What Did Billionaire Leon Black of Apollo Get for >$50 Million in Fees to Jeffrey Epstein?

It turns out that the smoke around private equity kingpin Leon Black’s business dealings with convicted sex offender Jeffrey Epstein was a sign of a real fire. Four sources told the New York Times that Black wired Epstein at least $50 million in fees after Epstein’s 2008 conviction; two said Black could have paid as much as $75 million.

Alert readers may recall that this is roughly the same level of money that Apollo spent in bribes, um, placement agent fees, to CalPERS. It’s never been made clear what exactly Apollo thought it would be getting for the $48 million it gave to former board member Al Villalobos, some of which wound as cash in paper bags to CalPERS CEO Fred Buenrostro, who is now in Federal prison.

The relationship between Black and Epstein is murkier and more troubling since it’s not clear at all what Black thought he was getting from Epstein. Keep in mind all the fees in question were paid by Black personally, not by Apollo.

Black claims he was buying investment and tax advice. This is an insult to intelligence. First, someone at Black’s level could easily hire the very best tax attorneys in the world, and similarly any financiers who had know-how that Black might value. Second, the fees Black paid to Epstein are astonishingly rich, particularly since Epstein didn’t have a brand name or even any meaningful credentials. Third, Black admits much of what Epstein supposedly did for him couldn’t be relied upon; substantial areas of his “work” had to be redone or were at best napkin doodles that had to be fleshed out by real pros. From the Times:

“Mr. Black received personal trusts and estates planning advice as well as family office philanthropy and investment services from several financial and legal advisers, including Mr. Epstein, during a six-year period, between 2012 and 2017,” said Stephanie Pillersdorf, a spokeswoman for Mr. Black. “The trusts and estate planning advice was vetted by leading auditors and law firms.”

Fourth, private equity barons are notorious skinflints; the idea that Black would pay so much for an uncredentialed individual with minimal relevant expertise and virtually no other clients strains credulity. Remember how Apollo was caught out keeping law firm discounts for itself rather than sharing them with its limited partners? This sort of chiseling is rampant in private equity.

Recall that Epstein’s marquee and likely sole meaningful client prior to his prosecution was Les Wexner of the Limited. Wexner dumped Epstein in 2007, the year after the first sex crime accusations against Epstein became public. Wexner apparently did let Epstein run his money, which isn’t what he was allegedly doing for Black. Wexner later accused Epstein of embezzlement; the Times reported that Epstein had returned “at least” $100 million.

Moreover, there’s a guilty look to how Black went about paying Epstein. If Black were paying professional fees for investment and tax advice, even at a ludicrously high rate, there would be no reason to do it in such a stealthy manner. Again from the Times:

Some of the payments from Mr. Black are described in an internal report by Deutsche Bank, which served as Mr. Epstein’s primary banker from 2013 into 2019…

Portions of the report reviewed by The Times describe a payment of $22.5 million in 2017 by a company called BV70 LLC, which the bank said owned Mr. Black’s yacht, to Plan D, the company that managed Mr. Epstein’s Gulfstream jet. When an employee in Deutsche Bank’s anti-financial-crime division inquired about the payment, she was told by another bank employee that it was a fee for consulting services provided by Southern Trust Company, one of the dozens of entities Mr. Epstein operated in the Virgin Islands. There was no explanation for why the payment went to Plan D.

The Deutsche Bank report also shows that BV70 made a $10 million donation in 2015 to a charitable foundation started by Mr. Epstein, Gratitude America, which made several million dollars in grants while Mr. Epstein was casting himself as a philanthropist. BV70 also planned to make another payment of $10 million to Mr. Epstein for advisory work, according to the report, although it was unclear if that payment was ever made.

And in 2014, Mr. Epstein received several million dollars in fees from Narrows Holdings, a company that Mr. Black — the chairman of the Museum of Modern Art — has used to purchase much of his billion-dollar art collection, according to two of the people with knowledge of the transactions. The details of the services Mr. Epstein provided in exchange for those fees are also unclear.

The Times describes how Epstein’s “investment” business collapsed in 2008, between the loss of Wexner and perhaps others, and the market rout. His firm lost $150 million from 2008 to 2012, and showed only $200,000 in fees in those years.

The article suggests that Black was key to Epstein’s revival of sorts:

The same year [2012], Mr. Epstein established a new business, Southern Trust Company, which he told territorial officials was primarily a DNA data-mining and genetic research provider with a “financial arm.” There’s little evidence the company — which had no scientists on its nine-member staff — ever did any research.

Southern Trust collected more than $180 million in fees between 2013 and 2017. (In 2018, the year Mr. Black said he cut ties with Mr. Epstein, Southern Trust reported no fee income.)

As we recapped earlier, Black and Epstein had a long-standing relationship. From a 2019 post:

But back to the current scandal, which has a Master of the Universe looking like he’s been caught with his pants down. Not only is Leon Black’s name in Epstein’s infamous black book, but Epstein was an “original trustee” of the Leon Black Family Foundation, dating from 1997. Black has attempted to disavow state filings that reported Epstein as still on the board through 2012, years after Epstein pleaded guilty in 2008 to solicitation of prostitution. Black has tried claiming that the filings were in error and Epstein left the board in 2007.

Three years after Epstein’s prosecution, Black and his four children invested in an Epstein venture; two sons are board members.

Recall also that in 2019, Bloomberg described how Black had pushed his partners at Apollo to promote Epstein as a financial/tax adviser, and they had regarded the notion as bizarre.

So what could be the basis for such a long and apparently close relationship?

While it’s possible the two men shared recreational interests, Black would be certain to be aware of the risk of being extorted by Epstein. Black came out of Drexel and Drexel attempted to entrap its clients with sex. Connie Bruck’s The Predators’ Ball described the famed annual bash for Drexel’s raiders. One part was when the heavy hitters were brought to a room full of enticingly beautiful women. Bruck recounts how, almost comically, none of the men took the bait: they huddled with their drinks well away from the sirens.

So another possibility was that Black was indeed paying for illicit services, but of the financial, not the sexual, type. To give an unrealistically simple-minded example, what if these “fees” were just a way to create tax deductions, and only a fraction of the nominal fees were intended to be compensation to Epstein? This scenario would at least be logical from a hard-nosed business perspective; the other vague explanations that Black has offered don’t make much sense.

Black is already too close to Epstein’s bad habits for comfort:

The attorney general of the Virgin Islands, Denise N. George, filed a civil forfeiture lawsuit against Mr. Epstein’s estate this year, claiming that Mr. Epstein had deceived officials to get Southern Trust a lucrative tax break and used his island retreat to engage in sex trafficking. Ms. George’s offices said in court filings that she intended to serve subpoenas on Mr. Black and several of his business entities. (Ms. George has said she intends to serve a subpoena on Mr. Dubin as well.)

Mr. Black’s representatives have been gathering documents to hand over to the attorney general’s office. Mr. Black was prepared to cooperate with Ms. George’s request, Ms. Pillersdorf said.

Black needless to say is still defending his virtue, and wrote to his investors that:

…..there has never been an allegation by anyone, including The New York Times, that I engaged in any wrongdoing or inappropriate conduct.

I dunno. Pushing your “partners” at your firm, as in people who work for you but are senior enough to have independent reputations and relationships, to push their contacts to engage an unqualified professional who also happens to be a convicted sex offender as a tax whiz sends a very strong Something Is Wrong With This Picture message.

Recall that CalPERS, which remains very close to Apollo and Black despite Apollo having shafted the giant fund in its pay to play scandal (CalPERS has never recovered from having a CEO indicted for bribery) has been embarrassed by being tainted with the Black-Epstein connections. Bloomberg’s piece on Epstein included a section on CalPERS asking Apollo to ‘splain itself.

And this unsavory-looking connection is a legitimate business story, as Dan Primack explained a while back:

I can’t speak for other media, but my interest in this story isn’t because it’s salacious or because Leon Black is rich. It’s because he continues to refuse to answer a central question about judgement ⁠— why he donated $10 million years after Epstein plead guilty ⁠— and Black’s judgement is a big part of what Apollo sells its shareholders and limited partners and portfolio companies. So, yeah, this will continue for a while.

It sure looks like other shoes will drop.


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  1. PlutoniumKun

    If there ever is an answer to the deep questions about how Epstein managed to have so many rich and powerful men in his web, I think it’ll be found via Giselle Maxwell. I can’t believe that its a coincidence that Epstein partnered up with a Maxwell. Maxwell’s father was a notoriously corrupt and bullying individual (with sources of wealth equally mysterious as Epsteins) with deep connections with the world of intelligence, particularly Mossad. He seemed to have been the main financial fixer in Europe for Mossad, and maybe other intelligence agencies. When he ‘fell’ off that yacht, presumably someone else had to fulfil whatever fixer role he performed.

    1. Off The Street

      When people don’t comply, you help them.
      Sometimes that includes a shove.
      Other times, that includes a providing a copy of some compromising photograph or audio or video file.
      It could be even just as simple as a whisper to remind them of just who controls the flamethrower and bazooka and thermonuclear devices.
      All of those are very effective on Wall Street, DC and points beyond.
      Once you see the petrified looks on television, for example, you can’t un-see them.

    2. jsn

      Whitney Webb’s “Too Big to Fail” series at Mint Press was really interesting.

      It traces sexual blackmail rings, still active, back to Edgar Bronfman and the Mob. From there to the FBI and thence to the CIA under Dulles, who thereby got the other Edgar, with a J., by the short hairs.

      Thence on to Mossad and our current crop.

  2. cnchal

    > It sure looks like other shoes will drop.

    When it should be raining anvils.

    . . . a company called BV70 LLC, which the bank said owned Mr. Black’s yacht . .

    See how this works? BV70 LLC loses tens of millions swaddling Leon in luxury, creating a gigantic well of carry forward losses that have no “use by or lose them date” that can be monetized by selling the BV70 LLC to another entity with a large tax liability, which uses those carry forward losses to offset those liabilities. Taxes are for chumps.

      1. John k

        I’m waiting for Biden to promise to take away those real estate tax breaks that trump used.
        Or revert to the tax rates in effect under Obama.
        Surely before the election…

        1. 1 Kings

          You mean the same Obama tax rates , er cuts passed by G. Bush that Mr O couldn’t just let expire? The ones he and Congress had to make permanent because ‘can’t “raise” taxes during THE GREATEST Econ slowdown since the great depression’, etc, etc.. as Obama speechified endlessly. You mean those?

  3. Eustache de Saint Pierre

    Off topic, but I am heading away & will be offline for 3 days so am posting this here as some might want to sign. It is an interesting read on how the UK press have reacted to the Assange Affair, particularly the Guardian who are the target of this letter.


  4. The Rev Kev

    There is another possibility that should be considered with Leon Black and that is whether he is the end payer of all this money. By that, I mean that as he is already in Epstein’s circle, that an outside country or agency might be using Black to pay Epstein for ‘services rendered’ by that country or agency. That way, for an investigator trying to establish who was really paying Epstein, Black would serve as a cut-out or a blank wall that an investigator would run up against. Something to consider here.

    1. Yves Smith Post author

      I didn’t want to get into the notion that Epstein had official sponsorship, but Black would never have advanced >$50 million of his own funds. So the money would have had to be conveyed to Black in a way that could not be characterized as income for US tax purposes. That is extremely difficult.

      Moreover, given that the CT theory that Epstein was running a non-US government sponsored honey pot, it would be much easier to launder the money to Epstein through non-US parties, particularly given that Epstein had accounts in a tax haven. A US citizen like Black would be a poor choice for an operation like this.

      The main merit of Black under this scenario would be to legitimate the appearance that Epstein was a bona fide money manager, which Les Wexner did. But Black would need to be an official client of Epstein to go that, not channeling funds to him via routes that look designed not to be visible.

  5. JBird4049

    I keep getting evermore cynical the older I get and I keep finding I am not cynical enough.

    What is next? Politics or some in finance involved in the slave trade? Which still exist but more on the down low.

    1. Anthony Noel

      Well if you don’t want to grow more cynical then don’t look into the Obama administration altering Malaysia’s human trafficking rating from the lowest Tier 3 to Tier 2 in 2015 in order to get the TPP passed.

  6. fresno dan

    While it’s possible the two men shared recreational interests,…

    When you’re rich, you get to put forward outlandish excuses, and the legal system believes them…

  7. Edward

    These people could have all been running a Mossad blackmail operation. Remember the Florida prosecutor was warned to leave Epstein alone because he was above his pay grade (or some such expression). There is wall to wall silence in the press on this possibility.

    1. Yves Smith Post author

      See my comment above. Leon Black would be an exceptionally poor choice for conveying funds to Epstein. You’d ring all kinds of bells at banks for getting the money in as well as out under anti-money-laundering rules. Too many people would need to be in the loop.

      And this is a ginormous favor being done by a billionaire who doesn’t get out of bed unless he is paid. Black isn’t one of the big Jewish political donors for Israel, and it would be far more logical for a guy like that to “help” Israel that way rather than put himself at risk by laundering funds to Epstein.

    2. John k

      But that’s something he would say, right? Whether he received a bribe or ‘favor’ in exchange for non prosecution… not likely to say I let him off bc he met my price and/or threw in a little fun… but the persuasion might well have come from, say, a formerly very powerful dem who didn’t want more investigation… remember, the deal included non prosecution of everybody, maybe Epstein got the sweetheart deal as his price for silence.
      It was the Miami rag that started it all up again, hope they keep this alive… seems other left msm not much interested.
      I loved the sign in front of a house loaded with Xmas lights ‘these lights didn’t hang themselves, neither did Epstein.’ I can imagine threats from him in that jail, get me out of here or I’ll sing like a canary’… they got him out all right. I don’t mind that, just wanted to hear him sing first.

      1. Yves Smith Post author

        Black is not in Clinton’s circle. Please don’t speculate with zero evidence. It makes the site look bad. This is not a chat board.

    3. fajensen

      I’d tend to think that this is more likely a basic “transfer-fee” tax scam. Epstein is really paid only a fraction of the money, while the rest ends up in some numbered account in, say, Latvia, Malta or Belgium controlled by Mr. Black. The total amount is intended to be a regular deductible business expense.

      “Why use such an openly dodgy person like Epstein?”, one may ask.

      Well, *someone* will have to take the rap over the tax liabilities.

      Unlike what happens in the EU, the US IRS will – granted, maybe after a long time, but they *will* eventually – ask when/how Mr. Epstein intends to pay his income taxes on those $50 million in fees and then move to collect. Just like what recently happened to John McAfee.

      At that point in time, Epstein was probably desparate enough to make a bet on “eventually” coming up at a much more convenient time for him and Epstein would likely know the right kind of scummy people for this job.

      1. Yves Smith Post author

        That is what I suggested without knowing the term of art. It’s the most logical explanation, both for the amounts of money involved and for Black making the payments in a covert manner.

  8. HotFlash

    So, our possibilities include tax fraud, extortion, money laundering, and international espionage — so far. If Black is not the originator of pmts to Epstein, but rather a bundler (no doubt with a quid for the quo), then that money got into the audit stream somehow. I presume that the diligent fibbies, IRS auditors, and and others charged with investigating financial crimes are busily digging into the sources of Black’s cash. Perhaps they could get a hand from Cali AG Beccera, who may have some ideas.

  9. Bob

    This whole affair stinks.

    It is well established that Mr. Epstein was operating a multinational pedophile prostitution ring with houses in France, Virgin Islands, New Mexico.
    It is clear that Mr. Epstein did receive extortionary favors from prosecution at the state, local and federal level.
    The lead federal prosecutor was rewarded with a plum position in Washington.
    It is widely reported that there was an extensive video surveillance / video taping system at his houses.
    Mr. Epstein passed away in jail due to an unbelievable string of coincidences.
    Mr. Epstein’s jailors were moved to other positions / jails without reprimand and in some cases rewarded with promotions.
    The FBI has continued to raid Mr. Epstein’s properties or to have other police agencies (French) do so even after he passed on to his reward. Any case against Mr. Epstein is of course moot at this point.

    Clearly there exists an unbelievable string of coincidences throughout this affair.

  10. QuarterBack

    There’s no reason to keep running a decades long intelligence and blackmail operation without someone monetizing or operationalizing its fruits somewhere. My guess is that Black was in the “I don’t want to know how you get it, just get it” camp on Epstein’s intelligence machine. The fees were for (fruitful) services rendered. These undertakings are dangerous and expensive to run. The real value of operations like Epstein is not cash payments. It is in the leverage that can be had to negotiate lopsided deals or agreement on placement of key people into powerful positions. I’ll bet this is part of the CALPERS story.

    I have peered into some of the billionaire class activities and the supporting functionaries that orbit around them. I have a notion that having a career ending or life-in-prison skeleton is considered an asset for a functionary. The billionaires like the idea of having an intelligent, highly motivated, operative that can be depended upon to do their bidding, with the comfort in knowing that there is always a kill switch to irrevocably remove them. It makes their operatives easier to manipulate, and sends a message to the others whenever they see the trap door being used. In the top circles, it can sometimes be so ugly that it is difficult to properly put into words.

    1. Yves Smith Post author

      No, Black would not have needed to pay $48 million in placement agent fees to CalPERS under your scenario. And he would have strong reasons to hide his ties to Epstein if he was laundering money for him. Trying to get his partners at Apollo to hire him would be utterly self-destructive under your theory.

      And Black is worth over $8 billion. Why should he run this level of risk? There’s no evidence he got anything of financial value from Epstein. A guy like Black is relentless in getting value for money. Epstein’s US network was not heavy on the type of people who commit money to Apollo funds (state and local public pension funds, life insurers). Apollo is so large that it doesn’t take money from wealthy individuals directly; those go through fund of funds and pay another layer of fees to get access to Apollo-level funds. Really rich guys have their own “family offices” and try to make PE investments directly.

      The only alternate theory that is remotely credible, and is more straightforward, is that Black was buying sexual services in bulk, but on behalf of non-US prospects for Apollo to close deals for Apollo. Think of decision-makers at sovereign wealth funds, particularly in the Middle East. But a guy like Black would do that through Apollo…why would he do this personally? He could just use the device that Eliot Spitzer described in Inside Job (the way Wall Street firms were buying hookers and blow), having Epstein invoice Apollo for “research” services. And you don’t need to pretend to have expertise in tax or estates or even investments to do “research”.

      That this sort of thing goes on is hardly a secret; we see the prettied-up version in the US via strip clubs. A scene in the book “How I Caused the Credit Crisis” which is barely fictionalized (the writer was a CDO salesman at Lehman; the reason for “bare fictionalization” is UK libel laws) has the protagonist, as a newbie hire, being tasked to take a client to an estate full of naked women carrying drinks. His job is to pay for whatever the client wants. The client immediately picks three and goes with them to a bedroom. And yes, the protagonist’s employer got the toxic CDO sale done as a result.

      1. PlutoniumKun

        Its not my world to know, but I find it hard to believe someone like Black would be buying sexual services ‘in bulk’ in that manner or for that cost. I’ve a friend who used to work in that particular line of work – she dropped out for a number of reasons, one was competition – quite simply, there is a surplus of beautiful young women (and men) from various parts of the world willing to do anything for men that rich, for sums of money people like Black would consider a pittance. Mostly, they pay more money for a guarantee of discretion, not the act itself.

        And in pretty much any part of the world there are agencies providing those services with a guarantee of privacy, it wouldn’t take much research to find them if you were so inclined. I find it hard to see what sort of ‘added value’ someone like Epstein could provide to justify such a huge sum of money.

        It also contradicts some of Epstein’s own behaviour – it seems like he and Maxwell went out cruising clubs to find vulnerable young women, just like any street level hustler. Thats hardly the act of people with high level contacts throughout the world and able to rustle up bulk buy quantities of high end hookers.

        1. Yves Smith Post author

          Remember, these women were underage. This is was way outside normal prostitution. Yes, it is all too easy to find beautiful women of age who will sell their services. But children? Who are usually trafficked or groomed as Maxwell did? She and Epstein did more than just cruise clubs. There are allegations that Epstein was a big force in underage sex trafficking in the Balkans, for instance.

          And single sourcing would be way less risky. Fewer moving parts. Fewer payments. Fewer contacts. Remember, Apollo is a public company. For starters, how is Black going to get the research you propose done to engage in the most illicit type of sexual services? He’s certainly not doing it himself.

          I have heard credible accounts of another major PE firm which is public operating what amounts to an in-house brothel, with girls in townhouses in several financial centers…strictly for its own top executives. So if they won’t hire outside courtesans for their own use, or use their private brothel as a selling tool, that points to their perception of risk.

          I’m not saying this is likely or all that great a theory. But it is less strained than “Black was doing a huuge favor for the Mossad”. The Mossad doesn’t have enough of a nexus to Apollo’s interests for Black to get enough value for the risk of acting as a money launderer. And there’s no evidence of Black having a strong interest in Israel.

          1. PlutoniumKun

            Thats fair enough – although I must admit I find it hard to reconcile the presumed needs of men like Black for absolute secrecy and discretion with Epsteins high profile and occasionally quite tacky behaviour. But then again, maybe that was part of the attraction to some otherwise very cautious men. I don’t really know, I’m just guessing based on my friends stories and conversations with her friends, also in the business. I once had to sit in on a court case (very long story) involving her and one of her friends, and I found it really astonishing at how naive in these matters some of the rich and powerful men they were involved with could be. But then again, these were very much below the level of power play of someone like Black and Epstein.

            As for the underaged aspects, thats a whole different level of course – it brings to mind the very lurid stories around the monstrous Marc Dutroux, a man who makes Epstein look almost innocent by contrast. There have been many rumours of his links to very powerful political and finance networks, although nothing was ever proven.

            1. John k

              Nailing somebody for underage is crushing, vast penalties, so any intelligence could be quite interested. Certainly ours, but others, too. So black could be pinched by Epstein alone or he might have just been an agent.
              But IMO Epstein alone is quite credible. Then, when caught, maybe we get the case influenced by who he might bring down… and we now know fbi loaded with left biases, so natural for some of them to want to protect their stars… water under the bridge… he/they learned their lesson, etc…
              Either theory explains why fbi was never very interested, they must have had an idea what Epstein was doing. Not surprising to me a modest rag in Miami investigated rather than our paper of record… course, they don’t investigate any more, they just print intelligence handouts…

              1. Yves Smith Post author

                I warned you earlier. You evidently didn’t read the post, which is a violation of our written site Policies. Black was at Drexel, where it was so well known that it tried to entrap clients with sex that it wound up in a bloody book!!! Black would have every reason based on his personal history to be extremely careful if he had particular sexual needs. And Black separately is depicted as far more private than his billionaire peers.

                And the NYT story says that Black regularly had lunch with Epstein. People are seldom on a friendly social basis with people who are extorting them.

                There is also zero basis for thinking Black could have gotten intel that would be useful give the scale of his fundraising for Apollo. A $50 million commitment to an Apollo fund barely rates. Participating with Epstein in extorting individuals would produce couch-lint level payouts versus Apollo’s funding needs and profits.

        2. fajensen

          It also contradicts some of Epstein’s own behaviour – it seems like he and Maxwell went out cruising clubs to find vulnerable young women

          Likely they were both the kind of people who gets a kick out of doing seedy things, but, I belive that Epstein and Maxwell were also “recruiting” for “blackmail potential”

          The problem for today’s blackmailers is that hardly anybody really cares about someone “important” dirtying themselves these days. It’s something people will see exposed in tabloids and guffaw over when having lunch at work. In contrast, most people do care quite a lot about peadophiles. So it has to be “that” for the blackmail to work.

      2. QuarterBack

        The fact that Black was more direct in his payments IMO would rule out something as nefarious as bulk sexual services. I am imagining consulting services along the lines of power meeting facilitation and back channel blackmail that could be painted as negotiation or mediation services. I could imagine Black painting the cover image of Epstein as a guy “who can bring important people together in the same room” or having some “insights” in how to get parties come together on a point or a deal, which would be attributed to his charismatic personality rather than his considerable blackmail and illicit trade offerings.

        1. Yves Smith Post author

          He wasn’t direct in his payments. Please re-read the post. The NY Times got excellent detail on that front.

          Direct would be in the name of Leon Black from one of his many personal check-equivalent accounts to Southern Trust, then Epstein’s business face. That isn’t how any of them ran. That’s why the bankers were upset, there was a clear intent to hide that the money was moving from Black to Epstein.

          Black is at a level that he doesn’t need Epstein to get meetings. Seriously. Any corporate or political figure would fall all over themselves to see Black in person. Apollo does so much business with top law and PR firms that he could use them as arrangers if his people didn’t want to make the call directly for whatever oddball reason.

          The only place where Epstein would have an advantage would be with people in the entertainment industry, and Black has never shown an interest in hob-nobbing with stars.

  11. zagonostra

    We can posit that it is more than likely that Bar, Trump, the Clintons, and other public officials both currently serving in gov’t positions or previously serving, have information not only on what Epstein was up to but who ultimately was responsible for his murder. Information that would illustrate and disseminate to the public at large just how corrupt to the core our ruling elites are is tamped down by said ruling elites. There is no mechanism available to the citizen for discovery, just bits and pieces that are leaked out and soon buried among the plethora of ever changing news stories and titillating distractions. We have certain freedoms, and thank God we do, but let’s not delude ourselves that we are a “self-governing” people ruled by democratic principles.

  12. young

    Maybe it was the ” finder’s fee” to Epstein for steering highly-compromised high net-worth individuals to invest with Black.

    1. Yves Smith Post author

      No, see the comment below. Mega funds like Apollo’s almost never take individual investors directly, since the minimums are too high; they come through “funds of funds” that charge another layer of fees.

      Private equity is a government sponsored enterprise. The biggest investors (30-35% of total assets under management) are public pension funds, followed by private pension funds, sovereign wealth funds, insurers, and foundations and endowments.

  13. flora

    $50m for recreational interests doesn’t jibe. $50m for personal ‘financial services’ could just possibly, maybe, if the principle isn’t paying attention, jibe. $50m for larger organizations paying for “transfer accounts” starts to sound more reasonable. Beyond this, it’s hard to not enter The Bourne Identity or The Italian Job movie fiction or some such territory. ;)

    And just where does Calpers figure, and is it as a naif and patsy or as something else? Sorry, I’ve watched too many Bourne Identity-type movies. Sorry. /heh

    1. Yves Smith Post author

      Not for Black personally. Possibly to procure for prospects or clients. I agree even that idea is plenty strained, but I see the Mossad theories as even less credible, so I am using the “using Epstein’s services as a closer” as a foil. If you don’t buy that, and you probably shouldn’t, you have to reject the Mossad theory too.

      As for CalPERS, CalPERS pointedly protected Apollo and the four much smaller Apollo-connected private equity funds in its “designed to be a whitewash” report. That document took the howler position that former board member Al Villalobos had victimized Leon Black! No one victimizes Leon Black. He’s famed as being the most brass-knuckled big PE player.

      The most likely assumption for CalPERS was that Apollo was paying to get much bigger commitments that it would otherwise have gotten. One year of management fees (at the full freight rate) for $2.5 billion of commitments is $50 million. And as you know, total PE charges are higher and PE commitments last much longer than one year.

  14. sd

    Interesting bit about the fine art – large sums of money moving around the world buying and selling as the artwork stays locked up in a vault and never really changes hands….

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