Leon Black's Epstein Nightmare Worsens
Inside the very bad couple of weeks of a multi-billionaire
I’m slowly emerging from a break following wrapping up my forthcoming Audible Original podcast series which will drop on September 21st.
Standby for details!
Meanwhile: an acquaintance in the art world stopped me in the street and asked “Can you believe the news about Leon Black?”
I was actually confused in the moment as to which piece of news he was referring to. Because Leon Black, who is the multi-billionaire who hung out with Jeffrey Epstein and admitted to paying him $158 million for tax advice and who stepped down from running the private equity giant Apollo Global Management, and from chairing the board of the Museum of Modern Art (MOMA), has had back-to-back bad news recently.
First: On July 21st it emerged in the New York Times that back in January Black paid the U.S. Virgin Islands $62.5 million to avoid being civilly sued in Epstein-related charges. (Epstein was domiciled in the US Virgin Islands. Its Attorney General is suing JP Morgan for $190 million claiming they banked Epstein, while aware of his sex-trafficking operation. JP Morgan has denied this. The bank has paid $290 million earlier this year to settle similar claims from Epstein survivors).
I’ve learned that lawyers representing the USVI interviewed Epstein survivors before settling with Black. The Times reported that Brad Edwards, a lawyer representing many Epstein survivors, was present at the mediation talks but told the Times reporter he was not “at liberty to discuss the topic.”
Whit Clay, a spokesman for Mr. Black, told the Times: “Mr. Black engaged and made payments to Jeffrey Epstein for legitimate financial advisory services, which, based on everything now known, he very much regrets. Consistent with settlements of other major U.S. banks, Mr. Black resolved the U.S.V.I.’s potential claims arising out of the unintended consequences of those payments. There is no suggestion in the U.S.V.I. settlement that Mr. Black was aware of or participated in any misconduct.”
Second: On July 24th, Senator Ron Wyden, the Finance Committee chair, published a sixteen-page letter he’d sent to Black’s lawyers, revealing that the Committee has been investigating Black’s tax and estate planning for over a year.
Sen. Wyden says this is due to “inconsistencies” in an “independent” report filed by the law firm Dechert LLP, in which Black explained away the $158 million to Epstein, who was neither an accountant or a lawyer, as payment for tax advice.
Sen. Wyden’s letter questions, among other things, why Black did not list the money paid to Epstein as a gift. It also questions whether Black has improperly kept money out of his taxable estate. It gives him a deadline of this September 1st to provide specific answers.
Black’s lawyers told the WSJ that “the letter repeatedly insinuates something illicit or untoward in the professional relationship between Mr. Black and Mr. Epstein,” and that “any such insinuation is without basis.” His lawyers also said that they wouldn’t provide any more information to the Committee.
There are wealthy people on Wall Street I’ve spoken to who sympathize with Black over Sen. Wyden’s scrutiny. They argue that since Black is a private citizen, why should he be singled out in a Senate investigation? But here’s the thing: Sen. Wyden has long tried to find ways to close tax loopholes used by the one per cent. So Black’s association with Epstein over his tax affairs is the low-hanging fruit that is a political gift to the progressive senator.
But Black’s bad news didn’t end with the announcement of the Sen. Wyden investigation.
The complaint makes for harrowing reading. This is the only account I know of that alleges that the Epstein trafficking ring extended to the nation’s capitol. Epstein liked to operate within his gilded Shangri-Las in Manhattan, Palm Beach, the US Virgin Islands—and Paris. The notion that his tentacles also extended into salons in Washington. D.C.—not an easily protected power-base for him—is jarring.
As for Leon Black: There are those (again on Wall Street, mostly) who argue, that at this point, what does Leon Black have left to lose?
Well…he may no longer sit atop a private equity giant, or the board of MOMA—but he still has billions of dollars.
$62.5 million is a lot of money to part with….even for a multi-billionaire.
I wrote a book on Milken and had some knowledge of Black 1987-1992. He didn't seem like a guy who'd write a $158 million check casually. I'm now writing a novel with several characters who are rich males. They can buy anything. One thing that's hard to buy: discrete sex. For that you pay top dollar. And I believe that's what Epstein delivered to Black and offered to Gates and others.
I'm so glad you have jumped down this rabbit hole and are exploring all the run ways in that dark den. Go for it Vicky!