One week ago, we asked a simple question in response to a NYT report that billionaire Leon Black, one of the brightest financial minds of this generation who is surrounded 24/7 by experts and specialists - and more importantly, his own paid employees - in absolutely every area of finance, paid "suicided" child molester and longtime pal Jeffrey Epstein $50 million after the deceased financier got out of prison for pedophilia.
Because the provided answer was ridiculous: according to Bloomberg, "For decades billionaire Leon Black turned to Jeffrey Epstein for financial advice." But why would a billionaire financier need Epstein, who was through and through clueless about any sophisticated areas of finance, need to pay Epstein tens of millions for advice?
Neither did the answer given by Black's spokeswoman make any sense: Black received “personal trusts and estates planning advice as well as family office philanthropy and investment services” from Epstein between 2012 and 2017. Wait... Black couldn't get all of that for free from the the world's biggest private equity company which just so happens he co-founded? Instead, he just had to pay Jeffrey $50 million.
"It is true that I paid Mr Epstein millions of dollars annually for his work," said Black in a letter responding to the Times report. "It also is worth noting that all of Mr Epstein’s advice was vetted by leading auditors, law firms and other professional advisors" Black added in the process throwing virtually everyone under the bus, and adding that he had 'once' picnicked on Epstein's private island with his family, and that he visited the dead pedophile 'from time to time' at his Manhattan townhouse.
Black's spokeswoman claims the two stopped communicating after a "fee dispute" in 2018, and that Black "deeply regrets having any involvement with him."
"There has never been an allegation by anyone, including The New York Times, that Mr Black engaged in any wrongdoing or inappropriate conduct," she added.
That may change very soon, though, because in what may soon become the first major domino to tumble as a result of last year's Epstein suicide, the WSJ reported that a group of Apollo Global Management independent board members will review Chief Executive Leon Black’s relationship with disgraced financier Jeffrey Epstein.
At a regularly scheduled meeting Tuesday morning, Mr. Black requested that the board’s conflict-committee members, which include Michael E. Ducey, A.B. Krongard and Pauline Richards, hire a law firm to examine his business dealings with Mr. Epstein, the people said. The committee interviewed a number of firms and selected Dechert LLP Tuesday afternoon.
Black's motive is clear: an publicity "effort" to put to rest renewed speculation into the nature of his ties to Epstein. And while that may work, a truly objective committee will ask numerous questions, starting with the one we suggested above: why did Black pay Epstein $50 million? And not only that, but why the various layers of cover - the NYT cited an internal report by Deutsche Bank that showed payments from entities controlled by the private-equity magnate to ones controlled by Mr. Epstein.
We doubt there is a simple answer.
Although the answer may be forthcoming once we get discovery from the pending discovery into what really happened: Black is among those who have received subpoenas in a civil investigation in the U.S. Virgin Islands into Mr. Epstein’s businesses. He has said he intends to cooperate with the inquiry.
And while we are confident the board members will be sympathetic toward Black - the same way that Twitter and Facebook are sympathetic to Hunter Biden - they may want to be careful: private-equity funds are structured in such a way that investors can only vote to pull their money under very specific circumstances, such as if a manager is convicted of a crime. But, as the WSJ notes, some of Apollo’s public-pension-fund investors have expressed concern that the issue may continue to produce negative headlines, the people familiar with the matter said.
In an Oct. 12 letter to Apollo’s investors that was reviewed by The Wall Street Journal, Mr. Black said Mr. Epstein served as an adviser to him between 2012 and 2017 and that he was “completely unaware” of Mr. Epstein’s “reprehensible” conduct.
"I deeply regret having had any involvement with him," Black wrote. This, we do not doubt at all.