We now know why people paid Epstein so much money, and it's the most boring thing imaginable.
[quote]Just months after Apollo announced an internal investigation into Black’s long association with the late financier, the investment firm said in a statement Monday that he would retire as CEO no later than July 31, while remaining chairman. Marc Rowan, one of Black’s top lieutenants, will succeed him as CEO as part of a governance overhaul that will also eliminate weighted voting rights.
Apollo said an outside law firm hired to conduct the review found that the asset manager never retained Epstein for any services and that he never invested in any Apollo-managed funds. While the law firm, Dechert, found no evidence that Black was involved in any way with Epstein’s criminal activities, its report revealed that the CEO had paid $158 million to the disgraced financier from 2012 to 2017, a sum much greater than previously known.[/quote]
[quote]The good news is that he paid Epstein all that money for actual tax advice, and also that the tax advice was excellent:[/quote]
[quote]Mr. Black “believed, and witnesses generally agreed, that Epstein provided advice that conferred more than $1 billion and as much as $2 billion or more” in tax savings, the report states.
It also supports Mr. Black’s contention that he paid Epstein a fee he believed was roughly equivalent to 5% of the value that the late financier generated on an after-tax basis. It describes the two men’s relationship deteriorating beginning in 2016 after a fee dispute. Mr. Black’s last payment to Epstein was made in April 2017.
Mr. Black also asked employees of his family office; attorneys at law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP; and other outside accountants, lawyers and tax professionals to vet and challenge Epstein’s advice when it was given, the report states.
“In short, there is no question that Epstein performed substantive work for Black and that Black genuinely believed that Epstein was extremely smart, capable, and saved him substantial amounts of money,” the report says.[/quote]
[quote]After Epstein was arrested on sex-trafficking charges and died in jail, there was quite a bit of wild speculation about where his money came from, and specifically about why billionaires were so willing to pay him so much money for somewhat vague services. After all that speculation, finding out that Leon Black paid Epstein $150 million for differentiated advice that really saved him $2 billion of taxes is in some ways the most boring possible explanation.
At the same time … what? Why was Epstein, who was not a lawyer or an accountant or a college graduate for that matter, so good at tax? I actually don’t have too much trouble believing this—in my experience, some people are just born with a natural gift for tax structuring, and need surprisingly little formal training to achieve their potential—but it is fascinating. Black would go his lawyers and say “hey my guy found this way to save a billion dollars in taxes, is it legal,” and the fancy lawyers in the Paul Weiss tax department would say “wow, sure is, this is amazing, why didn’t we think of this, this guy is a Michelangelo of tax minimization”? I don’t know, it’s just a weird niche. Also what did Black actually do to save all those taxes?[/quote]
Apollo said an outside law firm hired to conduct the review found that the asset manager never retained Epstein for any services and that he never invested in any Apollo-managed funds. While the law firm, Dechert, found no evidence that Black was involved in any way with Epstein’s criminal activities, its report revealed that the CEO had paid $158 million to the disgraced financier from 2012 to 2017, a sum much greater than previously known.[/quote]
[quote]The good news is that he paid Epstein all that money for actual tax advice, and also that the tax advice was excellent:[/quote]
[quote]Mr. Black “believed, and witnesses generally agreed, that Epstein provided advice that conferred more than $1 billion and as much as $2 billion or more” in tax savings, the report states.
It also supports Mr. Black’s contention that he paid Epstein a fee he believed was roughly equivalent to 5% of the value that the late financier generated on an after-tax basis. It describes the two men’s relationship deteriorating beginning in 2016 after a fee dispute. Mr. Black’s last payment to Epstein was made in April 2017.
Mr. Black also asked employees of his family office; attorneys at law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP; and other outside accountants, lawyers and tax professionals to vet and challenge Epstein’s advice when it was given, the report states.
“In short, there is no question that Epstein performed substantive work for Black and that Black genuinely believed that Epstein was extremely smart, capable, and saved him substantial amounts of money,” the report says.[/quote]
[quote]After Epstein was arrested on sex-trafficking charges and died in jail, there was quite a bit of wild speculation about where his money came from, and specifically about why billionaires were so willing to pay him so much money for somewhat vague services. After all that speculation, finding out that Leon Black paid Epstein $150 million for differentiated advice that really saved him $2 billion of taxes is in some ways the most boring possible explanation.
At the same time … what? Why was Epstein, who was not a lawyer or an accountant or a college graduate for that matter, so good at tax? I actually don’t have too much trouble believing this—in my experience, some people are just born with a natural gift for tax structuring, and need surprisingly little formal training to achieve their potential—but it is fascinating. Black would go his lawyers and say “hey my guy found this way to save a billion dollars in taxes, is it legal,” and the fancy lawyers in the Paul Weiss tax department would say “wow, sure is, this is amazing, why didn’t we think of this, this guy is a Michelangelo of tax minimization”? I don’t know, it’s just a weird niche. Also what did Black actually do to save all those taxes?[/quote]
41-45, M
