some of the most dynamic cities across the globe and how they are addressing unique challenges. we will look at moscow's massive renewal program and why refugees are flowing into the amazon. all of that ahead on bloomberg's this week. ♪ oliver: we are here with bloomberg businessweek editor-in-chief megan murphy to talk about a special focus on cities in this week.

i love you, you guys love to do because there is so much will it work. -- so much great work. tell me about this, why the focus? megan: the political, the economic, demographic, the changes that are happening and when we see entrenchments in the political level, cities are becoming the petri dish for experimentation. we have seen this massive rear re-urbanion -- massive efficacious in -- massive ication.if of the biggest challenges we are confronting, environmentally as well. we want to dive deep, look at success stories and places

struggling to deal with the change. oliver: i will play devils advocate here, because i think cities, aren't they always hotbed, the place where the forward thinking is? is it more so now as we are do talking about infrastructure with numeral leaders taking the home? -- helm? megan: the issue with being a mayor is that you actually have to get things done. if the subway does not work, you will not get reelected. if the infrastructure is not there in the city, you are going to get tossed out. that is really different than the national level where we have been talking about a national infrastructure bill for two decades and have not seen anything. the mayors of cities, it is a different story. they are things that people have to get done. they are also, unfortunately,

frequently the target of terrorist activity. look at london and paris, on frontline assignment issues. you have to be a solution oriented. -- on the frontline of so many issues. you have to be solution oriented. you have to keep up. that is different but because vacation at the national level. oliver: my favorite thing, -- then the calcification at the national level. oliver: my favorite thing, things of the national level take a couple of years to manifest themselves. problems on a city level, the mayor level, manifests within months. megan: within a day and receive immediate reactions, transit crisis. -- and you see immediate reactions, transit crisis. with the cities, it is pretty much the same issues. traffic, congestion, sustainability, development.

not even jobs in the generic sense of jobs but how a miami powering my city to attract high-paying jobs, to develop upscaling people to prepare a sustainable city. you are always going to see all categories. they smash up against each other all the time. making it a livable place for all. >> one of the cities you profile is moscow. there is a big effort to modernize their infrastructure and move their city in a very muche direction not following the restaurant values. howdy approach looking at moscow as a city? means.e are two and 1980's viewpoint.

and huge housing buildings which are empty. view is it is full of corruption. that it is unsafe and everywhere you go that somebody is looking for a handout and you have to be a company. no real visible city life in the city. why we want appeal this back is look at the moscow of today. they have really taken a forward look at revitalizing the sustainability and livability of the trafficwell as and congestion. >> we talked to editor miranda purvis. the story came out of the writer's own experience of going back to moscow after not being

there for several years. she is familiar with the city. and was back recently blown away by how much it was comparable to being in london or manhattan that everyone was on wi-fi, the parks were beautiful and green. incrediblehis lavishing of detail on historic buildings that had been quite ruthlessly torn down. citywas thinking about the and the world cup coming up there. a lot of people are interested in watching the game. city that feels a lot different than what your average american pictures moscow in a post-soviet breakup, a kind of visual image that comes to their mind.

>> i think they are quite surprised. the story brings up the fact that they had this moscow urban forum, which is a gathering supported by the city of urban planners from all over the world. to discusse people the future of big cities and vladimir putin himself said we need to be -- in order to be competitive you have to have a competitive mega-city. if people don't want to live in your city you can't compete. >> almost a conscious decision to make moscow into something that will draw people in. a conscious effort to change this. howhe talk of the city is

everything is being torn up. bike lanes have been introduced. there are new beautiful park benches everywhere. historically accurate trees lining boulevards. people actually come -- there are tourists coming in because the rubella is down and it is less expensive to stay there than it has been in the past. they are doing this so people who don't live in moscow but our russian come into the city. >> i love this week's focus, which is on cities. how do you choose an image to represent everything?

kind of get that cities will be more important over the next 25 years. more population will move there. >> you have a red square in the background, colorful but also the symbolic imagery which is the scaffolding in a foreground which represents the future in development but also the familiarity of the city now. >> anyway this is a classical photograph with a strong -- a strong foreground, background, and middle ground. story.so helps tell the >> it speaks to the power of a

good photograph when a lot of times the editorial team has to combine, edit, and put cool graphics on the cover. >> they have spent a great deal of time there. film and she on was going back to look at a city that she knew very well area and see the changes the story was talking about. >> russia braces for permanent sanctions from the u.s.. u.s. oil confronts a $10 billion threat. this is bloomberg businessweek. ♪

♪ oliver: welcome back to "bloomberg businessweek." you can also find us online. exclusively on the mobile app, russia is going to be walled off from foreign capital for the foreseeable future. >> we were trying to look at how the sanctions are different to what has happened before. the reality is that the measures are pretty much the same. they have taken them slightly. but the real important -- tightened them slightly. the president no longer has yet doherty -- has the authority.

they were looking at years and possibly decades. the point --ddress that or toal shift the sanctions put that to rest? was very potential reset on how the deal with moscow. >> the government in russia terriblehat the relationship that they had with the obama administration, we all

know why that happens. the russian intervention in ukraine. donald trump was seen as a great hope for turning a new page in relations. things have gotten worse. >> we know there is a direct focus on energy as well. where they aret coming out of serious on cement -- in terms of economic activity. >> pipeline projects, that is probably no longer happening. the language has softened. those only happen in consultation with allies. europe has a major energy independence on russia.

the worse case scenario hasn't happened. they keep very tight restrictions on financing. it basically stops russia from getting the technology it needs reservesp area offshore shale, arctic reserves. were major relationships between the state oil company. >> russian officials estimated the cost. imf and international monetary loss -- whereulus

is their opportunity for russia to make that up elsewhere? or is that just going to be an economic hit that they have to deal with? what is the potential recourse that they can take? >> i mean, russia has to hope that oil prices go up. because sanctions, there is not much that they can do about that. and that is going to act as a continuing brake on investment. looking to put money in russia, there will be investment, but not as much as it used to be. if they can diversify the economy, which they have failed to do over so many years, it is essentially dependent on raw materials. oliver: in the economic section, growing wary about venezuela.

>> venezuela, of course, has the world's biggest oil reserves. a major player in the industry. for the u.s., the biggest outside supplier of. one of every 10 barrels last year. so was a major factor in the u.s. oil industry, especially for refiners on the gulf coast. valero energy, chevron, pbf, we all have major facilities that depend on venezuelan crude for a large part of supply. it will be a big headache for them if we see sanctions. oliver: what has been doing on with the exporting of crude oil in the overall oil trade venezuela since things have blown up? >> venezuela's production has gone down. in the u.s., we are at a quarter century low in terms of import. it has been trending down. the artist producing less oil because of the economic crisis down there. u.s. importers have been turning

to other sources slowly to try to hedge bets. oliver: you know, i was going to restore it, and the numbers that you are talking about, $10 billion. i was surprised at some of these numbers of how big they are, especially given the energy independence the u.s. has been trying to achieve with shale. uws has been producing its own oil, -- even though the u.s. has been producing its own oil. how does that then i might go to this point were $10 billion is coming out? >> the key is that these refiners on the gulf coast have been built to take effect, high-density oil that you get from venezuela -- the effect, high-density oil that you get from venezuela.

they were calibrated over decades. the u.s. did not supply enough for a long time. we cannot really handle right now, or we would be mu -- it would be much less efficient. oliver: against him to the difference in terms of the material and crude coming in -- it gets down to the difference in terms of the material and crude coming in. >> there are all kinds of rage and varieties and they have evolved to take venezuelan crude. oliver: i imagined that if you are a refiner and you are used to getting a certain important number, high numbers from venezuela, you have to think about a potential downside if the turmoil does not come to some kind of conclusion. what have these companies been doing, valero and major u.s. refiners, to hedge? >> as you have said, they have been taking less and less venezuelan crude. to a certain extent, they have no choice.

venezuelan production is dropping. there are other alternatives, canada or mexico. they produce heavier crude that could work for these refineries. they have been moving. venezuela, still a big supplier for them. they have also been lobbying in washington to say, sanctions may not be the best answer. venezuela would still be able to sell is crude and other parts of the world. and you would have this lock on us here in the u.s.. they are cautioning the trump administration to be cautious. oliver: up next, why president trump is looking unprepared to deal with the special counsel. this is "bloomberg businessweek." ♪

♪ oliver: welcome back to "bloomberg businessweek.". i am oliver renick. you can also give us on sirius fm and in boston. -- catch us on sirius fm and in boston. and in london and in asia on the bloomberg radio plus app. in the politics section, as president donald trump's legal woes deepen, he has yet to put together a functional team. >> right now, their legal team is still in flux. in some ways, unfocused, which, compared to robert mueller, who now just tired his 16th lawyer, trump's legal team is trying to get it self-centered. bringing on washington veteran lawyers assuming to lack sort of one key resource that they might need to face off against bob mueller and that is a private law firm.

oliver: so, when you look at the list of folks on mueller's team and the crack squad he is putting together, it is pretty expensive. i am looking at the story and i look at the folks on the other side defending from and his team, it looks -- trump and his team, it looks lopsided. do we know why they are not assembled a team quicker to mark -- quicker? >> trump initially turned to his counsel whose area is civil litigation. but it was quickly clear that mark was not really working well with the trump administration and he was sidelined. additionally, live in trying to

go out and hire a law firm. they have reached out to a number of kind of hard firms such as sullivan & cromwell. but were rebuffed. -- a member of high-powered law firms such as sullivan & cromwell. they were rebuffed. oliver: right now, who are the folks that are at the home for -- helm for trump's defense. >> right now the team is centered around three people. you have john dowd, who is trump's lead counsel, taking over from mark in july. he is a longtime criminal defense lawyer from a law firm called gump in washington. does a lot of criminal defense work and congressional investigation. the kind of face of the team at the moment is jay, the christian right lawyer who was the one

that the trump team puts out on television to respond to news articles. and kind of the third individual that came on last week, that is tied called -- cobb. he is running the white house response to the investigation. cobb also comes from a longtime washington firm and is well experienced in congressional investigations, criminal investigations. did a lot of corporate work in private -- and private practice. he had to leave his firm. oliver: up next, limited liability companies every refugee crisis in the amazon. this is -- and the refugee crisis in the amazon. this is "bloomberg businessweek." ♪

oliver: welcome back. still ahead in the special city issue, the amazon city that has become a haven for refugees from venezuela. and we will talk to mayors about how they are tackling issues from poverty to pollution. also, moscow and the 2020 olympics. although that ahead on -- all of that ahead on "bloomberg businessweek." ♪ oliver: we are back with editor-in-chief megan murphy. one of the stories that is very interesting as a look at limited liability companies.

an interesting story. tell us why you decided to focus on these organizations. megan: we have focusing on the president and tax, issues, shall we say, and alley structures of -- and how he structures and sense he announced. more transparency love of the present has moved to separate himself and to divest control to his sons. we want to see how that is working, how he is paying his taxes, how these structures operate. in this particular article, this is a small glimpse, a small piece of the pie, but it is important. it explains why we see such limited transparency on the president's tax returns.

we can almost put together through limited information, we can likely conclude that he is using a structure, channeling through a web of llcs. we should be clear that this is far from unusual. anybody that controls or has an ownership stake in the kind of business organization that the president has almost always a structure like this. what is important for ordinary americans to know and voters to know is how, again, people with access to wealth, and advisers, and use these structures to minimize tax liability and how things are against them. oliver: you open up this story with the trump hotel in chicago. a huge building in a huge list of ownership. -- and a huge list of ownership. i like you bring it towards a

larger topic which is the president doing this. like you said, he has the ability to. it is not a question of whether it is illegal but whether it should be that case, so that wealthy americans could not find these loopholes and exploit them like they do. a lot of that comes with a very specific tax that they are able to avoid. tell us about that. megan: you are talking about the net investment in income tax. here is the issue. what is so fascinating about this is that donald trump and republican and democratic presidents alike have talked so much about simplifying the tax system as we have a system that is so complex that you can move different kinds of partnerships, whether an llc, particularly in s corporation -- an s corporation, which companies have used to avoid two kinds of taxes, medicare, a program designed to benefit the glue

cannot afford health care, as well as the net investment income tax, which is tax on the wealthy designed to be on investment income. the setting up and -- by setting up an s corp, you can avoid paying tax from your ownership stake. it is a complex provisions of the tax code, it is something that has been around for quite some time. what is fascinating is that president trump along with other people have proposed scrapping that. just the sheer complexity of our tax code really lends itself to creating these structures. that is the bigger point, whether we should have a tax code that he centrally incentivizes such complexity -- that's essentially incentivizes such complexity. oliver: let's talk about a story that focuses in a city that most people may not be familiar with. megan: it is in brazil, the triumph of amazonia in the heart of brazil.

a wash for us, a time has been one that has been a 70 -- eight lush forest, -- a lush forest. it is attracting indigenous people that have have a lifestyle for 9000 years. hunting and gathering and fishing, largely out of canoes. what they are now moving is with venezuela's extreme political disruption and violence, they are moving to menaus. this is a beautiful tale of the hope and the extreme challenges that they face. oliver: it is a combination of people in politics, and we

talked. >> manaus is equidistant between the atlantic and pacific. there is no passable road. everything is done by the water. are the waterfront, something like 40,000 ships docking every month. the fairies that take people into the jungle, little launches -- big ferries but take people into the jungle, little launches. oliver: the indigenous people -- you can get transatlantic cruise ships. if the start of the amazon river. oliver: the indigenous people from the amazonian region, in venezuela and brazil, where are they moving? >> we have people going everywhere. going to miami, middle-class people who can afford to buy flights to win a series. -- buenos aries. and there are some that are

coming to brazil. some of these people are indigenous people. they have lived in the delta by the river for millennia. over the past couple of decades, these people came to depend on modern civilization. they would come to a nearby cities, and we are talking about cities of 100,000 people max, to get medical care and consumer goods. they got some government aid. they became much more, you know, ingrained in modern society, even though they are still living in the delta. is very hostile environment. doing everything on dugout canoes. fishing in for a drink. -- fishing and foraging.

since they became dependent on modern civilization, when venezuela began collapsing, they traveled farther away to get consumer goods and medical here. some are ending up in brazil and some are ending up in a city of 2 million people. it is a bizarre existence, especially for people who speak a language that is completely isolated. they still maintain a lot of their lifestyle. they have since forever and a day. oliver: so now since existence for them has become even more strained, because, as you mentioned, the breakdown of democracy in venezuela, the chaos that has taken hold. these people have to go somewhere else to get necessities. basic things of everybody else does nothing about, right? now they have to move to a different region. how is the brazilian port in manaus handling this? david: it is about 500.

manaus has risen to the challenge, with venezuela. i can be 1800s, it used to be a backwater of 3000 people. and then there was the rubber boom. tens of thousands of migrants came in, many of them brazilian refugees from the drought in the northeast. people looking for more opportunities. oliver: up next, solutions for the growing number of cities. plus, bloomberg talk to some of the most powerful mayors on the planet. ♪

♪ oliver: welcome back to

"bloomberg businessweek." you can catch us online at businessweek.com. how governments are planning for the end of the century when 80% of the people will live in cities. >> in general, people are not rapidly changing where they live. that is very different in the global south. jakarta, manila, nairobi. i could go on and on. which are still seeing massive migration from rural areas the city. is proving an enormous strain -- it is putting an anonymous strain on the city's. -- an enormous strain on the cities. oliver: is this something that is happening now because of stronger economic growth or something new? >> the u.s. was once a developing country and it happened here. we have seen it before.

the difference i think, and i talked to add williams at harvard, an author, an expert on urbanization, what is happening in these megacities, karachi and and so on -- dacha and so on, is that they are urbanizing from a much poor level. the u.s. had a successful agricultural economy, had an excess of workers on the farms, and then they saw opportunities in the cities. these cities are not having that. we are coming from a position of trust subsistence agriculture in many cases -- they are coming from a position of subsistence agriculture in many cases. oliver: new york, this is a city that, early on, even though there were a lot of people

coming here, there was an industrialization process happening to support that. in these other cities, southern cities, is it more about the economy not being able to keep up with the number of people coming in? >> it is partly just the speed of a transition. if you take people in a little bit at a time, you can build up the infrastructure to help them. if they just come in wave after wave, you cannot do it. i'm trying to not just be negative in this piece because there are things that can be done. and i focus on a couple of small cities most people have never heard of in the north part of columbia. where the mayors have come up with a very clever idea in collaboration with a group from the europe university project. the idea is to say that we know the people are coming and we

know our cities are going to grow beyond where they are now. let's plan for it now. they are requiring rights-of-way to roads way out in the countryside. nobody lives there now. to mark them out, they are planting rows of trees. oliver: urban planning to expand the city? or is it about getting people in and out? >> it is about planning for that growth so that when people are moving there, they will not camp out where you need to have a road. because once people are there, it is just about impossible to move them to make room for a nice arterial road. therefore you have poor transportation, therefore people cannot get to work. oliver: mayors from across the globe wtalked -- talked with!." --"bloomberg businessweek." here is editor jake bennett. >> now there seems to be this trend where mayors are weighing in on issues that are lot of of

-- that are thought of as international issues. mayors used to be thought of as who -- lks we wanted to find mayors who had drew -- thatthat drove our choice. tell us what you chose to focus on here. i like that this is climate oriented. >> she has been on the forefront of this idea that mayors should be talking about this stuff and they can get together and be an international global political force. we did ask her why this is happening.

cities are where this issue of any quality is cute because you have a lot of the winners from but also a lot of people to's placed debt lot of people displaced by globalization so it makes it very immediate. >> this is obviously when you climate.t looking at something that the not quite go as planned this time around. is this something she talked about or addressed. >> about emissions, she has tried to partner with the investors to speed up the taxi fleet for more electric and hybrid vehicles. she's trying to pressure the

national government to allow her more leeway to deal with this. and that came up in a few of the interviews. down in go to cave south africa. what are they doing there? >> she basically has decided to shehis on a local level. felt like the national government really wasn't following through and actually hindering her ability to have for down to its part bitting her from switching energy providers. monopoly of a national utility there. she wasn't able to make that happen by meeting with the

relevant minister. she is actually taking it to court now. forhy european soccer and all clubs are vacationing in the u.s.. plus heading to the races. this is bloomberg businessweek.

>> welcome back. you can catch us on the radio channel 119 and a.m. 11 30 in boston, and 106.1 fm in 91 fm in washington dc and in the bay area. and in asia on the bloomberg radio plus app. soccer looks for a way to reach a billion dollars in revenue. >> the european clubs, the famous ones, manchester united,

manchester city, all of these are coming into the u.s.. supports.ch a vibrant soccer hasn't built up in a way it has for basketball. sport.er is such a huge there really isthat is as ubiquitous. obviously americans are about football and basketball. it looks like there is a growing support for soccer. maybe it is time for globalization. --ll a lot of room to glow room to grow. >> it has double the population of spain in its entirety. , club like our salon a tremendously popular around the world, they are saturated in spain. you look at the united states, which is a place fairly young

and its soccer's death fairly young in its lifespan. things like that are just helping push all these european teams to the u.s.. is aboutems like it the population size and number of people. as he points out when you look at a country like spain, at a certain point you can't bring in new fans. what is going to be the recipe for success? >> manchester city, they are emirates owners and that was there play to get their brand in the u.s. soccer fans. the german team, they are big on digital and social media. >> they are, the pioneers for bringing that into the u.s..

>> they were the first club to have an office in new york. team owned by american businessmen. they train here in florida every year. they get a chance to see it live, the autographs, the whole thing. barcelona's try to sign a woman's team. which would play in the traditional red and blue jerseys and carry the name. onre are different opinions the best way to approach the american fans. there is a massive growth opportunity. >> staying focused on sports, but in the technology section, clones are starting to make their mark on the race track. >> the first horse is cloned around 2003. the practice has really taken off particularly in the world of

polo racing and courses. the other limpets are on board. >> most people are aware of the -- where the technology is there. so many of these numbers in the story. how does this have the potential to affect the interesting part of the market. gambling and betting and horse racing three at how did you get into this story? >> it starts at the level of the track where the individual race , seabiscuit became a star in the 30's. >> it pretty healthy business.

>> the business is training for these kinds of races, a multibillion-dollar one in a given year. the difference in the united states, standards are controlled. association, the u.k. all say that artificial insemination is not up to their classical standards. >> it may not be widely as a but also a very dedicated and very tradition based audience that is very enthusiastic about it. described the way people will address the whole culture behind it.

it doesn't strike me as the .ulture that is very eager jockeys were not psyched to say the least. their industry is going to have the control over the global industry than they used to. international equestrian federation, which tells the andpic committee what to do has said they are -- they don't care at all. in fact only recently did they require people to disclose whether a horse is a clone or not. it seems likely clones will be involved. >> bloomberg businessweek will be available online as well is

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