A billionaire financier entered into a $158 million business relationship with Jeffrey Epstein after his conviction on sex offences because famous friends had not shunned the pedophile, a report has found.
Leon Black announced this week that he would retire as CEO of Apollo Management following revelations that he paid Epstein the money between 2012 and 2017.
However, law firm Dechert, which produced the report, found Black only let Epstein into his affairs because he had lied about his criminal past and because "numerous prominent figures" were still friends with him.
Dechert's investigation on behalf of Apollo found that Black had no links to Epstein's criminal conduct.
It does, however, shed light on important aspects of the Epstein story, including how the financier, who died in 2019, made his money and how he embedded himself in the lives of his contacts, attempting to make himself indispensable.
Theories about Epstein's activities have included suggestions that he was an Israeli spy or that he used video tapes of the rich and powerful as blackmail.
The report suggests Epstein did provide valuable financial advice that saved Black hundreds of millions of dollars.
However, it also uncovered attempts by Epstein to demand millions more than he was owed through a flurry of emails, "including by referencing personal matters that Black had shared with Epstein in confidence."
The report stressed: "There is no evidence that those matters had any relationship to any of Epstein's criminal activity or to any of Black's payments to Epstein."
'Well known businessmen, political figures, diplomats, scientists and celebrities'
Dechert found Black was introduced to Epstein in the mid-1990s by a mutual friend and initially thought he "was very intelligent and knowledgeable" about taxation and estate planning.
The report stated: "Black also was impressed by Epstein's connections to many prominent figures in business, politics and science."
It added: "Throughout Epstein and Black's relationship, Black viewed Epstein as a friend worthy of his trust.
"They attended social events together, Black confided in Epstein on personal matters and Black introduced Epstein to his family.
"Black regularly visited Epstein's townhouse in New York to either discuss business or to meet other prominent guests who were visiting Epstein, including well known businessmen, political figures, diplomats, scientists and celebrities."
The New York townhouse is one of the places where Virginia Giuffre claims she was forced to have sex with Prince Andrew after being trafficked by Epstein. The prince denies the allegation.
Black's own pronouncements echo Andrew's description of Epstein's "most extraordinary ability to bring extraordinary people together" at dinner parties for "academics, politicians, people from the United Nations."
Asked by the BBC in 2019 whether he regretted the friendship, the Duke of York said: "Now, still not and the reason being is that the people that I met and the opportunities that I was given to learn either by him or because of him were actually very useful."
The Dechert report said Black knew Epstein "often employed attractive women," but "did not believe that any of the women in Epstein's employ were underage."
It went on: "Black has no recollection of ever seeing Epstein with an underage woman at any time."
'Black believed the severity of Epstein's offenses was limited to a single instance'
Black began making payments to Epstein four years after his 2008 conviction for "solicitation of prostitution and procuring a person under 18 for prostitution."
The Apollo CEO said he regretted employing him but had been given a false story about Epstein's crimes.
The report said: "Black was aware of Epstein's guilty plea and understood from Epstein that these offenses arose out of a single instance in which Epstein had received a massage from a 17-year-old prostitute.
"According to Black, Epstein had told him that the woman had shown Epstein false identification suggesting that she was not underage."
Black appears to have said he was drawn back to Epstein in part because the convicted pedophile had maintained his relationships with other prominent figures.
The report states: "Following Epstein's prison sentence, Black believed that Epstein had served his time and that it would not be inappropriate to maintain a personal and professional relationship with Epstein.
"This decision appears to have been informed by at least three factors. First, Black believed that the severity of Epstein's offenses was limited to a single instance of soliciting a 17-year-old prostitute that Black believed Epstein had mistakenly understood was older.
"Second, numerous prominent figures, including CEOs, banking institutions, leading figures in technology, science and business, diplomats and Nobel laureates, continued to maintain social and business relationships with Epstein."
Among the prominent figures he was seen with after his conviction was Prince Andrew, who was photographed going for a walk with the financier in New York in 2010.
'Black knew Epstein was greedy and a self-promoter'
The first payment to Epstein in 2012 came in return for solving a complex taxation problem. Black was facing a $500 million tax liability on his estate and Epstein found a solution.
The report said: "Witnesses differed on what the value of the estate tax would have been today or in the future if the issues had not been resolved, but they believed the estate tax liability could have been as much as $1 billion or more."
Dechert repeatedly stated that the witnesses it interviewed said Epstein had provided services of significant value to Black.
However, the report also paints a picture of a difficult adviser whom Black struggled to cut off because Epstein kept finding ways to make himself valuable.
The report said: "Black knew Epstein was greedy and a self-promoter and was likely attempting to prove his own value.
"At the same time, Black also felt that Epstein was identifying genuine issues that needed to be resolved.
"As their business relationship continued, Black wanted to 'wean' the Family Office off Epstein so that he was less reliant on Epstein's services, but Black found it difficult to do so because, from Black's perspective, Epstein was identifying and solving significant issues that were not being addressed by other employees or advisers."
The connection was finally broken when Epstein demanded huge sums of money for a project he had helped, but which Black's other advisers said he had not originated.
When Black refused, Epstein hit him with a barrage of emails designed to "pressure Black to provide greater compensation."
The report said: "Epstein's communications also included extended warnings about a number of perceived issues affecting the Family Office and Black's estate planning, coupled with assertions that Epstein no longer wished to play any role in resolving those issues.
"Epstein also would invoke his friendship with Black in those emails, including by referencing personal matters that Black had shared with Epstein in confidence, although there is no evidence that those matters had any relationship to any of Epstein's criminal activity or to any of Black's payments to Epstein."
'Both Apollo and I condemn Mr. Epstein's reprehensible conduct'
Black has stated that he will remain chairman of Apollo, which he co-founded. He is also chairman of the board of trustees at the Museum of Modern Art in New York City. Newsweek has contacted MoMA for comment.
In a letter to Apollo partners, Black said: "It is important to emphasize that both Apollo and I condemn Mr. Epstein's reprehensible conduct in the strongest possible terms, and, as I have previously stated, I deeply regret having had any involvement with Mr. Epstein."
He added: "Having reflected at great length on my professional relationship with Mr. Epstein, a relationship that I profoundly regret, and having discussed the matter with my family, I have also decided that one way I can begin to address the grievous error of having maintained a professional relationship with Mr. Epstein is to pledge $200 million towards initiatives that seek to achieve gender equality and protect and empower women, including supporting maternal health, women in finance and the arts, in the classroom, in laboratories and in the field of entrepreneurship, as well as helping survivors of domestic violence, sexual assault and human trafficking."
