Apollo — not the Greek god of music and poetry who resides on Mount Olympus, the other one, the one who is a Wall Street god of greed and decadence — is busy attempting to clean up it’s permanently stained beyond any hope of repair reputation. Apollo is a massively profitable Wall Street private investment firm which has been famous for cutting corners, screwing competitors, and making it’s partners filthy rich. It’s clients, mostly US public pension funds and a smattering of endowments and foundations, have earned good but not spectacular returns.
Well, that was all fine and good in the United States of Let ‘Em Eat Cake until it became widely known that one of the two co-founders, Leon Black had been palling around with one Jeffrey Epstein. Jeff was a fun guy so you can see the attraction for a schlubby, overweight late 50’s finance nerd with a late 70s hair cut. Jeff owned his very own private island where he kept teenage girls captive and raped them. For decades. His “guests” participated. Epstein and the daughter of the late British media tycoon, Robert Maxwell, Ghislaine Maxwell (now in prison and a terrific reason to support the death penalty), essentially ran a massive sex trafficking operation for more than twenty years, more or less in public with the winking acquiescence of a long list of the great and the good in American society. Because Epstein had a home in Palm Beach, Trump became a buddy although The Donald claims he unfriended him years before they both became notorious for serial sexual misconduct. Getting invited to fly on Jeff’s private jet was a hot ticket for his pals because it was evidently a flying bacchanalia with guests offered cocktails and an assortment of teens. Creeps like Bill Clinton, Prince Andrew, Alan Dershowitz and Leon Black were reported to be frequent passengers on Air Rape. Unfasten your seat belts, we’re about to take off!
Well, this is all disgusting and appalling but for Leon Black, things really started to get sticky when it was revealed that he had paid Epstein a grand total of $150 million for “advice” from 2012 to 2017. Epstein is a college dropout who has never worked on Wall Street. This is a problem for Black but it’s also a problem for all the non-profit institutions that had gladly accepted Black’s monster gifts in exchange for slapping his name on their buildings. Black was the single biggest donor to the Museum of Modern Art in New York and is its current Chairman. Forget the girls, this is bad for business! Dartmouth, Harvard, and many other hospitals and foundations have received huge gifts from Black. Well, at least he spent it on Planet Earth and not on some hare-brained scheme to fly to Pluto like some other celebrated mega billionaires I can think of.
This is also a problem for the institutions who have hired Apollo to manage money for them. Many institutional investors are moving towards an investment approach which focuses on ethical investing. This approach restricts investment in things like fossil fuel companies or companies which employ child labor and encourages investment in firms and projects which “do good”. Hiring a firm run by a probable monster to invest in a socially responsible manner is an uncomfortable fit to say the least. On the other hand, if they start restricting investment managers to only those Wall Street firms which are ethically pristine, there won’t be a lot to choose from to say the least.
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So Leon did what any scumbag billionaire would do. He hired a “reputable” law firm to do an “independent” investigation in order to declare him exonerated. I’m sure it was expensive but poor Leon was in a bind. So the law firm, Dechert (motto: “just tell us what to write, it’s faster that way”) was hired to do a fearless, no holds barred whitewash. And, shockingly, that’s what Dechert did. They prepared a lengthy report full of sober sounding nonsense which declared that Jeff Epstein was paid the $150 million bucks because he provided tax advice which — get this — saved Black $1.3 billion dollars. Leon Black, the sharpest operator on Wall Street and a noted penny pincher, paid a fortune to a guy with no education or experience (other than, you know) for… tax advice. And Apollo, the firm that Leon Black has dominated for the thirty years since it was founded, was declared totally innocent of any Epstein ties. The rest of Wall Street is still laughing at this sick joke.
One more update on the toxic waste dump that is Apollo: last month they announced they had hired Jay Clayton, former Securities and Exchange Chair during the Trump Administration to be their lead “independent” (so much independence!) board director (Clayton will also return to his comfy nest at white shoe NY law firm, Sullivan and Cromwell (motto: “if you have to ask, you can’t afford it”). Clayton’s term at the SEC was focused on eliminating any rules or regulations that Wall Street didn’t like. Clayton must have done a good job as top cop on Wall Street because there were fewer insider trading charges brought during his term than in any SEC Chair’s term since Ronald Reagan. Yes, that was a joke too. Regardless, this correspondent thinks that Jay is the perfect man for Leon Black and Apollo. If your business depends on regulatory capture it’s important to give fat paydays to former regulators.
Yes sports fans, it’s just another sunny day on Wall Street…
Fun Facts:
- Leon Black’s father, Eli Black, was a prominent businessman who owned a company called American Brands. When the company was investigated for paying bribes to foreign governments, Eli committed suicide by jumping off the 44th floor of the Pan Am building in New York. Leon clearly learned something from this: don’t stint on legal fees!
- Leon was the right-hand man of Michael Milken at Drexel Burnam in the late 1980s. Milken is known as the inventor of junk bonds and was sent to prison in 1989 for a multitude of insider trading convictions. He was sentenced to ten years but, because he’s White and didn’t possess any marijuana, he only served two. Milken was barred from Wall Street for life but Leon… well, you know what happened. Better lawyers? Apollo was formed in 1980 with a nucleus of former Drexel executives.