Grubstakers - Episode 79: Leon Black

Episode Date: July 2, 2019

Leon Black is on the radar, and we know how did his dirty work. Tune in and see how the left-hand man of the Michael “Milk Man” Milken got away with being professional criminals. It’s a lot like Ocean’s Eleven except its nothing like it at all. Tune in and zone out you got Grubstakers. Black was regarded as "junk bond king" Michael Milken's right-hand man at Drexel. I studied in the temples of the Himalayas learning html from the great friend to all Tom. How easy life was then when all my eyes knew were memories of joy with others, I loved instead of looking at a box of light all my life. What have we done? -Ravi Peppershaker

First they think you're crazy, then they fight you, and then all of a sudden you change the world. Berlusconi flatly denies that any mafia money helped him begin a start in the dynasty. I have always had a thing for black people. I like black people. I'm telling you, these stories are funnier than the jokes you can tell. I said, what the fuck is a brain scientist? I was like, that's not a real job. Tell me the truth. But anyway. And five, four, three, two. Welcome back to Grubstakers, the podcast about billionaires.

I am Sean P. McCarthy, and I'm here, and I'm joined by my friends. Steve Jeffers. Yogi Poyol. We're very pleased to announce we have been acquired by Apollo Global Management, and as part of the restructuring, Andy has been laid off. That's right. So you will not be hearing him on the episodes anymore. You know, the podcast market is red hot right now.

And Apollo, it had to offload about $13 billion worth of debt onto our company. And as a result, we had to make some changes around here. Look, we're not going to question the geniuses at Apollo for buying us at a 20,000 multiple of EBITDA, our EBITDA of $400 a month. And they're 1.2 billion purchase price. And they're going to IPO our podcasts. And the first thing you got to do is restructure, which means lay off Andy.

So you won't be hearing him anymore. They've, they've cut our drops budget in half. We are cut down to two drops today, ladies and gentlemen. Three if you're lucky, and four if I'm feeling up to it when I'm editing this thing. You're just going to have to savor them. But we are talking today about Leon Black. We mentioned Apollo Global Management. Leon Black is the private equity co-founder,

senior partner in Apollo Global Management. And we've talked a fair bit on this podcast about private equity. But I just wanted to say, with this Leon Black episode, you might be thinking going into it, oh, great, it's another boring finance episode. Of course. No, this is actually a pizzagate episode oh because if you happen to like google the words leon black and jeffrey epstein uh you'll

find some interesting stuff um which is that uh according to uh gawker who broke this story and then mysteriously got shut down uh no it was actually also reported by City File. Yeah, the article was called Pizzagate Extra Slices. Dessert pizza. But just for those who might not know, Jeffrey Epstein was charged and convicted of soliciting sex with a minor,

and there have been allegations that he was running a massive child trafficking network. And for some reason, this is just from the new york times leon blacks the leon d black charitable foundation uh had jeffrey epstein as its director from 2001 to 2012 and uh he pleaded guilty to soliciting sex with a minor in 2006. And that is just kind of one of those things where it's like, just remember that the next time that a billionaire cites their charitable giving foundation. They're not really telling you who's on the board of directors.

You know, and what they don't tell you is the D in Leon D. Black, it stood for dignified. And how dare he besmirch his middle name, you know? With such classless acts as having Jeffrey Epstein be a co-worker. It stood for class D felony. But yeah, so just from the New York Times here, the Leon D. Black Foundation's Form 990, a filing made with the Internal Revenue Service. The website shows Jeffrey Epstein listed as director, just below Mr. Black as president treasurer,

and his wife, Deborah, as vice president secretary. And as we mentioned, he resigned in 2012. We don't know the reason, but maybe the fact that press articles were written about it had something to do with it. Yeah, usually when the press writes about who you do business with and why you do business with and why that's a bad thing, you kind of end up leaving a company. But so it is just something where there was also, we talked about this on the Jeffrey Epstein episode

with Matt Chrisman, but there was a 2005 Vanity Fair profile of Jeffrey Epstein. This is before the scandal. And that profile cited Leon Black as a frequent dinner guest of his. And then I do want to shout out this Twitter user, Miss Pan Streppen. She found, so basically, there's this Daily Beast article

about the Jeffrey Epstein charity, which is called Gratitude America LTD. Galt? Gratitude America LTD. Thoughalt? Gratitude America LTD. Though it should be... Galted. Yes. It should be noted that there is Gratitude America Incorporated,

which is a Florida nonprofit for veterans. So I just want to warn our listeners, if you are writing a check to Wounded Warriors, be very careful with the spelling because you might actually be funding a child sex trafficking network that just puts incorporated

that's my company is Wounded Warriors Incorporated right right you're not worried about the warriors at all you want wounded individuals in your life different kind of warrior. Oh, boy. Wounded warriors incorporated.

We mostly deal with Bitcoin, and you can pay us via an Onion add-on. We accept Libra. But so the Daily Beast article here, I'm just going to read one thing from it. Jeffrey Epstein was president of Gratitude America LTD. This was his charity. He used it for various charitable givings. He kind of kept it anonymous, tried to keep a low profile after he got out of prison in 2009. But so apparently this thing was dormant from 2012 to 2015. And then in that year, it recorded revenue for the first time, receiving a single $10 million donation from a mysterious company called BV70 LLC.

BV70 LLC. Steven, what do you think of what it is? BV70. It's from the Daily Beast. His birth year? Maybe. It's the same vehicle that acquired grub stakers so what is that company well that's the thing is that it's a mysterious llc but i wanted to

shout out this uh twitter user miss pan strep and because she actually like put these documents up on twitter you can look at them i'll try to if i ever update the tumblr i'll link to it uh but send all your tumblr complaints to Sean McCarthy. If your reviews have Tumblr complaints, he'll get on it. Only the five-star ones. But so Gratitude America LTD was dormant 2012 to 2015, gets this $10 million donation from an LLC. And so Ms. Panstrap, and on Twitter she points out that this company is headquarters at 445 Park Avenue, New York City.

Leon Black's Elysium Management LLC just happens to operate out of that address. So it's not a sure thing, but it is a significant coincidence and definitely a possibility that Leon Black made the sole $10 million donation to Jeffrey Epstein's Charitable Foundation. And it is just kind of a weird thing where I'm sure it has nothing to do with our discussion on that Jeffrey Epstein episode

about how he had secret recordings of people having sex with children that he trafficked. Oh what, that's weird? Oh what, you can't do that now, Sean? Just being clear that I am not saying That has anything to do With why he would make a 10 million dollar

Donation to this guy It's crazy how billionaires treat 10 million dollars cause like Even on our Patreon episode that we're Going to be coming out with on Thursday about Australian billionaire to be Announced they throw around Money constantly and 10 million dollars is like 20 dollars to them but Australian billionaire to be announced. They throw around money constantly,

and $10 million is like $20 to them. What'd you do? I spent $10 million making a movie. It didn't work out. What's it called? You know, the newest piece of shit nobody's watching. It doesn't matter. What'd you do?

I spent $10 million because somebody made a movie about me, and I don't want it getting out. Oh, you made it shittier? You know me. But so maybe we'll come back to that in future but it is just one of those things where it's like clearly this guy had no problem keeping jeffrey epstein on his board after he was convicted of you know sex with a minor and all sorts of horrific uh things uh and you know that 10 million dollar donation may or may not have come from him so who knows what their relationship is.

Maybe something else will come out in the future. But Leon Black is also just kind of the traditional private equity asshole that we've kind of beaten to death on this podcast. Not literally, unfortunately. Not enough, however. Only on the premiums. That's right. You can listen to us torture and kill a private equity executive. Well, we have multiple private equity-linked

presidential candidates, so we have to do our due diligence here. That's right. So, Leon Black, according to Forbes, as of June 2019, he's worth about $6.9 billion. Wow. Not very nice.

And the thing is, Apollo, so he's the founder of Apollo Global Management. He founded it in 1990. It went public on the stock market in 2011. He owns about 21% of the stock still. Apollo Global Management is a huge private equity. It's primarily private equity. They also are in real estate and credit and shadow banking and all that shit. Are they based out of New York?

Yeah, primarily. And they have about 269 billion assets under management. So they are huge. Oh, so nice. Yeah. And I did just want to mention the co-founders, Josh Harris and Mark Rowan are also billionaires. So we'll probably circle back because it's like an episode like this. There's so many different, you know, takeovers and angles of attack that you could focus on. And if you were a serious podcast, you'd really get down in the due diligence of like what pension funds they've been destroying instead of spending three hours Googling Jeffrey Epstein, Leon Black and looking through Twitter accounts to try and find out if he's a pedophile or not. But fortunately, we don't have that problem. And we just want our listeners to know it's Apollo,

not after the Greek deity, but Apollo Creed from Rocky. That's what they named their real estate equity thing. What are they on? Oh, I did want to just read these two things back to back. From the New York Times, Leon Black grew up in a family that had a home in Westport, Connecticut and an apartment on Park Avenue in Manhattan. Wow.

And then from Forbes, his self-made score is 8 out of 10. But it's like, the thing with Leon Black is this guy... Not even Southampton? You're proper. Leon Black became, he made several hundred million dollars as part of Michael Milken's criminal Ponzi scheme conspiracy theory. Again, we talked about this in the Michael Milken episode, but he was part of Drexel Burnham Lampert, which was the major Wall Street firm until 1990 when it collapsed and the junk bond collapsed. But so essentially, just to kind of like run over this again, Michael Milken was selling junk bonds to finance hostile takeovers, mergers and acquisitions, and these types of things. But Michael Milken had a network

of captive savings and loans and other companies, companies and the idea was like michael milken puts you in business he gets you these uh billions or millions of dollars and now in exchange you have to buy his junk bonds so he has all these captive buyers so it very quickly becomes a ponzi scheme right where you know it doesn't matter if you can actually get financing for these junk bonds. He has all these captive buyers. So Leon Black was head of mergers and acquisitions at Drexel Burnham Lampert. He made hundreds of millions of dollars as part of this Ponzi scheme. And then he went on to become a billionaire by kind of picking up the pieces that were left over from the result of this Ponzi scheme. And we'll kind of go through that in more detail in just a moment here. He's like that one dude that won the ice skating Olympics

against Apollo Ono that was like 11th, but then everyone fell and he showed up and was like, looks like I'm number one now. But in this case, it's with the dregs of billionaire criminal pasts being picked up by Leon Black. He hired

Tonya Harding to deal with his union problems. But so I wanted to just kind of like go through a couple other things that we should mention up top is that, you know, Apollo, as many private equity firms do, they own chains like Caesars Entertainment, Career Builder, ADT Security. They own Chuck E. Cheese, own chains like caesar's entertainment career builder uh adt security um they own chucky cheese which i'm sure has nothing to do with the allegations regarding jeffrey upstate

you know there's a theory that chucky cheese takes the leftover pizzas and puts them in the same like plate like pan and then research it to its customers like essentially you know stephen's got a family and some couple of runs and they don't need all their slices and so the next family that shows up they just take the leftovers from stephen's pizza and make a new pizza that's full of slices i think uh jeffrey epstein does a similar tactic in the laboratories of his secret U.S. Virgin Island. He kind of does the same thing

but with convertible debt. Now look, I'm not a lawyer or nothing, but it seems to me like it should be illegal for the owner of Chuck E. Cheese

to have Jeffrey Epstein on the board of his charitable foundation. It's Epstein on the board of his charitable foundation it's the obvious answers in front of your face that people rarely see yeah oh and then one other thing I just wanted to mention with regards to like what um uh Leon Black actually owns he owns fucking Blackwater which like you remember the uh Eric Prince episode we've talked about uh the Nisour Square Massacre and night hunting in Iraq and all these other things that private security contractors get up to. But just from Reuters, they bought Constalys, which is now a major firm that owns Blackwater, which changed its name because that's what you do when you murder.

Yeah, Academy. So Consulus owns Academy and Triple Canopy, which are like two different PMCs now, private military contractors. And so they bought it for a billion dollars in 2016, and as of 2018, they haven't been able to sell it. They're trying to sell it for like $2 or $2.5 billion. Well, and I heard that Leon Black hated the name change, because when it was called Blackwater,

he could just say my water. You think these jokes are bad? You should hear the ones I'm not saying. I do just like that. I mean, we've talked about this. The private equity strategy is buy a company, load it up with debt, cut services, lay people off, cut pensions.

And it's like, yeah, what could go wrong when we're doing this to Navy SEALs and Delta Force veterans? Blackwater, really great name. It's a pretty cool name. It's honestly a cool name for a mercenary company. Yeah, and there's no other cool name. Way better than Academy. Right.

Is it Academy with an I at the end? That's how it sounds. Yeah, some gay shit like that. Steven coming out with the claws. Hilarious. Yeah, and so look, if you want to also go down the Russiagate rabbit hole with Leon Black,

people will link him to Eric Prince who's of course an advisor to the Trump administration. And me, I prefer to go down to the network of billionaire pedophiles, Black Hole, and waste all my time trying to find information about that on the Internet. But it is just something to keep in mind, you know, if there's any sort of collapse in civil society. This guy owns a private army. Well, and this was interesting because Leon Black said this about the Russia situation. You getting that ass, Larry.

That's what the fuck you do. What are you talking about? You let the man slide today. You got to immediately get in somebody's ass when that happens to you. You pull that asshole open, step into their asshole, close the door behind you. Take a spray paint can, right? Larry was here. You spray paint.

Larry was here. It's Leon Black talking about the nisour square massacre look eric you got to get up in there asshole those those civilians at that traffic stop uh but i guess i did just want to mention uh one other thing um we've talked about this um a lot on this podcast private equity in general in, we did an episode about it with Josh Kosman, who's the guy who literally wrote the book on private equity. He wrote a book called The Buyout of America and made the argument, I think very convincingly, that private equity has really destroyed a lot of jobs, wages, benefits, these sorts of things. And I just wanted to go through a couple more statistics from private equity, and then we'll start with the Leon Black biography. According to New York Mag, the SEC started to audit private equity firms following the Dodd-Frank reform. And after reviewing a large sample, the agency said

that more than half of the firms were engaged in serious law breaking or other regulatory infractions. Over half? Yeah. So they had a bunch of settlements. In 2016, the FEC got like 52. Hey, I thought over half meant most. When did we stop saying most when we meant over half? That's what happens when you have to negotiate your press releases with a lawyer for four hours. And you end up with over half instead of most. So you're telling me it's 67% of these people who committed these crimes?

Yeah, so I mean, you know, most. Well, not necessarily most. I mean, maybe over half, but not most. 98%, so more than half of them were engaged in serious law breaking. But so there were a bunch of settlements like in 2016 the fec settled with um or the sec settled with apollo for 52 million because they were like not disclosing fees to fund investors or hiding fees or you know they always have these complicated fee structures so

you have no idea what you're getting charged for and they were also not disciplining a senior partner who was repeatedly charging personal investments, personal expenditures to the fund. Oh, my God. But I wanted to mention nearly half of private equity, according to the New York Times, nearly half of private equities, nearly half of private equities invested assets now come from public and private pensions around the world. And again, another thing we've beaten to death with this private equity stuff is that they destroy pensions, they destroy jobs, they destroy benefits. So it's like, I mean, it's like an insane thing that many different pension funds are engaged in. And then there's a level of bribery we'll talk about a little bit here, where these

workers are depending on pensions for their retirement, but they're also funding the very companies that are engaged in these very predatory practices that are destroying pensions. Snake eating its ass. Even if they were, like, quote, benevolent to these public pensions and actually did just manage your funds with only a minimal fee, that's still, like, tens of millions of dollars in fees that municipalities could be putting to better use. And I did want to mention one last thing about private equity because we've talked about this before. Josh Kosman in his book, he wrote about this. It was the fact that the private equity industry funded a study that was supposed to look at whether or not private equity

actually created jobs and growth and all that shit. Economist Professor Stephen J. Davis was the lead on this study. Equivalent to hiring the oil companies to write about global warming. But the fucked up thing is even their fucking study found that they destroyed jobs and wages. Fucking idiots. But I looked at this thing and it tick was it tickled me because it's like you know these economists are like hired by these companies so they have to present this data and present it in like the nicest way possible so just the fucking just the fucking language they

use when they like reach this crazy conclusion and uh just from the study steven j davis study uh they looked at a data set that spanned buyouts from 1980 to 2005, I believe like 3,200 different target firms. And they conclude that, quote, private equity buyouts catalyze the creative destruction process as measured by job creation and destruction and by the transfer of production units between firms, unquote. And like, you know, creative destruction,

this is of course just like the basic, whatever, corporate raider, capitalist propaganda. But just again, quoting from the overview of the study, on balance, employment at target companies falls 3% more than peer companies in two years following an LBO, leveraged buyout, and 6% more over five years. Wow.

Wait. Let me take that again. And so they like... We innovate 3% more and 6% more, respectively. What a twist. And so they kind of hand wave this away by saying it increases productivity is what they find. But, of course, like that extra productivity is going to the owners of capital rather than workers. But the last thing I want to quote from this summary,

target firms also reduce earnings per worker relative to peer firms after private equity buyouts. Thus, the evidence indicates that buyouts improve operating margins by hiking productivity and by lowering unit labor costs. Wow. And so that's about the nicest way you can write the words. Destroys pensions and makes people vote for donald trump fucks over everyone i think uh except the people who have the most money that's essentially what we're doing here this story is arguably like the main ethical reason for having a really large corporation

right right a lot of people are employed yes hey you know we're doing this good thing by having people have jobs we gotta cut that out of our making money. You know those totalitarian structures that tens of thousands of people depend on for their livelihoods? What if we took tens of thousands of people out of that and just left the totalitarian structures? Would we make more money from it? No, not at all. Oh, well, well yeah why not i think that i want our listeners to know that we refrain from talking about ass eating and a whole bunch of dumb shit

to talk to josh cosman about private equity but nothing says it better than schoolboy q on uh hot ones yeah man these some real white motherfuckers that invented this shit. I don't know none of that. Yeah, I actually, I did, I emailed Josh Gossman, just like, hey, do you have any scuttlebutt about Leon Black and he didn't get back to me? But it's like, I didn't want to invite him on the episode because I didn't want like this respected guy here when I'm like, alright, so

here's what's going on at Jeffrey Epstein's private pedophile. Oh, Sean, you can't do Epstein jokes in front of Cosman, huh? You can sit behind a keyboard and say whatever you want, but when Cosman's in the room... I'm a fucking coward. Apollo Global Management has cut our Jeffrey Epstein research budget. Well, Andy usually took care of that that but they bought him out but um so i guess just kind of

moving on to the the mostly chronological uh biography of of leon black and it is interesting where uh his father was a multi-millionaire corporate raider it's like so like father like son he gets into that shit uh we mentioned the new york times he his family had a home in westport connecticut and an apartment on Park Avenue, Manhattan. But Eli Black is pretty fascinating. And it is just kind of weird where it's like there's, from what I was able to find, there's more actual biography information available for his father

than there is for Leon Black. Really? Which is like, yeah, clearly this guy is hiding something. Sure, sure. It's like how we felt when we were researching Elon Musk way back way back when and we couldn't find stuff about his dad right and every time he would come up there'd be like a mysterious fog over some information about him being a shady person yeah his uh his ownership of the island in the u.s virgin islands and where they make sacrifices to moloch and shit. Yeah, man. These some real white motherfuckers

that invented this shit, dog. I don't know none of that. Just imagine him watching like a child sacrifice and saying shit like that. You're invited, but you don't subscribe to this. Right, right, right. A bunch of people in fucking eyes wide shut masks. Yeah, these some real

white motherfuckers fucking putting the sacred dagger through the heart of a virgin yeah man these are real white motherfuckers that invented this shit i don't know none of that i just want to i want to show schoolboy q the movie Eyes Wide Shut. But so Eli Black, he's born 1921, is of course Leon Black's father. Eli Black is born 1921 in Poland. He immigrates to the United States as a child. Interestingly enough, he was a rabbi. He comes from a long line of rabbis.

He was a rabbi for three and a half years before he joins Lehman Brothers as an investment banker. And basically the story is that he was working at Lehman Brothers in the 50s and 40s, and he was working on financing for a company that made caps for milk bottles. And then they convinced him to take it over and become CEO and chairman in 1954. He renames the company AMK, and he turns it into a vehicle for acquisitions. Starts doing a bunch of takeovers and this kind of stuff. And by 1967, AMK becomes one of the nation's top 500 companies in size. So again, hugely successful multimillionaire.

But the actual story of Eli Black is that in 1968... Hey, real quick before we go into that. Sorry to cut you off. But what's the thing where milk cartons today have plastic caps? Have you guys noticed this? Why is this happening? Why did we take milk cartons... I'm sure it's private equity has something to do with it.

Because milk cartons you can open with your hand if you've got practice and time. But then we started putting plastic caps on milk cartons why the fuck are we doing this does anyone know what do you mean as opposed to what well you still like come in the glass bottles and shit no but you can take a milk oh like a carton instead of glass well so a milk carton you can fold out like we did as kids for cafeteria lunch right but now milk cartons have a cap in the middle like like a fucking plastic cap like it's a fucking... Yeah, I guess that's more common. Yeah, and you think it'd be like, oh, well, maybe they're considering people that have weak hands and stuff.

But you know corporate shit don't give a fuck about the disabled. You know what I'm talking about, right? So why the fuck did they start putting bottle caps on milk cartons, dog? There was a CEO somewhere who got really mad at a seagull. I will put more plastic in the environment. We can't be making this shit out of cardboard. We gotta get some plastic on there. It's probably got one of those Uber stories. Yeah, something like that. One time I was mad at an entire species

of animal for existing in the sea. I got made fun of because I couldn't open my chocolate milk at lunch and now all the animals are dying. I hate that I find the plastic caps more convenient because I always fuck up the paper milk

the cartons and you pour it wrong and it comes all out. I understand that when you fuck up it's embarrassing but it doesn't mean we should poison

all the fish and fucking creatures on the planet with plastic. Maybe we should stop laughing at each other for fucking it up as much. Yeah. Empathy.

If we could just all use paper milk cartons, then the nature documentaries we watch would stop getting so sad. But anyways, back to the informational part of this podcast. Which we're here for, really. Yeah. Eli Black,

so what makes him famous or infamous or semi-famous for a time i should say is in 1968 he takes over united fruit company uh if you're not familiar uh united fruit company at the time is importing about one-third of all bananas imported to the united states today is chiquita banana uh but united fruit company is significant for uh destroying south and Central America. Yeah. The UFC fucks everything. Yeah.

According to Honduras, on seven different occasions between 1903 and 1925, U.S. soldiers intervened to either crush strikes, overthrow governments, or protect United Fruit Company property. Wow. In 1911, a company later bought by United Fruit literally supplied the weapons used for the coup in Honduras. So basically, they've been just fucking shit up in Honduras all throughout the 20th century, and he buys them. He buys United Fruit in 1968. He merges it into AMK, creating United Brands,

and he becomes the chairman and CEO of the new company. But interesting thing happens. In 1974, Hurricane Fifi in Honduras wipes out the banana crop, so his company's in a bit of trouble. And he, Eli Black, authorized a $1.25 million bribe to Honduran President Oswaldo López-Arolano, which was to reduce taxes on banana exports. And the Honduran, quote, president came to power in two different coups. Wow. One in 1963. Then he allowed an election in 1971, which he lost, and then did another coup in 1972. But so, yeah, Eli Black pays him $1.25 million in bribes to reduce his taxes.

And the SEC discovers this. So on February 1975, Elon Black jumps out of the 44th floor of the Pan America building, now the MetLife building. And I believe we do have the audio of Eli Black jumping to his death. The body was found by Don Draper going to work in the next morning. Do you watch Mad Men, Steven? What?

No. Oh, I know the intro. I never saw the show either. And whenever someone was like, hey, why don't you watch the show? I would just say, it's not racist enough. And they'd say, oh, you don't even watch it. I'm like, I know. It isn't.

It is true that they do say... What? They say Negro instead of like... Yeah, come on. Really committing. it is true that they do say what? they say negro instead of like really committing get the fuck out of here AMC made this show about white people before people stopped saying the n-word and these rich white people just happen

to never say the n-word grow up AMC you know this show about rich white people in the 1960s and how it's so realistic that they behave better than white people do in private today? But so, yes. Eli Black jumps to his death off the 44th floor of the MetLife building.

At this time, his son Leon Black is in his second year of Harvard Business School. So that does affect him throughout his life. But so I guess to just kind of like circle back to Leon Black, he was born in 1951. He grows up in, again, an affluent family. His mother was an artist. Her brother, oil executive, sister art dealer. He goes... Wait, artist, oil, art?

They all deal in oil in some way? Oh, yes. Very clever. It's like, that's the racket. Good work if you can get it. Fucking making oil paintings from your fucking uncle's or brother's Texas strike or whatever the case may be.

Exactly. Everyone's picking up what I'm putting down tonight. Yeah, man. These some real white motherfuckers that invented this shit, dog. I don't know none of that. But so in 1973, Leon Black gets a B.A. in philosophy and history from Dartmouth. He's summa cum laude. I'm sorry.

I just can't hear that without thinking of Jeffrey Epstein. Oh, God. I was wondering what was funny about it because I was like, oh, he pronounced it correctly. He's got his Latin down. But that's how... Why does it remind you of Epstein? Because there's cum in it. That's it?

Cum made you go Epstein? Yeah. We've broken Sean. The secret ingredient at Chuck E. Cheese. Oh my god. They got rid of the cum. That's why it's worse now. You motherfuckers complained.

You made McDonald's ruin the fries to appease the vegans. Even the ball pit is worse. Which restaurant, Steven? You made Chuck E. Cheese get rid of the Epstein. Oh, man. He almost got it out. He's literally dying. That's how funny he is ah if only 1973 leon black ba philosophy history dartmouth 1975 mba from harvard uh 1976 i know he played basketball yeah 1977 he starts uh

working at drexel burnham lampert which, we've mentioned here up top, eventually becomes a massive insider trading ring, Ponzi scheme, criminal conspiracy. And I guess I could just quote a little bit of biography that exists from the New York Times. At Drexel, his boss at the time said Mr. Black wanted to jump immediately into big picture planning, but he believed Mr. Black needed to understand the basics first. He, quote, wasn't working as hard as we had hoped, so I had some harsh discussions with him, recalls Frederick Joseph, the former head of Drexel. Not long after that little heart-to-heart, Mr. Black began climbing the ranks at the firm and became an influential financier as Drexel began financing mega buyouts. He would work all day, party all night, and come back and do it again the next day, Mr. Joseph says.

But he brought a lot more brains and a lot more strategic capacity to his deals than a lot of other guys at Wall Street at the time. And I do like that he had this heart heart to heart uh about how he wasn't working hard enough right after his fucking father jumped to his death wow i mean i guess you know hey look it's the business world but you know what gotta get over your dead father within two years exactly steven has brought up the fact that uh bullying is imperative in every billionaire and in this case it's hey we get that you said that your dad, but we need you to get your balls out of your ass and get to work. I mean, that's part of why his dad jumped.

He's like, he really drops the ball on bullying him early. He's like, how can I ensure that my son becomes a takeover billionaire asshole yeah i need to ensure the legacy the legacy of private equity let's leave him with something to prove it's like giant chip on his shoulder oh i know i'll make him question my love for him for the rest of my life it's like that uh what was that a christmas story where it's the past present future ghosts but the the it's just if he kills himself right now what will happen to his son

so if i if i jump right now he's gonna become a billionaire the ghost is like no you're you're taking the wrong message at this i'm saying that there's a lot of people that care about you but but my son he like no i mean look we'll just look at him i mean look at how productive he is look at how many pensions he's destroying i i just i mean i i know i'm supposed to say i should live but it really feels like he'd want me to jump at this point well just imagine the angel taking him to like see the honduran president he paid bribes to relaxing in bed with his wife this is what happens in the universe where you don't exist I mean this guy's just taking a nap

he seems like a good dude um but so oh yeah so and everyone gets bananas out of the deal I don't see what's wrong with this uh but so uh 1970 uh sorry and according to the book buyout of america by uh josh costman in 1982 leon black starts selling junk bonds to companies financing leveraged buyouts you know private equity takeovers uh just paraphrasing from the book a drexel would agree to lend acquired companies much of the difference between purchase price and then the amount the buyout firm put down which is usually pretty little maybe maybe like 20%, if that. And then Drexel resold its loans as junk bonds. And we mentioned Michael Milken had this kind of captive network.

So, of course, you can, like, raise all this money and just resell your loans to your captive network that has to buy them anyways, even if they do, many of them end up being totally worthless. This was part of the savings and loan crisis, right? Yeah. I mean, this is basically what inflated the entire savings and loan crisis. And this is what... So you had all these upstart small banks that have,

on top of the usual troubles of starting a bank, which are many, they have to earn this extra return just to repay the junk bonds. Oh.

And a lot of them didn't. There's a catastrophic failure. Yeah, that makes sense. I mean, it's a risk. According to the book Den of Thieves, in 1983, Leon Black came up with the Drexel, quote, highly confident letter, which was Drexel would to finance a takeover. Instead of even raising the money, they would just issue a letter saying that they were, quote, highly confident that they could raise the money and they could finance the takeover that way. And it was actually very successful as long as Milken

had this captive network. And then once the network falls apart the junk bond empire collapses. But I mean obviously Milken would have a captive network I mean he's just such a beautiful charismatic man. He's just got the face of just a

beautiful beautiful boy. He's like able to like essentially extort really cheap loans yeah basically these small banks and of course they use this to do like a fucking mergers and acquisitions hostile takeover corporate raider uh boom during the 1980s which destroys countless jobs pensions benefits um just like as one one example from the book Buy Out of America in 1986, Leon Black puts together KKR as another private equity firm. They put together their hostile takeover of a company called Beatrice. For this $8.7 billion deal, KKR puts down $402 million. So that's like nothing yeah yeah uh and

so that basically what they did here was they broke up the company and they sold off the individual pieces at the tax law at that time tax the tax code says you don't have to pay taxes on profits made by divesting pieces of a company so they made this huge profit selling off the pieces uh and doing massive layoffs every time they did so and then congress closed this particular tax loophole it says you can no longer new owners can no longer sell off business divisions without paying taxes on the profits they make there um almost like a native american corporate raider know, using all the pieces, get rid of all of it for what we need, you know. No peace unleft soiled. And I did want to mention Dennis Levine would be caught up in the Michael Milken insider trading ring.

He would cooperate with the government, serve prison time. Leon Black, of course, escaped any sort of legal ramifications. But Dennis Levine, according to the book Den of Thieves, thieves hated leon black and called him quote the fat slob unquote uh because leon black was the for a time co-head of mergers and acquisitions at drexel oh and this is how leon black got out of the prison time you spray paint larry was here wash me all that kind of shit fuck this whole asshole some Snicker bars, throw some paper on the floor, read a newspaper, roll a paper up a newspaper, and throw a newspaper on the floor.

Fuck this whole asshole up. You know what I'm saying? Leon Black definitely changed after his father died. He became a much angrier man. But stronger. Yeah. Side note, I don't know if Larry David took some sort of payoff from Leon Black to make it harder to research him.

But if you want to Google this private equity episode, asshole, prepare to find a lot of stuff about the show Curb Your Enthusiasm. Well, I think Larry David knew to research any of this material, you just have to see such darkness that you might as well get a little bit of comedy every now and then from J.B. Smoove while you're doing some deep diving on some wall street dirt bags and uh one other case i want to do of just two different quotes back to back this first one's from the financial times as head of mergers for drexel leon black financed about 75 percent of the buyouts of the pie the pioneers of private equity carried out in the 1980s including kkr's storied purchase of rjr And then this next quote is from Buyout of America by Josh Cosman.

So basically he did like about 75% of the financing of these leveraged buyouts, and then more than half of the companies would eventually go bankrupt. Right. More than half. More than half. But not most. Yeah. Not most, though. And so in 1988, the Justice Department threatens to bring RICO charges against Drexel

because they're trying to get to Michael Milken. We cover this in more detail on the Michael Milken episode. But basically, they have to settle. Drexel has to settle with the government. Michael Milken has to get pushed out. And then the company, this is 1988, the company has to restructure. It would collapse in 1990.

But what kind of happens, there's this Fortune article called The Last Days of Drexel Burnham Lampart. And they kind of restructure the company around Leon Black and a guy named Peter Ackerman. And basically what they're saying is like from Fortune, The Last Days of Drexel Burnham Lampart. Basically the... Did you say Fortune or 4chan? Fortune, yes. From 4chan magazine.

On their exclusive on Jeffrey Epstein. They broke this story about Drexel Burnham Lampert. But so basically he agreed to give like Ackerman and Leon Black like 75% of their bonus. But he told them that the more deals they brought in, the higher their bonuses. You know, because like even though the company just sorry just paid like hundreds of millions to the government and you know had to settle all these charges he like guaranteed their compensations would be at least equal to 75 of their previous year's compensation and promise this yeah so like men's warehouse guaranteed yeah because like he was worried that these people would like bolt after michael milken uh got slammed yeah uh and so uh from the fortune article when rumors got out about the special

arrangements ackerman black and a few others had negotiated morale took another nosedive a former member of the drexel board jeers the key to success was being a pig to allow his other investment bankers to vent their anger and envy j Joseph, the head of Drexel, brought in a psychologist named Ned Keenan, who is used by many companies, including KKR. What did employees tell Keenan? According to a former top investment banker, quote, that everybody hated Peter and Leon.

And so... That's not shocking. Yeah. And basically what happens is because their compensation is tied to the business they bring in, even though the junk bond captive network has just collapsed, they're bringing these huge deals. And one other thing from the Fortune article, among Drexel's worst selling underwritings of 1989 was those that Leon Black did to help William Farley, the t-shirt titan, take over textile maker West Point Peperal. Farley needed over $1 billion to swing the acquisition, but Black did not want to

see Drexel Welsh on his promises to raise the money, so he and Ackerman bowled through it. Unfortunately for the terms, Drexel failed to sell $250 million of the paper and had to inventory the stuff. So what happens is Drexel is doing all these junk bond raises, but then they can't sell

the junk bonds because Michael Milken isn't going to prison, his network collapsed, so Drexel is doing all these junk bond raises, but then they can't sell the junk bonds because Michael Milken is going to prison, his network collapsed, so Drexel has to start eating all these junk bonds, and they fall apart, and in 1990 they declare bankruptcy. But I did like one last thing from this article. The firm starts to fall apart, and then they have,

from the Fortune article, when the bonuses were announced in december leon black was perturbed at how small his was a mere 12 million dollars according to several drexel officers black went home and sulked for a couple of days before joseph relented and gave him three million more dollars joseph uh yeah and so this is like right. This is 1989. And then June 1990. No. Yeah. And then right at the beginning of 1990, the firm collapses into bankruptcy. Wow. And, you know, this massive Ponzi scheme and all this stuff. The thing is, because Leon Black was, he was working in New York. Michael Milken was working in Los Angeles, but he was kind of the New York banker with the most access and influence to Milken. So because of this, he knew where the bodies were buried.

Because, you know, this saving and loan collapse particularly accelerates in 1990 uh there's the congress in 1989 passes the financial institution reform recovery and enforcement act 1989 this is like the bailout of the savings and loans uh taxpayers would end up spending about a hundred public money about 132 billion dollars uh bailing out the savings and loans and like selling off their assets. So the thing is, Leon Black, because he worked with Michael Milken, he knows where the bodies are buried. He knows what's the good shit and what's the bad shit. Yeah, of course.

So basically, what happens is Leon Black is able to get an $800 million line of credit from Credit Lyonnaise, which it no longer exists. It was bought out by another French bank, but it was a French bank at the time, 90% owned by the French government. So he gets this $800 million line of credit and he starts buying distressed securities. Like he buys companies out of bankruptcy, which gives them a lot of value. Just from like Wikipedia, he invested in... And then like offloads those companies to other people essentially? Yeah, yeah.

Because the private equity business model is usually flip it in three to five years after cutting expenses. But he didn't have enough time to start going. Yeah, well usually like you cut expenses. You like... The nice thing is if you buy out of bankruptcy, it usually wipes out all the union contracts,

most of the pension, healthcare, all these obligations. So you essentially just hose labor and then you try to flip it once you've like kind of got it operational again. Right, right. So buying out of bankruptcy is very profitable if you have capital on hand. Yeah. Which is a through line to all billionaires is to have enough capital to fail multiple times so that when you succeed, people't be like wow can you believe kylie jenner sells fucking colorful

dirt for 18 when they usually you cost six and motherfuckers are paying 80 for this shit on the black market it is an area which we call but um just a interesting thing here is so um the government sets up the res the federal government the u.s sets up the resolution trust corporation which was supposed to like buy up these assets from all these failed savings and loans and sell them off to other investors but it usually does that on the cheap so because leon black is able to get this 800 million dollar credit line from this french bank he's able to start buying assets from the u federal government And so that's like we talked about there is no especially with regard to finance There is no billionaire that does not get a massive subsidy from the US federal government

So the resolution Trust Corporation starts selling off assets to other investors on the cheap And this is how Apollo makes most of their bank at first According to Wikipedia Apollo used a distressed debt to buy or invest in firms such as Vail Resorts, Walter Industries, Culligan, and Samsonite. And, you know, again,

this is like they set up this Ponzi scheme, tax public money has to pay $100 billion-some to resolve this Ponzi scheme, and then with the collapse resolve this Ponzi scheme. And then with the collapse of the Ponzi scheme, they become billionaires by picking up the pieces of like what's actually valuable in all these companies that they just drove into like debt and bankruptcy, you know?

So it's like, it's an amazing scam and it's incredible to me just like how much nice treatment this guy gets in Bloomberg or CNBC. And this is like, even if you are a capitalist, this is very straightforward fraud and, you know, pick up the pieces and then survive. Yeah, it's like I'm trying to, I always think of analogies for things, but in this case it seems like they're like, hey, we're going to ship a whole bunch of gold and valuables by boat,

but from one coast to the other. But some of these boats will have nothing on it, and then we're going to sink all of them, and one of us is going to go to the jail. But then Will only knows which boats have the treasures and which boats have nothing. That doesn't make any sense. I'll cut it.

But I think that the listener in my head appreciated it. Well, an interesting anecdote is the carried interest loophole was named after boat captains. Oh, really? They had interest for carrying goods on their boats. Maybe I won't cut it. interesting anecdote is the carried interest loophole uh was named after boat captains oh really interest for carrying goods on their boats maybe i won't and that's that's very similar to what private equity does today that's fucked up carrying goods on boats um but yeah and and so just one last thing from wikipedia on this early on apollo made a name for itself by acquiring interest in companies that drexel had helped finance by purchasing high yield bonds junk

bonds from failed savings and loans and other insurance companies. Apollo had acquired several large portfolios of assets from the U.S. government's Resolution Trust Corporation. So the U.S. government bails these out. Apollo buys them on the cheap. And because Leon Black was part of the scheme, he knows exactly what the good shit is and what isn't. And that's how he becomes a billionaire.

Just that simple. And I do just want to mention one particular case of this. So Executive Life is an insurance company, and there's just like a random California political corruption story here. John Garamendi is currently a congressman, Democrat congressman from the 3rd District of California. But in 1991, he becomes elected California's insurance commissioner. And what he does is he seizes executive life.

This is from the Sacramento Bee. John Giramendi becomes elected California's first elected insurance commissioner. Just weeks after that, he seizes executive life, contending that his junk bond portfolio was too risky to support payments to more than 300,000 retirees and people who held the insurance policies and such. A few months later, John Garamandi sold the junk bonds to Leon Black's clients for $3.25 billion.

They turned out to have, I think even at the time, a face value of more than $6 billion. Wow. So essentially, from Sacramento Bee, Black made somewhere from between $500 million to a billion dollars on this deal. What?

And the thing is, Wait, wait, wait. $500 million to a billion? They just don't know? We don't know exactly how much Leon Black cleared on this, but clearly the fund itself almost doubled its money. Right, right. Because $3.25 billion to more than $6 billion face value.

Yeah, a lot of times for individual stakeholders take on a deal like this, they don't know exactly what it is. They have to back into the figure based on the total sale amount and just historically what their percentage has been in the past yeah and so according to forbes the deal left policyholders taking a 40 shaving on their claims and uh you know so anyone who had 300 000 people had insurance policies of various types

annuities and such, and they had to take a 40% shave on this. And again, this is from the LA Times, 330,000 executive life policyholders lost $4 to $4.5 billion since the company's failure. From the LA Times, some have lost their homes. Others have foregone medical care that was to have been guaranteed by income from Executive Life's annuities. On the other hand, the buyers of the junk bonds have profited by as much as $1.76 billion. Wow.

And then just like the weird thing is like basically from the LA Times, they argue that First Executive Corp was part of Michael Milken's junk bond network. So again, Leon Black knows where the bodies are buried. He knows there's good shit in here if he can buy it on the cheap. So basically, Leon Black kind of knows better than this guy, Garamendi, who was elected insurance commissioner, what's going on there. And so the LA Times wrote an article about this. And basically the theory is that Leon Black told them, hey, you got to sell right away. This shit's worthless.

We'll take it off your hands. So the L.A. Times wrote that. But Giramendi's spokesperson said he didn't rely on Apollo for advice from the L.A. Times, but on his financial consultants, new york-based blackstone group but blackstone sources have said they advised him that policyholders would be best served by holding on to the bonds until prices recovered not by hastily selling them in a block garamendi was quote advocating selling at the worst of all possible times says the general partner says a then general partner at blackstone But the commissioner seemed predisposed to make the sale no matter what.

We figured out pretty early that we were the ants at the picnic, he told the LA Times. So very clearly, Blackstone is advising him, do not sell. But he insists on selling to Apollo for about half of the face value. And this makes him a billionaire. Again, 40% haircut for the actual people involved in this. And then one last thing from Forbes. As of 1998, Giramande was working at an investment outfit

with strong links to Leon Black. In April 1998, Los Angeles-based Ukapa Cosmetics or something, COS, an investment company that's done some big deals financed by Black, made Garamendi a partner. So basically, a company that had a bunch of financing links to Leon Black made him a partner in 1998. That's not suspicious.

Yeah. And then he was like California's lieutenant governor 2006 to 10, currently a Democrat congressman from california's third district so if you are living in california's third district make sure to call your congressman and ask him if he knows any good deals on insurance companies yeah man these some real white motherfuckers that invented this shit i don't know none of that but yeah i mean it's just like and so like this and other deals make him a billionaire and um we're not gonna have time to get to everything but uh steve did you want to none of that but yeah i mean it's just like and so like this and other deals make him a billionaire and um we're not gonna have time to get to everything but uh steve did you want to talk

about some of like apollo's business model in general yeah they're so apollo's three main areas of business are credit private equity and real real assets credit is primarily invest investments in what they call non-control corporate and structured debt that includes performing stressed and so-called distressed investments across the capital structure private equity which is i mean it's a private equity company that's what's best known for um is just what we said it's a mergers and acquisition transactions for to buy up companies and offload debt make restructur happen, and then sell them for a profit. Right, right.

They also have another area, and it's just called real assets. What was that? Real assets. Where is it? Yes, this is the real shit. Real assets where it's filmed in front of a live studio audience. Whee! Primarily this means real estate equity and infrastructure.

New rule, if you're my father, be careful what town car you land on. Ha ha ha! I didn't order my Mercedes painted. I think part of the new load of debt they're taking on is to finance the purchase of things like, they call it mezzanine loans, where they're taking on more dubious quality mortgage-backed securities and stuff like that. Yeah, anything called mezzanine loans where they're taking on like uh more dubious quality mortgage-backed securities and stuff like that yeah anything called mezzanine yeah it's in the

middle you know it's like mid-tier right right uh that's just a nice term for like approaching junk loan well it's a balcony junk loan it's not it's fancy yeah that's like this is kind of like the mostly versus right yeah versus over half yeah yeah terminology issue but yeah so they have like a slightly but i wouldn't use that in my life you know hey yogi how much pizza is left i mean uh over half also this is another situation that i found with several billionaires is that their main investment vehicle that they're known for is worth less than they are so this company is worth about 2.4 billion in other words it has assets in excess of its liabilities of 2 billion 2.4 billion and let's see leon's worth what six six six billion yeah

so like just without knowing any anything else about the business you can see what like it's he's really running it for his own personal purposes right the uh well yeah i mean that's kind of something we talked about with private equity is essentially like the people who are actually like partners are always first in line and they always kind of get paid uh and then the actual investors in the funds are in good position but if you're actually like an idiot holding the stock of a public private equity company you're going to get hosed right, you know, every, like, uh, just for an example, Apollo has been like, their actual public stock has been massively beaten by the, uh,

the S and P 500 the entire time. Uh, just from market watch since going public in March, 2011, Apollo stock has risen 69.4%. Well, the S and P 500 has risen 255%. Oh, that was another thing I was going to just mention real quick. So, despite all of these sophisticated deals, the S&P 500, one of the main indexes for stocks, rose 13% in the last quarter, but Apollo is slightly under it at 2.81

for return on investment. All right. So I think they need to be doing more insider trading perhaps or somebody else needs to jump, I guess. Yeah, well, and so I guess... They need to be inspired. There's two other things I want to mention before we wrap up here, because, of course,

there's so much stuff that we're just not going to have time, and we'll circle back with the two other founders, and I think we'll hit some of the rest of the Apollo shady buyouts and these kinds of things. But Stephen mentioned the actual fund investors. So CalPERS is the California Public Employees Retirement System. That's the pension fund for California. We mentioned about, according to New York Times, about half of private equity money comes from these pension funds

that are seeding their own destruction, as it were. But so, according to an independent study from CalPERS, this report detailed Apollo had paid tens of millions of dollars to a former CalPERS board member who helped it land billions of investments from the pension fund. So basically like, you know, and they go through this, Apollo was not actually accused of wrongdoing here. There was a guy, a former CalPERS board member, he committed suicide in 2015 because he accepted like tens of millions from Apollo. And then he like, he bribed another board member to like steer something like three point some billion dollars

of calper's money into apollo so it's like you do see that happening a lot where public pension funds get put into these um private equity things you know partly people say because they want to like get accelerated juiced returns that beat the s&p 500 but a significant part of it is just straight up bribery or you know influence influence peddling or whatever else is going on here um yeah i mean uh it's uh a lot a lot of times people will be like well you know if they just invested in the stock market and broad index they might have gotten more money but like with private equity a lot of it is about control as well as ownership and so you're looking for the even longer term in terms of like

influencing people right right and being known as someone who can uh partake in you know the the family business essentially of private equity right the moving and shaking side of it yeah yeah the creative destruction right right yeah, those are the people that have all the tools. Yeah. So you need to be known as someone who essentially has all this tribal knowledge. Yes. Of financial wisdom. And you can run a private equity vehicle. Right.

And hopefully we've mentioned this a lot. But another thing to remember with private equity is that they're almost guaranteed to make money. Like if you're an investor in their fund, you may or may not make more than the S&P 500, but the actual partners are almost guaranteed to the point where it's like what they do is as soon as they take over a company, they just get it a massive loan and they use it to pay themselves back almost within a year. Right, true. And so the last thing I want to do for Leon Black in particular is just read a little bit from this article from wealthdaily.com. And the author is making the argument about a vulture capitalist firm, what makes it a vulture capitalist.

He says, usually a vulture capitalist firm will buy a majority stake in a company with debt, using debt, that is. The vulture capitalist will not put up much of their very own cash, usually less than 10%. Then it transfers all the debt to the company's balance sheet all the debt used to acquire it gets dumped onto the company's balance sheet and then it starts paying out a huge dividends to shareholders of which it is the majority shareholder um so often the company will go into even more debt to do that and so the this author uses the examples of cla's. Claire's is like a famous... They do ear piercings. Right.

They got fucking preteen clothes and necklaces and fucking jewelry and shit. It's in the mall. You've seen it. It's got like a pink, purplish flower in the A-ish area. You know, I applied for a job there because I got rejected from all the jobs I applied for when I was starting out. I applied to the movie theater, the mall, the fucking blockbuster, everywhere. None of them were talking about me.

I applied to Claire's, and they looked at my application and then me. I just went, yeah, well, we'll see what happens. Because they want cute, good-looking women working at Claire's. They don't want 14-year-old girls to be fucking next to my dumb brown ass just being like, hey, you want Drew's Pierce? Claire's, Chuck E. Cheese, Jeffrey Epstein, it's all making sense.

Researching this episode, I had a giant whiteboard with a bunch of newspaper clippings. Yeah, we've been to strings attaching different pictures. Pictures of Leon Black. Red yarn. But so,

the author gives the article, gives the example of Claire's stores. So it was, you know, a jewelry chain. Apollo buys it in 2007. From the article, sales per square foot at the chain have stayed roughly the same, but the company has been losing money

ever since Apollo acquired it. Acquired it 2007. Why have profits been so bad? Probably because the payments on the $2.3 billion in debt that the Apollo put on the company. And Claire's would eventually declare bankruptcy in 2018. So that's exactly what happened with Toys R Us. We did a whole episode on this and you see this again and again with private equity.

Happened with Payless Shoes. It happened with, Sears was similar, I believe, or JCPenney or one of them and uh yeah and so you know it's just like again the the actual sales per square foot stayed constant but profitability was destroyed because of this massive debt payment but private equity doesn't give a shit because they're making money the first thing they do is take out a giant loan to pay themselves back and secure their profit and uh the uh article from wealthDaily.com also cites an aluminum producer called Noranda Aluminum, which was acquired in 2007. Apollo loaded the company with debt and started paying huge dividends.

Noranda was once a solid company that paid union wages, but don't worry, you won't find out much about it now. It declared bankruptcy in February 2016. And, you know, look, we could spend all day going through Rackspace, Career Builder is another one that just started doing layoffs that Apollo did. They bought

the parent company of University of Phoenix, which is engaged in very predatory pricing practices towards low income people. Right, pre-Apollo and post-Apolloapollo yes they didn't stop any of that stuff uh they bought uh some sort of vehicle uh uh for a fucking inspire communities developer which owns like 11 13 000 uh trailer park homes so you know of course they're like

harassing these people cutting their uh benefits uh There's a Vanity Fair story. Apollo has bought 29 local TV stations across the country as of April 2019. It will become the seventh largest owner of local television stations in the United States. And they quote someone in the article saying TV is what gets senators elected. So they might try a traditional profit thing there, but it is also just the fact like they own a fucking private military. They own a bunch of television stations in the United States. So they have an extreme amount of influence. So it's like, well, how did he get there?

Well, he ran a fucking giant criminal conspiracy with Michael Milken, a giant Ponzi scheme. But instead of being a fucking Bernie Madoff, he's Leon Black black he has so much influence that if you look on bloomberg cnbc you won't see any of this shit it took me like seven hours of digging and five hours of epstein see in fairness five of those hours i was completely distracted looking up epstein but you know but you're also jerking off during that time so you gotta really figure something out but you know what they're professional criminal

that's what it is you know we romanticize the outlaw aesthetic in this country but the fucking yahoos and fat cats on wall street are professional con men yeah and it is just something where it's like,

maybe we beat this point to death on the podcast, but a lot of these billionaires, they're maybe overpaid or whatever the case may be. They don't really create much value. In many cases, they're often damaging. But it's just like, even under the laws of capitalism, Leon Black is a straight-up criminal. Like, again, he inflated this

massive Ponzi scheme. The government had to come in and bail it out. And then he used, you know, government connections and bribery and just the fact that he got an $800 million line of credit to buy up assets on the cheap because of bankruptcies caused by his Ponzi scheme. And, you know, in the case of in the case of California and executive life insurance, there was probably straight up pay to play there where he actually hires the guy who makes the decision to sell it to him on the cheap. And it's so frustrating

because the people that are evaluating how morally or ethically good he is aren't fucking doing this fucking dirt digging Sean's doing to realize how much fucking garbage is in their goddamn portfolio. Yeah. And it's really been a pleasure recording the last episode of this podcast. I'm going to be very sad when he gets my address off a Palantir database. Fucking sends two men in black masks to my house.

It's going to be worse. It's going to be just like an envelope that's got a fucking powder in it that makes you faint. Yeah. Oh, I did forget to mention. He bought Edvard Munch's, one of the four copies of the Scream painting. Right. Paid $120 million for it. Yeah, mind you, we rarely talk about this, but all these fucks got art collections.

And if you go on Liamon black's wikipedia between the three or four things that they've mentioned it's about 160 million dollars worth of art and it's fucking money that would gone to not his fucking private art collection and i don't know museums or fucking uh public awareness on art or some shit but the main thing is is that it wouldn't be in fucking leon black's house i did just want to say uh the uh the screen painting is actually um an artist depiction of a pedestrian who saw eli black's father crush his town car um but everything's going to get cast everything's cutting out but we're still recording recording. Let's do this.

Alright, so I guess to close this out, we talked about this on our Carl Icahn episode, but Carl Icahn actually did stand up at Caroline's on Broadway. Solely out of merit. And he mentioned Leon Black there, and he tells a cute little anecdote, but I

think it would have been nice if I could have punched that up. Well, he tells the anecdote about how Leon Black's father took acid and thought he could fly. Very disrespectful. Carl Icahn is a roast comic. He's like, yeah, Leon's returns are falling to earth,

like his father. But I guess we just play like a little second of Carl Icahn doing stand-up. And he mentions an anecdote about Leon Black. And I kept making money. And I met this guy here tonight, Leon Black. I mean, Leon's a brilliant guy. He's nothing wrong with Leon. I don't care. I don't care what brilliant guy. There's nothing wrong with Leon. I don't care what people say.

There's nothing wrong with Leon. He's here with his son, a brilliant kid. I don't know where the kid came from, but the kid is brilliant. And Leon... You heard that knowing laugh. They know what people say about Jeffrey Epstein. Oh, yeah. They know exactly people say about Jeffrey Epstein. Oh, yeah.

They know exactly what Epstein's all about. But I was shocked because this was Leon Black's response to what Carl Icahn said. You misunderstood. What? It's once every 13 years. You know? You've got to recharge the mitzvah.

The mitzvah is kind of full. At capacity. Capacity. Mitzvah capacity. All right. Let's move on. Bowtie the... capacity capacity misfit capacity right bow tie there's so the

the story Carl Icahn tells there on the stand up you heard the two best punchlines oh yeah the rest of it's trash yeah then he has like some five minute anecdote

about how like Leon Black lectured some CEO at US Steel and the punchline is the US Steel CEO tells Leon Black if you don't get some ceo at u.s steel and the punch line is um leah uh the the u.s steel ceo tells leon black if you don't get the fuck out of my office right now i'm gonna cut your balls off wow and then uh leon black turns to carl icon after they leave and says i think i did pretty well in

there but um what a hack yeah i do just want to say that had the U.S. Steel executive cut Leon Black's balls off, many of Jeffrey Epstein's victims would be much better off today had U.S. Steel's CEO... Allegedly, this is the Freeside Show. Yes. None of this is true. This is all satire.

But you know what? I just wanted to say, again, the co-founders of Apollo are Josh Harris and Mark Rowan. They are also billionaires. And there's so much shit we didn't get to. Like, they have connections to the Trump White House, Kushner. They, like, gave Kushner a business loan. Apollo did, like, $100 million some.

So it's like there's so much fucking corruption, influence peddling, destruction. The New York Times wrote a long piece about what Apollo did to Hostess, where there was, like, they bought it out of bankruptcy, destroyed all these jobs, shut down a plant because they unionized. So it's like, again, there are so many different angles we could go to that we just didn't have time to get to everything today. But if you, the listener,

have favorite greatest hits of Apollo global management, just kind of destroying communities or various anecdotes about their most significant buyouts. Let us know. Twitter at GrubstakersPod. GrubstakersPodcast at gmail.com. Just let us know and we will circle back and cover as much as we missed as possible on a future episode about Josh Harris and Mark Rowan. so you know what just uh keep your eyes out uh and make sure that you are writing those uh donation checks to gratitude america incorporate it yes and not gratitude america ltd right okay well anything else we missed on leon

black thanks to the listeners for uh rating subscribing and listening and letting us know what you like and let us know what you don't like that we ignore from time to time but uh honestly we we do it for you we really appreciate it um it's a pleasure uh making this show for you yeah uh give us five stars on itunes and we will either bring andy back or never bring him back he's not coming back depending on who gets more five scars. Andy's fate is now determined by the five-star rating. We don't need Andy. We got me, and I can do this. Yeah, man.

These are some real white motherfuckers that have been at this shit, bro. I don't know none of that. All right. Thanks for listening. Bye.