing everything differently from my parents.

I had married the kindest, most stable person I’d ever known to ensure that our children would never know anything of the void of my own childhood. I nursed, loved, read to and lolled about with my babies—restructured and re-imagined my career—so that they would be secure, happy, attended to. My husband and I made the happiest, most comfy nest possible. We worked as a team; we loved our kids; we did everything right, better than right. And yet divorce came. In spite of everything.

I don’t know what makes a good marriage. I am inclined to think that Mark Twain was right when he wrote in an 1894 journal: “No man or woman really knows what perfect love is until they have been married a quarter of a century.” But I did know something about divorce, and I wanted—and my former husband wanted—to do it as “well” as possible.

Many of us do. The phrase “friendly divorce” may strike some as an oxymoron, but it is increasingly a trend and a real possibility. Relatively inexpensive and nonadversarial divorce mediation—rather than pricey, contentious litigation—is now more common than ever. Many of us are all too familiar with the brutal court fights of our parents, and we have no intention of putting our kids through it, too. According to a recent University of Virginia study, couples who decide to mediate their divorce are more likely than those who go to court to talk regularly about the children’s needs and problems, to participate in school and special events, daily activities, holidays and vacations.

We may not make it in marriage, but we still want to make it as parents. In the ’70s, only nine states permitted joint custody. Today, every state has adopted it. It was once typical for dads to recede from family life, or to drop out altogether, in the wake of a divorce. But dads are critical in helping kids to develop self-esteem and constructive habits of behavior. A 2009 study published in the journal Child Development found, for example, that teenagers with involved fathers are less likely to engage in risky sexual activities.

Joint custody also reduces family strife. According to a 2001 study, couples with such arrangements report less conflict with their former spouses than sole-custody parents—an important finding, since judges have worried, historically, that joint custody exposes children to ongoing parental fighting. Some divorced couples have even decided to continue living together in different parts of the home—or to “swap out” each week—in order to maintain some measure of stability for their kids.

I have yet to meet the divorced mother or father who feels like a good parent, who professes to being happier with how their children are now being raised. Many of us have ended up inflicting pain on our children, which we did everything to avoid.

But we have not had our parents’ divorces either. We can only hope that in this, we have done it differently in the right way.

—Adapted from “In Spite of Everything: A Memoir” by Susan Gregory Thomas, to be published by Random House next week. Copyright © by Susan Gregory Thomas.

By JIM CARLTON

MOAB, Utah—The Grand County Cemetery Maintenance District, running low on funds, is turning to a new revenue tactic: raising the prices of plots and burials as much as 400%.

“This is just crazy,” said Sheldon Hefner, a former local mortuary owner, of the public-cemetery fees that stand to jump to as much as $700 from $150 this month. “Families here don’t need to be exposed to those high costs.”

Jim Carlton

Jim Madden of the Grand County cemetery district in Moab, Utah.

The proposed rate increase is just one of the controversies breaking out nationwide as cities and counties increase burial fees at publicly owned cemeteries to offset rising costs and declining or stagnant tax revenues.

In May, Brunswick, Ga., more than quadrupled its weekday fee for digging and filling a grave to $900 from $200 in its municipal graveyards amid budget cuts. Effective July 1, Edmond, Okla., ratcheted up burial fees at the city-owned Gracelawn Cemetery by as much as 75% to offset rising costs, among other factors.

Public cemeteries are in a financial squeeze. Costs for fuel and equipment, among other things, have soared, while tax revenue has increased slowly or decreased amid a weak economy. At the same time, cemeteries have been hit with a surge in cremations, which bring in less revenue than traditional burials.

“You have to be tight and watch what you do,” said Brian Dawson, who is sexton, or director, of Oak Grove Cemetery in Montague, Mich., which raised its burial fees five years ago. “It is, I guess you can say, a money pit.”

Many public cemeteries are being hurt by declining general funds available from municipalities. In Ovid, Mich., the Maple Grove Cemetery Association fell $52 into the red last year as its revenue of $26,046 from a town general fund and services fell short of its $26,098 in expenses, according to the agency’s financial report. Revenue was down 29% from $36,394 in 2009.

Unlike their public counterparts, private cemeteries can collect fees on such things as headstones, vases and funeral services. Many public cemeteries collect mainly for plot space and burial or cremation fees. In Utah, the $150 cost for a plot in Moab’s public cemeteries compares with the $500 rate for many private cemeteries in the state.

“Municipal cemeteries really don’t have many options,” said Robert Fells, executive director of the International Cemetery, Cremation and Funeral Association in Sterling, Va.

In this city of 5,000 in Utah’s canyon country, Grand County Cemetery Sexton Jim Madden warned his board last May that the district could eventually run out of money to water lawns and do other upkeep of the town’s two graveyards. He said the district had a 2010 surplus of about $10,000 on an annual budget of around $200,000, just half the surplus of about $20,000 the agency had been running in since 2002. The district’s revenue comes mainly from property taxes.

Mr. Madden said one added cost has been the expansion of Moab’s Sunset Memorial Cemetery from seven to nine acres over the past five years to accommodate the town’s rate of about 50 interments a year. The district has another 40 acres of undeveloped land to expand on but won’t be able to expand without more money, he said.

In 2009, the board froze the pay of Mr. Madden and the district’s two other full-time employees. This June, the district announced plans to raise prices to $500 from $150 each for plots and burials of residents, to take effect after July 12. An even steeper increase is planned for nonresidents, whose burial fees are to jump to $750 from $150 while the fees for plots are to jump to $600 from $150.

“We’re not trying to snooker anybody,” said Pat Holyoak, chairman of the cemetery district and a Grand County councilwoman. “We’re trying to keep from going in the red.”

All of that hasn’t sat well with residents, who packed into a June 10 district meeting to protest the increases. Among other things, they complained that the increases were unfair to longtime residents who had already paid for upkeep of the cemeteries through their property taxes. Although the levies total as little as $11 a year, they said that adds up over many years.

“Don’t screw the little old lady down the street who can’t pay her rent,” said Manuel Torres, 61, a local contractor who attended the meeting.

Their arguments were likely to come to naught. “They can ask questions, but it’s a done deal,” Ms. Holyoak said.

Write to Jim Carlton at jim.carlton@wsj.com

By DIONNE SEARCEY And MICHAEL ROTHFELD

A growing rift between prosecutors and a lawyer representing the woman who accused former International Monetary Fund chief Dominique Strauss-Kahn of sexual assault could stall investigators seeking further details about her background and personal relationships, according to a person familiar with the matter and legal experts.

Manhattan District Attorney Cyrus Vance Jr. and his team are trying to decide how to proceed after they themselves raised questions about the credibility of the accuser, a maid at New York’s Sofitel hotel who claims Mr. Strauss-Kahn assaulted her in his suite in May.

The most serious charge carries a potential penalty of 25 years in prison. The 62-year-old Mr. Strauss-Kahn, who had been a contender for the French presidency, has pleaded not guilty.

Kenneth Thompson, a lawyer for the woman, a 32-year-old Guinean immigrant, has said that her mistakes notwithstanding, she “from day one has described that sexual assault many times,” and done so consistently.

Part of Mr. Vance’s decision likely will rely on further investigation of, among other things, the woman’s ties to a man incarcerated in Arizona and transactions involving tens of thousands of dollars deposited to an account in the woman’s name made by men in different states, according to people familiar with the situation.

“They’ll be pulling phone records, conducting witness interviews, looking into her finances,” the person who described the rift said. “There are a lot of things that take a fair amount of time.”

The relationship between prosecutors and the accuser’s attorney appears to have soured since the credibility issues arose. Earlier this week, Mr. Thompson demanded in a letter to Mr. Vance that he recuse his office from the case, blaming it for leaks to the media to “undermine her charges against Mr. Strauss-Kahn.” He said New Yorkers “have a right to a fair and impartial prosecution of such an important case.”

A spokeswoman for Mr. Vance said no decision has been made on how to proceed and that the investigation is continuing. Mr. Thompson, through a spokesman, declined to comment.

Relations started to fray in the early part of the investigation. Prosecutors were alerted to the accuser’s credibility issues three weeks after the alleged attack. Mr. Thompson had called to say his client wanted to describe inaccuracies in her political-asylum application, according to Mr. Thompson and the prosecution team.

Mr. Thompson has said prosecutors yelled at his client when he allowed her to be interviewed outside his presence in early June. Prosecutors said their behavior toward her was appropriate. After that, Mr. Thompson wouldn’t allow the woman to be interviewed again until June 28, a law-enforcement official said.

Prosecutors’ inability to interview a witness on a continuing basis, especially in a so-called one-witness case like this one, is a “major impediment” to a prosecution, said Harry Sandick, a white-collar defense lawyer in New York and former federal prosecutor.

“You can’t evaluate her credibility, you can’t get her side of the story,” Mr. Sandick added. “If you’re her lawyer, you’re essentially making it hard for the prosecution to vet out the things you’ve asked them to keep an open mind about.”

Meanwhile, French prosecutors have launched a preliminary investigation into attempted rape accusations made by a French novelist, Tristane Banon, against Mr. Strauss-Kahn, an official at the Paris prosecutors’ office said Friday. Through his lawyer, Mr. Strauss-Kahn has said he considered Ms. Banon’s account of the 2003 meeting “a figment of her imagination.” Ms. Banon maintains that Mr. Strauss-Kahn attempted to rape her, according to her lawyer.

—Ashby Jones and David Gauthier-Villars contributed to this article.

Write to Dionne Searcey at dionne.searcey@wsj.com and Michael Rothfeld at michael.rothfeld@wsj.com

By STEPHEN MILLER

Betty Ford used the White House as a podium to share her concerns and crises with the American people in a way that hadn’t been seen since Eleanor Roosevelt.

Ms. Ford, who died on Friday at 93, talked openly as First Lady about her worries about her children’s adolescent experimentations with sex and drugs. When she developed breast cancer, she used it to promote mammograms. She leveraged her subsequent dependence on prescription pain killers and alcohol into the Betty Ford Center, a paradigm for recovery centers.

View Full Image

Agence France-Presse/Getty Images

Former first lady Betty Ford, right, with her husband former President Gerald Ford during the Congressional Medal of Honor ceremony in October of 1999. The Fords were awarded the medal for their public service.

Her plainspoken concerns about issues confronting many American families made her at times a more popular figure than her husband, late President Gerald Ford. Campaign buttons when he ran for election bore the message “Betty’s Husband for President ’76.”

“I’m real proud her polls are better than mine,” Mr. Ford told U.S. News during the election. Seldom had a White House couple seemed so much like equal companions, although Ms. Ford was comfortable in the role of a traditional homemaker.

An activist before she set foot in the White House, Ms. Ford was an outspoken advocate of women’s rights who once had to explain to her fans that, in the White House, her support for the Equal Rights Amendment was “as a citizen, not first lady.”

Her populist touch extended to wearing a mood ring and talking on a CB radio, signature fads of the era. Her CB handle: First Mama.

“She has just what it takes to make people feel at home in the world again,” Marshall McLuhan told the New York Times in 1974. “Something about her makes us feel rooted and secure.”

Raised in Grand Rapids, Mich., Elizabeth Ann Bloomer was the daughter of a salesman. She studied dance from grade school, and when she was 20, moved to New York City as a junior member of the Martha Graham troupe. But it was a part-time job as a fashion model that proved more influential on her early career. In 1941, she returned home and became fashion director for a department store in Grand Rapids, Herpolscheimer’s.

After a brief failed marriage, she was divorced and in 1948 married Gerald Ford, who was in the midst of his first run for Congress. After he won, they moved to Washington.

Mr. Ford, a dashing lawyer and former college football star, rose to minority leader in 1965 and began spending long periods away from home. Ms. Ford was to speak and write in later years about the loneliness and depression caused by his absences and her increased responsibility for their four children. She turned to psychotherapy, but never the less gradually became dependent on alcohol and pain killers, initially prescribed for a pinched nerve in her neck.

Mr. Ford was appointed to replace Spiro Agnew as vice president on Dec. 6, 1973, and then became president when Richard Nixon resigned less than a year later. Yet Mrs. Ford seemed unfazed by her husband’s sudden promotion, giving remarkably frank interviews throughout her husband’s years in the executive branch. Shortly after Mr. Ford was designated vice president, she made the politically inexpedient remark that she would prefer her husband not seek the presidency in 1976.

When Morley Safer asked her on “60 Minutes” in 1975 what she would do if she found her daughter Susan was having an affair, Ms. Ford replied that she would “certainly counsel her.” Later, her daughter asked her what an affair was, according to Shiela Weidenfeld, Ms. Ford’s press secretary in the White House.

Ms. Ford was equally outspoken in the interview on her support for the Supreme Court case Roe v. Wade, which sanctioned abortion rights, calling it a “great, great decision.”

The president, perhaps jokingly, speculated that the interview had cost him 20 million votes, but Ms. Ford’s approval ratings only strengthened.

Asked if the president was concerned, his spokesman, Ron Nessen, told the Washington Post, “The President has long since ceased to be perturbed or surprised by his wife’s remarks.”

In 1974, only months after moving into the White House, she was diagnosed with breast cancer and underwent a radical mastectomy. Airing the details constituted a remarkable break with traditions of medical privacy, and the American public responded with an outpouring that included over 55,000 get-well cards. But her recovery from cancer did nothing to mitigate her problems with addiction.

It was not long after Mr. Ford lost the 1976 election that her family staged an intervention. After initial resistance, she entered a treatment program, the details of which she set forth in a pair of memoirs.

In a journal entry during her ordeal she wrote, “You get better when you least expect to, when you’re not even trying, when you’re down by the coffee machine kibitzing with two black seamen who are playing cards. In my everyday life, I would never have met these men, but they and I helped to heal one another.”

In 1982, Ms. Ford and an old friend, former ambassador to Belgium Leonard Firestone, established the Betty Ford Center in Rancho Mirage, Calif. The center soon became a favorites of celebrities, attracting Elizabeth Taylor and Liza Minnelli, among other early clients. Many consider it to be the leading center of its kind in the country.

The post-White House years constituted the meatiest part of Ms. Ford’s career as she remained a highly visible avatar of a growing recovery movement. President George H.W. Bush awarded her the Presidential Medal of Freedom in 1991; eight years later, Congress voted to give her its Gold Medal.

In 2005, Ms. Ford was succeeded as chairman of the Betty Ford Center by her daughter, Susan Ford Bales.

Ms. Ford continued to give frank interviews, though there were few revelations left to expose. The Fords spent much time together at their home abutting a golf course in Rancho Mirage, often eating off TV trays while watching “Jeopardy!” Mr. Ford died in 2006.

Write to Stephen Miller at stephen.miller@wsj.com

By JUSTIN LAHART and JOE LIGHT

The U.S. economy added painfully few jobs for the second month in a row, undermining hopes that the sluggish recovery was getting back on track, depressing financial markets and putting new pressure on policy makers to come to the rescue.

The nation’s unemployment rate ticked up to 9.2% in June, with only 18,000 non-farm payrolls added to the economy. WSJ’s Sudeep Reddy and Phil Izzo join the News Hub panel to break down the numbers.

The government’s broadest snapshot of employment showed the nation added just 18,000 jobs in June. Private-sector hiring slipped to its slowest pace in over a year, and government continued shedding workers. May’s equally disappointing job-creation number was cut in half.

The unemployment rate ticked up to 9.2%, from 9.1% in May. The report also showed that even more workers dropped out of the job market.

The economy has been fitful for two years since the recession formally ended. In the past, spending and hiring rapidly recovered after deep downturns. But the damage the housing bust and subsequent credit crisis did to household and business balance sheets appears to have hobbled that rebound.

Most economists remain hopeful that hiring will increase in the months to come as supply-chain disruptions ease and as lower gasoline prices boost spending power. But the weak jobs report raises the chances that consumers will hold off on purchases and that, in turn, will make companies reluctant to hire. “We really do need to see some signs that economic growth is picking up in the near future,” said Goldman Sachs economist Andrew Tilton. “The pressure is on.”

June’s dismal numbers contradict a string of relatively upbeat recent reports on the economy, which had convinced many investors and economists that it was gaining steam. Stocks fell, with the Dow Jones Industrial Average shedding 62.29 points to 12657.20. Treasurys rose, pushing their yields lower.

The weakness in Friday’s jobs report was broad-based.

Alongside scant hiring, wages edged lower, and the amount of time private-sector workers clocked on the job each week slipped. The numbers also hinted at trouble to come: Temporary-help jobs, which often signal the job market’s direction, fell by 12,000, the third straight monthly decline.

Average hourly earnings for all workers on private payrolls edged down 1 cent to $22.99 in June. The average work week slipped to 34.3 hours from 34.4 in May.

President Barack Obama addresses the concerns of Americans following today’s job report. Video courtesy of Fox News.

Hiring was tepid across most industries. Manufacturing employment, which many economists expected to climb as supply disruptions stemming from Japan’s earthquake eased, rose by just 6,000. Retailing jobs increased by only 5,000, despite reports from many stores of solid June sales. Construction payrolls fell by 9,000 and the financial-services sector cut 15,000 jobs.

“Every major component of the report was weak,” said Bank of America-Merrill Lynch economist Ethan Harris. “That doesn’t happen very often—usually there’s some little ray of hope. The only silver lining is it might motivate Washington to get its act together.”

President Barack Obama, who is to meet with congressional leaders Sunday as part of talks to reduce the budget deficit, tied uncertainty over the debt ceiling and the lack of a concrete deficit-reduction plan to the weak job market.

“The American people need us to do everything we can to help strengthen this economy and make sure that we are producing more jobs,” Mr. Obama said in the Rose Garden.

A Historical View

U.S. unemployment since 1948

View Interactive

But congressional Democrats and Republicans remain at odds over the budget. Democrats say that given the weak job market, they want no austerity cuts for at least another year and Republicans say they won’t accept any tax increases for the same reason.

“Tax hikes on families and job creators would only make things worse,” House Speaker John A. Boehner said Friday.

The grim jobs update puts pressure on the Federal Reserve to explore new ways to support an economy that appears to be stumbling.

At the very least, the report makes clear that the Fed is unlikely to raise interest rates in the foreseeable future.

With inflation picking up this year, the Fed is unlikely to take new steps to bolster growth soon. But if inflation drops, or if the second-half economic rebound Fed officials expect doesn’t materialize, the central bank could take new actions. One option would be to restart the Treasury-buying program it ended last month. Others include making new commitments not to raise interest rates or sell its securities holdings.

The private sector added just 57,000 jobs in June, down from 73,000 a month earlier and the fewest since May of last year. Private payrolls, which account for about 70% of the work force, are 2.1 million higher than they were at their low in 2009, but are still 6.7 million below where they were in late 2007 when the recession began.

Carl Camden, chief executive of Troy, Mich.-based staffing company Kelly Services Inc., said that so far his company hasn’t seen customers shedding temporary workers—usually an early warning that the economy is in deep trouble—and that some companies have been converting temporary workers to permanent status.

“This still feels to me like a soft patch rather than a harbinger of doom,” he said.

Employer Rose Marie Nichols McGee, the co-owner of Nichols Garden Nursery in Albany, Ore., isn’t optimistic. With sales flat this year, she says she is unlikely to expand her work force of 10 employees. “The economy here is just not bouncing up,” she says. “We’re just not experiencing the growth we keep hearing about.”

Amid the struggle to close budget gaps, government employment at the federal, state and local levels fell by a total of 39,000 jobs in June, the eighth consecutive month of declines.

Johnna Palm of Carlisle, Pa., lost her job as a community-development specialist with the Cumberland County Redevelopment Authority in mid-June. Ms. Palm, 45 years old, estimates that her severance package, along with her savings and unemployment, are enough to last her six months.

Right now, she plans to apply for a range of positions, possibly in grant writing or administration. But once her savings dwindle, she says she’ll start looking at lower-paying work.

“If I get to that point, I can work retail. I can stock shelves. I can be a hotel desk clerk,” she says. “I’m trying to be realistic.”

—Jonathan Weisman and Jon Hilsenrath contributed to this article.

Write to Justin Lahart at justin.lahart@wsj.com

BY CHIP CUMMINS AND EDWARD WELSCH

EDMONTON, Alberta—In a 21st-century oil boom, this sparsely populated Canadian province has become one of the world’s newest petroleum powerhouses. Foreign investors are piling in, and Alberta plans to double production over the next decade.

The problem is that the U.S.—the biggest consumer of Alberta petroleum—may not want the additional oil.

Most of Alberta’s 1.5 million barrels of daily exports are extracted from oil sands, or bitumen. Turning this tar-like substance into oil is an energy-intensive process that generates lots of carbon dioxide, a gas suspected to contribute to global warming. Almost all the oil produced ends up in the …

By GAUTAM NAIK

Doctors have replaced the cancer-stricken windpipe of a patient with an organ made in a lab, a landmark achievement for regenerative medicine. The patient no longer has cancer and is expected to have a normal life expectancy, doctors said.

View Full Image

David Green

A lab-made windpipe was implanted June 9 into a 36-year-old patient whose own windpipe was obstructed by a tumor.

“He was condemned to die,” said Paolo Macchiarini, a professor of regenerative surgery who carried out the procedure at Sweden’s Karolinska University Hospital. “We now plan to discharge him [Friday].”

The transplantation of an entirely synthetic and permanent windpipe had never been successfully done before the June 9 procedure. The researchers haven’t yet published the details in a scientific journal.

The patient’s speedy recovery marks another milestone in the quest to make fresh body parts for transplantation or to treat disease. More immediately, it offers a possible treatment option for thousands of patients who suffer from tracheal cancer or other dangerous conditions affecting the windpipe.

View Full Image

Associated Press

Paolo Macchiarini, a professor of regenerative surgery, carried out the procedure.

“It’s yet another demonstration that what was once considered hype [in the field of tissue engineering] is becoming a life-changing moment for patients,” said Alan Russell, director of the McGowan Institute for Regenerative Medicine in Pittsburgh, who wasn’t involved in the latest operation.

In 2006, researchers disclosed how they had implanted lab-grown bladders into children and teens with spina bifida, a birth defect. And in 2008, members of a team that included Dr. Macchiarini said they had given a patient a new windpipe made partly from her own cells, and partly from “scaffolding” material taken from a cadaver.

The latest experiment shows that a fully functioning windpipe can be manufactured in the lab without the need for a cadaver.

View Full Image

“It makes all the difference,” said Dr. Macchiarini. “If the patient has a malignant tumor in the windpipe, you can’t wait months for a donor to come along.”

The patient in this case is a 36-year-old Eritrean man, identified by doctors as a father of two studying geology in Iceland. Surgery and radiation treatments failed to stem a cancerous growth in his windpipe.

When the tumor reached about six centimeters in length, it almost completely blocked the trachea, or windpipe, making it hard for the patient to breathe.

With no suitable donor windpipe available, the final option was to try to build one from scratch. Dr. Macchiarini had good reason to feel emboldened: He had successfully transplanted cadaver-based windpipes in 10 patients.

View Full Image

David Green

The patient is expected to be released from the hospital Friday.

The windpipe is a hollow tube, about 4.5 inches long, leading to the lungs. A key part of it is a scaffold—which functions like a skeleton for the organ—consisting of tissues such as cartilage and muscle. As a first step, a team led by Alexander Seifalian of University College London used plastic materials and nanotechnology to make an artificial version of the scaffold in the lab. It was closely modeled on the shape and size of the Eritrean man’s windpipe.

Meanwhile, researchers at Harvard Bioscience Inc. of Holliston, Mass., made a bioreactor, a shoe-box-size device similar to a spinning rotisserie machine. The artificial scaffold was placed on the bioreactor, and stem cells extracted from the patient’s bone marrow were dripped onto the revolving scaffold for two days.

With the patient on the surgery table, Dr. Macchiarini and colleagues then added chemicals to the stem cells, persuading them to differentiate into tissue—such as bony cells—that make up the windpipe.

Related

In a notable advance in organ transplants, surgeons at UC Davis Medical Center have restored the voice of a woman who couldn’t speak on her own through a transplant of the larynx, thyroid and trachea. Avery Johnson has details.

About 48 hours after the transplant, imaging and other studies showed appropriate cells in the process of populating the artificial windpipe, which had begun to function like a natural one. There was no rejection by the patient’s immune system, because the cells used to seed the artificial windpipe came from the patient’s own body.

Dr. Russell of the McGowan Institute sounded a note of caution about using this technique to build more-complex organs. For example, while tissue engineering can help to build hollow organs such as a windpipe, it will likely prove a bigger challenge to use the technique for creating the heart, which has much thicker tissue.

Dr. Macchiarini said he planned to use the same windpipe-transplant technique on three more patients, two from the U.S. and a nine-month-old child from North Korea who was born without a trachea.

Write to Gautam Naik at gautam.naik@wsj.com

By JESS BRAVIN

Texas executed a Mexican national whose prosecution violated U.S. treaty obligations soon after the Supreme Court refused to intervene Thursday.

U.S. high court clears the way for Mexican man, convicted of rape, to be executed in Texas. Video Courtesy of Reuters.

Humberto Leal Garcia, 38 years old, was convicted of the 1994 rape and murder of a 16-year-old girl. He had asked the court to stay his execution while Congress considered legislation that could have granted him a chance to raise the treaty issue before a federal judge. The Obama administration backed Mr. Leal’s request, citing “serious repercussions for United States foreign relations” should the execution proceed.

The court said no by a 5-4 vote, dividing along its conservative-liberal line. Texas Gov. Rick Perry had earlier declined a clemency petition.

The Mexican government said in a statement Thursday night that it “strongly” condemned the execution.

Mr. Leal contended that Texas authorities violated the 1963 Vienna Convention after his arrest when they failed to advise him of his right to assistance from his home country’s consulate or embassy.

Texas and other states routinely have failed to advise foreigners as required under the treaty. In 2004, the International Court of Justice, which the U.S. had agreed could review disputes under the treaty, said condemned inmates should have an additional hearing to consider whether the denial of consular rights had prejudiced their trials.

Former President George W. Bush reacted by withdrawing the world court’s jurisdiction over future Vienna Convention disputes involving the U.S. But the administration said states should obey the 2004 rulings.

Some states took steps to comply, including Oklahoma, whose governor commuted a death sentence to life imprisonment. Texas, however, defied its former governor, asserting that President Bush had no authority to compel the state to grant the hearings.

In 2008, the Supreme Court agreed the U.S. had an international-law obligation to obey the world court, which sits in The Hague and is the principal judicial arm of the United Nations. But it held that federal courts were powerless to make Texas comply unless Congress passed additional legislation to enforce the world court judgment.

Last month, Senate Judiciary Committee Chairman Patrick Leahy (D., Vt.) introduced a bill giving federal courts jurisdiction to hear Vienna Convention claims, and the Obama administration said the execution should be put off while the measure was pending.

The Supreme Court majority, in an unsigned opinion, said that wasn’t good enough.

“We are doubtful that it is ever appropriate to stay a lower court judgment in light of unenacted legislation. Our task is to rule on what the law is, not what it might eventually be,” the court said.

The court was unmoved by government warnings of diplomatic consequences, including adverse treatment of Americans arrested overseas.

The issue has been around for years, the court said, and “Congress evidently did not find these consequences sufficiently grave to prompt its enactment of implementing legislation.”

Chief Justice John Roberts and Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito comprised the majority.

In dissent, Justice Stephen Breyer wrote that Mr. Leal’s petition should be put on hold until the court reconvenes in the fall, giving Congress a chance to consider the implementing legislation.

The majority “ignores the appeal of the President in a matter related to foreign affairs, it substitutes its own views about the likelihood of congressional action for the views of Executive Branch officials who have consulted with Members of Congress, and it denies the request by four Members of the Court to delay the execution until the Court can discuss the matter at Conference in September,” Justice Breyer wrote. He was joined by Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan.

Write to Jess Bravin at jess.bravin@wsj.com

By LUCA DI LEO And JEFF BATER

WASHINGTON—The U.S. economy barely added jobs for the second month in a row in June and the unemployment rate rose to the highest level this year, adding to concerns the labor market will take years to recover.

The nation’s unemployment rate ticked up to 9.2% in June, with only 18,000 non-farm payrolls added to the economy. WSJ’s Sudeep Reddy and Phil Izzo join the News Hub panel to break down the numbers.

Nonfarm payrolls rose 18,000 last month, far fewer than expected, as small gains in the private sector were just enough to outweigh continued government-job losses, the Labor Department said Friday in its survey of employers. Payrolls data for the previous two months were revised down by a total 44,000 to show increases of only 25,000 jobs in May and 217,000 in April.

The jobless rate, which is obtained from a separate household survey, increased for the third straight month to 9.2% in June from 9.1% in May. It was the highest level since December 2010. There are 14.1 million Americans who would like to work but can’t get a job.

Economists surveyed by Dow Jones Newswires had forecast payrolls would rise by 125,000 and the jobless rate would remain steady at 9.1%.

A Historical View

U.S. unemployment since 1948

View Interactive

The choppy two-year-old recovery is proving to be one of the worst since the 1930s. It has been too slow to make up for all the jobs lost after the financial crisis of 2008 and 2009. With little scope left for policy to help, President Barack Obama is likely to confront the highest unemployment rate of any postwar incumbent when he seeks re-election in the fall of 2012.

Friday’s report showed private-sector employers, which account for about 70% of the work force, added 57,000 jobs in June, down from 73,000 in May. The weakness was broad-based.

Manufacturing employment remained weak, adding 6,000 jobs. Economists were expecting a rebound as disruptions to manufacturing production stemming from Japan’s earthquake should be easing. Employment in the battered construction sector was broadly unchanged. The housing sector remains a big drag on the economy.

Employment in professional and business services, which had shown strong gains in previous months, rose by 12,000.

Government employment fell by 39,000, the eighth drop in a row, following declines in all levels of government struggling to close budget gaps.

After spending funds to fight the crisis, policy makers have few tools left to stimulate the economy. Mr. Obama is focused on cutting the budget deficit, while the Federal Reserve, which sees unemployment at about 8.0% at the end of 2012, has already cut interest rates close to zero and is reluctant to purchase more government bonds now that inflation is rising.

Americans’ incomes, which are crucial to fuel the spending needed to boost the economy, edged lower. Average hourly earnings of all employees fell $0.01 to $22.99. Over the past year, earnings have increased by 1.9%.

Write to Luca Di Leo at luca.dileo@dowjones.com and Jeff Bater at jeff.bater@dowjones.com

By STEPHEN MILLER

For a decade starting in the late 1970s Barry Bremen bluffed his way into professional venues where he impersonated a New York Yankee, a professional golfer and the manager of an Emmy-winning actress.

View Full Image

Associated Press

Barry Bremen as a New York Yankee in 1979. He also impersonated a pro golfer and the San Diego Chicken.

Mr. Bremen, who died June 30 at age 64 of esophageal cancer, earned his living marketing lingerie, Famous Amos cookies and gag toys such as spectacles with spotlights.

But for kicks he sold himself as a range of professional sports figures and even, in a memorable football game in Texas, a Dallas Cowboys Cheerleader. He billed himself as “The Great Impostor.”

It was an era when exuberant sporting pranks counted as publicity-worthy. It was the days of streaking, of Morganna, baseball’s kissing bandit, and of Rollen Stewart, whose rainbow afro and “John 3:16″ sign were often seen at stadiums. Today such antics are as apt to attract Homeland Security as a puff-piece on NBC’s “Today” show.

Sports journalist Dick Schaap gave Mr. Bremen—a native of Michigan who grew up in the suburbs of Detroit—his first taste of national publicity, featuring him as “Sportsman of the Week” on NBC’s “Today” show for crashing the halftime warm-ups of the 1979 NBA All-Star game. Soon Mr. Bremen was on “Tonight” with Johnny Carson and the madness was established.

Mr. Bremen snuck on at the PGA US Open tournament at Toledo, Ohio, that year, playing most of a practice round with two pros before being discovered and hustled off the course by officials. Weeks later, he donned a Yankees uniform in Seattle and managed to get on the field to shag flies before the All-Star game. He was arrested during the team photo lineup.

In December came one of his master strokes: appearing in full regalia as one of the Dallas Cowboys Cheerleaders. At 6 feet 4 inches, Mr. Bremen stuck out despite the shaved legs and pom-poms, and barely produced a cheer before security dragged him to jail. Nearly all his stunts led to arrests, and he cheerfully paid the fines.

“What are they going to do?” he asked People magazine in 1980. “Put wanted posters at every entrance?”

Officials at the 1982 Super Bowl at the Pontiac Silverdome did just that—and apprehended Mr. Bremen as he tried to crash the game disguised as the San Diego Chicken.

During the 1980s, Mr. Bremen was indefatigable, briefly appearing on the sidelines as an NFL referee, playing more PGA championship golf, and provoking Los Angeles Dodgers manager Tommy Lasorda to throw Mr. Bremen—in a Mets uniform—off the field in Houston in an expletive-filled rage before the 1986 baseball All-Star game.

Departing from sports impersonations, Mr. Bremen strode on stage to accept a 1985 Emmy award meant for “Hill Street Blues” actress Betty Thomas, who was slow to stand up when her name was called. In his acceptance speech, Mr. Bremen thanked Mr. Schaap—and was subsequently fined $175 for interfering with an event.

Mr. Bremen’s family was more than accepting of his activities. His wife helped him create his cheerleader outfit, and two of his children even boasted of crashing the Playboy mansion as Gwyneth Paltrow and her agent.

Mr. Bremen eventually hung up his uniforms. He said he was discouraged after a knife-wielding assailant stabbed tennis star Monica Seles during a 1993 match in Germany.

“Security is not good to people who break in,” he told the Associated Press in 1997.

Write to Stephen Miller at stephen.miller@wsj.com

BY TAMER EL-GHOBASHY

Former Manhattan District Attorney Robert Morgenthau on Thursday praised his successor’s handling of the sexual assault case against the former chief of the International Monetary Fund.

Mr. Morgenthau’s statement comes a week after revelations that the case against Dominique Strauss-Kahn had weakened considerably after the credibility of his accuser was called into question by prosecutors working for Cyrus Vance Jr.

While supporters have said Mr. Vance acted ethically in bringing the concerns to the court’s attention, critics have said his office rushed to judgment by pushing for an indictment before the accuser’s background was investigated.

An attorney representing the accuser …

By JACK NICAS And ISABEL ORDONEZ

LAUREL, Mont.—Yellowstone floodwaters have covered nearly all of Jim Visser’s 26-acre property along the Yellowstone River since May, reaching a high point a week ago.

That’s when an Exxon Mobil Corp. pipeline broke eight miles upstream, leaking an estimated 1,000 barrels of oil into the river, which carried the crude across pastures and farmland.

View Slideshow

Associated Press

Cleanup crews worked to clear oil. To broaden its search for the oil, Exxon planned to test whether the river was safe to navigate with a jet-powered boat.

As the contaminated floodwater washed over Mr. Visser’s land this week, vegetation was stained black, clumps of oil were caught in brush and black rings on tree trunks marked where the waters had risen.

“It looks like a wasteland,” said Mr. Visser, 55 years old, who works as Yellowstone County’s noxious-weed superintendent. “They’ll clean it up as best as they can, but at some point nature’s going to have to take care of what’s left.”

Cleanup crews have focused on about 20 miles of river between where the pipe broke in Laurel, a city of 6,700, and Billings, Mont., population 104,000, according to Jim Martin, regional director for the Environmental Protection Agency.

Federal officials said there were signs of oil as far as 240 miles downstream. Mr. Martin said the scope of contamination was unclear. “We don’t know what we’re going to find when the river recedes,” he said.

In an interview Thursday, Montana Democratic Gov. Brian Schweitzer said the floodwaters deposited most of the oil by the time they left Billings, likening the river to a bowl of water with a splash of vegetable oil. “The oil sits on top. Add more water and the oil is first over the edge,” he said.

View Full Image

Reuters

Workers clean up oil this week along the Yellowstone River in Laurel, Mont. Up to 1,000 barrels of oil leaked into the water from a busted pipe.

Montana’s renowned fishing industry has mostly avoided harm, local anglers and officials said, because the affected stretch of river happens not to be good for fishing—too warm for trout and too cold for most other fish.

Mr. Schweitzer estimated oil reached the property of 50 to 300 people, including 2,000 to 5,000 acres of farmland. “For the folks who’ve been affected, they’ve been affected in a very dire way,” he said. “But out of the $3 billion agricultural economy in Montana, this is a small setback.”

The spill also affects many farmers with uncontaminated land as the Yellowstone is an important irrigation source.

Lloyd Webber, a 73-year-old cattle rancher, has oil residue on some of his land, but said he had confidence in Exxon after company officials addressed the public at a meeting Wednesday. “Seemed to me like they have a pretty good handle on it and they’re trying to do what they can,” he said.

In Laurel, local officials said they have been raising concerns for months about the pipeline being vulnerable.

In late 2010, foreseeing the potential for flooding, Kurt Markegard, Laurel’s director of public works, began seeking financial support to bolster levees near where the pipeline crosses the river.

Mr. Markegard asked federal pipeline regulators to arrange a meeting with local oil companies, he said in an interview. Representatives from Laurel, the U.S. Pipeline and Hazardous Materials Safety Administration, Exxon and other companies met at the levee, he said, but no one pledged the support the town requested.

After flooding began in May, Exxon called Mr. Markegard to discuss the pipeline, he said. But Mr. Markegard said the river already was flowing so fast he didn’t think it would be possible to reach the pipeline to strengthen it.

Exxon spokesman Alan Jeffers declined to comment on the alleged conversation but said the company did what was required when the city raised concerns.

Just after dawn Thursday, the smell of oil hung on the air as cleanup workers in hard hats convened near the site of the pipeline rupture. Workers broke into teams and used absorbent pads and boom lines to collect oil as the slow-moving floodwater flowed past.

In one spot about a half-mile downstream from where the pipe broke, the river was flooded and muddy, but there were no signs of oil. Up the riverbank, trash bags packed with oil-soaked pads and boom filled a dumpster.

Farther downstream, stretches of the river are accessible only by boat or foot. But boats are unsafe with the river flowing so fast, so “we have people literally walking miles and miles and miles of river,” Mr. Martin said. “There are crews out there on their hands and knees either digging out or chopping down vegetation or literally scraping up the oil.”

For the past decade, Mr. Visser put everything he had into preserving his property along the Yellowstone River. Last year, he hosted a friend’s wedding and his son’s engagement party on the wooded spread, also a haven for whitetail deer and wild turkeys.

Mr. Visser said he was eager for the cleanup to reach his land. “It’s really disheartening,” he said.

“Now I’m not saying anything against Exxon. As long as we live with combustible fuels, this process is going to go on.”

Write to Isabel Ordonez at Isabel.ordonez@dowjones.com

By ARIAN CAMPO-FLORES

KENNEDY SPACE CENTER, Fla.—Bad weather is threatening Friday morning’s launch of space shuttle Atlantis, in what would be the last blastoff of the 30-year shuttle program.

Around the World (About 20,000 Times)

A brief catalog of the Space Shuttle program’s missions

View Interactive

A Space History Sampler

Take a look back at the history of space travel and the U.S. space shuttle program.

View Slideshow

NASA

The Endeavour and its crew of six glided into Runway 15 at Kennedy Space Center on Jan. 20, 1996, after spending nine days in space on the STS-72 mission.

• 
  
  More photos and interactive graphics
  
  

The “weather is not looking good for launch,” said shuttle weather officer Kathy Winters at a news briefing Thursday morning. She put the chances of favorable conditions for the 11:26 a.m. Friday launch time at only 30%. Among the concerns are heavy clouds, showers and lightning.

The mission is the 135th of the $209.1 billion shuttle program and heralds the end of an era when the U.S. fleet of reusable craft dominated human spaceflight.

The event is expected to draw as many as one million spectators to the Cape Canaveral area, all angling to catch a glimpse of a historic moment. “The anticipation has been really high,” said Rob Varley, executive director of the Space Coast Office of Tourism.

If the liftoff is delayed, officials at the National Aeronautics and Space Administration said they have until Sunday, or perhaps Monday, to try again. Otherwise, the Atlantis launch will have to wait until the following weekend, due to a previously scheduled rocket launch. The likelihood of favorable weather is expected to improve through the weekend, reaching 60% on Sunday, said Ms. Winters.

Tourists were already pouring into the region Thursday. Prime vantage points like Space View Park in Titusville were filling up with cars and mobile homes. Virtually every hotel within 25 miles was booked solid. At the visitor complex here, the entrance was choked with people from all over the world.

Among them was Janice Frank, a 52-year-old chemistry teacher who came with her husband and two children from Austin, Texas, to see the launch. “It’s just epic,” she said. “I can remember sitting in the living room watching astronauts land on the moon. How far we’ve come since then is phenomenal.”

View Full Image

Reuters

A NASA contractor photographs the space shuttle Atlantis on the launch pad Thursday at Cape Canaveral, Fla.

Atlantis’s 12-day mission, manned by a four-person crew, is aimed primarily at restocking the International Space Station. The orbiter will carry a module filled with 8,640 pounds of supplies, enough to keep the station crew provisioned for up to a year.

The shuttle and space-station crews will also perform several experiments, including testing technology to refuel satellites robotically and trying out a new method for recycling wastewater in space.

Though NASA officials have often strived to present a stoic face in discussing the final mission, payload mission manager Joseph Delai became emotional while discussing the cargo module at the Thursday news briefing. “It’s not a piece of metal, it’s a way of life,” he said. “It’s emotional, but it’s also part of history. I think that’s what you’re seeing from a lot of folks down here.”

The sentiment is shared by many who have come to see Atlantis blast off. Tom Baker, who traveled from Maryland with three friends to see his third and final launch, laments that American astronauts must now depend on Russian capsules to reach the space station. “You would’ve thought there was something here to replace it already,” he said.

Upon Atlantis’s return to earth, scheduled for July 20, the orbiter will be prepared for retirement at the space center.

By JOHN R. EMSHWILLER And TAMARA AUDI

PASADENA, Calif.—A three-judge federal panel pressed a U.S. Justice Department attorney Thursday to justify the government’s decision to force psychotropic drugs on Jared Loughner, who is accused of shooting Rep. Gabrielle Giffords and 18 others in January in Tucson, Ariz.

The judges appeared skeptical of the government’s argument that Mr. Loughner could be involuntarily medicated without clearance from a court.

The government attorney argued that under a Supreme Court decision, federal prison officials can make such a decision on their own when they determine that someone in their custody is a danger to himself or others.

Prison officials, who have had custody of Mr. Loughner since the January shootings, made such a determination last month at a hearing in the Missouri prison where the defendant is being held, citing incidents where he had thrown chairs in his cell and spit at his attorney.

However, late last week, the three-judge appellate panel ordered the forcible medication to be at least temporarily stopped as they considered the case. The battle over medicating Mr. Loughner, who has been diagnosed as a schizophrenic, will be a key determinant whether he will ever stand trial for allegedly killing six people and wounding 13 others, crimes that could bring the death penalty if he is convicted.

The panel could render a decision at any time, but a court spokesman noted the panel has approached the Loughner case “with a sense of urgency” making it likely the panel would rule sooner rather than later.

At the Thursday hearing here, the judges drew a distinction between a convicted inmate, who was the subject of the Supreme Court decision, and a pretrial detainee, such as Mr. Loughner, who has the presumption of innocence.

“Why should someone presumptively innocent not be treated with greater personal deference” than an inmate, asked Judge Alex Kozinski, chief judge of the Ninth Circuit Court of Appeals.

Whether a person is an inmate or a pre-trial detainee “when you are dangerous in a prison setting, you are dangerous,” said Christina Cabanillis, the assistant U.S. attorney representing the government at the hearing.

The judges questioned Ms. Cabanillis, often interrupting her and asking her to more closely listen to their questions, for nearly an hour in what turned into an unexpectedly long hearing of over 90 minutes.

The three judges also challenged Mr. Loughner’s attorneys. Panel members were dubious about the attorneys’ claim that forcibly medicating him was automatically causing him irreparable harm.

Forced medication “is an injury to his personal autonomy, his personal dignity,” said Reuben Cahn, an attorney for Mr. Loughner.

“Let’s say I don’t buy that,” said Judge Kozinski. “Do you have a back-up?” Judge Kozinski seemed willing to weigh the potential harm that psychiatric drugs could do to a patient—an argument that Mr. Loughner’s attorneys had made in their court filings.

A major issue in the oral arguments revolved around the purpose for medicating Mr. Loughner. The government said it was because he was deemed dangerous to prison staff. However, his attorneys argued that the government was using that as an excuse to make an “end run” around the more demanding federal rules governing a prisoner who has been deemed mentally incompetent to stand trial.

In May, federal Judge Larry Burns, who is presiding over the Loughner case, declared the defendant incompetent to stand trial because of psychiatric problems. That ruling put his trial on hold while prison medical officials evaluate and possibly treat him in an effort to restore him to competency.

Ms. Cabanillis, the government attorney, said that if Mr. Loughner resumed treatment because he was a danger and happened to be returned to competence at the same time that would be an “incidental effect” that “doesn’t undermine” the legality of the treatment.

Write to John R. Emshwiller at john.emshwiller@wsj.com and Tamara Audi at tammy.audi@wsj.com

By JULIAN E. BARNES

WASHINGTON—The top U.S. military officer accused Iran on Thursday of shipping new supplies of deadly weapons to its militia allies in Iraq, in what he described as Tehran’s bid to take credit for forcing American troops to go home.

Agence France-Presse/Getty Images

Adm. Mike Mullen testifies before the House Armed Services Committee in Washington on March 31.

Adm. Michael Mullen, speaking to the Pentagon Press Association, said Iran had curtailed weapons shipments, including powerful rockets and roadside bombs, in 2008 but resumed them recently. Top-level officials in Tehran know about the weapons shipments, he said.

“Iran is very directly supporting extremist Shiite groups which are killing our troops,” said Adm. Mullen, chairman of the Joint Chiefs of Staff. “There is no question they are shipping high-tech weapons in there…that are killing our people. And the forensics prove that.”

The Wall Street Journal first reported in its weekend editions that Iran’s Islamic Revolutionary Guard Corps was shipping arms to allies in Iraq and Afghanistan. Iranian officials interviewed for that article denied the charge.

On Thursday, two more U.S. troops were killed by a roadside bomb outside a Baghdad military base. Officials believe an explosively formed projectile, many of which are manufactured in Iran, was responsible. The weapons are designed to penetrate layers of armor.

The alleged arms transfers come at a time when the U.S. and Iraq are flirting with the idea of keeping as many as 10,000 American troops in Iraq after the Dec. 31 withdrawal deadline. U.S. officials favor a continued presence, but promise they will withdraw fully unless invited to stay by Baghdad.

The current Iraqi government remains bitterly divided over whether the Americans should leave a residual force.

Discussions over a longer-term U.S. presence have focused on the numbers of troops that could remain and the military capabilities the Americans could help the Iraqis develop if they did so, Adm. Mullen said.

“There are clear capability gaps the Iraqis security forces are going to face,” he said.

Iraqis need help with their air force, air defenses and integrating and using intelligence, Adm. Mullen said.

Adm. Mullen said a decision on whether the U.S. stays in Iraq is up to Baghdad’s government and President Barack Obama, but he said the U.S. presence in Arab countries has been a “stabilizing” force in an important, volatile region.

Some defense analysts and officials have said Iran is supporting political parties and militant groups in hopes of controlling the government in Baghdad, and ensuring that Iraq remains friendly to Tehran. The two countries fought a devastating war in the 1980s.

Adm. Mullen said he believed Tehran was trying to play an outsized role in Iraqi politics. “There is no question they want influence, particularly in the south,” a Shiite-dominated area, he said.

By CAROL E. LEE, JANET HOOK and NAFTALI BENDAVID

President Barack Obama and congressional leaders agreed Thursday to strive for a blockbuster deficit-reduction deal and will spend the weekend determining whether political support is possible for a sweeping plan to curb entitlements and make major tax-code changes.

Obama said progress was made in a meeting with congressional leaders on how to slash the U.S. deficit and clear the way for raising the federal borrowing limit. Jerry Seib has details from Washington.

The package to reduce the federal deficit by $4 trillion or more over 10 years is much more ambitious than negotiators envisioned just two weeks ago, and represents the most far-reaching of three options Mr. Obama presented to lawmakers Thursday in a closed-door meeting in the White House Cabinet Room.

To achieve such a reduction, negotiators likely would have to agree to spending cuts for domestic programs, defense and entitlement programs such as Medicare and Medicaid, as well as boost tax revenues. Most negotiators agree that spending reductions would outweigh any new revenues by a sizable margin, though significant reductions in tax breaks and deductions for businesses also likely would be part of the mix.

Such a deal would have to overcome many hurdles to pass a divided Congress in time to clear the way for a vote to raise the government’s $14.29 trillion borrowing limit before Aug. 2. Treasury Department officials say that without a higher debt ceiling the government will begin to default on its obligations, including debt payments.

Investors in U.S. Treasurys aren’t betting that a major deal is going to solve the U.S. debt problem in one fell swoop.

Nor do bond buyers appear worried that a deal won’t be reached. While yields—which rise when prices fall—have risen on better-than-expected economic data lately, they still remain low by historical standards. Late Thursday, as stocks jumped, investors pushed down the price of the benchmark 10-year note 15/32 to yield 3.151%.

View Full Image

Reuters

Reps. Pelosi and Boehner and Presidet Obama at the Thursday meeting.

While lawmakers in both parties cheered the idea of a big deficit-reduction deal, they dug in their heels on several key issues. Liberal Democrats are furious that Mr. Obama has opened the door to significant changes to Medicare, Medicaid and Social Security, and many Republicans continue to resist tax increases.

House Speaker John Boehner (R., Ohio), who met with Mr. Obama and other congressional leaders at the White House Thursday, told his Republican colleagues the parties will know in a matter of days if a large deal is possible and gave the prospects of one a 50-50 chance.

Mr. Obama sounded optimistic about reaching deal, but acknowledged in brief comments to reporters that Democrats and Republicans “are still far apart on a wide range of issues.”

Staff members from the White House and Congress will work on drafting an agreement through Saturday. Mr. Obama will then meet with congressional leaders at the White House Sunday, a meeting that is expected to last most of the afternoon and into the evening.

“At that point, the parties will at least know where each other’s bottom lines are and will hopefully be in a position to then start engaging in the hard bargaining that’s necessary to get a deal done,” Mr. Obama said after Thursday’s White House meeting. “Everybody acknowledged that there’s going to be pain involved politically on all sides.”

The White House needs a deficit reduction agreement to get enough votes in Congress to raise the debt ceiling and avoid default, which leaders from both parties say could trigger another economic recession. Administration officials have said the parties must reach a deal by July 22 to give legislation time to get through the Republican-controlled House and Democratic-led Senate.

Hitting the Ceiling

See what the federal debt limit has been at year-end since 1940.

View Interactive

Until this week, White House officials and congressional leaders had been looking at a deficit reduction package of a roughly $2 trillion over 10 years and were at an impasse over taxes. But the idea of a grand plan that would tackle the sticking points on both sides gained traction last weekend when Messrs. Obama and Boehner met secretly at the White House.

Mr. Obama told lawmakers Thursday he wouldn’t sign any agreement that does not extend the debt ceiling through the 2012 election, people briefed on the meeting said. He then presented lawmakers with three options, these people said: a small deal that would shrink the federal deficit by just over $2 trillion over 10 years that would be accompanied by a vote to raise the debt ceiling through November 2012; a $3 trillion deal; and deal in the range of $4 trillion.

The larger deal could tether entitlement program changes to a broad tax overhaul that would end tax breaks to generate the revenue Democrats want in exchange for lowering individual and corporate rates, which Republicans want.

Most of the eight lawmakers in the room favored the largest option, people familiar with the meeting said, though a few favored the $3 trillion choice. Sen. Jon Kyl (R., Ariz.), and Rep. Eric Cantor (R., Va.) said they would prefer the biggest deficit cut possible but do not think it’s achievable, people familiar with the exchange said.

Mr. Cantor, though, balked at Mr. Obama’s plan to include more than $1 trillion in tax increases, Mr. Cantor’s spokesman, Brad Dayspring, said.

Democrats worry that a big deal by definition means more spending cuts than they want and are anxious that there’s been more talk about cutting entitlements than raising taxes. They’re also reluctant to include savings from Medicare because they believe that would rob them of a key argument against Republicans in 2012: an earlier House GOP vote for deep Medicare cuts.

Republicans, meanwhile, are concerned that a larger deal would mean they ultimately give up some of the Bush-era tax cuts, which the parties agreed to last year to extend through 2012.

The White House and some in Congress believe that lawmakers could be attracted to the idea of participating in a sweeping, historic package, one that would be discussed for decades. They argue that the big deal is easier to sell to rank and file members than a small one because it would be large enough for everyone to declare victory and hit the 2012 campaign trail saying they accomplished a significant deal that tackles an issue that is of rising concern for voters.

All sides acknowledge that any deal will need support from Democrats and Republicans to pass.

One major proposal under consideration is to alter the way the federal benefits and taxes are adjusted for inflation. Another proposal being discussed would permanently change the alternative minimum tax so it doesn’t hit millions of middle-income Americans.

While such a deal could help Mr. Obama’s re-election prospects by appealing to independent voters, it puts him on a collision course with some members of his own party.

House Minority Leader Nancy Pelosi (D., Calif.) and House Democratic Whip Steny Hoyer (D., Md.) told the president they’re in favor of the bigger deal, but raised House Democrats’ concerns about cuts to Social Security and Medicare, people briefed on the meeting said. Ms. Pelosi and other Democrats later said they’re open to changes so long as they do not cut benefits—and that they be enacted separately from a deficit deal.

A bigger deal also carries risks for Mr. Boehner. Any openness to tax increases pits the speaker against the conservative wing of his caucus. The speaker assured colleagues he is not giving ground on the GOP pledge to oppose tax increases.

But some of the party’s most conservative members—including freshmen elected in 2010 with strong tea-party support—may oppose any debt-limit increase even with a $4 trillion deficit-reduction deal attached. The Republican Study Committee, a large conservative faction in the House, is demanding even deeper spending cuts, strict spending caps, and a constitutional balanced-budget amendment as a condition of raising the debt limit.

Some Republicans are also irked about the private nature of the talks. “I’ve been frustrated from the beginning that the public has been excluded” from the debt-limit talks, said Rep. Jim Lankford (R.,Okla.).

—Damian Paletta, John D. McKinnon and Matt Phillips contributed to this article.

Write to Naftali Bendavid at naftali.bendavid@wsj.com

By ANNA RAFF

A protective berm holding back floodwaters from a Nebraska nuclear power plant collapsed early Sunday after it was accidentally torn, surrounding containment buildings and key electrical equipment with Missouri River overflow.

Nuclear Regulatory Commission inspectors verified that processes to cool the reactor and spent-fuel pool were unaffected, the agency said in a press release.

The 484-megawatt Fort Calhoun plant, located 19 miles north of Omaha, had been shut down since April 7 for refueling, and the NRC has said it won’t be restarted until floodwaters recede.

Regulators have been keeping close watch on Fort Calhoun and Cooper Nuclear Station, both operated by the state of Nebraska, as flooding along the Missouri River has become increasingly widespread.

Two years ago, deficiencies in flood preparation at the plant were found during an inspection, but were remedied.

The situation in Nebraska has developed amid heightened fears about nuclear safety following the catastrophe at the Fukushima Daiichi plant in Japan. The damage wreaked by an earthquake-triggered tsunami in early March was the cause of a series of explosions and the release of harmful radiation.

The water-filled berm—not required by NRC regulations— provided supplemental protection. It collapsed at about 1:25 a.m. after it was accidentally torn while work was being performed at the site, according to Victor Dricks, an NRC spokesman.

The berm, essentially a huge inner tube, subsequently collapsed. Mr. Dricks said he didn’t know the exact nature of the work that was underway.

The auxiliary and containment buildings surrounded by water are protected by design to a floodwater level of 1,014 mean sea level. Missouri River levels aren’t expected to exceed 1,008 feet.

The berm’s collapse allowed floodwaters to wash around the main electrical transformers. As a result, emergency diesel power generators were started. Later in the day, power was restored.

The NRC’s Mr. Dricks said temperature monitors were working properly and temperatures of key parts of the nuclear power plant were normal. Water has not seeped into any of the containment structures, he said.

Even when in shutdown mode, a nuclear plant requires electricity to keep key components cool in order to avoid any degradation or melting of the core that could result in the release of radiation.

In response to the berm collapse, the NRC has activated its Incident Response Center. The lowest of four levels of emergency notification remain in effect for the plant.

NRC Chairman Gregory Jaczko is scheduled to visit the plant on Monday. Water levels were receding a bit overnight, but weather forecasts are calling for more rain.

Write to Anna Raff at anna.raff@dowjones.com

By GEOFFREY A. FOWLER And CAROL E. LEE

New York’s decision to permit same-sex marriages sets the stage for battles in half a dozen other states and could propel gay rights as a political wedge issue in the 2012 elections.

The new battle lines were already being drawn as states such as Minnesota prepared to take on the same-sex marriage issue in the near future and as the New York law put fresh pressure on President Barack Obama to articulate a clearer position on the topic.

Proud of Their State

View Slideshow

Agence France-Presse/Getty Images

Motorcycle riders take part in the New York City gay pride parade on Sunday.

Gay-rights advocates, who celebrated Sunday at parades across the country, said New York’s move—a bill permitting same-sex marriage that was championed by Democrat Gov. Andrew Cuomo and passed by a Republican-led state Senate on Friday—marked a turning point in the nearly 20-year political and legal debate over the definition of marriage. “This is an immense win that brings giant momentum to the movement to end marriage discrimination in the U.S.,” said Evan Wolfson, president of national gay rights group Freedom to Marry.

After the gay-pride parade Sunday in New York, Mr. Cuomo said, “I think you’re going to see this message resonate all across the country now. If New York can do it, it’s OK for every other place to do it.”

Opponents said they would go on the attack against Republicans who support gay marriage. Brian Brown, president of the National Organization for Marriage, said New York’s move was a “disaster for the Republican party,” and that his group planned to spend $2 million over the next 18 months to defeat the legislators who supported it.

But those GOP lawmakers also received pledges of support from Wall Street, including from hedge fund manager Cliff Asness of AQR Capital Management. The political action committee of the Gill Action foundation, started by Tim Gill, promised aid.

A cadre of financial executives including Paul Singer, head of New York-based Elliott Associates, have been organizing efforts to support gay marriage for more than a year.

In September, Mr. Singer and Ken Mehlman, a partner and global head of public affairs at Kohlberg Kravis Roberts and a former chairman of the Republican National Committee, were among the organizers of a fund-raiser to help push gay marriage legislation. Daniel Loeb, head of New York hedge-fund firm Third Point LLC, joined forces with Mssrs. Singer and Mehlman, telling colleagues and others that he considers it a civil-rights issue, one person close to him said. Hedge-fund investors have been calling to thank Mr. Loeb for backing the measure, the person said. Mssrs. Singer and Loeb themselves declined to comment through spokespeople.

New York’s move may have implications in other states. Minnesota bans gay marriage and voters there will consider a constitutional amendment next year that would add a heterosexual definition of marriage to the constitution. Bill backers and gay rights leaders have pledged to raise at least $4.7 million for their campaigns.

In North Carolina, home of the 2012 Democratic National Convention, the state is weighing whether voters should take up a constitutional ban on gay marriage. Legislators in Maryland and Rhode Island are considering pro-gay marriage bills of their own.

Gay-rights leaders in Oregon and California, where 2008′s Proposition 8 banned same-sex marriages, are also weighing whether to bring pro-gay marriage initiatives to the ballot next year.

“It is absolutely important that we continue fighting just as hard, even stronger, in Maryland and everywhere else,” said Robert Broadus, the head of Protect Marriage Maryland, who was in New York last week trying to help defeat the vote.

View Full Image

Associated Press

Lee Moulton, at San Francisco’s parade on Sunday, salutes New York.

President Obama, who supports civil unions, has said his position on same-sex marriage is “evolving.” At a Manhattan fund-raiser with gay and lesbian donors Thursday, Mr. Obama expressed support for the process New York was undergoing. In doing so, he angered some Democratic supporters, who said leaving marriage up to states shifts the burden in what they believe should be a federal issue.

“The progressive Democratic community is looking at Andrew Cuomo and seeing Bobby Kennedy and the president is not looking very politically astute by comparison,” said Richard Socarides, who advised President Bill Clinton on gay-rights issues. “People remember that when he ran for president he said, ‘I want to change the country.’ Now he’s saying to gay people, ‘If you want change, look to your state legislature?’ ”

Mr. Obama “has long believed that gay and lesbian couples deserve the same rights and legal protections as straight couples,” said Obama spokesman Shin Inouye. “The states should determine for themselves how best to uphold the rights of their own citizens. The process in New York worked just as it should.”

New York’s move more than doubles, to 35 million, the number of Americans who live in states that permit same-sex marriage. Five other states, plus the District of Columbia, also allow gay weddings.

Tens of thousands of gay rights supporters marched through Paris Saturday to mark the 10th Gay Pride weekend, buoyed by New York’s move to legalize same-sex marriage. Video courtesy of AFP.

A May Gallup poll, echoing a March Washington Post-ABC News poll, found 53% of Americans believe same-sex marriage should be recognized as valid, with the same rights as heterosexual marriages. The poll, which has a sampling error of 4%, found 44% support for same-sex marriage last year.

Opponents point to a May Alliance Defense Fund poll which claimed a 2.53% margin of error found that 62% of Americans think marriage should be defined “only as a union between one man and one woman.”

—Jenny Strasburg, Andrew Grossman and Steve Eder contributed to this article.

Write to Geoffrey A. Fowler at geoffrey.fowler@wsj.com

By PATRICK O’CONNOR

WASHINGTON—Two top congressional Republicans said Sunday that Congress won’t approve a deficit-reduction package that includes tax increases, reiterating a stand as President Barack Obama joins talks on the issue this week.

However, Arizona Sen. Jon Kyl, the No. 2 Republican in the Senate, left room for maneuver on raising revenue in ways that might not be defined as a tax increase.

Associated Press

Sen. Jon Kyl (R-Ariz.).

“We’ve been discussing some fee increases and some other things that would actually generate revenue,” he said on “Fox News Sunday.” “But what we object to is changing the tax code. We don’t need new taxes right now. We need to reduce spending.”

Proposed ways to reduce the U.S. budget deficit include ending tax breaks for ethanol producers or other energy companies, and revising tax deductions for corporate jets. Some call those steps tax increases, while others describe them as closing tax loopholes.

Mr. Kyl, who abandoned White House talks last week, joined Senate Minority Leader Mitch McConnell (R., Ky.) on Sunday by pointing to resistance in the Republican-controlled House as a practical hurdle to including revenue increases in the final package.

“It’s just not going to work,” Mr. McConnell said during an interview on ABC’s “This Week.” In the interview, the Kentucky Republican said Democrats have also opposed past measures to raise taxes.

The president meets with congressional leaders from both parties this week as he tries to obtain a deficit-reduction package from Congress in exchange for legislation to increase the country’s borrowing limit from $14.2 trillion. Congress has until Aug. 2 to increase the debt ceiling or risk a default that would roil world markets.

Both parties have accused the other of embracing partisan ideology over practical reality. On Sunday, Mr. Kyl said Mr. Obama needs to decide between opposition to tax breaks for big industries and a measure that Congress can pass.

In a separate appearance on ABC’s “This Week,” South Carolina Rep. James Clyburn, a senior Democrat who was also involved in the bipartisan deficit-reduction talks, said Republicans need to accept reasonable measures to increase revenue. Mr. Clyburn accused GOP leaders of walking away from negotiations right as the group was finalizing an agreement.

On CNN’s ” State of the Union,” House Minority Leader Nancy Pelosi (D, Calif.) said she “has no objections” to Mr. Obama and House Speaker John Boehner (R, Ohio) entering talks on the deficit but said if they want House Democrats to come on board, “then Democrats will have to be part of the agreement.”

Ms. Pelosi said special-interest tax loopholes run rampant and must be closed. Also, the final agreement needs to include more than just spending cuts, she said. “You cannot achieve what you set out to do if you say it’s just about cutting,” Ms. Pelosi said. “It has to be about increasing the revenue stream.”

The only point on which the party leaders agreed: A deal needs to happen fast, before the brinksmanship spooks bond markets and interest rates spike. “It need not go necessarily to the 11th hour,” Mr. McConnell said.

Write to Patrick O’Connor at patrick.oconnor@wsj.com

By GEOFFREY A. FOWLER And CAROL E. LEE

New York’s decision to permit same-sex marriages sets the stage for battles in half a dozen other states and could propel gay rights as a political wedge issue in the 2012 elections.

The new battle lines were already being drawn as states such as Minnesota prepared to take on the same-sex marriage issue in the near future and as the New York law put fresh pressure on President Barack Obama to articulate a clearer position on the topic.

Proud of Their State

View Slideshow

Agence France-Presse/Getty Images

Motorcycle riders take part in the New York City gay pride parade on Sunday.

Gay-rights advocates, who celebrated Sunday at parades across the country, said New York’s move—a bill permitting same-sex marriage that was championed by Democrat Gov. Andrew Cuomo and passed by a Republican-led state Senate on Friday—marked a turning point in the nearly 20-year political and legal debate over the definition of marriage. “This is an immense win that brings giant momentum to the movement to end marriage discrimination in the U.S.,” said Evan Wolfson, president of national gay rights group Freedom to Marry.

After the gay-pride parade Sunday in New York, Mr. Cuomo said, “I think you’re going to see this message resonate all across the country now. If New York can do it, it’s OK for every other place to do it.”

Opponents said they would go on the attack against Republicans who support gay marriage. Brian Brown, president of the National Organization for Marriage, said New York’s move was a “disaster for the Republican party,” and that his group planned to spend $2 million over the next 18 months to defeat the legislators who supported it.

But those GOP lawmakers also received pledges of support from Wall Street, including from hedge fund manager Cliff Asness of AQR Capital Management. The political action committee of the Gill Action foundation, started by Tim Gill, promised aid.

A cadre of financial executives including Paul Singer, head of New York-based Elliott Associates, have been organizing efforts to support gay marriage for more than a year.

In September, Mr. Singer and Ken Mehlman, a partner and global head of public affairs at Kohlberg Kravis Roberts and a former chairman of the Republican National Committee, were among the organizers of a fund-raiser to help push gay marriage legislation. Daniel Loeb, head of New York hedge-fund firm Third Point LLC, joined forces with Mssrs. Singer and Mehlman, telling colleagues and others that he considers it a civil-rights issue, one person close to him said. Hedge-fund investors have been calling to thank Mr. Loeb for backing the measure, the person said. Mssrs. Singer and Loeb themselves declined to comment through spokespeople.

New York’s move may have implications in other states. Minnesota bans gay marriage and voters there will consider a constitutional amendment next year that would add a heterosexual definition of marriage to the constitution. Bill backers and gay rights leaders have pledged to raise at least $4.7 million for their campaigns.

In North Carolina, home of the 2012 Democratic National Convention, the state is weighing whether voters should take up a constitutional ban on gay marriage. Legislators in Maryland and Rhode Island are considering pro-gay marriage bills of their own.

Gay-rights leaders in Oregon and California, where 2008′s Proposition 8 banned same-sex marriages, are also weighing whether to bring pro-gay marriage initiatives to the ballot next year.

“It is absolutely important that we continue fighting just as hard, even stronger, in Maryland and everywhere else,” said Robert Broadus, the head of Protect Marriage Maryland, who was in New York last week trying to help defeat the vote.

View Full Image

Associated Press

Lee Moulton, at San Francisco’s parade on Sunday, salutes New York.

President Obama, who supports civil unions, has said his position on same-sex marriage is “evolving.” At a Manhattan fund-raiser with gay and lesbian donors Thursday, Mr. Obama expressed support for the process New York was undergoing. In doing so, he angered some Democratic supporters, who said leaving marriage up to states shifts the burden in what they believe should be a federal issue.

“The progressive Democratic community is looking at Andrew Cuomo and seeing Bobby Kennedy and the president is not looking very politically astute by comparison,” said Richard Socarides, who advised President Bill Clinton on gay-rights issues. “People remember that when he ran for president he said, ‘I want to change the country.’ Now he’s saying to gay people, ‘If you want change, look to your state legislature?’ ”

Mr. Obama “has long believed that gay and lesbian couples deserve the same rights and legal protections as straight couples,” said Obama spokesman Shin Inouye. “The states should determine for themselves how best to uphold the rights of their own citizens. The process in New York worked just as it should.”

New York’s move more than doubles, to 35 million, the number of Americans who live in states that permit same-sex marriage. Five other states, plus the District of Columbia, also allow gay weddings.

Tens of thousands of gay rights supporters marched through Paris Saturday to mark the 10th Gay Pride weekend, buoyed by New York’s move to legalize same-sex marriage. Video courtesy of AFP.

A May Gallup poll, echoing a March Washington Post-ABC News poll, found 53% of Americans believe same-sex marriage should be recognized as valid, with the same rights as heterosexual marriages. The poll, which has a sampling error of 4%, found 44% support for same-sex marriage last year.

Opponents point to a May Alliance Defense Fund poll which claimed a 2.53% margin of error found that 62% of Americans think marriage should be defined “only as a union between one man and one woman.”

—Jenny Strasburg, Andrew Grossman and Steve Eder contributed to this article.

Write to Geoffrey A. Fowler at geoffrey.fowler@wsj.com

By JACK NICAS

MINOT, N.D.—Key levees held as the Souris River crested here early Sunday, marking the climax of a record-shattering flood that promises to scar this city for years to come.

In less than four days, the river filled the valley that runs through the city with an average of seven feet of water, with some places reaching 14 feet deep, Mayor Curt Zimbelman said. Some 4,000 homes are flooded.

A third of Minot, N.D. has been flooded by the Souris River, which crested early Sunday after reaching record-shattering levels earlier in the week. WSJ’s Jack Nicas reports.

A helicopter tour reveals a town submerged: baseball fields; a golf course; the state fairgrounds; a shopping mall and neighborhood after neighborhood – some dotted with homes with water to the front steps, others virtual lakes with shingled rooftops poking out.

Still holding is a one-mile stretch of 16- to 20-foot dirt walls that stands between the swollen Souris and thousands of dry homes. On Sunday, the river still raged through Minot at 27,600 cubic feet a second—five times the fastest rate of the past three decades, Mr. Zimbelman said. Workers are constantly repairing any erosion on the levee, and officials said they would raze two nearby homes to widen it if necessary.

The Souris, which is known by locals as the Mouse River, dips in and out of North Dakota from Canada. With reservoirs upstream full from heavy snowmelt and rainfall, recent storms forced officials to release unprecedented flows. On Friday alone, the river rose more than four feet in 18 hours.

After reaching a peak of nearly four feet above its 1881 record, the Souris receded about an inch Sunday. Forecasters predicted the river will still be a foot above its record by next Sunday with 10 feet to go before it dips below flood levels.

Once that happens, the city will focus on recovery. “This flood was unprecedented,” Mr. Zimbelman said. “And it’s going to take an unprecedented amount of time to recover.”

Risk Levels

See the latest data from flood gauges throughout the Midwest and South.

View Interactive

• 
  
  More photos and interactive graphics
  
  

Minot was booming when the Mouse overspilled its banks. North Dakota has the nation’s lowest unemployment rate at 3.2%. From 2006 to 2010, Minot’s population grew nearly 18%. Workers drawn to the state’s booming oil industry have flocked to Minot. As a result, virtually every bed in the city is taken.

“It takes a matter of hours to sell a home,” said local real-estate agent Dawn Rasmussen

Many of the 11,000 people evacuated Wednesday eventually will return to their homes but some will not, considering the degree of damage and widespread lack of flood insurance. Officials estimate 10% of the flood victims had flood insurance.

At the Crest in Minot

View Slideshow

Scott Olson/Getty Images

A MInot cul-de-sac was covered in river water Sunday.

Local real-estate agent Dawn Rasmussen did not, and now her eight-month-old home has water to its second level. But few thought such a flood was possible after upstream dams were constructed years ago, she said. “When my clients asked me if they needed flood insurance, I was like, ‘No, you don’t.’”

The Federal Emergency Management Agency approved Minot for individual assistance this week. And FEMA spokesman Ed Conley said temporary housing will likely be part of the city’s aid package.

But since the flood hit, the residents of Minot have largely depended on each other. Just 2% of the evacuated residents stayed in the Red Cross shelters over the weekend. The rest stayed with family or friends nearby.

View Full Image

European Pressphoto Agency

Local officials patrol for downed power lines and other problems caused by the swollen Souris River in Burlington, N.D., eight miles north of Minot.

Arlin Pederson, 74, said he and 11 others were staying in his son’s home. Minot Police Chief Jeff Balentine said 24 of his 65 officers were displaced and found someone to stay with. Mr. Balentine said he was housing two friends and had an officer’s belongings in his garage.

Elsewhere in the state, the Souris continued to cause problems. All but one of the 11 reading points along the river were at record flood levels by midday Sunday, said National Weather Service meteorologist Lindsay Tardif-Huber. The cities of Sawyer and Velva, combined population of 1,350, had evacuated their residents as the crest neared.

The overflowing river is also affecting agriculture. Laverne Mikkelson, who grows wheat and soybeans, said he could seed only 30% of his 16,000 acres this year.

“The ground is so wet … when you break through the surface underneath, it’s just mud,” he said. “We’ve had problems for three years now, but it’s just been getting worse. And this (year) is the worst of them all.”

By LAURA SAUNDERS And JASON ZWEIG

Commodities are hot, but exchange-traded funds and other vehicles that hold them are causing massive tax headaches for investors.

Just ask Darren Neuschwander, an accountant in Robertsdale, Ala., with high-net-worth clients around the country. In April Mr. Neuschwander billed one wealthy executive $3,500 to prepare his tax return—triple the tab from the year before.

ETF Tax Tips

View Interactive

Matt Collins

Mr. Neuschwander explained why to his shocked client: He had to account for investments in 30 ETFs, up from five the year before. Even though the executive lives a state with no income tax, he had to file returns in half a dozen other states for the first time. The client said, “If my broker had told me about this, I probably wouldn’t have gotten in.”

This is the dark side of investors’ current rush into the trendiest investment strategy around: exchange-traded funds and other hot “alternative investments” such as exchange-traded notes and master limited partnerships, specializing in commodities like oil, currencies and gold.

Collectively, the products fall under a new umbrella called “exchange-traded products.” There isn’t any doubt about investors’ appetite for them: According to data compiled by analyst Deborah Fuhr of BlackRock Inc., which owns ETF giant iShares, ETFs specializing in commodities, currencies and other alternative assets took in $38 billion in new money from investors in 2009, $14 billion last year and another $7 billion so far in 2011. Over the same period, more than $75 billion flowed out of U.S. stock mutual funds.

The largest commodity exchange-traded fund, SPDR Gold Shares, holds $59 billion, and by the end of May there were 205 commodity-related ETFs, up from 158 in December 2010.

It is easy to see why investors are enamored. Still rattled by 2008′s slaughter of conventional stocks and mutual funds but hungry for performance and yield, many have turned to commodities and currencies to hedge against the risks of a rising cost of living and falling dollar.

ETFs can be a cheaper and easier way to invest in commodities than traditional methods such as futures or options. They trade throughout the day and you can see, in real time, what they own. Most don’t have the risk of leverage, or borrowed money, that can wipe out a position if markets move against you.

But they also carry potential tax traps. Among them: soaring tax preparation bills, odd tax rates, unexpected filings and tax on some assets in tax-sheltered individual retirement accounts (see “What to Ask Before Buying”). That is ironic, since ETFs have long been praised for extraordinary tax efficiency; SPDR SP 500, the oldest ETF, hasn’t distributed a capital gain since 1996, three years after it was launched.

Even though ETFs trade like stocks and provide diversification like a fund, they often are structured very differently from the stocks and mutual funds many investors grew up with. Mutual funds generally aren’t allowed to hold commodities directly, so the firms offering ETFs have turned to less familiar vehicles, such as partnerships, trusts or corporations.

SPDR Gold Shares, for example, holds gold bullion in a “grantor trust.” As such, profits and losses aren’t claimed by the trust but “flow through” to holders and are taxed at their income-tax rates.

There is a big difference at tax time: While holders of gold stocks in a mutual fund would pay tax on long-term capital gains (those held longer than a year) of 15%, long-term gains for Gold Shares holders are taxed at 28% because physical gold is a “collectible.”

Tax advisers and preparers are worried. “Most investors in these products have no grasp of what they’re getting into,” says Robert Gordon, head of Twenty-First Securities Corp. in New York. “I doubt if the brokers selling Alerian MLP ETF [a basket of energy firms] are explaining that it is a corporation that owns parts of many partnerships that own oil assets and owes an extra layer of taxes.”

Confused investors probably won’t find much individual help from sponsors on thorny issues like having to file returns in multiple states or the fine points of mark-to-market rules for funds holding futures.

Although Uncle Sam is phasing in rules requiring brokers to calculate “cost basis” for investors, they often don’t apply to commodity ETFs.

That is why paying your tax preparer to sort it out can cost so much. Here is just one example: Many ETFs are organized as partnerships for regulatory reasons, and they issue an annual K-1 tax report to each investor. A K-1 is like the 1099 for your mutual fund, but much longer and far more complex.

CPAs interviewed for this article said each K-1 from an ETF takes up to an hour to put into a tax return, often at rates north of $150 an hour. That is why Mr. Neuschwander’s tax-prep bill for his client with 30 ETFs was so large.

At least the return was correct. K-1 tax information may be spread over many pages—unlike a simple 1099—confounding many do-it-yourselfers and even some professionals. Mr. Neuschwander also caught a mistake this year involving ETF K-1 information on a return prepared by another professional that missed a $20,000 deduction.

ETF tax complications have become so notorious, says Chief Investment Officer William Koehler of ETF Portfolio Partners Inc. in Leawood, Kan., that some investors are insisting on selling funds generating K-1 forms even if they made money and want to hold the same underlying assets. Instead they are asking for ETFs that don’t generate tax headaches. Mr. Koehler and his partners have a nickname for these clients: “K-1 and done.”

For investors in commodity ETFs, tax surprises can dent or even erase the gains you thought you got. With these new products, the old adage “know what you own” may not be enough. You also need to know what you’ll owe.

What to Ask Before Buying

Chasing hot investment returns can wreak havoc on your tax returns. Many exchange-traded funds, especially those holding commodities and currencies, use structures such as partnerships, trusts or corporations that are taxed very differently from the garden-variety mutual funds and ETFs investors are used to.

Here are useful questions to ask before you buy:

Does this investment have tax quirks?

There are many in the world of exchange-traded products. For example, investors in precious-metals ETFs organized as trusts (SPDR Gold Trust, iShares Silver Trust) often are surprised that long-term gains are taxed at 28% rather than 15%—because the metals are deemed “collectibles.”

On the other hand, those who buy Sprott Physical Silver Trust, a Canadian fund the Internal Revenue Service classifies as a foreign corporation, can qualify for the 15% tax rate if they make a special filing. If they miss the filing’s due date, the gain is taxed as ordinary income at rates up to 35%, plus interest.

In addition, investors in ETF partnerships that invest in futures, such as the Powershares DB Commodity Index Tracking Fund or the United States Oil Fund, have gains and losses that are deemed to be 60% long-term and 40% short-term. The gains and losses realized by the partnership flow through to investors, and there may be a tax bill without a corresponding cash payout to cover that bill.

Alternatively, some ETFs are organized as corporations. These products may be more convenient for investors because they are less complex than partnerships, but they also owe additional corporate taxes on income at rates up to 35%.

What if you own not an ETF but an exchange-traded note, or ETN? The good news is that ETNs get generous tax treatment. Unlike with mutual funds, capital gains within them can grow tax-free for years.

So why doesn’t everyone buy only ETNs? They have an Achilles’ heel: If the issuer goes bust, so can the ETN—as many Lehman Bros. holders found out after it collapsed. Congress also may revisit their favorable tax treatment.

How will I know the ‘cost basis’ of my investment?

When you sell an investment in a taxable account (as opposed to a tax-sheltered one like an individual retirement account), the taxable gain or loss is measured from the purchase price, known as the “cost basis.”

Tracking basis is notoriously difficult for taxpayers, especially when there are adjustments common with ETFs such as reinvested dividends, which raise basis, or return of capital, which lowers it. If you make mistakes, you can end up wildly overpaying or underpaying tax.

Some brokers already track the cost basis of stocks and mutual funds as a courtesy, and new tax rules require them to do so (and report the information to the IRS) for new investments.

New holdings in ETFs organized as corporations are subject to these rules for 2011, while brokers have to track purchases of many mainstream ETFs and mutual funds starting in 2012.

But few if any brokers accurately track customers’ cost basis in ETFs structured as partnerships, grantor trusts or unit investment trusts. This is unlikely to change, says Stevie Conlon, a basis expert with Minneapolis-based Wolters Kluwer Financial Services, because Uncle Sam has exempted these structures from basis tracking until at least 2013.

A time-honored way of dealing with unknown cost basis in stock shares is to give them to charity and take a deduction for full fair market value, but taxpayers donating some partnerships, including ETF partnerships, don’t get the same break.

Might I have to make multistate tax filings?

If you own a publicly traded partnership, you may have to file a tax return in one or more states where you don’t live if income generated in those states—say, from an oil well—is above a certain level. Even if the payout on one investment is below a state’s threshold, the total from two or three may put you over the limit.

When will I find out about taxable income each year?

Mutual funds must usually send out 1099 forms by Feb. 15, but ETF partnerships often get extensions until the following Sept. 15. Some report results to investors by March 15 and others send a letter or post a website notice before the April due date with estimates of income, but often there is no requirement to do so, according to an IRS spokesman.

If I hold my investment in a tax-sheltered account like a traditional or Roth IRA, could I have a tax problem?

A popular way to circumvent thorny tax issues is to hold an investment in a traditional or a Roth IRA. But independent tax expert Robert Willens says there can be a booby trap involving some publicly traded partnerships held in IRAs.

For complex reasons, the income from the partnership may be classified as Unrelated Business Taxable Income (UBTI). The prospectus often says whether UBTI is expected or not.

Taxpayers who have more than $1,000 of UBTI within an IRA have to file a separate a 990-T form and pay tax at corporate rates on that income. “Smart brokers know that making this mistake loses a customer,” Mr. Willens says.

—Email: taxreport@wsj.com

Write to Laura Saunders at laura.saunders@wsj.com and Jason Zweig at intelligentinvestor@wsj.com

By IAN SHERR

SAN FRANCISCO — Lulz Security, a hacker group that has claimed attacks on corporations and government entities, released on Saturday a cache of allegedly stolen files in a move it says will mark the end of its nearly two-month spree of digital mayhem.

“It’s time to say bon voyage,” the group, which also goes by the name LulzSec, wrote in a message posted on its website. The message employed many sailing terms, part of the group’s frequent use of nautical motifs. “Our planned 50-day cruise has expired and we must now sail into the distance.”

The apparent end of LulzSec’s hacking comes after a swell of attacks from various groups that followed a breach of customer data from Sony Corp. That hack compromised the personal information of roughly 100 million users.

LulzSec did not claim responsibility for the initial Sony attack, but targeted the Japanese technology-and-media giant soon after.

The group has attacked other companies, including Nintendo Co. and broadcaster PBS, as well as government entities such as a Federal Bureau of Investigation affiliate, the Senate and the CIA.

While the group has claimed its attacks are made both to raise awareness of poor security and to have fun, LulzSec took a more overtly political stance when it released documents from the Arizona Department Public Safety as a form of protest against a controversial state immigration law.

In its farewell message, the group also posted a cache of files that included documents it claims it poached from AOL Corp., ATT Inc. and the FBI.

AOL, ATT and the FBI did not immediately respond to requests for comment. LulzSec also did not respond to a request for comment on its Twitter account.

Write to Ian Sherr at ian.sherr@dowjones.com

By JACK NICAS

MINOT, N.D. – The Souris River is expected to crest here nearly two feet below previous predictions, easing worries of key levee failures and resulting devastation when the river peaks early Sunday.

Officials in Minot, North Dakota say they have done all they can to protect critical infrastructure. Now, it’s up to the water. Video courtesy of Fox News. Image courtesy of Getty Images.

“Make no mistake, this is a time to celebrate,” U.S. Rep. Rick Berg (R., N.D.) said in a press conference at city hall, minutes after the announcement was greeted with cheers.

But the celebration yielded minutes later when officials announced at least a 24-hour boil-water order for the city of 41,000 because untreated water entered the city’s drinking water system.

And to be sure, the revised prediction was a small victory for the city. About 11,000 residents have been evacuated and more than 4,000 homes are flooded, hundreds up to their roof.

News was also grim for the citizens of nearby Burlington, a city of 1,100 just west of Minot. About 60% of the homes there flooded earlier this week; now the remaining homes are without water, “probably for a long time,” said Burlington Mayor Jerome Gruenberg. “We would urge them to relocate and, if not, they may have to haul water for domestic use.” A water main broke in a flooded area and drained much of the city’s water tower before it was isolated, he said.

Photos: Souris River Expected to Crest

View Slideshow

European Pressphoto Agency

A dike fails to protect this house as thousands of residents are displaced as the Souris River floodwaters engulf Minot, North Dakota.

River forecasters revised their prediction for the crest in Minot to 1,561.8 feet above sea level – the lowest crest prediction in days, but still nearly four feet above the river’s record high recorded in 1881. Thunderstorms upstream Saturday will likely extend the crest in Minot already expected to last several days, said National Weather Service meteorologist Joshua Scheck.

A lower crest will relieve the stress on key levees that are protecting the city’s main bridge and its northeastern neighborhood containing thousands of dry homes. “That’s a huge deal for us,” Mayor Curt Zimbelman said in an interview. It also lessens the likelihood that workers will have to raze two homes to widen the levees. “We’ve got dirt up against those homes. I just hope we don’t have to take that action.”

Downstream, cities evacuated their residents as the Souris—also known as the Mouse River–began to rise rapidly.

In Velva, N.D., population 1,000, officials ordered about 800 residents to evacuate by Saturday night. City Commissioner Paul Thomas said that if levees are finished by the time the river crests there, the town should stay dry. “But we’re being extra cautious because human life matters,” he said.

In Sawyer, N.D., the Souris overtopped a levee Saturday morning, flooding four homes, Mayor Cy Kotaska said. The water was still overflowing hours later but Kotaska said the evacuation was specifically intended “to clear the roads of sightseers” so workers can finish building levees around the city of 350 before the crest arrives on Sunday night.

Said Sawyer City Auditor Jessica Badke: “Get ‘em out of the town so we can save the town.”

By REED ALBERGOTTI

The Spartan Race is a circuit of grueling obstacle courses that includes slithering under barbed wire, running through flames, carrying buckets of water and throwing spears. Nobody does it better than Hobie Call. WSJ’s Reed Albergotti reports.

The “Death Race,” a 24-hour obstacle-course competition that begins Saturday in Vermont, is advertised as so difficult it “will make giving birth seem like a walk in the park.” Typically, fewer than a quarter of participants are able to finish.

This year’s 200 competitors include accomplished triathletes, military special forces and a person who has been called the “world’s fittest man.”

The race’s organizers, though, are focused on Hobie Call, a 34-year-old father of five who installs air conditioning for a living.

When Mr. Call learned that owners of a series of obstacle-course races were offering a $100,000 prize to anyone who can win 14 of them in the U.S. this year, he announced he was going to pull off a sweep. “I didn’t believe him,” says Joe De Sena, co-founder of the Death Race. “There just are not that many people who have that drive.”

‘Spartan Races’ Have Man to Beat

View Slideshow

Nuvision Action Images

Hobie Call jumped over flames in a Spartan Race. Details of the 24-hour-plus obstacle-course competitions are kept secret so participants can’t train specifically for them.

But so far, Mr. Call has won six in a row. Now, the race owners are intent on stopping him, saying that if he wins Saturday’s Death Race, they’ll give $20,000 to anyone who can beat him in the future.

The Death Race is part of a circuit of obstacle-course competitions in the U.S., Canada and the U.K. known as “Spartan Races.” They are as frustrating as they are physically grueling. Details of each Spartan Race course are kept secret so competitors can’t specifically train for them.

Organizers force racers to do just about anything, including crawl through muddy troughs covered in barbed wire, jump through flames, solve puzzles, chop wood, carry water and learn Greek. It also helps to be very fast. The Death Race, the longest of the Spartan races, usually covers 45 miles. It lasts at least 24 hours, but has gone on for as long as 72. (Participants won’t know exactly how long until it’s over; they are given instructions during the race.)

“It emulates life,” says Mr. De Sena. “Everything that can go wrong, will go wrong.”

In February, Mr. Call left the suburbs of Salt Lake City in a 10-year-old Dodge Caravan and drove 11 hours to Temecula, Calif., to compete in his first Spartan Race. Mr. Call, who has the fastest known time for lunging a mile (24:56) and has run marathons, thought it would make for a fun vacation. He packed his own food and slept in his car. The next day, he blew away his competition in a race that involved climbing a slippery wall, running through flames and solving one side of a Rubik’s Cube.

Since then, Mr. Call has gone to extraordinary lengths to win six Spartan Races in a row. He sold his TV, he says, to buy a plane ticket to a race in Austin. Thanks to a cult following, fans and competitors have helped cover some expenses and offered up their hotel rooms so he doesn’t have to sleep in his car.

Race organizers are looking for someone to defeat him. Mr. De Sena, an institutional trader, says he invested his life savings in the series and will have to pay $100,000 out of his own pocket if Mr. Call reaches the goal. “We were told we should get insurance,” he says. “We laughed and said no one could do this.”

Spartan Race staffer Jason Rita has been charged with finding the perfect athlete to beat Mr. Call. He has asked everyone from mixed martial-arts studios to the Navy SEALs to send someone. All have declined. In one race, Mr. Call nearly lost when he was asked to drag bricks using a rope. A competitor caught up to him, but Mr. Call out-sprinted him to the finish.

Hobie Call

Mr. Call looks nothing like the hulking Spartans in the Hollywood film “300.” He has the stature of a distance runner, wears glasses and has a quick smile. “I don’t have that rough look, but when it comes time for the race, I have that rough mentality,” he says.

He says runners don’t have the upper-body strength to beat him and the buff guys are too slow. “It’s my combination of strength and speed,” he says. “Good luck finding somebody.”

The Death Race began in 2004 with fewer than a dozen competitors. It grew in popularity and last year, Mr. De Sena expanded it into a series of events called Spartan races. This year, there are 30 Spartan races scheduled in the U.S., Canada and the U.K. Organizers say the vast majority of competitors—who pay a fee to enter—just want to finish.

The Spartan series is one player in a fast-growing industry of obstacle-course events, billed as grittier alternatives to triathlons and marathons. Other companies putting on similar events include Muddy Buddy. Warrior Dash and Tough Mudder.

The obstacle-race industry is “one of the fastest-growing things that the running industry has seen for some time,” says Mark Sullivan, editor of Running Insight, a trade magazine.

Because he doesn’t know exactly what the race will involve, Mr. Call has been training by running around his neighborhood, wearing a 30-pound vest and repeatedly tossing a 30-pound stone. Occasionally, he has thrown the stone down a ravine and chased after it.

“He’s training exactly how I would train,” says Mr. De Sena. “He’s obviously smart, which you need to be for this event.”

If Mr. Call wins the Death Race, organizers hope the $20,000 bounty will draw enough top-caliber athletes to defeat him. Mr. De Sena thinks team-sport athletes are too pampered and would be among the first to drop out of the Death Race when a frustrating obstacle is put in their way.

“When I think of a real athlete, I think of the gladiator in the Coliseum,” he says. “You have to deal with the unknown. You have a couple of lions coming at you. The ref is certainly not in your corner. He’s looking for the lion to eat you.”

Write to Reed Albergotti at reed.albergotti@wsj.com

By MIRIAM JORDAN And ALEXANDRA BERZON

John Loomis for The Wall Street Journal

Student Anna Demidchik, above, cried when the lottery was invalidated.

Ever since he traveled from his home near Yaounde, Cameroon, on a scholarship to Michigan State University in 2009, Dieudonné Kuate dreamed of immigrating to the United States.

As a visiting graduate student in epidemiology, he marveled at the sophistication of the chemistry labs and the excellence of the teaching. There was no comparison to his university in Yaounde, where he shared a cramped 27-square-foot room with three other students.

The State Department has apologized for a computer glitch that wrongly awarded 22,000 people a place in the Green Card lottery. WSJ’s Neil Hickey reports from Washington that the applicants aren’t satisfied with just an apology.

One of eight children, Mr. Kuate grew up on a poor farm in the western plateau town of Banjoun. His parents couldn’t read or write. Mr. Kuate is the only child in his family to complete university. “My dreams have been to be a top researcher in my field of specialty. The only place I see these goals being realized is the United States,” says the 31-year-old Mr. Kuate, who returned to Yaounde last year and finished his Ph.D. in chemistry.

For the past six years, Mr. Kuate has applied for the State Department’s annual green-card lottery, and, like 15 million other people, he applied again this year. The 20-year-old program offers about 50,000 people a year a chance to win permanent residence in the U.S.—and a ticket to the American Dream.

Denied six times, Mr. Kuate finally saw his number come up on May 1.

“There is no English word to express my happiness when I discovered that I was selected,” said Mr. Kuate, whose first name means “God given.”

Emmanuel Tumanjong for The Wall Street Journal

Dieudonné Kuate, above, had his brother sell land for application fees.

Within days, his older brother sold family land in Banjoun for around $4,400 for Mr. Kuate to use for application fees, medical examinations and to start a new life in the U.S., he said. His mother believed God had intervened: “According to her, I was going to travel to the white man’s country and see how to help other family members who have not gone far in book work,” he said.

But on May 13, those hopes were abruptly dashed. After logging on to the State Department website, Mr. Kuate said, “I saw a message saying the lottery had been canceled.”

Mr. Kuate was among 22,000 people around the world mistakenly informed last month that they had won the lottery. There had been a technical glitch and the lottery would have to be held again, the State Department said, explaining that a computer had selected 90% of the winners from the first two days of the application window instead of the full 30-day registration period.

The snafu is the latest twist in the contentious history of the immigration lottery. The Diversity Visa Program was authorized by Congress in 1990 as a way to increase immigration from under-represented countries. Though supporters still believe it’s the most democratic way to allow new immigrants into the country, critics want to eliminate it altogether, arguing that immigrants shouldn’t be chosen at random but for their skills and family relationships.

“I felt I was in heaven. The American dream actualized,’ said one of the mistaken winners.”

The cause of the lottery glitch, State Department officials said in an interview, was software—a human error that one official said was akin to a “typo” embedded in millions of lines of code.

Told they would have to reapply, Mr. Kuate and three dozen of those who were mistakenly selected filed a lawsuit last week in federal court against the State Department seeking to reinstate their selection rather than make them compete in another round. The State Department said that the first drawing wasn’t random and a new one will be held, in fairness to applicants who submitted their entries after the first two days.

Though they come from a cross section of countries, careers and cultures, the applicants tell similar tales of hopes shattered and dreams extinguished after receiving news of the lottery error.

Nigerian molecular biologist Ugoo Anieto, 31, had tried the lottery 14 times, starting when he was 18. After being chosen this time, Mr. Anieto quickly got the required physical exam and vaccinations. Now he’s despondent.

“I don’t know how death feels,” said Mr. Anieto. “But I feel this is more bitter than death.”

Graham Trott

Stuart McBrien, an Irish management consultant who was mistakenly told he won the green-card lottery, said he and his wife admire the ‘American way of life.’

Alejandro Alvarez, a 26-year-old graduate student in Alicante, Spain, recalls watching episodes of “The A-Team” and “Family Matters” as a child and dreaming of living in America. After receiving notice that he’d won, Mr. Alvarez says he began imagining a new life working toward a doctorate in economics at the University of Chicago.

Stuart McBrien, a 34-year-old Irishman who lives in the U.K., said he entered the lottery out of “a sense of adventure.” The management consultant said he and his wife “admire the American way of life.”

About a million people immigrate legally to the U.S. each year, primarily through family- or employment-based programs. Because of lengthy backlogs, it can take several years for a green-card application to be processed.

Getting a green card is complicated. Many variables, including an applicant’s country of origin and relationship to a U.S. sponsor, influence the speed. For employment-based green cards, applicants must show they possess extraordinary abilities or skills that will benefit the U.S.

Applicants from some countries, such as India, China, Mexico and the Philippines, endure particularly long waits because of an annual limit on how many people can immigrate to the U.S. from any single country. It can take more than a decade to bring a brother or sister here as a legal immigrant.

The lottery, however, offers one of the fastest paths to a green card, typically less than two years.

The U.S. immigration system is weighted disproportionately toward uniting families, which results in a high percentage of people coming from Latin America and Asia. For the first four years after the Diversity Visa Program was passed by Congress, it favored the Irish. In 1995, it was expanded to accept entries from everywhere except countries already heavily represented in the U.S. immigrant pool.

View Full Image

Since then, the lottery has drawn ever-larger numbers of submissions, attracting people from a variety of backgrounds, from physicists to plumbers, all of them eager for a chance at a new life.

The lottery has succeeded in its goal of diversifying the immigrant population, according to an April report by the Congressional Research Service. In 2009, for example, 49% of lottery immigrants came from Africa, which contributed only 11% of the total 1.1 million legal immigrants to the U.S. that year.

Like other green-card holders, lottery winners eventually qualify for U.S. citizenship.

“It is the only purely democratic way a person can legally come to the United States other than being sponsored by a relative or employer,” said Mark Jacobsen, an immigration attorney in Haleiwa, Hawaii. “The American dream is held out as a torch to the entire world.”

Thousands of people apply from Italy, Japan and other prosperous countries. But the program is especially popular in the developing world, where it creates a frenzy in the months leading up to the 30-day period in the fall when entries are accepted.

Banners advertising the lottery festoon remote villages and narrow urban alleyways in such places as Bangladesh and Ethiopia, where self-styled “visa agents” market their services translating forms and filling them out for applicants who lack English skills. Lines snake outside Internet kiosks where people file the electronic entries.

In the days when the lottery was paper-based, the State Department’s Kentucky Consular Center, which handles the program, created a post-office address with a fictitious city named Migrate, Ky., putting the address on applications. Applicants mailed their forms to the city and lottery winners who eventually settled in the U.S. would sometimes search in vain for Migrate on the U.S. map.

In 2005, when the State Department first allowed people to apply online, almost six million entries were submitted. It’s free to enter. Only the winners pay $819 in application and other fees.

Applicants typically send in their entries electronically in the fall. In the spring, the State Department holds the electronic draw, which results in 100,000 winners being notified on May 1 that they have been selected for further processing.

Many people are then weeded out for failing to meet deadlines and requirements. Ultimately, about 50,000 of the winners get green cards.

Winning Numbers

The top 10 source countries for green-card lottery winners, including the number of visas issued.

2010

1. Ethiopia 3,774

2. Uzbekistan 3,356

3. Egypt 3,253

4. Bangladesh 3,017

5. Nigeria 2,834

6. Ghana 2,660

7. Kenya 2,420

8. Nepal 1,936

9. Iran 1,854

10. Ukraine 1,807

2000

1. Ukraine 3,491

2. Albania 3,428

3. Nigeria 3,262

4. Bulgaria 2,818

5. Russia 2,564

6. Romania 2,460

7. Morocco 2,180

8. Ghana 1,972

9. Bangladesh 1,559

10. Egypt 1,525

Source: U.S. Department of State

Fraud is a major challenge. The fervor for a shot at the American dream prompted one Bangladeshi man to submit 2,800 entries this year, State Department officials said. Fake marriages are sometimes arranged between a winner and stranger for money. False birth certificates, marriage certificates and high-school records are also common, the officials said.

In past years, some brokers who helped people fill out an entry used their own address on the application and then extorted money from winners or sold a winning number to another individual, the officials said. It’s the reason this year, for the first time, individuals were notified electronically of the results, rather than by mail.

The recent lottery snafu renews questions about whether the current U.S. immigration system is outdated. A majority of lawmakers and the business community have long argued that the current system, last reformed in 1990, doesn’t meet the needs of the 21st century.

Congress has failed several times in recent years to agree on a comprehensive immigration overhaul amid a heated debate over whether to provide 11 million illegal immigrants, who overstayed their visas or entered the U.S. unlawfully, with a pathway to legalization.

Some lawmakers argue that, to benefit the economy, a new system should emphasize skills over family ties. Others argue that the U.S. must attract more immigrants to perform essential, low-skilled jobs. Otherwise, they say, low-wage service and farming jobs will continue to be filled by illegal immigrants.

Though the Diversity Visa Program represents a small percentage of legal immigrants, it has spawned controversy. At a House Judiciary Immigration Subcommittee hearing in April, Rep. Bob Goodlatte, a Republican from Virginia who has introduced legislation to eliminate the program, called the lottery “grossly unfair” because it allows people to bypass others who have waited years to immigrate to the U.S.

Others at the hearing said the program is inviting to terrorists, because it doesn’t exclude nationals from countries that sponsor terrorism or require applicants to have special skills or family bonds in the U.S.

The State Department says it has modernized the lottery to comply with security measures mandated by the USA Patriot Act of 2001. Those who get in through the lottery are subjected to the same security review as other visa applicants, a department official said.

Backers of the program say it creates goodwill toward the U.S. They also highlight the winners’ contributions to American society, as Silicon Valley entrepreneurs, decorated soldiers, professional athletes and scientists.

View Full Image

Trevor Paulhus for The Wall Street Journal

Nigerian molecular biologist Ugoo Anieto tried the lottery 14 times. ‘I don’t know how death feels,’ he said. ‘But I feel this is more bitter than death.’

Although lottery immigrants are required only to have a high-school education or two years of experience in an occupation, they are more likely than other immigrants to possess managerial and professional backgrounds, the April Congressional Research report said. In 2009, 24% of diversity immigrants reported managerial and professional occupations, compared with 10% of the total legal immigrants that year.

Mr. Anieto, the molecular biologist, dreamed of making it in America ever since he was a young boy in Onitsha, Nigeria, following Michael Jordan’s victories with the Chicago Bulls and watching Bill Cosby on television. “Seeing those skyscrapers in New York was breathtaking,” he said.

He listened to Voice of America radio, which sent him maps of the U.S., with brief histories and illustrations of different places, helping to fuel his imagination.

Mr. Anieto entered the green-card lottery for the first time after he became eligible as an adult, at age 18. “I played the lottery every year for 14 years,” said Mr. Anieto, who specializes in biofuel research.

Without the lottery green card, Mr. Anieto, who came on a student visa to attend the University of North Texas at Denton, would have to find an employer to sponsor him to remain in the U.S. after completing his doctorate. That can cost several thousand dollars. It also deprives Mr. Anieto of the freedom to change jobs while he is on a work visa.

Mr. Anieto stumbled out of bed in the wee hours of May 1 to check this year’s results on the State Department’s website. He typed in his case number and a letter addressed to him popped up, stating that he had been “randomly selected” for further processing.

“I felt I was in heaven. The American dream actualized,” recalled Mr. Anieto.

He visited a local clinic for a required physical examination; he got three rounds of vaccinations, which cost about $420; he submitted two required forms to the Kentucky Consular Center.

On May 13, a fellow Nigerian told Mr. Anieto that the draw had been invalidated. Mr. Anieto went on the State Department website and watched a video in which the Deputy Assistant Secretary of State David Donahue, who oversees the lottery, apologized for the mishap and explained the consequences.

“Regrettably, the results that were previously posted on this website are not valid,” Mr. Donohue said, “because they did not represent a fair, random selection of the entrants, as required by U.S. law.”

The snafu was contained in a single line of computer code, according to State Department officials. “It was a small coding error—it’s just very unfortunate,” Mr. Donohue said in an interview. It was caused by human error; no one was fired. “We really regret the frustration,” he said.

The State Department had switched to a new program in an effort to improve control and efficiency in the process. The department has since corrected the problem and will use the same program for the next draw, Mr. Donohue said.

On May 1, reports of the lottery selection began to pour in on a popular immigration message board, forums.immigration.com. By that evening, members—many of whom hadn’t been chosen—began to post comments saying that most people who had won had applied over the course of just two days.

On May 2, one forum user wrote, “I’m from Ukraine and didn’t won…. All winners filled their forms on 5 or 6 of October (mostly fifth). No winners of the later dates… ‘random’ selection looks very strange.”

View Full Image

State Department officials say that, as such evidence accumulated in online forums, they started to investigate.

By the time the State Department took down the site, 1.9 million of the 15 million applicants already had visited the site to check the results. Among them were the 22,000 “winners.”

Disenchanted applicants set up a Facebook page they dubbed “22,000 Tears” and started a campaign to draw attention to their plight.

“It’s a broken commitment,” said Kenneth White, their attorney in the federal suit. “The United States government made a promise to these 22,000 people.” Mr. White added that he was hopeful the dispute could be settled amicably out of court.

Anna Demidchik, a 27-year-old second-year law student at Hofstra University studying immigration law, says she has entered the green-card lottery every year since 2007. She admits that she didn’t put a lot of faith in the process, so she was surprised to hear that she had won.

Born in Kazakhstan, she won a scholarship in high school to spend a year in rural South Carolina. She later studied Chinese in Russia and then enrolled in a business program in the U.S. before entering law school.

Sitting in her favorite seat in the Hofstra Law School’s student lounge, she says that after hearing she had won the lottery, she called her parents in Novosibirsk, Russia. They put their apartment up for sale so that she could take out her one-quarter share of the money—worth about $20,000—and show U.S. authorities that she would have cash to support herself in the U.S.

On May 13, her brother told her to check the Internet because the results had been invalidated. Fidgeting and clutching an 8-ounce water bottle, she said at that moment she was in the middle of final exams so “I couldn’t let myself go. But once the finals were over I spent the whole day crying.”

Since the disappointing news, she has spent hours writing letters to congressmen and immigration organizations in a quest to get the 22,000 individuals recognized as winners.

In Cameroon, Mr. Kuate is also contemplating his next move. Since discovering his selection was canceled, he said he has grown depressed, losing his appetite.

“I sunk into total shock, disappointment and disbelief,” he said.

Inside his cramped room near Yaounde University, under a poster of Michael Jackson, Mr. Kuate said his current conditions are intolerable. “How can one continue to live in this misery—no water, no electricity and even basic food to eat or money to pay for transportation.”

While he holds out hope that the State Department will reinstate his selection, he said he is determined to go to the U.S. one way or the other. “Frankly, I’m still trying to put the pieces of my life together,” he said.

The State Department said results of a new draw will be available on July 15.

—Emmanuel Tumanjong, Pervaiz Shallwani, Ana Campoy and Ilan Brat contributed to this article.

Write to Miriam Jordan at miriam.jordan@wsj.com and Alexandra Berzon at alexandra.berzon@wsj.com

By JOSH MITCHELL and SHARON TERLEP

The Obama administration is considering a fleetwide average of 56.2 miles per gallon for all new cars and trucks sold in the U.S. by 2025, two people briefed on the matter said.

The proposal would roughly double current fuel-economy targets, and would likely raise the price of some cars by several thousand dollars.

The proposal isn’t final, and could be adjusted over the next several weeks as regulators prepare a formal draft to send to White House budget officials.

U.S officials presented the proposal to representatives of Detroit auto makers this week to determine the costs of such a proposal, said one of the people briefed on the matter. This person emphasized that the 56.2 mpg figure was floated as a means to kick negotiations among California, environmental groups and the auto industry into the final phase, and that the numbers could change.

The administration has said previously that it is looking at requiring cars average between 47 and 62 mpg by 2025.

The fuel-mileage targets would be accompanied by stringent rules to reduce vehicle emissions of greenhouse gases.

Environmental groups and the state of California have pressed for the 62 mpg target or something close to that, while the industry has lobbied for a target on the lower end of the administration’s range.

Spokeswomen at the Transportation Department didn’t immediately respond to requests for comment Saturday. The 56.2 mpg figure was initially reported by The Detroit News.

The targets for 2025 would build on the administration’s requirement that autos average 35.5 mpg by 2016. U.S. officials are expected to release their final numbers for 2017-2025 in September.

Write to Josh Mitchell at joshua.mitchell@dowjones.com and Sharon Terlep at sharon.terlep@wsj.com