Situational awareness: 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.
This week's Edge clocks in at 2,328 words (< 9 minutes), thanks to all the Epstein material. If you scroll past that, you'll also find items on American housing policy and interest rates.
Illustration: Sarah Grillo/Axios
"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 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."
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.
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.
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.
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.
"I was told by Joi that Epstein had cleared the MIT vetting process."— Reid Hoffman, in an email to Axios
Reid Hoffman, the venture capitalist and LinkedIn founder, appears regretful for his role in enabling Epstein's post-conviction rehabilitation.
In an email to Axios, Hoffman writes:
The abuse described by Jeffery Epstein’s survivors is abhorrent, horrific, and disgusting. I am hopeful survivors can attain justice and support, and the communities damaged by these events can begin healing.
My few interactions with Jeffrey Epstein came at the request of Joi Ito, for the purposes of fundraising for the MIT Media Lab. Prior to these interactions, I was told by Joi that Epstein had cleared the MIT vetting process, which was the basis for my participation. My last interaction with Epstein was in 2015. Still, by agreeing to participate in any fundraising activity where Epstein was present, I helped to repair his reputation and perpetuate injustice. For this, I am deeply regretful.
Recent reporting has made clear allegations of willful deception across multiple departments at MIT. Wherever this is true, this is completely unacceptable and needlessly tarnishes the work of MIT faculty and students. I support a thorough, independent investigation into Jeffrey Epstein’s connections and am hopeful that the investigation announced by President Rafael Reif exposes the flaws in the existing process and establishes new clear safeguards moving forward.
Hoffman invited both Ito and Epstein to an August 2015 dinner in Palo Alto with Elon Musk, Mark Zuckerberg and Peter Thiel. He tells Axios that he invited Epstein at Ito's behest, and only because Ito vouched for the convicted criminal, saying that he had successfully cleared MIT's vetting process.
The big picture: Hoffman, here, is blaming Ito for vouching for Epstein. MIT president Rafael Reif is doing the same thing, in a letter where he talks about how his office "accepted Joi's assessment" of Epstein.
Letter courtesy of Signe Swenson / Whistleblower Aid
An easy $2 million. In late September 2014, Epstein typed a one-line email to Ito saying that Bill Gates wanted "a write up on our one science program."
Gates asked that his donation remain anonymous, and placed no restrictions on its use. There wasn't even a gift agreement, which almost always happens when a multimillion-dollar gift arrives.
Why it matters: Anonymous gifts have historically been applauded for their selflessness, but this gift wasn't really anonymous: It arrived on Gates's letterhead, after all. "Anonymous," in this context, really just means "secret."
The bottom line: The unusual was usual at MIT, it seems, whenever Epstein was involved. At one point, according to Farrow's reporting, Epstein suggested that the Black and Gates donations might be matched by the Templeton Foundation — but then, Swenson's emails reveal, the Templeton Foundation asked the Media Lab to fill out a grant proposal.
Illustration: Sarah Grillo/Axios
Joi Ito, who resigned from the Media Lab on Sunday (and also from the boards of the New York Times Company and the MacArthur Foundation), is the highest profile person so far to have suffered professional repercussions for consorting with Epstein.
Peter Cohen, who left MIT last year, has been placed on administrative leave from his new job at Brown University, pending a review of his activities at MIT.
Richard MacMillan resigned from MIT before the Epstein scandal hit and now works as co-executive director of the Fine Arts Work Center in Provincetown, Massachusetts. He did not respond to a text, voicemail and email asking for comment.
What's next: Epstein's MIT ties pale in comparison to the amount of time, money, and attention he lavished on his beloved Harvard; that would seem to be the natural next shoe to drop.
Meanwhile, pointed questions remain about what MIT president Rafael Reif knew and when he knew it. He certainly knew about the $2 million donation from Gates, for instance; what we don't know is what questions he asked about it.
Illustration: Aïda Amer/Axios
Fannie Mae and Freddie Mac are in an uncomfortable limbo, and have been ever since they were bailed out by the government during the financial crisis. Absolutely no one likes the status quo, least of all Republicans who hate the way in which the government (which owns 80% of both companies) dominates housing finance.
The bottom line: As the WSJ's Aaron Back says, "America’s mortgage-finance system isn’t going to change in a fundamental way for the foreseeable future." No matter how many people really want it to.
Illustration: Sarah Grillo/Axios
Why it matters: Fed chair Jerome Powell wouldn't clarify in August whether or not his actions were the beginning of a rate cutting cycle. If he does 2 consecutive rate cuts, and especially given the additional cuts the market is expecting, it's going to be hard for him to preserve ambiguity.
Photo: Rick Friedman/Corbis via Getty Images
The MIT Media Lab building is one of the most impressive, expensive, and eye-catching structures on MIT's campus. Designed by Japanese starchitect Fumihiko Maki and completed in 2009, the Lab connects to IM Pei's 1985 Wiesner Building, adding some 163,000 square feet of gleaming steel-and-glass laboratory, office, and meeting space.
Finally, apologies for garbling a passage about the Argentine elections in last week's Edge. Cristina Fernández de Kirchner is of course running against her successor, Mauricio Macri; she is not his running mate, as I somehow ended up implying.