carroll: welcome to bloomberg businessweek. >> we are coming to you from inside the headquarters in new york. carol: is building more pipelines the answer? oliver: paul manifold is back. the campaign manager for president-elect donald trump never really went away. isques and how the military handling cyber security training. oliver: all of that, ahead. the jime're here with ellis. i want to start with the global

economics section because europe is really getting kind of a super election cycle underway. we're watching a referendum in italy. >> people are looking at italy because it's a good barometer of way that the voters across europe think about how happy they are with their government. isn though the referendum something that seems fairly arcane, changing the way the parliament is set up in italy, cutting down the number of senators there. we all seem to have lots of governments turning over. over 300 senators and they are cutting it down by about two thirds. it is supposedly going to streamline government but allows lots of things within government to change. it tells you if people are angry enough that they want big changes in government. see it happens, you will across the continent in places like france and have important elections later this year. oliver: it is sort of a peach or

dish. that will be important for this sort of globalization coming to a halt. >> that is one of the problems. populism has gotten a big boost because there have been employment problems, people worried about immigration. security is an issue. we have to figure out how angry people are and how much change they want. oliver: a slightly less serious topic. >> it is a fascinating story zahra has gone from a to being the biggest fashion retailer in the world. style.nk there is a somebody is out there saying this is what people wear. they've put that upside down and

their 350 designers in spain and they try to figure out what is hot. they use data and information they get from countries around the world. every night, they are getting information from websites. also, they are getting information from consumers in big, major markets like moscow, new york, tokyo. havethey have done is they moved a lot of the production capacity to spain. it doesn't sound smart because it's spain. but what happens from the far east, it takes months to sell it. they want to do it much quicker so that they can turn passion and a couple of weeks. is, people think it is new. i've got to buy it. is 24/7 fashion.

the cover story like pipeline explosion. tell us about this narrative. >> this one pipeline basically for millions of people. pipeline safety has become an issue. carol: christopher leonard actually visited the pipeline and we caught up with him. >> the pipeline was built in 1962. wastime it was built, it the largest private-sector infrastructure project in u.s. history. it is a pipeline that serves a really vital role in the u.s. energy infrastructure. the pipeline begins in texas and louisiana where there is a large concentration of oil refineries, and it takes a finished fuel product by diesel fuel and gasoline all the way across the southeast, of the eastern

seaboard from atlanta to new york and ends in new jersey. amazingly, about half of the fuel used along the east coast is transported through this single pipeline. it 50 million people a day depend on it for fuel. carol: 1.4 million gallons of gasoline every day go into the pipeline? >> correct. that is just the line that carries gasoline fuel. another line carries an equivalent amount of diesel fuel and other fuel products as well. >> about the colonial pipeline this halloween, you probably learned about it because it is a big story. there was a big explosion. >> it was sort of a follow-on effect for the large accident that happened in september. back in late september, this pipeline spring a leak,

essentially. gallons of00 gasoline went spilling out into the surrounding woodlands. underscored the importance of this pipeline. they had to shut off the gasoline flow. and when that happened, gasoline on the east coast of the united states plunged it their fastest level in u.s. history. stocks fell all across the eastern seaboard as gasoline stations realize they weren't getting supplies to come. colonial tried to fix this wiki section of pipe that spring a leak in september. they hired a crew in october to start doing permanent fixes on this aging section of pipe. what happened on halloween was really tragic. we don't have the details yet,

but we know a crew of nine men was excavating earth around the pipeline and somehow, the earth moving tractor struck a pipeline. .t exploded a column of flame shot more than 50 feet in the air. one worker was killed immediately. construction workers were terribly burned and taken to the nearby town, birmingham, to be treated. we saw the flow of gasoline was immediately stopped. you're going to have accidents in any industry, but theres worrisome is that has been an increase in the number of accidents or explosions in the last 12 months. >> it is an aging piece of

infrastructure. about 50 years old. they have had six incidents. six weeks this year alone. ant's as many as they had alabama for the previous five years altogether. there has been a sharp increase in incidents just in alabama. comment to would not me at all as to what is driving that increase. it we don't know what going on in alabama at this point. if you go back and look at the pipeline structure as a whole, we are also seeing an increase in accidents year-over-year. we are seeing the accidents are getting more and more expensive and doing more and more property damage. colonial federal regulators, the national transportation safety board are all investigating at this time.

carol: turning it into a cover image was the job of the creative director rob vargas. >> in october, the colonial pipeline -- it was hard to get an image of that because it happened very quickly. we didn't have a photo, so we turned to photoshop. --created this morning sign warning sign. in this hellish blaze. stating pretty plainly. in the fire on the background. it's not often you take an image and blowout the cover. see,om the images we did it did look like a small nuclear explosion. it seemed like a very intense

blast. wanted it that without showing the news photo from afar. >> the company itself is also exploding as a result. >> they have had a few incidents and we want to make sure that that gets on there as well. paulson bet on donald trump when most of wall street said, no, thanks. now he's reaping the rewards. oliver: and hillary clinton supporters on wall street are changing their attitude about a trump white house.

carol: welcome back to bloomberg businessweek. oliver: in the markets and finance section, john paulson seeing a huge payoff. carol: i spoke to reporter joe

light. a big shortous for he made before the financial crisis. subprime mortgage loans. dollars.of and he's moving on to other issues. carol: fannie mae and freddie mac. he's also had some interest in for a good reason. that's right. at fannie mae and freddie mac are at the center of the u.s. mortgage market. there are a couple companies taken over by the government in 2008. and eventually received $188 billion in taxpayer bailout .oney the curiosity is that even though the government took over the company's, they left a lot of fannie and freddie, and shares. at the time, they seemed worthless.

as the mortgage market started investors,rtain paulson among them, though we don't know when he bought his shares, they started to see the value there. >> he is making money on it? >> the share prices have risen a great deal since the drop of the crisis. fannie and freddie's bailout. all the profits to the u.s. government. all the profits to the u.s. government. the seal those profits start flowing to shareholders again.

it is very much an outstanding question whether the administration or congress will it to happen and court cases where they start to change that policy. carol: this is where the story gets interesting. i think everybody has been trying to get their head around them for years before the crisis. are they government agencies, cause i government agencies? they were publicly held entities. it's kind of interesting. john paulson made a bet on donald trump. he was out there early, backing donald trump. it's curious to see what kind of leverage they will have, maybe be more favorable. those profits will ultimately go back to shareholders. john paulson has been spending money lobbying or supporting donald trump and his affiliated campaigns, if you will. joe: also became involved in the

trump campaign early on when it seemed like trump didn't have a chance of winning the presidency. than $300,000ore , but also torump -- beforeican becoming involved in the trump campaign and thousands of dollars on lobbyists. basically trying to get in the halls of congress, get in the ear of lawmakers who have influence on proposed reforms. want to save fannie and freddie, democrats who want to eliminate and save on the republican side, they have been

trying to convince some lawmakers to go to bat for what paulson would say are the rights of shareholders. theseght to a share of profits. clinton: some supporters are turning around. >> it's not that they suddenly dislike clinton and love donald trump, the reason is they think they will have things go well for their wallets. expecting tax cuts, to be deregulated, interest rates to go up. had their feelings hurt during the campaign when trump was making fun of them, but now i think they know to look at their wallets. they say i'm really upset about

the things donald trump says and then ims, women, get greedy and i know things are going to be good times. it was amazing to hear someone say that to me in an interview. at least he was being honest. he was saying what a lot of people are feeling. you work for a big bank. whereme through this era bankers had to deal with a lot of regulation. the dodd frank act was put in place to prevent a global financial crisis and it meant some of the rules of the road will change and people will expect those rules are going to change again and will make life for the big banks a lot easier. oliver: it doesn't take a genius to look at trump when he talks about whether or not it's going to be good for financial markets and banks. so why is the sudden of tiffany

that this guy is going to be great for us -- they had to know that along the way? was it the toxicity of supporting trump in a major urban area? justthink a lot of people didn't think he was going to win. there is also a third dynamic that hints to what you're talking about. trump is inconsistent. he talks about rolling back dodd-frank. bankers expect life is going to get better for them. and of course- doing things like a moratorium on new regulation. on the other hand, the republican platform for 2016 has in it that there will be a new glass-steagall which would be really disruptive to wall street. wall ineagall put up a the stock crash when the great depression started.

new glass-steagall would be pretty annoying for citigroup which would be putting together with travelers. created, they was were doing it illegally with the expectation that the wall was going to come down and it did. that is what we still have citibank. if it comes back, these banks are in trouble. you can say the bankers really believe when trump says he's going to lower their taxes and deregulate their industry. they do not believe him when he says this populist rant against wall street and the republicans suggest a new glass-steagall. that is my understanding after speaking to these people. do autocrats know how to lead a democracy? reemergesul manafort as a player at trump tower. ♪

carol: welcome back to bloomberg businessweek. oliver: you can also listen to us on the radio. 1200 in boston. i deny .1 fm in washington, d.c. carol: and in asia on the bloomberg radio plus app. a controversial figure in trump land emerges. we spoke to reporter bob coulter. steve bannon was supposed to be the mastermind that was going to bring trump of victory. he resigned in august. it seemed like that was going to be it. and we would never hear from him again. what i've reported out is the idea that he never went away. he stayed close to trump all the way through and he articulated

the strategy that rot trump the victory. steve bannon was making noise with fringe groups. real centerget the of america to go on trumps side, that was all paul manafort. it speaks to his power as an unseen force for decades. i take a look at the scope of whatareer and evaluate might be in store for him in the future. the trump administration, we believe he will be antiestablishment but it doesn't seem like it will ultimately work out that way. paul manafort seems to be the ultimate washington insider. >> insider is the perfect word for him. he came up in the 70's in young ofublican circles and health the gerald ford campaign and ronald reagan campaign and invented the culture of lobbying donald trump seems to make a lot

of noise about not liking. that broughtfor these controversial foreign figures to the bush white house. it was manna who worked on the dole campaign in 96 and trump turned to him because he couldn't find anyone else to primarieshen his looked like the end of him last spring. oliver: he popularized the phrase "influence peddling." it's a synonym for lobbying. of the time, he likes to be below the radar. a flashy and well-dressed guy. .e's not a public guy he's not flamboyant. during this hud scandal in the late 80's, he played a part in

the directing of federal funds. public flat out to the that some call it lobbying and some call it influence titling. it depended on how you define it. carol: you made a lot of money doing this. you profile him. he's a nice dresser. he has lovely places. isis a low-key guy but he involved, from one we are hearing, still, in the trump administration. >> he was in touch directly with trump on how to handle the jim comey revelations that the fbi was going to look again at hillary hoss emails. a males go back to michigan. you can win michigan and trump did win michigan. >> tell us about the background and how they got to know each other.

>> they met in the 70's through roy cohn of all people. of those ragtag group swirl of famous people need each other. defending his casinos against indian casinos that were going to come up. he knew manna for it that way. when manna for was in charge of the republican national convention, it would bring george bush a victory. trump came and visited in there and took a look at the campaign operation. andas very impressed started to get a feel for the sort of thing that manna for did. did.ul manafort his say two friends of you've got to get metaphor to help you with the campaign. he called them and pick them up and the rest is history. carol: why trump conflicts of

interest may become the new normal. and 700 thousand immigrants currently shielded from deportation in the u.s..

carol: welcome back to bloomberg businessweek. oliver: clues on how donald trump might run his presidency by looking at autocrats around the world. carol: and what it would take to remove conflicts of interest. oliver: and the tool that businesses have to fight sexual harassment. we're here with jim ellis. one that is particularly interesting is what is happening and in particular, chinese investment in london.

>> it is a strange time given post-brexit. in the financial center at risk. they are talking about not investing in london order of reducing staff. the chinese have decided that a bunch of banks are putting money behind huge financial services development in london that would basically be the home for lots of chinese businesses in london. they say it will remain a financial market. it will play the fact that they can make a lot of money as well. it is sort of counterprogramming. they are hoping that won't happen. they have their own companies.

the technology section, and uber won a b. elements.fun >> we hear so many people that want to get into the right healing start a business. raisedsupposed to have $250 million. the only raised about $40 million. they spend big on offices, multiple continents. they had parties. everything from free-flowing champagne to exotic dancers.

they gave the impression the big money was there. it turns out it did not work. the app that this was all supposed to go for didn't work as well. true story of investors and markets getting into -- getting ahead of themselves. ascertaining what donald trump is going to do as president, you look to a particular type of leader, the autocrats already in place. cracks everybody keeps saying that donald trump -- >> everybody keeps saying that donald trump, we've never seen anything like him. -- this wholed thing about unelected autocrat has been done in europe. it with putin, people that come in with strong, right wing, authoritarian leaders.

try to take a look at the common things there. it gives you a hint of whether we can see trump follow the same thing. you guys take a dive into why unwinding donald trump is not going to necessarily be so easy. trump is his business. is a licensing machine that praise off of him and his persona that makes it very difficult to think about how you can take trump off of all these buildings that are there trying to get people to pay more for rent or office space. they might contractually need to

have him involved. it is a big problem. he wants to maintain the structure and keep his children running them. it will never have anything quite like this before. oliver: a lot of questions. we spoke to the reporter. carol: donald trump sold all of his business interests, it would get rid of the conflict of interest problem. walk us through that. >> what everybody seems to be he has these, business partners coming to visit him as he's making these transition decisions. and he's going to have all of these business ties with guys and others. everybody is really concerned

about how that will affect how trump governs. all of that is up in the air. do ise're trying to anything we can do to distance himself from the businesses that could pose a lot of problems and a minimally keep everybody questioning why he is doing what he's doing as he engages in countries where they have business ties. carol: selling his businesses are not so easy. businesses are incredibly unique. you have trump golf courses. you have his licensing deals with international partners where he's giving his name to owner developers, getting higher prices for condos. it is hard to separate trump the

man from that business. want to own the rights to put his name on things when i am not trump and don't get to control what he does? there are other things were he's a minority partner. he would need to get their permission for that. also in the politics section, the fear gripping immigrants working in the u.s. legally. an individual, why is he nervous? >> he doesn't know if he's going to lose his permit to work in his protection from deportation within the next couple of months. he is someone that can be a poster child for president obama for the childhood arrivals program who was brought here is

a visa that-old on he and his family stayed past the expiration of. he's spent almost his whole life in the united states. to worken't able legally in 2012. the executive authority has it and it came here early in their life. they would worry about what would happen if mitt romney got elected. whatin this possession of donald trump is going to mean for him. carol: his name and address and everything the government now has.

>> they provided information to the government which people involved in the program have confirmed now will be information that's available to president trump and to his government which he is committed to take a more aggressive approach when it comes to forcing people to leave the country. >> what has trump said about this specific docket? about repealing it, addressing it. how specific has he been? >> he will and it in other executive moves. what remains to be seen is how literally and specifically he chooses to keep that pledge. and if he can somehow be swayed by others, including people in the business community to change his view. is if he questions

would revoke, immediately and instantaneously, all of the work authorizations. someone who is legally employable one day would be unemployable the next day or if he would allow them to run out. and how much of a deportation risk there would be for people who previously were protected. information toed make it easier to track them down. is a target of fake writers on the internet. oliver: ibm is for pairing for cyber warfare. ♪

carol: welcome back to bloomberg businessweek. oliver: in the technology section, the trolls elon musk things are behind many internet complaints and mysterious attacks online. carol: let's begin by talking

about shepard stewart. >> he is a fake op-ed writer. his byline appears on websites, particularly the politically conservative websites. they're very much intent on criticizing elon musk. the very well-known tech entrepreneur and mogul who is affiliated with companies like tesla and spacex. has enemies in the world that want to attack him but don't want to do it in a straightforward way. like opposition he faced from an industry specific standpoint. people whose best interests may not be aligned with elon musk. tell me where these people are from. that strong suspicion is

his commercial competitors perhaps at a couple of levels have hired firms who are going out and putting websites up. but i was not able to connect all the dots. in some instances, you can identify what group is behind a website. it is a relentlessly negative website that portrays him as someone who sucks up federal subsidies and does nothing in return for it. that website is affiliated with a conservative group in that group is a 501(c) four group. so it doesn't have to disclose donors and you don't really know who is providing the money. >> are they making up stuff? >> for the most part, they are

with badng stories news about his companies and the companies have had a rocky up-and-down history. and in addition to that, you get the mock editorials. it is very negative opinions about everything he does. his companies have received in centers from government at different levels. is that a terrible thing or is that smart policy to encourage solar energy through his company solar city? he's not the only person receiving those incentives. these writers, the opinion is always negative. >> help us understand the not so easy to understand world of the venting cyber attacks, hacking,

and what you looked at to prevent this type of stuff. >> there is an increasing awareness of companies that have a large breach. basically, pick your hack the last few years. it can be a huge brand damaging event. that parts of the teams and corporations that don't normally do security are really prepared for. if you take target for example. iwas a breach that happened around christmas time. turns out that the company itself had overlooked some mornings that could've prevented the whole thing. ,y the time it all leaked out the ceo ended up resigning. cambridge is on in

that ibm has taken the initiative to create a simulator. can put in the characters involved in a big breach. let them in a room and run them through a very complicated scenario. it illustrates what a company deals with. up a cybere set security training center. it's not just about the technology, but crisis management. >> they spent a lot of money creating an environment that can realistically create not just the conditions of an actual breach but the things that happen afterwards. it can create this traffic that

goes along with a corporate network. traffic ofmulate the a major corporate network and say you have a security team trying to figure out what happens after a fishing email is .pen and they have all of these other things that allow them to put the rest of the management team through the paces. it is this beautiful room that has a huge screen on the front of it. technology that comes from hollywood. they have a studio where they can do mock interviews upstairs. press andked to the see how the team handles it. >> why more women don't come forward to report sexual harassment. ♪

oliver: welcome back to bloomberg businessweek. carol: you can listen to us on the radio and also at a.m. 1130 in new york. oliver: and in london and in asia on the bloomberg radio plus app. carol: a three-part look at sexual harassment and how companies try to fight it. oliver: why more victims don't come forward. carol: reporting in their own words. something we have talked a lot about as a country recently. roger ailes from fox news. recently megyn kelly, her book alleges that he made demands 10 years ago and she never said anything until carlson sued.

and on top of that, president-elect trump has been accused of also harassing or groping women. he has been caught on video saying that himself. i wanted to look at the state of harassment in the workplace specifically and why, despite decades of laws and lawsuits, people's careers have been ruined over this, why it is still so common. >> how did you find these women? some are connected to cases in the media, but some are not. >> some of them have sued their employers or past employers and i found them through looking old news articles. and i put a call out for this. , had friends of friends complete strangers contact me online. it ends up being much easier to find people than you would

expect. i had an absolute flood of responses. >> how many people once you put out, you got a lot of responses? i had friends that are not at all in the story but tell me things i didn't even know and we had been friends for years. i had been a reporter for over 10 years now and i had never gotten the response that i had in this article. what were the biggest takeaways that took you by surprise? understand sexual harassment, it is such a broad term. it was meant to mean all the ways that women were made to feel uncomfortable at work from leering to groping and actual propositions for sex. women that were told that if they didn't submit to this, they would lose their jobs.

but from a legal perspective, it is very broad. courts havers, the had it down to a couple of things. quid pro quo. you do this or you lose your job. i thought was sort of the mad men era thing that did not happen very much anymore and it is what gretchen carlson accused roger ailes of. he has never admitted to it but it is done now. i thought maybe it was just an unusual situation. thought maybe it was just an unusual situation. i talked to attorneys and women and it turns out that that still happens. women or anyone, 16% of harassment claims are made by men who don't have power in their job that maybe you or i have.

and it can happen at major establishments as well. there is also hostile work environment. you're not going to lose a ,aycheck or anything monetarily but this is just the general atmosphere you have to work in and that's what most women complain about. >> most big companies have policies. and the way employers deal with .t some can be very supportive of andwomen making the claim some are not. >> pick any company off the top of your head, you can find a policy that says they have no tolerance for harassment.

some of them stick to that policy and some of them don't. ask you what it like where you work, don't say according to our employee manual, we have this and this. you talk about the people that you work with. all of that sort of stuff. about what women think when they decide whether or not they're going to come forward and it is the real policy of companies. >> what is the loophole here were even though these policies are on paper -- >> companies don't take this seriously at all. to give companies the benefit of the doubt, most of them know this is a problem culturally and

want to do something about it. is a he said she said situation so they are faced with potentially firing someone over something that they don't have proof about. oliver: bloomberg businessweek is available on newsstands. carol: i like the story that looked at autocrats. trying to figure out what type of president donald trump will be. we look to some of the developing markets where there have been selected. and have kind of controlled the media. with ibmm going to go because it is kind of a nice relief from the politics stuff, looking at how companies can prepare for cyber attacks. ibm buying up these companies.

>> more bloomberg television starts right now. ♪

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david: what propelled you to pick google as a company? who cares about his search engine? eric: i did not think google was going to be a successful. david: is it awkward when you are the ceo dealing with founders? eric: our dress code, you have to wear something. david: you have been in one of these cars and you feel safe? eric: we are doing this to save lives. david: europeans seem to not like google as much as americans do. have you resolved those issues with europe? >> will you flex your tie please. -- fix yr