“What a Sad Tale of Sycophants”: Wall Street Isn’t Buying Leon Black’s Epstein Story

Nice try, Leon. 

You must think we are pretty stupid, gullible, or insane to believe the tale you spun to Dechert, the Wall Street law firm, about your decades-long involvement with Jeffrey Epstein, the late convicted pedophile. Well I, for one, am not buying it, not any of it, and neither are many other smart Wall Streeters. “What a sad tale of sycophants,” was the way one longtime Wall Street banker explained it to me. Added a Wall Street lawyer, “It’s preposterous.” 

Leon is, of course, Leon Black, one of the billionaire cofounders of Apollo Global Management, the publicly traded private-equity and investment firm with around $350 billion under management. According to Bloomberg, Black has a net worth of nearly $10 billion. Of course, he has a private jet and a luxury yacht and lots of fancy homes. In 2012, he paid nearly $120 million for one artwork—one of the four versions of Edvard Munch’s 1895 pastel, The Scream. He has a world-class art collection. He is also the chairman of the board of trustees at the Museum of Modern Art; his wife, Debra, is on the board of the Metropolitan Museum of Art. He is rich and powerful. That means he can hire what appear to be reputable law firms to put their stamp of approval on a version of the truth that is not likely to be independently verified by anyone not getting paid by Black, or by Apollo. That’s not the same as transparency.

In October, the conflicts committee of the Apollo board of directors hired Dechert to “conduct a thorough investigation” into the relationship between Black and Epstein, after The New York Times reported that Black had paid Epstein “at least” $50 million for Epstein’s services. Over the years, there has been a lot of bad press about the relationship between Black and Epstein—and many rumors—but the Times’ report appeared to be the last straw for some members of the Apollo board. The conflicts committee comprises Michael Ducey, its chairman, a consultant and something of a professional board member; A.B. “Buzzy” Krongard, the former CEO of Alex. Brown & Sons, the defunct investment bank, and a former executive director of the CIA; and Pauline Richards, a former insurance executive and, like Ducey, a professional board member. During its three-month investigation, Dechert reported that it reviewed more than 60,000 documents, voluntarily provided to it by Black, his family office, Apollo executives, and by Apollo’s outside counsel, Paul Weiss. Dechert said it spoke with more than 20 individuals—“some more than once”—including Black, and also on a voluntary basis. Dechert did not have the ability to subpoena either documents or witnesses.

According to the Dechert report, which was dated January 22 and then filed with the Securities and Exchange Commission, Black and Epstein had a “social relationship” from the mid-1990s to 2018. They were introduced by an unnamed “mutual friend.” Black “viewed Epstein as someone who was very intelligent and knowledgeable regarding issues relating to estate planning and taxation,” the report allowed. In 1997, Black appointed Epstein to be one of the initial directors of the Black Family Foundation, established to facilitate his charitable giving. Black, apparently, was impressed that David Rockefeller had appointed Epstein to the board of Rockefeller University, a scientific research university on the East Side of Manhattan. According to the Dechert report, Black’s “understanding” was “that Epstein was extremely knowledgeable about science and technology, as well as a strong proponent of scientific research and development.” Epstein had somehow convinced Black, one of our most gifted financial engineers, that he was the ultimate autodidact, exceptionally skilled in both the arcane rules of tax structuring and estate planning and also of scientific research. According to the Dechert report, Epstein introduced Black to “well-regarded” researchers at MIT and Harvard. Epstein stayed on the Black Family Foundation board for 10 years, until he resigned in mid-2007, the year before his 2008 conviction for pedophilia. (Because of “an oversight,” the foundation reported to the IRS that Epstein remained on its board until 2012; when the mistake was discovered in 2013, the reporting was changed.)

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