But we've created this class, a hubristic class of people. They're able to have anything they want in the world and will forever. I mean, they've created generational wealth. They are untouchable in that regard. It seems that he who has the gold rules. There probably needs to be more accountability generally. This is undermining our society when we create a class of oligarchs who seem to have no carburetor on their behavior or on their mouths or any accountability for their actions. And I think that's debilitating to our society, and unfortunately it's starting at the top of our society too.
Welcome to Open Book. I am your host, Anthony Scaramucci. Joining us is a dear friend, Bill Cohen.
Bill, what a book this is. Okay, I'm going to make the argument here that this is your best book, and I've read every one of your books, but the title of the book is Money to Burn: The Unvarnished Truth About Leon Black, Apollo, and the Rise of a New Wall Street. So, one of your reviewers said it was like five different books in one. But the reason I love the book, and I appreciate you giving me an advanced copy, which I read over the summer, is this is an unusual group of people. I mean, these are contemporaries of yours and mine, and we know these people, and so the research that you did on these people I think was legendary. But let's start with the title. Why Money to Burn? What is the point that you're trying to make with that title?
Well, first, Anthony, thank you for having me. It's always great to see you. You know, you yourself have a new book coming out, which I wish you all the best with, and I can't wait to... I've read most of it, and I can't wait to see how well it does. Well, credit first to my wife, your former teacher's daughter or librarian's daughter out where you all grew up.
How, what a kismet sort of story. So, I'm going to interrupt you for a second. So, the former librarian of the Port Washington Middle School is your wife's mom, Mrs. Futter. And I'm going to tell... this is a tale out of school, but it'll just... I think everyone will appreciate this. I had a great relationship with her, and she used to save for me the Sports Illustrated bathing suit editions in the archive. How much do you love that? I mean, how much do you love that? It's legendary.
How much do you love a 13-year-old Anthony Scaramucci going into the middle school library...
...and saying, 'Mrs. Futter, do you have my stash?' She says, 'Yes, Anthony.' And I would go back to that little study cubicle.
And I can totally believe it. I feel like it's completely accurate. I can see you with your motorcycle jacket on going back in the cubby.
I mean, that's how we grew up. But she was awesome, you know. And by the way, she and you have a... I think your sister-in-law was president of Barnard there for a while, right? And she went on to the Museum of Natural History, I believe, as well, right?
Oh, correct. That's true.
So, she knew how to raise people. That's for sure. All right. But go ahead, Bill.
Well, my wife, who's very good at coming up with these titles because she has been in publishing, she runs two publishing companies as part of Macmillan and has for a long time. So we were sort of struggling. I was sort of, you know, something to do with Apollo, Apollo Rising, you know, the whole Greek god angle of this, and then she just came up with that, and I think it really summarizes sort of what's going on here. And again, you alluded to this. I mean, we all started, you know, with these people in the private equity business, you know, on Wall Street in the mid to late '80s, and, you know, this could have been us. I mean, if we had been fortunate enough to go in the private equity direction or, you know, could have had the guts to start a private equity firm ourselves. Now there are these big behemoths, you know, which everybody on Wall Street wants to go work at, and essentially they've become, you know, immensely rich, fabulously rich. Pretty much anyone who touches private equity has become fabulously rich, and certainly that is the case among Leon Black, Josh Harris, and Mark Rowan. And really it comes from, you know, superb financial engineering thanks to a benefit in our tax code that allows for the tax deductibility of interest, and their own intelligence and smarts and savvy, and being in the right place at the right time. And so as a result of having all this money now, they have money to burn in effect, and they're burning it.
Well, look, I love the title because you're saying something else in the book, actually, and I'm going to test this on you and I want you to respond. Okay. But when I hear money to burn, I hear that there's a paradox to wealth. And when I hear money to burn, sometimes you can become so wealthy that it's almost damaging to your brain. It's like that old commercial when you and I were kids in the '80s. This is your brain. And they crack two eggs. And they say, 'Well, this is your brain on drugs,' and the eggs are frying. And I sort of feel like there's a paradox to wealth, you know, and you and I have done well. We're not as wealthy as these guys. But sometimes when you get so wealthy, it can cause you to start thinking about yourself differently than other people. You know, what did Leona Helmsley say? You know, the little people, right? Not us, right? Fitzgerald said, 'The rich think differently than you and I.' And I'm just wondering if that's laced in the story. There's a cautionary tale in this story about wealth and almost like psychosis and, you know, sociopathic behavior. Am I missing that, Bill, or is that the thread of the... To me, I want to give this to my children, read the book, because you've got to be careful in life about excesses in all facets of life. Am I not reading it right?
Well, and Anthony, you had a front row seat and continue to have a front row seat, you know, even, you know, 11 days right in the beating heart of it, of this new class of uber-wealthy people that have been created in this country, much more than even in any of the previous Gilded Ages. I mean, we're talking about unbelievable amounts of wealth. And, you know, Leon, Josh, and Mark, you know, they're mere 10- to 15-billionaires. They're not like Elon and Larry Ellison. I mean, and these people just generally, these people with so much money, they have been able, you know, Tom Wolfe wrote about 'insulate, insulate, insulate' in Bonfire of the Vanities, and that was prescient because, I mean, these people have perfected being insulated, whether it's being surrounded by people who are beholden to them and therefore may not always give them the best advice or tell them when they're stepping out and behaving poorly. They obviously have every rich-person amenity you could possibly imagine: jets, boats, homes. And I think even more importantly, they seem to be above the law and above any accountability. And, you know, again, I'm not suggesting necessarily that any of the people I've written about in this book, you know, although others have, need to be, quote-unquote, held accountable or broken any laws, but we have certainly created a class from the Oval Office down of people who consider themselves now above the law and there's no accountability for them. And there's really... we haven't figured out how to hold these people accountable, and it's due to their extreme wealth and therefore the power that derives from that experience.
Well, I mean, I don't want to go off topic of the book, but I think this is also related to Citizens United because I give the money to the politician and the politician will do whatever I want. Let me give more money to the politician. So now no breakup of the monopolies. I get tax breaks. The big beautiful spending bill is helping me as a rich guy, hurts the little guy. If you look at the legislative agenda since that decision was rendered, these guys are way more protected, way more insulated because they've now got the politicians completely in their pockets. But that's a whole other...
And of course, and the President of the United States, you know, now cannot be held accountable for anything he does while in office.
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Well, I mean, that's another... there's another big issue for reform. But I also saw the House of Atreus in this book. And so just to remind everybody who was in the House of Atreus, this was the son of Zeus who cooked his son Tantalus and fed it to everybody at the banquet. And Zeus said, 'Okay, your house, the sins of the father will be handed down to the son for eternity.' And it was a big message in mythology about your dad and trying to get out of the shadow of your dad if he's not necessarily a good guy. And let's talk a little bit about Eli Black, who was a prominent businessman whose career ended in scandal. And how did that affect Leon Black's ambition, Bill?
Well, I love talking to you, Anthony, because you're so learned and intellectual, and it's not me, it's you.
Yeah. Well, I read the book differently. Everyone's going to read the book and say, 'Oh, this is a Wall Street book and there's a psychodrama.' But I read this as like a cautionary tale about watching your own personal crazy. But go ahead. Go ahead.
Well, first of all, Leon Black comes from, you know, ten generations of Orthodox rabbis. So, right there, I mean, that is an incredible fact, and, you know, which no one, I think, really appreciated or had knowledge of. His father was an Orthodox rabbi, too, practiced, you know, in like the Five Towns region of Long Island, south of where you grew up and my wife grew up. And, you know, he did that for like three years, and then at one point he decided, okay, enough, I don't really... I'm not really enjoying being an Orthodox rabbi. I'm going to, you know, somehow pivot to being a businessman. And you do that, of course, like the same way I did it from being a journalist to being a banker by getting my MBA. He went to Columbia, the same place I went to get my MBA, and that allowed him to go to Lehman Brothers, believe it or not, and be a banker. And then from there he went and worked for one of his clients, running one of the client's portfolio companies, took it over. It was a company called Seal Cap, which made, believe it or not, and you might remember this, Anthony, the paper tops that went on glass milk bottles that were delivered on our doorstep when we were kids.
I remember those very well.
Okay. And his company that he ran owned made those paper tops to the glass milk bottles, which of course now don't even exist even in fossil form. And he converted that into a conglomerate. You know, conglomerates were really big in the '60s and '70s, you know, whether it was ITT or GE or any of the other big conglomerates. Well, he created one called United Brands, the big centerpiece of which was United Fruit, which was the largest importer of bananas. You know, we don't grow bananas in this country, never have. The climate is not right. So we have to import them from Central and South America. So he created... he, you know, bought all these companies. At one point he owned Baskin-Robbins and A&W root beer and Foster Grant sunglasses. So his father was like a big deal. They lived on Park Avenue. They had a weekend home in Westchester County. He worked in the Pan Am Building, which is now the MetLife Building. And so, long story short, and I don't want to ruin it for people, there was a scandal involving tariffs, which, you know, is very relevant to our life today. And when Leon was in his second year of Harvard Business School, where he went because his father basically insisted, he didn't want to go. Leon was like a philosophy major at Dartmouth and a very smart guy. But he did so well at Dartmouth that he easily got into Harvard Business School and went even though he didn't want to. Didn't like it. And in his second year at Harvard Business School, his father jumped out of the Pan Am Building onto Park Avenue from the 44th floor. Somehow broke the panes of glass with his briefcase. I'm not exactly sure how that happened. Committed suicide amid a scandal, which I talk about in the book. And that's the so-called 'Rosebud' chapter, of course. And, you know, Leon, who, you know, was thinking about how to use his philosophy degree from Dartmouth, his father was a big businessman with wealth tied to the stock of United Brands, jumps out of the window of the Pan Am Building, and next thing you know the family is in turmoil. Stock goes down, money is lost, wealth is lost. His mother is an artist, his aunt is an art dealer, and his sister is a teacher. So guess what? It falls to Leon in the second year of Harvard Business School to try to figure out how to resurrect the family, not only its reputation, but how it was going to survive, you know, day-to-day and make a living. And of course that became, you know, I think his driving force in life, and he exceeded it in terms of wealth, but then of course had his own scandal. So there you go. Back to your mythology.
Well, he's haunted, and it's obvious that he's haunted. Also, the book, you know, Bill, among the many things I love about you is that you're an observer of human nature, but we're also both fallible guys, right? So we both also can own our own fallibility. But in this book, when I read about Leon Black, Josh Harris, and Mark Rowan, I know both of them, I've not met Leon, but when I read about them, it's like a rock and roll band, okay? Now, Keith Richards and Mick Jagger could keep it together, okay? They punched at each other for 60 years, but they're still making music together. Okay, Paul, Ringo, George, right, John, they couldn't keep it together, right? They let the egos in. And so these guys built arguably one of the most successful businesses in the world, right? It's certainly the best thing that comes out of Drexel, but they can't keep it together. They are beating the daylights out of each other inside that firm. So tell us a little bit about that, and tell us a little bit about why human nature is like that, because this is a predictable story. It's not, you know, I'm reading the book and I'm like, okay, yeah, that happens. That's not unpredictable. Guys, thank you so much for listening and subscribing to Open Book. You know, we've had 200 authors on this show. It's been a lot of fun for me, but I'm also an author now, too. And I've got All the Wrong Moves available. Go to scaramucci.net/allthewrongmoves. You can buy your copy today. It's a lot of fun and lots of commentary about what's gone on in the US over the last three decades.
Well, you're right. I am a student of human nature, and I love it, and I love a great narrative. And one of the reasons I wanted to write this book is because it's a fascinating story right from the get-go with, you know, Leon's family and then Drexel blowing up. I mean, we could talk about that for hours, too. But, and then out of that comes this firm, Apollo, which of course is a metaphor for rising from the ashes itself. And so it was definitely Leon's firm. He brings together the merry band of people he wants from Drexel, and, you know, off they go trying to build a different kind of private equity firm. And they kept it together for a longish time. It was definitely Leon's firm, and eventually, when it came time to go public, Leon wanted to show that it wasn't just Leon's firm and that he had a succession plan sort of in hand, which is why he named Mark and Josh sort of his co-founders, even though they weren't, and why he gave them, you know, 58 million Apollo shares, which instantly made them billionaires when Apollo went public. So that was the plan. And two out of the three of them had to agree on things for anything to happen. And of course, Leon basically used his influence as the largest shareholder and the real founder. He had 93 million shares to get his way. And so over time, each of them did their own things. They had some great deals, some deals that stunk. But I think they had an understanding at the firm that, you know, we're going to do good deals, we're going to do bad deals, it's not going to hurt your career. And so then, you know, come, you know, in the 2020 time period, you know, six or so years ago, Leon decides it's time to retire. He's going to be 70, and he wants Mark to succeed him. Even though Mark had been on like a semi-sabbatical or, you know, sort of taking his time away from the firm after he had built Athene, this insurance behemoth which has been the origin of the private credit market. And anyway, the feud became, you know, who was going to succeed Leon, and Josh, of course, wanted to be the successor. Mark was playing it cool. Leon wanted Mark, and eventually, you know, Leon got his way.
Got to get to Jeff Epstein here.
