Show an ad over header. AMP

I am the FIRST

What we now know about Leon Black's relationship with Jeffrey Epstein

Leon Black is "retiring" as CEO of Apollo Global Management, the alternative investment giant he has led since co-founding it in 1990. But he is not making a full break, as Black will remain chair of Apollo's board of directors.

Why it matters: This is the culmination of 18 months of head-in-the-sand obfuscation of Black's dealings with Jeffrey Epstein.


What we already knew: Black and Epstein had both a business and personal relationship stretching back to before Epstein's 2008 guilty plea for soliciting prostitution with a minor.

  • Black maintained those contacts until 2018, when they crumbled due to a "fee dispute," even though even new Epstein allegations came out during the 2016 presidential campaign because of his associations with both Bill Clinton and Donald Trump.
  • Black was believed to have given Epstein at least $50 million, including a $10 million charitable donation that was funneled to MIT.

What we just learned: Black paid Epstein a total of $158 million between 2012 and 2017, for tax advice and related work that Black believes saved him upwards of $2 billion, according to the results of an investigation conducted by law firm Dechert on behalf of Apollo.

  • Dechert found no evidence that Epstein ever did work for Apollo or other Apollo executives, although Black did make introductions.
  • Epstein received a $5 million allocation to Apollo's initial public offering in 2011, as part of a directed share offering program, although Black told Dechert he doesn't recall the circumstances. That stock today would be worth more than $12 million.
  • Epstein also co-invested with Black and Black's family office on a personal investment.
  • Black loaned Epstein $30.5 million in early 2017, of which only $10 million was repaid.
  • Dechert found "no evidence that Epstein ever introduced Black, or offered to introduce Black, to any underage woman." It adds that "Black has no recollection of ever seeing Epstein with an underage woman at any time."

What Black is saying: "It is important for me to stress again how deeply I regret having had any involvement with Mr. Epstein."

  • Read his full statement, which includes a $200 million pledge toward "initiatives that seek to achieve gender equality and protect and empower women."

What Apollo is saying: Black will formally step down as CEO by July 31, and will be succeeded by fellow co-founder Marc Rowan (who's largely credited for Apollo's massive debt business).

  • The CEO shuffle features some serious palace intrigue. Rowan had stepped back from day-to-day Apollo activities last year, while the firm's third co-founder, Josh Harris, is said to have angled for the job.
  • That's the same Josh Harris who co-owns the Philadelphia 76ers and New Jersey Devils with The Blackstone Group's David Blitzer.

The bottom line: Leon Black is giving up day-to-day control of his firm, just shy of his 70th birthday, because he broke the two cardinal rules of private equity: Conduct thorough due diligence and, when that fails, own up to it by cutting bait quick.

4 ffp

Why the startup world needs to ditch "unicorns" for "dragons"

When Aileen Lee originally coined the term "unicorn" in late 2013, she was describing the 39 "U.S.-based software companies started since 2003 and valued at over $1 billion by public or private market investors."

Flashback: It got redefined in early 2015 by yours truly and Erin Griffith, in a cover story for Fortune, as any privately-held startup valued at $1 billion or more. At the time, we counted 80 of them.

Keep reading... Show less

Scoop: Facebook's new moves to lower News Feed's political volume

Facebook plans to announce that it will de-emphasize political posts and current events content in the News Feed based on negative user feedback, Axios has learned. It also plans to expand tests to limit the amount of political content that people see in their News Feeds to more countries outside of the U.S.

Why it matters: The changes could reduce traffic to some news publishers, particularly companies that post a lot of political content.

Keep reading... Show less

Scoop: Amazon quietly getting into live audio business

Amazon is investing heavily in a new live audio feature that's similar to other live audio offerings like Clubhouse, Twitter Spaces and Spotify's new live audio platform, sources tell Axios.

Why it matters: As with Amazon's efforts in podcasting and music subscriptions, the company sees live audio as a way to bolster the types of content it can offer through its voice assistant, Alexa, and its smart speaker products.

Keep reading... Show less

Hurricane Ida exposes America's precarious energy infrastructure

The powerful hurricane that plunged New Orleans into darkness for what could be weeks is the latest sign that U.S. power systems are not ready for a warmer, more volatile world.

The big picture: “Our current infrastructure is not adequate when it comes to these kinds of weather extremes,” Joshua Rhodes, a University of Texas energy expert, tells Axios.

Keep reading... Show less

"We must go further": 70% of adults in European Union are fully vaccinated

About 70% of adults in the European Union are fully vaccinated against COVID-19, Ursula von der Leyen, the president of the European Commission, said Tuesday.

Why it matters: The milestone makes the E.U. one of the world's leaders in inoculations, after an initially lagging vaccine campaign, the New York Times notes.

Keep reading... Show less

What Elizabeth Holmes jurors will be asked ahead of fraud trial

Jury selection begins today in USA v. Elizabeth Holmes, with the actual jury trial to get underway on Sept. 8.

Why it matters: Theranos was the biggest fraud in Silicon Valley history, putting both hundreds of millions of dollars and thousands of patients' health at risk.

Keep reading... Show less

Insights

mail-copy

Get Goodhumans in your inbox

Most Read

More Stories