Jul 11, 2019

Leon Black's Jeffrey Epstein bungle

Dan Primack, author of Pro Rata

Illustration: Sarah Grillo/Axios

It was just a clerical error: That's the message from Leon Black, CEO of Apollo Investment Group, after federal tax filings showed that Jeffrey Epstein served as a director of Black's family foundation for six years after pleading guilty to a state charge of soliciting prostitution from underage girls.

Driving the news: The Black Family Foundation submitted Form 990-PFs for calendar years 2007–2012 that included Epstein as a member of its executive committee. 2007 was the year that Epstein struck his highly-controversial plea deal with Alex Acosta, then Miami's lead federal prosecutor and now the U.S. Secretary of Labor.

  • For the first 24 hours or so after the filings were first uncovered, neither Apollo nor Black provided public comment.
  • Then, late yesterday afternoon, media outlets (including Axios) were provided with a January 2015 document, apparently signed by both Black and Epstein, saying that Epstein resigned from the Foundation in July 2007 (several months before the plea was finalized). It also says that a copy of the actual resignation could not be found, and that his continued inclusion on tax forms "was an oversight by the Foundation's tax accountants which was not noticed until 2013."

Black's personal spokesperson declined to answer follow-up questions, including what exactly Epstein did for the Foundation or if he did other work for Black. He's generally referenced as a wealth manager, but there are lots of oddities in that background, with some suggesting he was more of a tax strategist.

  • Black's spokesperson also declined to explain why the 2015 document was created in the first place, as it appears to have been attached to another, undisclosed document.

The bottom line: This is, at best, a very bad look for one of private equity's top power brokers. Particularly given that this isn't the first time that Black's judgment in picking business associates has been objectively dubious (see Villalobos, Alfred). It's also unlikely to be the last well-known name tied to Epstein, now indicted on federal sex trafficking charges, as so far Black is one of just two business clients to have been publicly identified.

Go deeper ... Pro Rata Podcast: Jeffrey Epstein's powerful pals

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