Inside the Rise and Fall of Leon Black

But I have gone through the, you know, 3 million emails that Epstein wrote to Leon, which Leon never responded to. But a lot of it is just Epstein ranting, trying to get more money out of Leon until Leon just like was fed up with it and cut him off in 2017.

First, thank you for the kind words, Peter. I look up to you as well. I can't wait to clue in on a regular basis to your new podcast, which I find to be a brilliant idea, and I am riveted by what will surely be a historic presidential race. Can't get enough of it. I just saw John Bolton up here in Nantucket and that was interesting. Here by the way is the new book in all its brilliant redness and blackness.

So look Peter, when you write a book of this kind of tome-like quality, it's very important to have a story and a narrative that you are, I am myself, interested in. And I've, you know, been aware of Apollo since its founding in 1990. When I was a banker at Lazard, I used to cover the firm. Used to traipse over there to see Mark Rowan and bring him what I thought were actionable M&A ideas. It was an immensely thankless task, of course, because the last thing that Mark Rowan wanted to hear from was, well, I think he wanted to hear M&A ideas. He certainly didn't want to hire and pay a fee to an M&A banker since he himself was a former M&A banker. So I did that for any number of years. It was utterly thankless, but I did get to know Mark and I had never met Leon. I once or twice, you know, bumped into him on Fifth Avenue, but I just thought that the whole story, starting with, you know, Leon's father's suicide and going to Drexel and Drexel's implosion and Apollo being born out of the ashes of Drexel, and then, you know, to say nothing of all the number of good deals they've done and bad deals they've done, I don't dwell on that too much, but and the succession process, Jeffrey Epstein, as you mentioned, affairs with people who are not their wives, you know, that kind of thing.

Well, at the time that Drexel imploded, which was February 1990, and they started the firm, which was around June of 1990, there weren't that many private equity firms. So, it wasn't that they needed to necessarily distinguish themselves from the pack to try to raise money. It started in kind of an interesting way. So you have these guys, as you say, with the stink on them from the collapse of Drexel, a bunch of Jewish guys from New York basically, and with a twist of LA. And then Leon got a call from a French banker in New York from Cредit Lyonnais who called him like six times before Leon decided to return the call. And the guy basically wanted Leon and his crew to set up a US domestic M&A business for Cредit Lyonnais. And when Leon finally spoke to the guy, he said, "Hey, guess what? It's 1990, there's a big credit freeze on in this country and there's very little M&A business, but there is a big opportunity in buying distressed debt and seeing when the economy improves whether that debt trades up or if it doesn't can be converted into equity. So why don't you stake me and us with hundreds of millions of dollars, like $400 million, and, you know, we'll buy distressed debt." I think what distinguished them was somehow their ability to get Cредit Lyonnais, which was like the Royal Bank of France at the time, since merged into Cредit Agricole because of its own blunders, to back these guys who had just come out of Drexel who had the stink on them. It seemed very unlikely but it happened. They got the 400 million, then they got another 400 million, and they convinced the French, who are, you know, not necessarily the most creative thinkers when it comes to finance, to back Leon and his partners in buying distressed debt at a discount, and they all made a fortune. For an encore, they bought the portfolio of Executive Life a few years later with French backing. They paid 50 cents on the dollar for $6 billion worth of junk bonds that Mike Milken had sold the Executive Life executives. And now Apollo and Leon, who had worked at Drexel with Michael Milken, were buying them for 50 cents on the dollar and they made another fortune doing that.

Well, I think, Peter, as you will no doubt find out soon, when you make billions, when you have a net worth in the billions, and Leon has now got a net worth of $18 billion, and he also gave a gift basically of Apollo stock to Mark and Josh that was now worth like 10 billion each. So they had all this money, you know, they bought their planes, they bought their mansions in New York, they bought their houses in the Hamptons. Leon bought Tom Cruise's house in LA and has since sold it. He's got a house in London. I mean, they got all the homes and the planes and the yachts that they can handle. So now it becomes different things. For Leon, it became this art collection which is a, you know, world-class art collection which he showed me many times that is probably the best, the most significant art collection in private hands, certainly in the US, maybe the world. Josh, as you said, owns the Washington Commanders, the Sixers, the New Jersey Devils. He owns a piece of a UK football club. Mark Rowan decided to, you know, buy a bunch of and build or create a bunch of restaurants in the Hamptons and in Eastern Long Island. You know, he has boats and planes as well, a duplex on Fifth Avenue, Greenwich. You know what happens is when you get really, really, really, really rich, you start buying all sorts of expensive toys.

There was a sequence here of events. You know, Jeffrey Epstein dies by suicide, I gather we're told, we're led to believe. And that was in what...

2019, right? In 2020, the New York Times reported that Leon had paid Epstein between 50 and $75 million for financial advice. That number really got tongues wagging across Wall Street. Why would he pay Jeffrey Epstein that much money for financial advice? If you built this giant company that you wrote about, it seems like he's pretty good with the financial advice. What was Jeffrey bringing to the table?

Exactly. Why would somebody with Leon Black's reputation for financial shrewdness be paying Jeffrey Epstein, a guy who didn't even, you know, barely graduated high school, an autodidact, for financial advice? It just blew everybody's mind. And of course, 50 to 75 million was low. It turned out to be 158 million, which blew people's minds. So on analyst calls, on quarterly analyst calls, Leon started getting questions from research analysts about his relationship with Epstein. I think some sort of institutional investors were getting nervous about that relationship and wanted to know the extent of it. So Leon essentially asked a special committee of the board of directors of Apollo to hire a law firm and do a report and investigate his relationship with Jeffrey Epstein. Now, he told me he did that because he didn't think he did anything wrong. The report was published in January 2021 and did reveal that he paid 158 million to Epstein, which further blew everybody's mind on Wall Street. Although it did talk about how he received financial and tax and estate advice from Jeffrey Epstein and that Jeffrey Epstein had in effect saved Leon $2 billion in what might have been a tax bill for his kids' trusts that he had set up, where there's apparently some flaw in them, which seems hard to believe, but apparently there was. And Jeffrey Epstein, again, seems hard to believe, uniquely was able to come up with a solution that passed muster with Leon's traditional Wall Street law firms. And the documents were redrafted, and the IRS has never questioned it. And so Leon didn't have to pay that two billion that he otherwise might have had to pay if Jeffrey Epstein didn't come up with this thing. And that led to, you know, Jeffrey Epstein trying to worm his way into everything that Leon was doing, his family office, his buying and selling of art, his buying and selling of jets and boats, etc., any asset that could be bought in a tax-efficient manner. Jeffrey Epstein was all over it, and that's why Leon ended up, he says, paying him $158 million.

Which seems, you know, exorbitant, and a lot of people, I think, still to this day find it all hard to believe. Certainly when I first heard and read that Decker report in January of 2021, I wrote a piece in Vanity Fair where I said I thought it was really hard to believe and I can't believe Leon expects us to believe it. But, you know, during all the interviews with me, he's stuck to that and there's basically been nothing really emerging to question that, although clearly Jeffrey Epstein is dead, so the other side of the equation is not able to discuss it or ratify it. But the plan was when the Decker report came out that Leon would, he was still CEO, he was still chairman of the board, but that he would resign as CEO six months later in June, June of 2021 on his 70th birthday and turn the company over to Mark Rowan and he would remain executive chairman. That was the plan. The plan got blown up, however, two months later on March 17th when this woman that he'd been having a consensual affair with and that had ended basically, and with whom he had signed an NDA and had agreed to pay $21 million in exchange for signing the NDA, after he paid her $9 million of the 21, she blew it up by tweeting about their affair, which was in violation of the NDA, and making all these crazy claims...