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 he 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 “involving estate planning, tax, structuring of art entities and philanthropic advice” from 2012 to 2017.
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 theApollo’s investors.
Apollo’s stock fell 1% on Thursday and is down 15% over the last month.
“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.”
He 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.”
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’s shareholders were sparked by a New York Times article Oct. 12, which stated that 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 that 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 chief executive said Thursday that 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 nonprosecution 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.
“Like many other people I respected, I decided to give Epstein a second chance,” he said Thursday. “This was a terrible mistake. I wish I could go back in time and change that decision, but I cannot.”
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