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tv   60 Minutes  CBS  May 20, 2018 7:00pm-8:00pm PDT

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monopoly. in fact, they are a monopoly in several markets. they're a monopoly in search. they're a monopoly in search advertising. >> they know who you are, where you are, what you just bought, what you might want to buy. and so, if i'm an advertiser and i say, "i want 24-year-old women in nashville, tennessee who drive trucks and drink bourbon," i can do that, on google. ( ticking ) >> our work is in being able to make testing more accessible. >> elizabeth holmes was a charismatic stanford dropout, who promised to revolutionize
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blood testing, by using this small box, supposedly filled with dazzling technology. the invention was backed by hundreds of millions of dollars from a-list investors, until the theranos story unraveled. >> this is one of the most epic failures in corporate governance in the annals of american capitalism. ( ticking ) >> he would ask to wrestle with me. he would try to grab me. he's a monster. >> really? a monster? >> i think mario batali's a monster. >> trish nelson was a waitress in a new york restaurant called the spotted pig, where she often served, and she says was abused, by celebrity chef mario batali. she and several other women are speaking out tonight because the sexual abuse they experienced is all too common, they say, in the restaurant business. >> he crossed a line. a huge, a huge line. assaulting someone that's unconscious. ( ticking ) >> i'm steve kroft. >> i'm lesley stahl. >> i'm scott pelley. >> i'm anderson cooper.
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>> i'm norah o'donnell. >> i'm bill whitaker. those stories, tonight, on "60 minutes." ( ticking ) this
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>> kroft: this past week, the federal trade commission was asked to investigate the data collected by google on its android operating system, which powers most of the world's smart phones. it was a tiny blip in the news cycle, but another sign of washington's and europe's growing concerns about the enormous, largely unchecked power accumulated by tech giants like facebook, amazon and google over the last two decades.
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of the three, google, which is part of a holding company called alphabet, is the most powerful, intriguing, and omnipresent in our lives. this is how it came to be. most people love google. it's changed our world, insinuated itself in our lives, made itself indispensable. you probably don't even have to type google.com into your computer-- it's often the default setting, a competitive advantage google paid billions of dollars for. no worry. google is worth more than three-quarters of a trillion dollars right now, and you don't get that big by accident. since going public in 2004, google has acquired more than 200 companies, expanding its reach across the internet. it bought youtube, the biggest video platform. it bought android, the operating system that runs 80% of the world's smart phones, and it bought doubleclick, which distributes much of the world's
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digital advertising. all of this barely raising an eyebrow with regulators in washington. were any of those acquisitions questioned by the anti-trust division of the justice depart >> gary reback: some were investigated, but only superficially. the government just really isn't enforcing our anti-trust laws. and that's what's happened. none of these acquisitions have been challenged. >> kroft: gary reback is one of the most prominent anti-trust lawyers in the country, widely credited with persuading the justice department to sue microsoft back in the '90s, the last major anti-trust case against big tech. now, he's battling google. you think google's a monopoly? >> reback: oh, yes, of course google's a monopoly. in fact, they are a monopoly in several markets. they're a monopoly in search. they're a monopoly in search advertising. >> kroft: those technologies are less than 25 years old, and may seem small compared to the industrial monopolies like
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railroads and standard oil a century ago, but reback says there's nothing small about google. >> reback: google makes the internet work. the internet would not be accessible to us without a search engine. >> kroft: and they control it. >> reback: they control access to it. that's the important part. google is the gate keeper for-- for the world wide web, for the internet as we know it. it is every bit as important today as petroleum was when john d. rockefeller was monopolizing that. >> kroft: last year, google conducted 90% of the world's internet searches. when billions of people asked trillions of questions, it was google that provided the answers, using computer algorithms known only to google. >> jonathan taplin: they have this phrase they use, "competition is just a click away." they have no competition. bing, their competition, has 2% of the market. they have 90%. >> kroft: jonathan taplin is a
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digital media expert and director emeritus of the annenberg innovation lab at the university of southern california. he says google's expertise may be technology, but its business is advertising. and, its most valuable commodity is highly specialized information about us. it's helped google control roughly 60% of worldwide advertising revenue on the internet. taplin says traditional companies can't compete because they don't have the data. >> taplin: they know who you are, where you are, what you just bought, what you might want to buy. and so, if i'm an advertiser and i say, "i want 24-year-old women in nashville, tennessee who drive trucks and drink bourbon," i can do that, on google. >> reback: people tell their search engines things they wouldn't even tell their wives. i mean, it's a very powerful and
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yet very intimate technology. and that gives the company that controls it a mind-boggling degree of control over our entire society. >> kroft: google is so dominant in search and search advertising that analysts and venture capitalists in silicon valley say it's extremely difficult for start-ups to get funding if their business model requires them to compete with google for ad revenue. jeremy stoppelman co-founded yelp more than a decade ago, a website that collects local reviews on everything from auto mechanics to restaurants nationwide, and makes money selling ads. >> jeremy stoppelman: the initial promise of google was to organize the world's information, and ultimately, that manifested itself in you expecting that the top links, the things that it shows at the top of that page, are the best from around the web. the best that the world has to offer. and i could tell you that is not the case.
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that is not the case anymore. >> kroft: instead of doing what's best for consumers, stoppelman says google is doing what's best for google. >> stoppelman: if i were starting out today, i would have no shot of building yelp. that opportunity has been closed off by google and their approach. >> kroft: in what way? >> stoppelman: because if you provide great content in one of these categories that is lucrative to google, and seen as potentially threatening, they will snuff you out. >> kroft: what do you mean, "snuff you out?" >> stoppelman: they will make you disappear. they will bury you. >> kroft: yelp and countless other sites depend on google to bring them web traffic-- eyeballs for their advertisers. but now, stoppelman says, their biggest competitor in the most lucrative markets is google. he says it's collecting and bundling its own information on things like shopping and travel and putting it at the very top of the search results, regardless of whether it belongs there on merit. he showed us how it worked by googling "sushi san francisco." >> stoppelman: all the prime real estate is here.
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this is where the consumer, their eye focuses. and that's by design; google wants you to pay attention to their content. >> kroft: all of the information here is owned by google, from the maps to the reviews. stoppelman says if you click on any of these links at the top of the page, you may think you've gone to another website, but in fact you will still be on google, seeing what it wants you to see while it collects your personal information and maybe exposes you to google advertising. if you click anything inside this box, you stay on google and they make more money? >> stoppelman: that's right. >> kroft: google told us it doesn't have anything to do with money. it's about improving its product by making searches quicker and easier for its customers by eliminating the need to click through lots of other sites. stoppelman says it's about stifling competition, pushing it down the page where it's less likely to be seen. the advantage, he says, is even more striking if you look at the search results on a smart phone. >> stoppelman: this is exactly
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what your phone would look like in the palm of your hand. this is all of google's own property, right here. it takes up the entire screen. >> kroft: how important is that first page? >> stoppelman: it's not even just the first page. it's the first few links on the page, is the vast majority of where user attention goes, and where the traffic flows. >> kroft: so if you're not at the top of the page or at the bottom of the first page, or on the second page, that's going to affect your business? >> stoppelman: yeah, if you're on the second page, forget it. you're not a real business. >> kroft: yelp, microsoft, amazon, ebay, expedia, and yahoo all complained about google's dominance, and what they called its "anti-competitive behavior," to the federal trade commission, which in 2011 conducted an investigation. according to this confidential memo- parts of which were inadvertently given to the "wall street journal" years later- the f.t.c.'s bureau of competition had recommended that an anti-trust lawsuit be filed against google for some of its business practices. it said, "google is in the
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unique position of being able to 'make or break any web-based business'" and "has strengthened its monopolies over search and search advertising through anti- competitive means" and "forestalled competitors and would-be competitors' ability to challenge those monopolies." it specifically cited google for stealing competitors' content, and imposing restrictions on advertisers and other websites that limited their ability to utilize other search engines. but, the recommendations were rejected. >> reback: it flatly says that google's conduct was anti- competitive. it flatly says that google's conduct hurt consumers. i mean, what else would you need to know to vote out a complaint? there it is, written by your own staff. and yet, nothing happened. >> kroft: they closed the case? >> reback: they closed the case. correct. >> kroft: the f.t.c.'s commissioners decided that google's conduct could be addressed with voluntary improvements to some of its business practices, and that
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google's decision to move its own products to the top of the search page could plausibly be of benefit to consumers. but reback and others who were directly involved in the investigation have long suspected that the outcome had something to do with google's political muscle in washington, and its close relationship with the obama administration. google spent more money on lobbying last year than any other corporation, employing 25 different firms and helping fund 300 trade associations, think tanks and other groups, many of which influence policy. >> reback: they have a seat at the table in every discussion that, that implicates this issue at all. they know about developments that we never even hear about. so their influence, from my perspective, is very, very difficult to challenge. >> kroft: right now, the only one taking aggressive action against google and the power of
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big tech is margrethe vestager, the competition commissioner for the european union. during her four years in office, vestager has become a thorn in the side of silicon valley, fining facebook $122 million for a merger violation, and ordering ireland to recover $15 billion in taxes owed by apple. last summer, she levied a record $2.7 billion fine against google for depriving certain competitors of a chance to compete with them. >> margrethe vestager: just as well as i admire some of the innovation by google over the last decade, well, i want their illegal behavior to stop. >> kroft: and that's what you feel has gone on. >> vestager: not only do we feel it, we mean that we can prove it. >> kroft: in researching the case, vestager says her staff went through 1.7 billion google search queries and found that google was manipulating its secret search formulas, or algorithms, to promote its own products and services and sending its competitors into oblivion.
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>> vestager: it's very difficult to find the rivals. because on average, you'd find them only on page four in your search results. >> kroft: and why so far down? >> vestager: well, because then you don't find them. i don't-- i don't know anyone who goes to page four in their search results. the-- jokingly, you could say that this is where you should keep your secrets, because no one ever comes there. >> kroft: do you think this has been deliberate on google's part? >> vestager: yes. we think that this is done on purpose. >> kroft: how do they do it? i think everybody has this idea that google has this algorithm, and they put the best searches right at the top. >> vestager: well, it is exactly the algorithm that does it. both the-- the promotion of google themselves, and the demotion of others. >> kroft: so, they're rigging the game. >> vestager: yes, and it is illegal. >> kroft: google has paid its $2.7 billion fine and is aggressively appealing the decision. but for now, stoppelman says everyone is still playing by google's rules. if you're in business, you have to be on google. >> stoppelman: yeah. google wields enormous power across the industry, and they set the rules. the question is, who's watching
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google? >> kroft: google declined our request for an interview with one of its executives for this story, but in a written response to our questions, the company denied it was a monopoly in search or search advertising, citing many competitors, including amazon and facebook. it says it does not make changes to its algorithm to disadvantage competitors, and that "our responsibility is to deliver the best results possible to our users, not specific placements for sites within our results. we understand that those sites whose ranking falls will be unhappy and may complain publicly." ( ticking ) i'm just worried about the house and taking care of the boys. zach! talk to me.
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maybe you could trust you won't be next to a loud eater. (eating potato chips loudly) or you could just trust duracell. (silence) ♪ >> o'donnell: elizabeth holmes was just 19 years old when she
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dropped out of stanford university with a dream of creating a company that would revolutionize blood testing. she founded the start-up theranos, and boasted her technology could take a pin- prick worth of blood from the finger and perform hundreds of laboratory tests. it was, she claimed, "the most important thing humanity has ever built." at its zenith, theranos was worth nearly $10 billion, and elizabeth holmes became the youngest self-made, female billionaire in the world. she was also, as the "wall street journal" uncovered, at the center of a massive, multi- year fraud. you're about to hear from insiders how the theranos deception hoodwinked gullible investors, and worse, endangered unsuspecting patients. >> elizabeth holmes: our work is in being able to make testing more accessible. >> o'donnell: elizabeth holmes built her company theranos on this invention she named the edison-- a miniturized blood analyzer that would disrupt the $60 billion lab testing industry
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dominated by giants labcorp and quest diagnostics. holmes called her invention the ipod of healthcare, and it made her a celebrity. she graced magazine covers and was praised by politicians and the press alike. >> bill clinton: you founded this company 12 years ago, right? tell them how old you were. >> holmes: i was 19. ( applause ) >> reporter: the woman who i will be interviewing needs no introduction... >> o'donnell: she sold her vision with grandiose claims that her blood tests would cost a fraction of current prices. >> holmes: what we're doing in just pricing is saving medicare and medicaid hundreds of billions of dollars on an annual basis. >> o'donnell: holmes' biotech startup was backed by an illustrious board packed with national security heavyweights like henry kissinger and james mattis, the current defense secretary. the board was filled with friends of george p. shultz, the former secretary of state who
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helped end the cold war. he introduced his grandson tyler to holmes. dazzled, tyler shultz became a believer, and joined the company soon after getting his degree in biology from stanford university. when you met her, and you heard about elizabeth holmes' vision, what did you think? >> tyler shultz: i was totally sold on it. >> o'donnell: tyler shultz began working at theranos in september 2013. it was a pivotal moment, as the company announced a partnership with walgreens. the deal would put an edison machine in every store. elizabeth holmes claimed the edison performed all the tests big lab machines like these could-- from cholesterol to cancer-- all from a painless finger-prick. but tyler shultz says the edison he saw just didn't work. was it a sophisticated piece of machinery? >> shultz: no. there were components that would kind of fall off in the middle of testing, that you would have to then fish out. they had doors that wouldn't close.
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they would get too hot, and then they would get too cold. >> doug matje: when i was there, we could not complete any test accurately on the devices that we were manufacturing. >> o'donnell: doug matje joined theranos in 2012, after getting his doctorate in biochemistry. his job was to adapt blood tests for the edison-- tests, which holmes told investors, were ready to use on patients. but elizabeth holmes had told walgreens in 2010 that it had developed this device that was capable of running any blood test from a few drops pricked from a finger, in real time, and less than half the cost of traditional labs. was that true? >> matje: no. certainly not. >> o'donnell: do you think she was lying to walgreens? >> matje: i do, yeah. >> o'donnell: are you a clinical lab specialist? >> erika cheung: no. >> o'donnell: erika cheung was fresh out of berkeley with a degree in molecular and cell biology when she went to work at theranos. she was just 22, but even the novice lab tech suspected something was very wrong when
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she saw faulty test results sent to walgreen's patients. when did you think, "i probably shouldn't be doing this?" >> cheung: pretty-- ( laughs ) pretty soon in the process, especially when we started to pick up more patient samples. >> o'donnell: and when those samples were re-tested, she says, there were often contradictory results. did you ever alert the patient? >> cheung: no. we didn't let them know, "hey, we re-ran your patient sample and we're not actually positive about what the diagnosis is." >> o'donnell: this is someone's health information. >> cheung: exactly. this isn't an app crashing. this isn't, you know, someone's food delivery coming late. it's just a different ballgame. >> o'donnell: its not the only game elizabeth holmes was playing. theranos employees told us they were instructed to stage fake demonstrations for investors who visited company headquarters. >> cheung: it was kind of a show. all they would see was their blood getting collected. they didn't see what was going on behind closed doors, about how it was processed.
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>> matje: they would get their finger pricked, with a small amount of blood, then they'd be led out of the room. they'd go have a meeting, go have lunch, whatever, and at which point an engineer would run in the room, grab the cartridge, bring it out into the lab. >> o'donnell: so was the edison doing the testing? >> matje: no, absolutely not. >> o'donnell: who was doing the testing? >> matje: it was scientists at the bench. >> o'donnell: by hand. >> matje: by hand, yeah. >> o'donnell: it was a bait and switch for investors that kept the money rolling in. theranos raised nearly $900 million from those investors, who now say they were swindled by elizabeth holmes and company president ramesh "sunny" balwani. the pair claimed, in investor documents obtained by "60 minutes," that theranos technology was validated by the f.d.a., pharmaceutical companies, and was deployed on the battlefield by the u.s. military in afghanistan. those claims were fabricated. and in one public appearance after another, holmes' pitch became even more fantastic and
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reckless. >> holmes: we've done some work with people at hopkins, who have developed and demonstrated that, in blood, you can see the onset of pancreatic cancer 17 years before a tumor forms. >> o'donnell: we called johns hopkins medicine. they told us they never collaborated with theranos. and doug matje says, test data he compiled for the food and drug administration was falsified. >> matje: there was so much pressure from above to get good- looking results that are going to be able to pass the f.d.a. guidelines, that people were pressured into making things disappear. >> o'donnell: the bad results. >> matje: the bad results. >> o'donnell: that's deceptive. >> matje: yeah. for sure. >> o'donnell: did you ever go to your boss and say, "this isn't right"? >> matje: absolutely. all the time. but, you know, he was under a lot of pressure from the people above him. and he was trying to do his best
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to make, to make everyone happy. >> sunny balwani: this invention is going to be way up there, with-- with the discovery of antibiotics. >> o'donnell: day-to-day operations were run by company president sunny balwani. balwani is a millionaire software engineer with no training in the biological sciences, but he did have a powerful connection to elizabeth holmes. sunny balwani was her secret boyfriend. >> balwani: some people are here because of the mission, the cause. some people are both here for the science. >> o'donnell: balwani was also holmes' enforcer, firing employees on the spot and berating scientists for failed tests. after a year and a half, matje quit. >> matje: i saw that there was, you know, potentially fraud taking place. there was far too much illegitimate things going on there. i talked to sunny, decided i didn't want to be there any more, and i left. >> o'donnell: tyler shultz was also becoming disillusioned. >> shultz: i had a personal relationship with elizabeth.
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she was close to my family. and i felt like she was deceiving my family, and the public. >> o'donnell: and almost every media outlet, including us here at cbs, bought into the theranos myth. a health care pioneer is being compared to visionaries like bill gates and steve jobs. do you think she wanted to be the next steve jobs? >> shultz: yeah. i think she just really idolized him, so, she wore the black turtleneck. i think she created a world where she was steve jobs for a little bit. >> o'donnell: as her wealth and reputation soared, elizabeth holmes took on the trappings of power. she bragged bullet-proof windows were installed in her office, and she traveled with a full- time security detail. theranos employees told us they were closely watched and required to sign non-disclosure agreements, all reinforced, they said, by a threatening team of lawyers and private investigators. that's why, when tyler shultz alerted authorities in the spring of 2014, he used a fake name.
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>> o'donnell: why did you come up with an alias? >> shultz: i knew how seriously theranos protected their trade secrets. i knew they would not take it well if they knew that i was talking to regulators. >> o'donnell: in his email to new york state department of health regulators, shultz outlined questionable lab practices and said he believed test results were being switched. >> shultz: i just said, "this happened in my laboratory, and i just want to know if this is okay." and they responded and said, "no, this is cheating. this is not how it's supposed to be done." >> o'donnell: tyler shultz was ready to resign, but first he sent elizabeth holmes an email about his concerns. he got a response from sunny balwani. >> shultz: that i was arrogant, ignorant, patronizing, reckless, and i was lacking the basic understanding of math, science, and statistics. that if i had any other last name, that i would have already been held accountable to the strongest extent. >> o'donnell: tyler shultz quit
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in april 2014, and soon after, erika cheung did too. by february 2015, the theranos fairy tale was about to unravel publicly. at the "wall street journal," pulitzer prize-winning reporter john carreyrou, who has written a book about the theranos saga, got a call. it was a tipster casting doubt about the edison, theranos and its charismatic founder, elizabeth holmes. >> john carreyrou: she is a pathological liar. she wanted to be a celebrated tech entrepreneur. she wanted to be rich and famous. and she wouldn't let anything get in the way of that. >> o'donnell: what kind of job did the board do in holding holmes accountable? >> carreyrou: this is one of the most epic failures in corporate governance in the annals of american capitalism. they did nothing to verify that her scientific claims were true. >> o'donnell: carreyrou's first article appeared in october 2015, and revealed "theranos did less than 10% of its tests on
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edison machines." >> jim cramer: what do you think is going on here? >> o'donnell: holmes struck back. >> holmes: this is what happens when you work to change things. and first they think you're crazy, then they fight you, and then all of a sudden, you change the world. >> o'donnell: but skeptics were no longer buying the theranos deception. >> holmes: what i am showing you now is the result of hundreds of engineers' and scientists' work. >> o'donnell: holmes repeatedly insisted she would present proof at a major industry conference that her technology worked. >> holmes: you can see the tray dropping into the detection module there... >> o'donnell: it was proof that never came. >> panelist: and the evidence you presented fell far short of that. >> o'donnell: in 2016, after a series of surprise inspections, federal regulators shut down the company's laboratory, saying it posed "immediate jeopardy to patient health and safety." nearly one million theranos test results were invalidated. >> carreyrou: when she started using this technology on the
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blood samples taken from consumers in walgreens stores, that was an unauthorized medical experiment. there's no other way to put it. >> o'donnell: theranos was on the brink of collapse. big name investors found their stock was worthless. education secretary betsey devos and her family, and media mogul rupert murdoch each lost more than $100 million. walgreens sued theranos, and settled for less than a quarter of their $140 million investment. >> o'donnell: why do you think this was outright fraud, as opposed to any other silicon valley startup that just wasn't able to deliver on lofty goals? >> carreyrou: well, because she raised money, hundreds of millions of dollars, on the basis of this technology not only being ready and working, but being commercially rolled out. you're also lying to the public. you're lying to patients. you're lying to doctors. you're lying to regulators.
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most people would call that fraud, as well. >> o'donnell: the securities and exchange commission called it "massive fraud" when they charged elizabeth holmes and sunny balwani in march. holmes settled the s.e.c. case without admitting guilt and paid a half a million dollar fine. balwani, who left theranos two years ago, calls the s.e.c. charges "unwarranted" and is fighting them. at its height, how much was theranos worth? >> carreyrou: $10 billion. there was a period of several months where it was more valuable than uber, more valuable than airbnb, more valuable than spotify. >> o'donnell: and how much is it worth now? >> carreyrou: zero. >> o'donnell: elizabeth holmes remains c.e.o. of theranos. she would not comment for our story, but last month she wrote to investors, asking them to put in even more-- or the company would soon run out of cash. a federal criminal investigation is ongoing. ( ticking )
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>> why the elizabeth holmes story proved irresistible to so many reporters. go to www.60minutesovertime.com. you can't always predict them, but you can game plan for them. for 150 years, generations of families have chosen pacific life for retirement and life insurance solutions to help them reach their goals. being ready for wherever life leads. that's the power of pacific. ask a financial advisor about pacific life.
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he helped saved california from financial disaster during the great recession. ...leaving more to invest in progressive priorities like education, healthcare and affordable housing. john chiang. the proven, progressive leader we need for california's future. ( ticking ) >> cooper: when chef mario batali stepped away from his business empire this past winter, after nine women made accusations against him, it may have surprised his fans, but it did not come as a shock to many of the people who'd worked for him, or served him at the spotted pig, a new york city restaurant he'd invested in and frequently visited. the spotted pig is owned by a friend of batali's named ken friedman, and its chef, april bloomfield. over the last six months, we've talked to dozens of people who worked there, or in mario batali's restaurants. and tonight, some of them are speaking out-- we want to warn
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you, in sometimes graphic detail-- about what they experienced or witnessed in a work environment where they say putting up with incidents of sexual harassment and sexual assault were required if you wanted to keep your job. >> trish nelson: he would ask to wrestle with me. he would try to grab me. he is a monster. >> cooper: really, a monster? >> nelson: i think mario batali's a monster. he has been lauded as this incredible chef and this leader, but behind the scenes, he's hurtful and he does not respect women. >> cooper: and you're saying this based on your personal experience. >> nelson: yes. yeah. >> cooper: trish nelson was a waitress at the spotted pig, who frequently served mario batali. batali is one of the biggest stars in cooking. he owns 26 restaurants, and has appeared on television for years, as a gregarious and friendly master italian chef.
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>> nelson: we called him the "red menace." >> cooper: why? >> nelson: because it was a warning, the red menace is here. like, pull all of your bits in, mario's in town. >> natalie saibel: he came to party and have a good time. and make passes at the female wait staff, and make inappropriate comments. grab people. >> cooper: that happened more than once? >> jamie seet: yeah. >> saibel: it happened a lot. >> seet: yeah. >> cooper: that was common? >> both: yeah. >> cooper: natalie saibel was a waitress, and jamie seet a manager at the spotted pig. >> seet: he grabbed my breasts. >> cooper: were you serving him? >> seet: yeah, and he kind of reached around and-- >> cooper: seet says she complained about batali to one of the restaurant's co-owners, ken friedman. >> seet: and i said, "ken, mario just grabbed my boobs." and he's like, "oh, don't worry about it, it's just mario." and i was like, okay. >> cooper: mario batali was an investor in the spotted pig, and a close friend of friedman's. >> ken friedman: what i do for a living is, basically, i throw parties every night. >> cooper: when friedman opened the new york restaurant 14 years ago, he wanted a place that
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catered to celebrities. batali and other a-list stars would frequently hang out in a private party room on the third floor. >> cooper: what was the allure of the third floor of the spotted pig, for celebrities? >> nelson: you could smoke cigarettes, you could smoke pot, you could do drugs, you could have sex if you wanted to. i mean, there were no boundaries. >> cooper: dozens of employees told us that lack of boundaries meant a workplace where ken friedman and mario batali did whatever they wanted, and there was no one to complain to. many told us that emotional abuse and intimidation were common. did you ever see ken in a rage? >> nelson: on a daily basis. >> cooper: what kind of things would he say? >> nelson: he would berate you, belittle you, make you feel like you were nothing. >> cooper: erin fein, who bartended at the spotted pig for two years, says friedman's abuse wasn't just verbal. she says he sexually assaulted her in his car outside the restaurant in september of 2014. this is the first time she's spoken publicly about it.
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>> erin fein: he lunged forward, he grabbed my face, he started kissing me, very, sort of sloppily. he pulled up my shirt. he put his hands on me. and i felt frozen. >> cooper: fein says she managed to get out of the car, and friedman told her not to tell anyone what happened. >> fein: it was terrible and not what i wanted. but-- you know, he didn't ask. >> cooper: hours later, friedman sent fein these three emails, asking her for "sexy" pictures. >> fein: "send sexy pix tonight. i'll delete." and i was just really shocked by that. i worried about what would happen if i didn't respond. >> cooper: you worried if you didn't respond, what, that he might retaliate? >> fein: ( sighs ) it was not a good option for me to not have this job. so i thought the best move would be, you know, don't respond and
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just, let's pretend like this never happened. >> cooper: a spokesman for ken friedman says he "vehemently denies any non-consensual activity," and says erin fein "never issued a complaint" and continued to want to work for him. but fein wasn't the only employee who received requests for sexy pictures from the boss. these text messages were sent to carla rza betts the same night she says friedman tried to kiss her in 2010. rza betts was an executive in charge of selecting wines for all friedman's restaurants, but she says he was often demeaning to her. >> carla rza betts: ken came up, and i was leaning down to put something away. and he-- i had a low-cut dress on, and he said, "oh, i understand why you need to wear push-up bras. i see the stretch marks on your breasts." and i stood up... it's amazing, there's this much emotion connected to it still. i stood up, and i was furious.
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and i was like, "carla, don't punch your boss. don't punch your boss. keep your job, because you love this job." >> cooper: why do you think he said that to you? >> rza betts: it is a pure use of power to manipulate somebody into not feeling like they have any power. >> cooper: it was that feeling of powerlessness, they say, that kept nearly all these women from speaking out until recently. ken friedman and chef april bloomfield own seven restaurants together, and have employed hundreds of people over the past 14 years, but they didn't have a full-time human resources department until 2017. so there was no chain of command to go to? >> rza betts: uh, uh, nope. and i didn't go to april, because i didn't trust her about it either. >> cooper: did you feel, as a female co-owner of the company, that april bloomfield had your back? >> rza betts: no. i know other people went to april, and she did nothing to
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make them feel safe. >> cooper: other staff say bloomfield may not have known the extent of the harassment. she declined our request for an interview, but in a statement says "i am in the final stages of severing my partnership with ken friedman. i deeply regret not doing more to protect my staff, who relied on me." many of the women we spoke with say they feared being fired if they complained to ken friedman, and say he would sometimes blackball former employees. manager jaime seet says freidman was so angry when she was leaving his company that he contacted the new restaurant where she had just been hired. >> seet: the director of operations of that restaurant called me and he said, "i'm so sorry, we're rescinding your job offer." and i said, "does this have anything to do with ken friedman?" and he was like, "yes." >> cooper: trish nelson finally quit in october of 2012, the day after she says ken friedman sexually assaulted her in his car. >> nelson: we got into the car and he lunged to kiss me. he's a six-four man, and so
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you're pretty overpowered, and i just felt panic. i felt panic, because i never thought that was going to happen to me. i thought that i was respected. >> cooper: ken friedman and mario batali also declined our requests for interviews. in a statement, friedman says, in part, "over the past several months, i have focused on my own personal decisions and my mistakes, for which i have apologized." mario batali says in a statement, "my past behavior has been deeply inappropriate and i am sincerely remorseful for my actions." in december, he was removed from his television show, and is leaving the company he founded. >> woman: i had thought about it a lot. >> cooper: but earlier this year, another woman came forward to us, with an incident she says occurred all the way back in 2005. she asked us to conceal her identity because she says she was concerned about future job prospects. >> woman: who wants to be defined by the worst day of their life? >> cooper: she was working in
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batali's restaurant, babbo, when she says he invited her to the spotted pig for a party. she says she remembers sitting with batali alone at a small table on the second floor, drinking white wine. >> woman: it gets completely foggy for me. and this is-- part of the messy, scary part for me, there is a part where it-- it all disappears. i remember a moment where i was on his lap, kissing him. like, he was kissing me. and then i remember throwing up in a toilet. and, that is all. >> cooper: she says she woke up around dawn, in a room on the third floor of the building. >> woman: i woke up by myself, on the floor, i don't know where i am, of an empty room, wooden floor. i see broken bottles. the first thing i think is, "i've been drugged." that was the first thing i thought, is, "i've been-- i've been assaulted." my right leg was very deeply wounded, like, scratched. like, deep scratches.
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i didn't think i had been raped. i didn't feel any kind of trauma. >> cooper: internally, you didn't feel-- >> woman: i didn't feel any trauma internally. but i also did find-- i looked on my skirt-- there were two areas. it looked like d.n.a. >> cooper: semen. >> woman: semen. >> cooper: she says she had to go in to work, and hours later, was back at batali's restaurant, babbo, when he called in. >> woman: i said, "what happened?" >> cooper: you asked him that. >> woman: yeah, i asked him. "what happened last night?" and he just was silent, wouldn't talk to me. >> cooper: after her shift, she says she called a crisis hotline and went to a hospital for an examination. four people confirmed to us that she told them what happened at the time, one of whom accompanied her to the hospital. she says she also went to speak with a detective at the new york police department's special victims division. >> woman: they tried getting me to file a report. they tried, they tried. but i-- you know, a young actress, no resources, no money. i couldn't. i-- i couldn't do it.
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>> cooper: because she declined to file a police report, the rape kit taken at the hospital was never processed, and hospital records have been expunged. she still has few answers as to how she ended up blacked out and alone on the third floor of the spotted pig. >> cooper: you believe he broke the law with you? >> woman: yes, and that's why i called the crisis hotline, because i knew something very wrong happened to me. >> cooper: mario batali issued a statement that says "i vehemently deny the allegation that i sexually assaulted this woman." but three years later, there was another incident in that third floor party room. manager jamie seet told us what she saw; and three other employees, who were also there, confirmed her account. >> seet: we were in the third floor of the restaurant, and there are cameras. and there had been a party. and it dwindled down to two people, mario and then this woman. >> cooper: seet says she was counting the evening's receipts in the office and watched on a video monitor as mario batali began to reach his hand up between the legs of the woman.
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>> seet: she looked like this. so that, to me, looks like someone is unconscious. >> cooper: and he actually-- you saw him pull up his chair and start to touch her? >> seet: uh-huh. >> cooper: sexually? >> seet: yes. >> cooper: when you saw that on the monitor, what did you think? >> seet: you know, he crossed a line. a huge, a huge line, as of-- to doing-- assaulting someone that's unconscious. so we all went out there, and we-- we stopped what was going on. "hey, mario, how are you doing? let's get you a cab." just-- you know, we were saying something just to snap him out of this. >> cooper: seet and others say a number of employees later watched the video of what happened, and say ken friedman was told about it as well. you have no doubt you saw mario batali-- >> seet: no doubt, absolutely. >> cooper: --sexually assaulting an unconscious or semi-conscious woman. >> seet: yeah, no doubt at all. and, you know, to this day, i'm-- i feel ashamed that i never called the police. >> cooper: we spoke to the attorney for the woman, who at the time was an up-and-coming chef. she declined our request for an interview.
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trish nelson and all the women we spoke to say they are speaking out about the spotted pig because what happened to them is all too common, they say, in the restaurant industry. >> nelson: doing this over 20 years, there isn't one place that i haven't had this kind of an experience. >> cooper: there's not one restaurant you've worked in that you haven't had some sort of harassment? >> nelson: exactly. it's pervasive throughout the entire industry. >> cooper: you would like what happened to you and others to have an impact around the country? >> nelson: yes. i would love for, for women to be able to feel like they finally have a voice. they can say no, and not lose their jobs. >> cooper: the new york police department confirms to "60 minutes" that there is an ongoing criminal investigation into mario batali. ( ticking ) >> this cbs sports update is brought to you by the lincoln
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motor company. in the nhl playoff, the vegas golden knights beat the winnipeg jets 2-1 to advance to the stanlly cup finals in their inaugural season. they'll await the winner of the lightning and the capitals series. in baseball, the red sox blanked the orioles and the yankees topped the orioles. the two rivals remain atop the alaina it's. this is steve obermeyer reporting. the lincoln mkx, more horsepower than the lexus rx350 and a quiet interior from which to admire them. the lincoln spring sales event is here. for a limited time get 0% apr on the lincoln mkx. plus get $1000 bonus cash. so if you have heart failure, your heart doesn't only belong to you. ask your doctor about entresto. it helped keep people alive
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(automatic gunfire) can't stay here! we got to get rid of that sniper! cover me. ready? let's go! (screams) (gunfire continues) (panting)

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