Leon Black, chairman and chief executive officer of Apollo Global Management
Patrick T. Fallon | Bloomberg | Getty Images
Billionaire Leon Black told investors in his private equity firm he “deeply” regrets having ever been involved with sex offender Jeffrey Epstein.
Black, hoping to quell concerns among investors and shareholders, said Thursday on Apollo Global Management’s third-quarter earnings call that the company never conducted business with Epstein, who faced charges of sex trafficking underage girls before his death by suicide in jail last year.
Black reiterated that he paid the financier millions of dollars annually to provide professional services to his family partnership from 2012 to 2017 “involving estate planning, tax, structuring of art entities and philanthropic advice.”
Though Black underscored that his firm had no dealings with Epstein, the chief executive acknowledged that worries about his ties to the late financier are nonetheless disturbing Apollo’s investors.
“This matter is now affecting Apollo, which my partners and I spent 30 years building. And it’s also causing deep pain for my family,” Black said on the call. “Knowing all that I have learned in the past two years about Epstein’s reprehensible and despicable conduct, I deeply regret having had any involvement with him. With the benefit of hindsight, working with him was a horrible mistake on my part.”
Apollo’s stock fell 2.5% on Thursday afternoon and is down 15% in the last month.
The CEO added that there is documentation of the work Epstein did for Black’s family’s entities and that it was vetted by law firms, accounting firms and other advisors.
“For that work, there exists substantial documentary support for the services provided,” Black said. “Let me be clear: There has never been an allegation by anyone that I engaged in any wrongdoing, because I did not. And any suggestion of blackmail or any other connection to Epstein’s reprehensible conduct is categorically untrue.”
Epstein’s accused procurer, Ghislaine Maxwell, was arrested in July on charges of allegedly abetting his sexual abuse of several girls in the 1990s. Maxwell, a British socialite, has denied the federal charges. She is being held without bail after a judge said she was a flight risk.
Board members seek review
Black’s explanation came after three Apollo board members last week hired a law firm to conduct an independent review of the CEO’s dealings with Epstein. Black said he asked for the review and is cooperating fully.
The latest concerns among Apollo shareholders were sparked by an Oct. 12 story in The New York Times that said Black wired Epstein $50 million in the years after Epstein’s 2008 conviction for soliciting prostitution from a teenage girl. Two unnamed sources told the Times the total amount sent by Black to Epstein could have been as high as $75 million.
That article did not present any evidence that Black himself had participated in inappropriate behavior, though it nonetheless spooked some of Apollo’s public-pension investors. The CEO said Thursday he wasn’t aware of Epstein’s “sickening” conduct until it was reported in late 2006 that he was under investigation by state and federal authorities.
Epstein later agreed to a federal non-prosecution agreement to resolve that investigation, pleading guilty the following year to two state prostitution counts.
Following his release, Epstein returned to his financial advisory work and continued to associate with luminaries in finance, academia, science and government, Black said.
Epstein, who was 66 when he died, had previously been a friend of Presidents Donald Trump and Bill Clinton, as well as of Britain’s Prince Andrew, and many other wealthy and powerful people.
Black referenced the financier’s many illustrious connections in explaining why he had felt comfortable taking advice from Epstein.
“At the time, Epstein was advising prominent clients on estate tax matters and his network of relationships included luminaries I respected and admired, including several heads of state, heads of prominent families in finance, a U.S. Treasury secretary, accomplished business leaders, Nobel laureates, acclaimed academicians and noted philanthropists.” Epstein had just been named a trustee of Rockefeller University. he added.
“Like many other people I respected, I decided to give Epstein a second chance,” Black said. “This was a terrible mistake. I wish I could go back in time and change that decision, but I cannot.”