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Apollo Global Management co-founder Leon Black has been very clear about his long personal and professional relationship with late pedophile and sex trafficker Jeffrey Epstein: Sure, he went to Epstein for tax advice, in spite of Epstein’s having no undergraduate degree, let alone a law degree with a focus on tax matters, and paid him a good deal of money for it. Sure, he occasionally visited Epstein’s Manhattan townhouse and private island, but not for the reasons that other people did. And Epstein never had anything whatsoever to do with Apollo in any way.

In spite of all of that, Black and Apollo saw fit to conduct two investigations into the matter. And wouldn’t you know that the latest completely bears out everything that Black has ever said about his old buddy?

Apollo never retained Epstein for any services and Epstein never invested in any Apollo-managed funds;

Epstein regularly advised Mr. Black on trust and estate planning, tax issues, philanthropic endeavors, and the operation of his Family Office; 

All fees paid to Mr. Epstein by Mr. Black or his Family Office were for bona fide tax, estate planning and other related services, and the amounts were intended to be proportional to the value provided by Mr. Epstein; 

Epstein’s advice was vetted by respected professional advisors; and 

Dechert found no evidence that Mr. Black was involved in any way with Mr. Epstein’s criminal activities at any time. 

So there you have it. Wait, there appears to be a simultaneous press release. Wonder what this one says….

Chairman and CEO Leon Black has informed the Board of Directors that he will retire as CEO effective on or before July 31, 2021 consistent with best-in-class governance practices…. In addition, Apollo’s Board will be expanded and will include four new independent directors…. Apollo Co-Presidents Scott Kleinman and James Zelter have been named to the Board and will take on increased responsibility for the day-to-day operations of the company….

In addition to the changes detailed above, Mr. Black has requested that the Board and the Executive Committee evaluate and consider (subject to required corporate and regulatory approvals) meaningful new measures to further enhance Apollo’s corporate governance, many of which will be differentiating in the alternative industry….

Huh. That’s strange. Why would any of that be necessary—even if Black is not going the full Dubin and retaining his chairmanship—given that everything that was done was totally above board and absolutely beyond reproach, even if it all seems a bit gross in retrospect? I mean, what’s $75 million to a multi-billionaire? Oh, so you’re saying that that quite literally wasn’t even the half of it?

The review — ordered by the firm’s board at Mr. Black’s behest in October, after The New York Times detailed at least $75 million in payments — found that Mr. Black had paid Mr. Epstein $158 million in a five-year period ending in 2017. He had also lent Mr. Epstein more than $30 million, only $10 million of which was paid back, the report found.

Still, what’s the problem? Are you not convinced? It seems like you might not be convinced. And, more importantly, that Apollo co-founder and Good Cop Josh Harris is not convinced.

The details of their financial dealings — Mr. Epstein’s advice was worth perhaps $2 billion in tax savings to Mr. Black, according to the report — created friction between Mr. Black and one of Apollo’s other founders, Joshua Harris…. During a series of meetings on Sunday evening, including with individual board members, Mr. Harris raised objections to Mr. Black’s timeline for stepping down, believing that the reputational threat was so serious that Mr. Black should relinquish the chief executive role without delay, the people said. Mr. Harris also made his case to his co-founders that night in discussions with Apollo’s executive committee — which consists of the three of them.

In the end, Mr. Harris’s objection fell on deaf ears, said the people, who requested anonymity to discuss private deliberations.

Apollo Global Management Announces Conclusion and Release of Independent Review [press release]
Apollo Announces Review of Significant Governance Enhancements as Part of Continued Evolution and Institutionalization of the Firm and Leadership Transition [press release]
Apollo C.E.O. to Step Down After Firm Finds More Payments to Jeffrey Epstein [NYT]


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