Sep 12, 2019

Exclusive: MIT and Jeffrey Epstein's billionaire enablers

Felix Salmon, author of Edge

Illustration: Sarah Grillo/Axios

The Jeffrey Epstein story is going to far outlive Jeffrey Epstein, as is evidenced by Ronan Farrow's latest blockbuster report in the New Yorker about the criminal’s secret ties to the MIT Media Lab, as well as by MIT president Rafael Reif’s latest revelations about the number of university officials who knew about Epstein’s donations.

Why it matters: These raise a lot of questions about the billionaires in Epstein's circle, especially Leon Black and Bill Gates. My reporting, below, answers at least some of them.

"When I was informed of the arrangements with [Leon] Black and then later [Bill] Gates, [Mortimer] Zuckerman and Templeton [Foundation], it was phrased by [MIT money-raiser] Peter Cohen that ‘Jeffrey has friends who owe him favors, and they’ll be making the donations to MIT.’ ‘Favor’ was a word that was used."
— Signe Swenson, former MIT development officer, in a phone call with Axios

On the morning of July 28, 2014, Richard MacMillan sent an urgent email to his colleague Peter Cohen, with the subject line "Yikes! IMPORTANT." MacMillan, who worked in MIT's fundraising office and oversaw large gifts from individuals, had woken up to an email telling him that Jeffrey Epstein had donated $50,000 to the university, and that he — MacMillan — was listed as being Epstein's relationship manager.

  • The problem: "We are not taking gifts from him," wrote MacMillan to Cohen, who was the chief development officer at the MIT Media Lab. Epstein had, after all, been convicted of sex crimes.
  • The solution: MacMillan did not suggest that MIT return the money. Instead, he asked why it hadn't arrived in a more circuitous manner. "What happened to the Leon Black route?" he asked, according to emails provided to Axios by Whistleblower Aid, which represents former MIT employee Signe Swenson.

"The Leon Black route" was MacMillan's way of characterizing the idea that Epstein should not donate money directly. Instead, Epstein would allegedly engineer a donation from Black, the chairman and CEO of private equity giant Apollo, or from other undefiled third parties. (Black declined to comment, as did MIT and MacMillan.)

According to the emails obtained by Axios, $50,000 was just too little money to bother Black with, Cohen told MacMillan. "Jeffrey has an account that is supposed to allow him to make small gifts anonymously," Cohen wrote — as if making the donation anonymous somehow made it OK to accept money from Epstein. "If this was credited to him, it should have been anonymous."

  • The Black gifts were much larger. The last one, explained Cohen, was $500,000. As Farrow reported, Black ended up giving some $5.5 million to the Media Lab in all.

Black was considered "do not contact, do not solicit" within the MIT development department (something that hasn't been reported until now). That designation effectively ensured that Black would not be contacted by MIT fundraisers who didn't know about the Epstein connection and who might take his donation at face value.

Black's gifts were understood within the Media Lab to be Epstein money, according to 3 MIT sources. And that understanding applied more broadly than just to Black.

  • It wasn't that Epstein gave money directly to Black, which was then passed on. But it was understood that Black and others owed Epstein "favors" — perhaps they owed Epstein money for some kind of financial advice — and that Epstein could ask them to send those sums directly to MIT.

Bill Gates gave $2 million to MIT in a very similar deal, and former Media Lab director Joi Ito — who resigned soon after Farrow's article was published — pursued millions more via Epstein from the Templeton Foundation and from media mogul Mort Zuckerman, according to documents supplied to Axios.

  • Gates has repeatedly denied that Epstein directed any of his personal grantmaking.
  • A Gates spokesperson told the New Yorker that “any claim that Epstein directed any programmatic or personal grantmaking for Bill Gates is completely false.” Gates himself told the WSJ before Farrow's article appeared that "I didn’t have any business relationship or friendship with" Epstein, even though he did fly on Epstein's jet.

Epstein exercised control over the Black and Gates money even after it was donated, says Swenson, who worked in the Media Lab development office at the time — even though the contributions were ostensibly unrestricted.

  • Epstein visited the Media Lab at least once in Swenson's recollection. "The visit where Epstein came to campus was to have him meet with faculty and see what he was interested in funding,” she says — despite the fact that the gifts went directly into Ito’s discretionary fund.

The bottom line: Epstein found it very easy to maintain his web of influence even after he had been jailed for sex crimes. Thanks to people like Ito, Black, and Gates, Epstein's post-conviction life was filled with money, access and esteem.

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