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. plaques and how the military is handling cyber security training. liver: all of that, ahead. carol: we're here with the jim 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. even though the referendum is 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. they have 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. if that happens, you will see it across the continent in places like france and have important elections later this ear.

oliver: it is sort of a petri 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. italy will be the start of that. oliver: a slightly less serious topic. >> it is a fascinating story ecause zahra has gone from a single store to being the biggest fashion retailer in the world. you think there is a style. 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. about what's selling, what's hot, what people are clicking on. also, they are getting information from consumers in big, major markets like moscow, new york, tokyo. what they have done is they have 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. hey want to do it much quicker so they can turn fashion in a couple of weeks. what happens is, people think it is new. i've got to buy it. his is 24/7 fashion. oliver: let's talk about the

environment. that is the cover story like pipeline explosion. tell us about this narrative. >> this one pipeline basically carries gasoline for millions of people. it is really dependent on it but increasingly 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. the time it was built, it was 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 ersey.

amazingly, about half of the fuel used along the east coast is transported through this single pipeline. about 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. what happened? >> exactly. what's really interesting about what happened on halloween is the follow-on effect for the large accident that happened in september. back in late september, this pipeline spring a leak,

essentially in the state of alabama. about 330,000 gallons of gasoline went spilling out into the surrounding woodlands. it underscored the importance of this pipeline. they had to shut off the gasoline flow. when that leak was discovered, and when that happened, gasoline reserves 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 etting supplies to come. colonial started to fix this leaky 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 ipeline and somehow, the earth moving tractor struck a pipeline. it exploded. a column of flame shot more than 50 feet in the air. one worker was killed immediately. four other construction workers were terribly burned and taken to the nearby town of birmingham to be treated. once again, we saw the flow of gasoline was immediately stopped. carol: you're going to have accidents in any industry, but what is worrisome is that there has been an increase in the number of accidents or explosions in the last 12 onths. >> that's right. as you can see, we're dealing with an aging piece of infrastructure. it is about 50 years old. but in alabama particularly,

something seeps to be going on with the clone yell pipeline company. they have had six incidents. six weeks this year alone. -- six leaks this year alone. that's as many as they had an alabama for the previous five years altogether. there has been a sharp increase in incidents just in alabama. the company would not comment to me at all as to what is driving that increase. it we don't know what going on in alabama at this point that is causing all of these leaks. 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 nvestigating at this time. but they wouldn't tell me what

is driving this increase in accidents. 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. because they set up a very wide perimeter around the area. we didn't have a photo, so we turned to photoshop. we created this warning sign, warning splitting pipeline. t may result in hellish blaze. stating pretty plainly. in the fire on the background. carol: it's not often you take an image and blowout the cover. it's just everywhere. >> from the images we did see, it did look like a small nuclear explosion.

it seemed like a very intense blast. we wanted it that without showing the news photo from afar. >> there is a lot of different impact. you also point out the company itself here 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. carol: john 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 inance section, john paulson seeing a huge payoff. that nks to his bet

donald trump could win the election. carol: i spoke to reporter joe light. >> he is famous for a big short he made before the financial crisis. subprime mortgage loans. made him famous. made his funds billions of dollars. 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. joe: 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 money. the curiosity is that even though the government took over the companies, they left a lot freddiecommon shares. at the time, they seemed

worthless. as the mortgage market started o turn, certain investors, paulson among them, though we don't know when he bought his shares, they started to see the value there. and scooped the shares back up. >> he is making money on it? correct? >> that's right. at least the share prices have risen a great deal since the drop of the crisis. one of the difficulties for paulson and other investors is that the current terms of fannie and freddie's bail out requires them to send 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 risis. are they government agencies, cause i government agencies? yet there are investors. 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. t's curious to see what kind f leverage he will have in making his administration 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 ampaigns, if you will. >> that's right. paulson became involved in the

trump campaign pretty early on when it seemed like trump didn't have a chance of winning the presidency. he has given more than $300,000 to not only trump, but also to the republican national committee and different republican organizations. even before 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. to try to convince some of hose guys to change the policy fannieand freddie, aalong the same line.

democrats 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 ights of shareholders. the right to a share of these profits. carol: some clinton supporters are coming around to the idea of president trump. >> 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. they are expecting tax cuts, to be deregulated, interest rates to go up. they might've 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. it is out of self-interest that they are getting happy. >> we had a person say to us look, i'm really upset about

the things donald trump says about muslims, women, and then i get greedy and i know things re going to be good times. but i know these 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. if you work for a big bank, you have come through this sort of era when 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. why then is it a sudden

epiphany 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 rban area? >> i think a lot of people just 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. which is what i'm referring to. bankers expect life is going to get better for them. on the other -- 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. glass-steagall put up a wall in the stock crash when the great depression started. they put up a wall between commercial and investment banking.

new glass-steagall would be pretty annoying for citigroup hich would be putting together with travelers. with travelers. the only reason citigroup exists is when citigroup was created, they 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. to be able to square the circle, 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. carol: do autocrats know how to lead a democracy? we'll take a look at what's happening around the world. oliver: paul manafort reemerges as a player at trump tower.

carol: welcome back to bloomberg businessweek. oliver: you can also listen to us on the radio. cirrus xm channel 119 and also on 1200 in boston. m 960 in the bay area. carol: and in asia on the bloomberg radio plus app. a controversial figure in trump land emerges. oliver: we spoke to reporter bob coulter. >> paul manafort before steve bannon came along 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. in order to get the real center 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 his career and evaluate what might be in store for him in the future. carol: 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. e came up in the 70's in young republican circles and helped with the gerald ford campaign ands ronald reagan campaign and

invented the culture of lobbying donald trump seems to make a lot of noise about not liking. it was manna for that brought all of rt who brought 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 help him when his primaries looked like the end of him last spring. oliver: he popularized the phrase "influence peddling." it's a synonym for lobbying. >> most of the time, he likes to be below the radar. a flashy and well-dressed guy. he's not a public guy. like lee atwater was back then. he's not flamboyant. during this hud scandal in the late 80's, he played a part in the directing of federal funds.

he said flat out to the public that some call it lobbying and some call it influence titling. it is just a matter of how you define it. that was a glib statement that efined his career. carol: you made a lot of money doing this. you profile him. he's a nice dresser. he has lovely places. he is a low-key guy but he is involved, from one we are hearing, still, in the trump administration. and the forming of what's to come. >> 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's emails and more closer to the final days, he was one of the ones who was saying you have to go back to michigan. you can win michigan and sure enough, trump did win michigan. >> tell us about the background and how they got to know each other. >> they met in the 70's through oy cohn of all people.

where like ragtime, famous people meet each other. defending his casinos against indian casinos that were going to come up. he knew manafort 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. the trailer at the convention, asked questions, said he was very impressed and started to get a feel for the sort of thing manafort did. years later, manafort has a home in trump tower. at least two friends of his say 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 ormal.

oliver: over 700,000 immigrants currently shielded from deportation in the u.s. ♪

ahead, clues on how donald trump will run his presidency. carol: and why it may be impossible for president-elect donald trump to remove his conflicts of interest it -- profits of interest. all ahead on "bloomberg businessweek." ♪ we are here with the editor with a lot of must reads. one that is interesting is what is happening in london and chinese investment within london. >> it is a strange time given

that post-exit, one is worried that time at the financial center is at risk and a lot of people are talking about rent is going down. enter the chinese, they decided a bunch of chinese banks are putting money behind a huge financial services development and london that will basically be the home for lots of chinese businesses in london. they continue to believe that london will remain a big financial market, and also, they can also play the fact that they can make a lot of money on the real estate as well. it is counterprogramming, but if it works, it works really build -- it works really big. they think because they have so many of their own companies that need to have big outpost, that

gives him a floor. oliver: this was an over one of the says they had raised a lot of money and they cannot. there are fun elements. jim: it is a fun story because we see so many people who want to get in the right healing startup business. this company had a lot of press. it is based in london. it was supposed to have raised $250 million. turned out that they only raised $40 million. carol: big difference. jim: they were spending big on --ices, multiple confidence offices on multiple continents and had parties. the ceo had a party in las vegas and had exotic dancers on the company dime, cars, all the things that big money was here

-- all the things that gave the impression that big money was here, but it did not work out. the app did not work as well. this is a true story of investors and markets getting ahead of themselves. oliver: let's talk about something in the opening remarks section about ascertaining what donald trump will do as president. these type of leaders, autocrats, better in place obama world. jim: everybody keeps saying donald trump -- it turns out this whole notion of an elected autocrat has been done a number of times across europe. on, wee from mussolini have seen it with putin, with people who have come in with strong, right-wing, authoritarian leaders, but .otten elected to those posts

. we try to look at one of the common themes that gives you a hint of whether we could see tell follow the same thing. talking about donald trump in politics and policy, unwinding dive into donald trump from his businesses will be impossible. jim: trump is his business. what trump is is a giant licensing machine that trades off of him and his persona that makes it very difficult to think about how you can take trump off of all of these buildings, trying to get people to pay more for rent an office space. a lot of those might contractually need him involved. the other thing is that he doesn't want to separate his businesses. he wants to maintain all of his

structure, and is keep his children running them. i will not even say the word conflict of interest. we have never heard of anything quiet -- quite like this before. oliver: very little precedent. sayingkicked up a story if donald trump sold his business interests, it would get rid of the conflict of interest problem. walk us through that a little bit. now, what everyone is talking about his political opponents in the media. he has these business partners making the transition decisions. going forward, he will have all these business ties with these guys and others, as well as ties to lenders, and everybody is concerned about how that could affect how trump governs, what

like, andraft looks all of that is up in the air. what we are trying to figure out is what he could do to distance himself from those businesses that the potentially pose a lot of problems, and minimally keep everyone questioning why he is doing what he is doing as he engages in countries where he has these business ties. yet, selling his businesses are not so easy, right? >> no. trump's businesses are incredibly unique. you have the trump golf courses. licensing deals with these international partners where he is giving his name to honor developers in hopes of getting higher prices for condos or hotel rooms. it is really hard to separate trump the man from that business.

do i want to own the rights to andtrump's name on things don't get to control what trump does, or what trump does as president? there are other things where he is a minority partner, and he would need to get their permission to sell. also in the politics section, the gripping immigrants working in the u.s. legally. story talking about -- years old, an engineer, and he does not know if he is going to lose his permit to work in his protection from deportation within the next couple of months. someone come in many ways, who could be a poster child for president obama's deferred action for childhood arrivals program that was brought here is

a seven-year-old on a visa that he and his family then stayed , andthe expiration date of spent his whole life in the united states, and was not able to work legally until 2012 when he was covered under the program initiated through executive authority but president obama, which so far has shielded over 700,000 people who have been here a long time, and came here beingin their lives from threatened with deportation, and has provided them work permits. he actually hesitated. he told me that he was going to apply for the program in 2012, worried about what happened if mitt romney got elected. his address and everything, the government has all of this, correct? >> yes.

he provided information to the government, with people involved in the program have confirmed will be information that is 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. oliver: so, what exactly has trump said about this specific daca, that repealing it, addressing it, how specific has he been? >> he said he is going to end it. what remains to be seen is how literally and how specifically he chooses to keep that pledge. he could beif swayed by others, including people in the business community to change his view. among the questions is whether he would revoke immediately,

instantaneously all of the work authorizations, meaning someone who was legally employable one day and employable the next -- unemployable the next day. and how much of a deportation risk there would be for people previously protected, and provided information that the government to make it easy to track them down. carol: up next, white elon musk is a target of fake writers on the internet. ♪

carol: welcome back to "bloomberg businessweek." i'm carol massar. oliver: elon musk things the trolls behind internet tax online. is shepard stewart?

his byline appears on websites of political conservatism, and whoever is behind the shepard stewart identity is intense on criticizing elon musk. he's affiliated with companies spacex.la and he has enemies in the world want to attack them, but don't want to do it in a straightforward way. oliver: you delve into one corner of the internet largely, the opposition he faces in an industry-specific standpoint. whose interest may not best be a mind with elon musk's. >> my strong suspicion is his commercial competitors have

hired firms who are going out putting websites up and hiring fake writers. i was not able to connect all the dots. it is the: history behind it -- it is the coto industry that is behind it. industrythe coal behind it. website is affiliated with the conservative group. that group is a 501(c) four group that does not have to disclose its donors. you don't know who is providing the money. carol: are they making up stuff? >> they are aggregating stories with bad news about musk's

companies, and the companies have had a rocky up and down history. in addition to that, you get these mock editorials. are they making stuff up? it is very negative opinions about what he does. his companies have received incentives from government at different levels. that is a fact. it had a terrible thing, or smart policy? for example, to encourage solar energy through his company solar city? he is not the only person in the solar industry receiving those incentives. that is a matter of opinion. with these writers, the opinion is always negative. carol: mike riley takes a tour of cyber wargames. oliver: help us understand the not so easy to understand world of preventing cyber attacks, hacking, and what you looked at in the story helping to prevent

this type of stuff. >> there is an increasing awareness among major companies that a large breach like we have seen with target or sony, take k, can becac -- big hac . huge dampening event take target. that was a hack that happened around christmas time. turns out the company had overlooked some warnings that could have prevented the whole thing. -- by time that leak out the time it leaked out, the ceo was resigning. initiative tothe

create a simulator that you can put in a bunch of characters a , put thembig breach in a room, and run them through a very complicated scenario that illustrates what a company deals with when it deals with a massive breeze, and sees what happens. carol: you write about what ibm is doing, and they set up a cyber security training center. it is about the crisis management after there is a hack. doing, and what you saw? >> it is impressive. they spent a lot of money creating an environment that can very realistically create the conditions of an actual breach, but all the things that happen afterwards. they had this amazing technology that can create the traffic that goes along with the corporate network.

so, they can simulate all the traffic of a major corporate network so you can have a security team in that room trying to figure out what , are trying to track down a hacker in real-time. then they have all of these other things that allow the management team to put them through their paces. it is this beautiful room that has this huge screen on the front of it, this technology that comes from hollywood. they have a studio where they can do mock interviews. they will start throwing things into the mix, like a leak to the threat or net the investigation, and see how the team handles it. carol: up next, the psychology of why more women do not comport to report sexual harassment.

♪ oliver: welcome back to "bloomberg businessweek." i'm oliver resnick. carol: and i'm carol massar. you can listen to us on radio. oliver: and in london and on -- and in asia. more victims don't come forward. carol: here is a reporter. >> sexual-harassment is something we have been talking about more recently. alleges in her book that -- on top of that, president-elect

trump has been accused of andssing or groping women caught on video actually saying that himself. state ofto look at the harassment in the workplace, despiteally, and why decades of laws, lawsuits, people's careers ruined, why is this so common? i was surprised at what i found. carol: how did you find all of these women? some women are connected to cases that are played out in the media, but some not. >> yes. some of them have sue their employers or past employers. i found them to looking and old news articles -- looking at old news articles. i had friends of friends, complete strangers contacting me online. sup -- iting -- it in

ends up being much more response. carol: you got a lot of responses? >> this is anecdotally, but i had friends who are not in the story, tell me things i did not know and we had been friends for years. for overen a reporter 10 years now, and i have never gotten the response that i have for this article. oliver: you mentioned the surprise in putting this article and what with the biggest takeaways it took you by surprise? >> to understand sexual-harassment, it is such a broad term. it was going in the 1970's meant all the ways a woman is made to feel uncomfortable at work. women who are told that if they some things,t to

they would lose their jobs. but from a legal perspective, very broad. havethe years, the courts cut it down to a couple of things. thiss quid pro quo, you do or you don't get a promotion. i thought that was the mad men era saying that do not have -- that did not happen very often. i talked to attorneys and women, and it turns out that that still happens. 16% of lesson plans are made by men. from people who do not have the sort of power in their jobs like you and i do not have, like

service workers. obviously, it could happen at major establishments as well. call a is something we hostile work environment. going toot necessarily lose anything monetarily, but it is just the general atmosphere you have to work in. that is what a lot of women complain about. carol: it is interesting, most big companies survey have policies, and a lot of companies have policies, and yet the way someyers deal with it, could be very supportive of the women making the claim, and some are not. >> if you pick any company just off the top of your head, you can find a policy that says it absolutely no tolerance for harassment.

some of them stick to that policy, some of them don't. the way i describe it to people is, if someone asks you what is it like where you work? you don't say, according to the employee manual, we have this, and this, and this. weird persont the in the mailroom, that kind of stuff. that is what makes a company culture, and that is what makes -- and that is what women think about in deciding if they are going to come forward. oliver: what is it about the sort of loopholes that has emerged even though these policies are not stated and on paper, -- >> companies don't take it seriously at all of my talk to women who had very egregious violations happen to them, and nothing really happened. to give companies the benefit of the doubt, most of them know it is a problem and want to do something about it.

but when it is brought to their attention, most of it is a he said, she said situation, so they are faced with potentially firing someone over the fact. businessweekberg is on stands now. i like the story about autocrats, trying to figure out what kind of president donald trump will be. we are looking at some of the developing markets where there were autocrats elected, people who won on the charisma and personality and control the media. i thought that was fascinating. i am going to go with ibm in the tech section because it was a nice change from all the politics, looking at how companies could prepare for cyber attacks. ibm buying of these countries and this little warfare center.

carol: really fascinating. more bloomberg television starts right now. : ::

>> coming up on bloomberg best the tories that shaped business am europe, middle east and africa. >> market are pricing in we are staying in. prospects for u.k. outside the e.u. are incredibly bright. understand that the decision with seismic consequences. and there has to be regret taking back control. >> the economic consequences of brexit will be more severe. business is a pro government. >> the financial sector suffered considerable pain. >> the sentiment