Latest / Breaking Points with Krystal and Saagar / 9/8/26: Fetterman Staffers Expose Insane Behavior, Leon Black & Jeffrey Epstein

Transcript

9/8/26: Fetterman Staffers Expose Insane Behavior, Leon Black & Jeffrey Epstein · Breaking Points with Krystal and Saagar

0:00
Speaker 1: Hey guys, Sagar and Crystal here.
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0:33
Speaker 2: Time to check in with our favorite brain-damaged Israel shilling
0:37
Speaker 2: Senator John Fetterman. A new article out with staffers spilling
0:41
Speaker 2: the tea about how he has very little interest in
0:44
Speaker 2: actually being a United States senator and quite a lot
0:47
Speaker 2: more interest in doing the bidding of Israel. and appearing
0:50
Speaker 2: on conservative media, specifically Fox News. Let's put this article
0:54
Speaker 2: up on the screen from the Wall Street Journal. The
0:56
Speaker 2: headline here is, Behind Closed Doors, John Fetterman Shows Little
1:01
Speaker 2: Interest in the Work of a Senator. The headline very
1:04
Speaker 2: much underplays some of the anecdotes that they have here
1:07
Speaker 2: backed up by text messages. Let me go ahead and
1:09
Speaker 2: show you some of the most stunning examples that they
1:12
Speaker 2: pull here. Let's put the first one up on the screen.
1:14
Speaker 2: So they say that last summer he was supposed to
1:18
Speaker 2: meet with CHOP is the Children's Hospital of Philadelphia. He
1:22
Speaker 2: says to his staffer in a text message, why do
1:25
Speaker 2: I have to keep meeting with the Children's Hospital? The
1:28
Speaker 2: aide says because they're worried about vaccines and Medicaid cuts.
1:32
Speaker 2: Fetterman replies, well, I'm not. I'm convinced they just want
1:36
Speaker 2: free trips to D.C., So aggrieved at the idea he
1:41
Speaker 2: has to meet with the Children's Hospital and saying, I
1:43
Speaker 2: don't really give a shit about vaccines and Medicaid cuts myself.
1:46
Speaker 2: It's not of interest to me. Let's go and put
1:48
Speaker 2: this next one up on the screen. We've got some
1:50
Speaker 2: more tweets here from an aide. This is with regards
1:53
Speaker 2: to the funeral of three different police officers that he
1:58
Speaker 2: was supposed to attend. So the aide says, update on
2:01
Speaker 2: the event. No one will be allowed to staff you
2:04
Speaker 2: due to number restrictions. The organizers are requiring everyone to
2:07
Speaker 2: be seated. by 11 a.m., and the funeral will begin
2:11
Speaker 2: at noon and last at least three hours. Fetterman says,
2:15
Speaker 2: three hours? Question, question. The aide says, yes, it's a
2:18
Speaker 2: very formal ceremony and the equivalent of three separate funerals. Fetterman,
2:23
Speaker 2: This may be a non-starter. So can't attend the cop
2:27
Speaker 2: funerals because it's just going to be too burdensome on him,
2:31
Speaker 2: too much of a time commitment. Three hours is just
2:34
Speaker 2: too much out of his day. Let's put the next
2:37
Speaker 2: one up on the screen here. We've also got some
2:39
Speaker 2: details here, I believe, about his commitment to to Israel
2:44
Speaker 2: and the way this is all going. So they say
2:46
Speaker 2: that he wanted to, told his advisors and senior staff
2:49
Speaker 2: he wanted to introduce a resolution forcing every senator to
2:52
Speaker 2: take a public stance on whether the war in Gaza
2:54
Speaker 2: constituted a genocide. I would also actually welcome that resolution.
2:58
Speaker 2: His senior staff tried to talk him out of this idea,
3:00
Speaker 2: according to people familiar with the matter, but he was undeterred.
3:03
Speaker 2: Last September, the Israeli ambassador met with Fetterman in his
3:06
Speaker 2: office and suggested an alternative. Fetterman could write an op-ed
3:10
Speaker 2: explaining why he continued to support Israel, according to people
3:13
Speaker 2: familiar with the matter. Fetterman agreed and told Leiter, that's
3:16
Speaker 2: the ambassador, he would write the submission based on any
3:19
Speaker 2: points the ambassador sent over. According to these people, a
3:21
Speaker 2: few days later, MC staff sent over drafted points for
3:25
Speaker 2: Fetterman to consider. So literally taking talking points from the
3:30
Speaker 2: Israeli from Israeli officials.
3:32
Speaker 1: That's great.
3:33
Speaker 2: There was another incident we didn't pull the graphic of,
3:35
Speaker 2: but there were three disabled veterans from Pennsylvania who'd set
3:39
Speaker 2: up a meeting with him that they traveled all the
3:41
Speaker 2: way from Pennsylvania to D.C.
3:43
Speaker 3: For.
3:43
Speaker 2: You know, they'd waited months to be able to have
3:46
Speaker 2: his ear on an issue that was important to them
3:48
Speaker 2: and their.
3:48
Speaker 1: Quality of care.
3:50
Speaker 2: He texts the staffers. Oh, I think I got food poisoning. Uh,
3:54
Speaker 2: I'm not going to be able to make this meeting
3:56
Speaker 2: with the veterans. Then shortly after the meeting shows up
3:59
Speaker 2: in the office, seeming perfectly fine and says, I've gotten,
4:03
Speaker 2: I've gotten, uh, an appearance with Fox news on the topic,
4:07
Speaker 2: of course, of, I think it was the Iran war
4:09
Speaker 2: or Israel. So, uh, I gotta, I don't want to
4:11
Speaker 2: be late for that. I got to get over for that.
4:13
Speaker 2: So showing his priorities there, but, um, Not shocking, but
4:17
Speaker 2: pretty stunning. Just, I mean, this really goes beyond a
4:20
Speaker 2: sort of left-right spectrum. Just shows what a kind of, like,
4:24
Speaker 2: piece of shit he is, honestly. Not caring about his
4:27
Speaker 2: constituents on basic issues like healthcare for children or disabled
4:32
Speaker 2: veterans or these cops that were killed whose funeral he
4:35
Speaker 2: was supposed to attend and shows you his priorities. He
4:38
Speaker 2: wants to be on camera talking about how much he
4:40
Speaker 2: loves Israel. You put that together with that article we
4:43
Speaker 2: covered previously, Sagar, about how he has this One super
4:47
Speaker 2: pro-Israel guy who's like showed up out of nowhere and
4:50
Speaker 2: is with him all the time and sort of guiding him.
4:54
Speaker 2: You know, it's a pretty it's a very disturbing picture
4:57
Speaker 2: because this is definitely not what Pennsylvania voters thought they
5:00
Speaker 2: were getting when they voted for this guy.
5:02
Speaker 1: Absolutely. And the thing is that really, Senator, it's not
5:06
Speaker 1: a hard job. I know that people, you know, build
5:09
Speaker 1: it up and all of this. Unless you're the majority leader,
5:13
Speaker 1: you basically don't do anything really all that great. You
5:17
Speaker 1: take a party line vote, up or down, occasionally. The
5:21
Speaker 1: good ones, they get sent to a foreign relations committee.
5:23
Speaker 1: They can do investigations, et cetera. But especially when you're
5:27
Speaker 1: in the minority, you don't do anything. Your only real
5:30
Speaker 1: job is to take these types of meetings and to
5:33
Speaker 1: use your name, you use your staffers and your name
5:37
Speaker 1: to go and to get things done for your constituents,
5:40
Speaker 1: like the Children's Hospital. That's something they actually might be
5:43
Speaker 1: able to help or save. They're like, hey, you've got
5:45
Speaker 1: a budget cut that's coming here. Let me get on
5:47
Speaker 1: the phone with the administration. In fact, Fetterman- You could
5:50
Speaker 1: even argue, considering all of these connections he has now
5:53
Speaker 1: with the Republicans, he could be really using that for
5:56
Speaker 1: the benefit of Pennsylvania. He could say, I'm not going
5:58
Speaker 1: to vote for this, this, and this. I'll back you
6:00
Speaker 1: guys up on Israel. You guys got to give me this.
6:02
Speaker 1: You got to make sure you keep CHOP out of
6:05
Speaker 1: the budget cuts. You got to make sure that some
6:06
Speaker 1: of these cuts and things don't affect this disabled veteran
6:09
Speaker 1: community or this veterans hospital. This is what real politics
6:13
Speaker 1: looks like. A lot of it won't show up at
6:15
Speaker 1: the national level. for a show or something like that
6:17
Speaker 1: for us. But that's what makes an actually effective United
6:20
Speaker 1: States senator. He does none of that. He doesn't seem
6:24
Speaker 1: to care about Pennsylvania at all. He does not seem
6:27
Speaker 1: to care about his constituents at all. The only public
6:31
Speaker 1: appearances this guy is making are ones that are organized
6:33
Speaker 1: by Dave McCormick's staff, the Republican senator from Pennsylvania, who
6:37
Speaker 1: he doesn't even have to do any of the work.
6:40
Speaker 1: I think it's also very telling. Look, You and I
6:42
Speaker 1: both know there's a lot of bad bosses on the Hill, right?
6:46
Speaker 1: They're legendary senators, like the Klobuchar thing has come out.
6:49
Speaker 1: I won't spill all the beans, but everybody knows these
6:52
Speaker 1: people's names. I have never, ever seen People leak an
6:57
Speaker 1: internal senator's text messages. And in this case, we now
7:00
Speaker 1: have a group of Fetterman staffers put, what is it, D4,
7:05
Speaker 1: where his own former staffers have come together and are
7:08
Speaker 1: now saying, hello, Twitter. We're a group of former campaign
7:12
Speaker 1: staffers for John Fetterman who are disgusted with what he's become.
7:15
Speaker 1: If you were troubled by yesterday's story, trust us, they're
7:18
Speaker 1: just the tip of the iceberg. It is even worse
7:20
Speaker 1: than you thought. We have come together to share our
7:23
Speaker 1: stories and screenshots to show us Pennsylvanians exactly who their
7:26
Speaker 1: senator is. Set your calendar for September 14th, the day
7:29
Speaker 1: the Senate is back in session for our first drop.
7:32
Speaker 1: Let's be honest, maybe the 15th. He'll skip Monday votes.
7:37
Speaker 1: He is calling these smears. I mean, again, I can
7:41
Speaker 1: tell you a roster of a dozen of stories of
7:45
Speaker 1: people here in Washington and what these people are really like.
7:48
Speaker 1: Even they. never have had a band of their former
7:52
Speaker 1: staffers come out and just be like, let me show
7:54
Speaker 1: you how much of a piece of shit that this
7:56
Speaker 1: guy really is. I mean, this is the, there is
7:58
Speaker 1: a code of Washington. You never leak this type of
8:01
Speaker 1: stuff for the principal. But he has no respect for
8:05
Speaker 1: these people. And what's telling is, is I don't think
8:08
Speaker 1: any of the other senators would even care. They would
8:10
Speaker 1: still hire them. That's the main reason why this stuff
8:12
Speaker 1: usually doesn't come out, because they despise John Fetterman just
8:16
Speaker 1: as much as his own family. staff does. That's how
8:19
Speaker 1: unprecedented this situation is. Yeah.
8:21
Speaker 2: Well, and also he's already most of the people, if
8:25
Speaker 2: not all the people who were with him when he
8:27
Speaker 2: was a progressive running as having endorsed Bernie Sanders and
8:30
Speaker 2: in favor of Medicare for all those people have.
8:33
Speaker 1: By and large left already.
8:35
Speaker 3: Right.
8:35
Speaker 2: So the staffers we're talking about now, these are the
8:38
Speaker 2: people that came in knowing like, OK, well, you know,
8:41
Speaker 2: he's a centrist now and he hangs out with Republicans
8:44
Speaker 2: and he's super pro-Israel. Like those are the people that
8:47
Speaker 2: we're talking about who are now leaking these anecdotes who
8:50
Speaker 2: are like above and beyond anything else. Like all he
8:54
Speaker 2: cares about are his Fox News appearances. There's a broader
8:57
Speaker 2: issue here. Clearly, like he is not the same person
9:02
Speaker 2: politically as he was because he was an established politician
9:05
Speaker 2: with the track record and we interviewed him before the stroke, etc.,
9:09
Speaker 2: This is a person who is different because of a
9:11
Speaker 2: stroke and because of the damage that was done to
9:14
Speaker 2: his brain. I know that's uncomfortable to say, but there's
9:16
Speaker 2: just no other conclusion you can come to based on
9:19
Speaker 2: how differently he's comported himself now versus before. How is
9:23
Speaker 2: it that there's no mechanism for voters to get to
9:26
Speaker 2: weigh in on the capability of a center? We mostly
9:29
Speaker 2: talk about this with health issues like specific like the
9:32
Speaker 2: Tom Keene situation or most frequently with people who are
9:35
Speaker 2: extremely old and whose brains are deteriorating in front of us.
9:39
Speaker 2: This is a major democracy issue that this guy who
9:42
Speaker 2: is completely changed to stripes just and does not care
9:47
Speaker 2: about doing the job and doesn't seem to care about
9:49
Speaker 2: getting reelected either is just allowed to persist. And there's
9:52
Speaker 2: no check on that whatsoever. I think to a lot
9:55
Speaker 2: of people that seems totally, totally insane. And you can
9:58
Speaker 2: imagine what's going to happen. happened here, Sagar. Like he's
10:02
Speaker 2: awkward and weird and people don't like him in the
10:05
Speaker 2: Democratic caucus. So you had the, you know, the Israel types,
10:09
Speaker 2: the pro-Israel types sort of swoop in and they got
10:11
Speaker 2: their guy on the inside who's like, oh, let me
10:13
Speaker 2: tell you what to do. And let's push this. And
10:15
Speaker 2: here I'll help you with your op-ed and all of
10:17
Speaker 2: those sorts of things. And then the Republicans smelled an opportunity.
10:21
Speaker 2: So you had a couple of Republicans, including, as you
10:24
Speaker 2: were pointing out, his Republican colleague from Pennsylvania, Senator from Pennsylvania. Oh,
10:29
Speaker 2: I'll be your friend. Like, let's go hang out. Let's
10:31
Speaker 2: have dinner together. Come over to my house. Meet my wife.
10:34
Speaker 2: We've seen way too many times how even with people
10:37
Speaker 2: who haven't had significant brain injuries, who they can be
10:41
Speaker 2: really seduced by that. Oh, this is the people that
10:43
Speaker 2: are being nice to me. So my politics are going
10:46
Speaker 2: to shift more to their viewpoint because they're the ones
10:48
Speaker 2: that are being nice to me. Whereas the people I
10:50
Speaker 2: used to agree with politically, they're being mean to me.
10:53
Speaker 2: So I'm going to completely change my politics just based
10:56
Speaker 2: on who's being nice or who's being mean to me.
10:58
Speaker 2: And so Republicans have really, I think, very cleverly kind of,
11:03
Speaker 2: you know, manipulated him and have helped to craft him
11:08
Speaker 2: into the person that we see today. In terms of
11:11
Speaker 2: his political future, you and I were debating this. I
11:14
Speaker 2: think he is delusional enough to think that he could
11:16
Speaker 2: get reelected. One of the last articles that came out
11:19
Speaker 2: about him, his staffers were saying that he thinks he
11:21
Speaker 2: could be a vice presidential pick. He even thought maybe
11:25
Speaker 2: he would run for president, but he was like, oh,
11:27
Speaker 2: maybe I'll be a vice presidential pick on the Democratic side,
11:29
Speaker 2: which is so insane, which is why I think he
11:33
Speaker 2: may saga be deluding himself into thinking that he has
11:36
Speaker 2: a lane either as a Democrat or Republican to actually
11:39
Speaker 2: win reelection, even though it's utterly preposterous. I mean, Democrats
11:43
Speaker 2: completely hate him. And then the Republicans, they're not going
11:46
Speaker 2: to want some like you know, sort of Republican they're
11:49
Speaker 2: going to want. Someone who's a true believer, who's with
11:52
Speaker 2: them all the way on everything. And he is not that.
11:54
Speaker 2: So as much as they may love him when he's
11:56
Speaker 2: a Democrat who's pissing on Democrats, it's another thing for
12:00
Speaker 2: him to get nominated, let alone be able to win
12:03
Speaker 2: in a competitive election.
12:06
Speaker 1: I don't know. I could be wrong. He's more cinema
12:09
Speaker 1: than my... I will say I've hated John Fetterman before
12:12
Speaker 1: the brain aneurysm, so I think I deserve an award.
12:14
Speaker 2: You've hated him the whole time.
12:16
Speaker 1: I've hated him from day one. He was weed degenerate
12:19
Speaker 1: from the beginning. Maybe it's weed. You know, actually, I
12:22
Speaker 1: should adopt that new thing. It's not just the brain aneurysm.
12:24
Speaker 1: It's the marijuana. that cooked his brain. But look, the
12:28
Speaker 1: guy is a literal resident ogre being used by the
12:33
Speaker 1: Israel lobby or Katie Britt or Dave McCormick. You could
12:37
Speaker 1: be right. He is so delusional that he may run
12:41
Speaker 1: for reelection. Here's the thing. I don't think he would
12:44
Speaker 1: even make it through the Democratic primary. At least as
12:47
Speaker 1: of right now.
12:48
Speaker 2: He would have a better chance in the Republican primary
12:51
Speaker 2: than the Democratic primary.
12:51
Speaker 1: He probably would.
12:52
Speaker 2: Zero percent chance he.
12:53
Speaker 1: Wins the Democratic primary. And like you said, by the way,
12:55
Speaker 1: Pennsylvania GOP is literally insane. They're nominating outright morons up
13:00
Speaker 1: there on the ticket. McCormick is definitely not the, how
13:04
Speaker 1: should I say this, he is not the norm whenever
13:06
Speaker 1: it comes to who they usually are putting up there
13:09
Speaker 1: on the ballot. But when we actually just think about
13:12
Speaker 1: Fetterman's career- This is a guy motivated clearly by ego
13:17
Speaker 1: and by media love. That's part of the reason why
13:21
Speaker 1: running for office is hard. You know, Fetterman now is lazy.
13:24
Speaker 1: He literally does nothing. When he ran for reelection, to
13:26
Speaker 1: his credit, he actually did go to like almost all
13:29
Speaker 1: the counties in Pennsylvania. He barnstormed the whole state. He
13:32
Speaker 1: was all over the media. I mean, you got to
13:33
Speaker 1: really work at it. I mean, this is a big
13:35
Speaker 1: ass state. It's a 15 million people, right? It takes
13:38
Speaker 1: several hours to drive across the entire thing. You really
13:40
Speaker 1: think he wants to do that? I mean, he was
13:42
Speaker 1: already a little rich boy beforehand whose parents were floating
13:45
Speaker 1: his mortgage and all of his payments, now he could
13:48
Speaker 1: just be a multimillionaire and do Fox News hits from
13:51
Speaker 1: his weird basement in Pittsburgh, which is like some former
13:57
Speaker 1: auto dealer. That seems, again, to me, to fit his
14:00
Speaker 1: more current personality as opposed to actually running because running
14:03
Speaker 1: is not It's not easy. You got to go out
14:05
Speaker 1: and shake hands. You got to take meetings. I mean,
14:07
Speaker 1: if you think taking meetings with veterans is hard, the
14:10
Speaker 1: type of groups you have to meet when you're running
14:11
Speaker 1: for office, that's a whole other level of what it
14:15
Speaker 1: would actually take. That's my only reason. I think he's
14:17
Speaker 1: just unbelievably lazy and motivated at this point by money
14:20
Speaker 1: and fame. I mean, it's not that hard to live
14:23
Speaker 1: that life, especially now you've done what you've done. You
14:25
Speaker 1: can get hired by some lobbyist firm. He can make
14:28
Speaker 1: a million dollars a year for the rest of his life.
14:30
Speaker 3: I don't know.
14:30
Speaker 1: Seems like a path he might take.
14:32
Speaker 2: Or hired by, you know, government of Israel to do
14:35
Speaker 2: whatever for them. Like, all of that is certainly on
14:38
Speaker 2: the table for him and his future career prospects.
14:41
Speaker 1: So you may be right. He should make Aliyah. He
14:44
Speaker 1: should make Aliyah. He should convert to Judaism and make Aliyah.
14:48
Speaker 3: We'd all be better off.
14:49
Speaker 1: We really would. All right. Let's move on. We're very
14:55
Speaker 1: excited now to be joined by William Cohan. He is
14:57
Speaker 1: the author of a new book, Money to Burn. Let's
15:00
Speaker 1: put it up here on the screen. The Unvarnished Truth
15:03
Speaker 1: About Leon Black, Apollo, and the Rise of a New
15:06
Speaker 1: Wall Street. William is a longtime financial journalist and has
15:10
Speaker 1: done an extraordinary work here. We're very excited now to
15:13
Speaker 1: be joined by him on the show. Thank you for
15:14
Speaker 1: joining us, sir. Appreciate it.
15:15
Speaker 3: Thank you. Thank you for having me. Absolutely.
15:18
Speaker 1: So I will confess I knew a little bit about
15:20
Speaker 1: Leon Black from his days at Apollo. Obviously, now your
15:24
Speaker 1: book book has done a lot of work to uncover
15:28
Speaker 1: his rise and what it means about financial capitalism. But
15:31
Speaker 1: for the vast majority of Americans, I think they became
15:33
Speaker 1: familiar with him with the more recent revelations around Jeffrey Epstein.
15:38
Speaker 1: In fact, Mr. Black is currently in the news. let's
15:41
Speaker 1: put it up here on the screen, currently actually suing
15:44
Speaker 1: the United States House of Representatives over a subpoena and
15:48
Speaker 1: refusing to give a deposition, which has included many of
15:52
Speaker 1: the other billionaires named in the Epstein files. What throughout
15:56
Speaker 1: your work struck you about Leon Black's, his rise in
16:00
Speaker 1: his fortune and his relationship with Jeffrey Epstein?
16:03
Speaker 3: Well, I mean, first of all, yes, I agree that, uh, everybody,
16:08
Speaker 3: if they know him at all, they know him because
16:10
Speaker 3: of his relationship with Jeffrey Epstein, which is of course, uh,
16:14
Speaker 3: I mean, Jeffrey Epstein's behavior is reprehensible in every way,
16:19
Speaker 3: as we all know. And Leon's relationship, uh, is sorted, uh,
16:24
Speaker 3: at worst, uh, maybe even, uh, potentially, uh, uh, criminal,
16:30
Speaker 3: although he's certainly not been, uh, found to have, uh, any, uh,
16:34
Speaker 3: criminal engagements with him. Um, but it certainly is reflective
16:39
Speaker 3: of poor judgment, which he and Lee and I talked about. Uh,
16:43
Speaker 3: but again, the, the story of, of Leon, uh, and
16:47
Speaker 3: his father and his family, and, uh, I know, and
16:50
Speaker 3: I mean, Jeffrey Epstein is really the last portion of
16:54
Speaker 3: all of this. Uh, uh, you know, it, it began with, uh, his, uh,
16:59
Speaker 3: his famous father committing suicide when, Leon was in his
17:04
Speaker 3: second year at Harvard Business School, which he didn't even
17:07
Speaker 3: want to go to, but his father basically insisted that
17:11
Speaker 3: he do that. And then after his father's death, realizing
17:16
Speaker 3: that he had to become the family's breadwinner, and he
17:20
Speaker 3: figured out that the best way to do that was
17:21
Speaker 3: to go to Wall Street. It turned out that he
17:24
Speaker 3: was very, very good at what Wall Street did, especially
17:29
Speaker 3: advising companies on mergers and acquisitions. He did that at
17:33
Speaker 3: Drexel Burnham, which was, of course, a very powerful firm,
17:37
Speaker 3: especially in the late 80s during the reign of Mike Milken.
17:42
Speaker 3: Of course, most people know who he is. But then
17:46
Speaker 3: Drexel blew up in 1990. It actually was liquidated. And
17:52
Speaker 3: Leon sort of corralled a bunch of the best people
17:56
Speaker 3: he could find from Drexel and started Apollo, which was
18:02
Speaker 3: a private equity firm, so to speak. It was also
18:08
Speaker 3: more than that. And so, you know, he made his
18:11
Speaker 3: fortune in sort of a very sharp elbowed way. The
18:16
Speaker 3: firm was very aggressive, very smart, smarter than most others.
18:20
Speaker 3: firms and made a lot of money over many years.
18:24
Speaker 3: The firm is now, what, 36 years old. And Leon
18:31
Speaker 3: and his partners became billionaires. And then what we all
18:37
Speaker 3: know now is is that in addition to having very
18:41
Speaker 3: good judgment, I guess, about doing deals and making a
18:44
Speaker 3: lot of money, he had very poor judgment in his
18:47
Speaker 3: personal life with his involvement with Jeffrey Epstein and also
18:51
Speaker 3: a number of women he was having affairs with who
18:53
Speaker 3: were not his wife.
18:55
Speaker 2: What do you think led to that? And is there
18:57
Speaker 2: anything that we can sort of extrapolate? Because obviously land
19:00
Speaker 2: block is far from the only elite who had that
19:04
Speaker 2: quote unquote bad judgment with regard to their activities and
19:08
Speaker 2: Jeffrey Epstein. What was it that led to that dichotomy
19:13
Speaker 2: you're setting up where in the business world, he perhaps
19:15
Speaker 2: had good judgment, putting the, you know, sort of moral
19:18
Speaker 2: judgments there aside, but in his personal life had such
19:22
Speaker 2: incredibly disastrous judgment that led to a lot of, I mean,
19:26
Speaker 2: massive reputational harm and, you know, ultimately business damage for
19:30
Speaker 2: him as well.
19:31
Speaker 3: Yeah, I mean, he ended up having to give up
19:34
Speaker 3: his job as CEO of Apollo and as chairman of
19:36
Speaker 3: the Apollo board, although he remains with 85 million shares,
19:40
Speaker 3: the largest single shareholder at Apollo, which has made him worth,
19:44
Speaker 3: you know, whatever, $ 15 to $ 20 billion now. You know,
19:48
Speaker 3: I asked Leon on many occasions because I had unusual
19:53
Speaker 3: access to him. He was on the record for 99%
19:57
Speaker 3: of our conversations, which, you know, I give him credit for.
20:00
Speaker 3: Most guys wouldn't sit for that. And, you know, he
20:06
Speaker 3: hasn't talked to many other journalists. So, You know, I
20:11
Speaker 3: appreciated that very much. And there was like no question
20:14
Speaker 3: that he shied away from, you know, it's clear that he,
20:20
Speaker 3: you know, I don't know whether it was his father's
20:24
Speaker 3: suicide when he was in graduate school that obviously, you know,
20:30
Speaker 3: he revered his father, his father, he comes from Paris.
20:32
Speaker 3: 10 generations of Orthodox rabbis. His father was an Orthodox rabbi,
20:37
Speaker 3: practicing Orthodox rabbi in Woodmere, Long Island, and then went
20:41
Speaker 3: to business school and became a banker at Lehman and
20:44
Speaker 3: then went off and ran a company and created a
20:47
Speaker 3: major and important conglomerate and then jumped out of the
20:51
Speaker 3: Pan Am building. And that was front page news in
20:56
Speaker 3: the New York Times. So obviously that was traumatic. Leon
21:04
Speaker 3: I didn't psychoanalyze him. I'm not sure why somebody steps
21:10
Speaker 3: out on his wife. I mean, he's got four kids.
21:15
Speaker 3: By all reports, he's a good father and the kids
21:21
Speaker 3: are all well-adjusted, including one who works for the Trump administration. Look,
21:28
Speaker 3: I can't explain why that happens. That happens a lot,
21:32
Speaker 3: as we all know. Leon's poor judgment in that regard
21:37
Speaker 3: became front-page news, and his involvement with Jeffrey Epstein became
21:42
Speaker 3: front-page news, which I see as sort of a strange
21:46
Speaker 3: circle of life with his father, both involved in scandal
21:51
Speaker 3: and even though Leon was trying to restore the family's
21:56
Speaker 3: name and to some extent did do that. But now
22:01
Speaker 3: it's meshed in, you know, entwined now forever, I guess,
22:04
Speaker 3: with Jeffrey Epstein. But, you know, he answered my questions
22:07
Speaker 3: about it. He explained the involvement. There was this report
22:11
Speaker 3: by Deckard, the law firm, which, you know, basically found
22:17
Speaker 3: no wrongdoing on his part that it was for tax
22:21
Speaker 3: and estate advice. You know, there's been subsequent reporting in
22:26
Speaker 3: the New York Times and other places that showed that
22:29
Speaker 3: there was some more involvement with other women than was
22:35
Speaker 3: reviewed in the Decker report. But people have been trying
22:38
Speaker 3: to make.
22:38
Speaker 2: He was paying an awful lot for that tax advice.
22:41
Speaker 1: That's what I was going to get at, sir, is
22:42
Speaker 1: that to me, you know, look, you talked about his
22:45
Speaker 1: personal indiscretions. I don't care about his personal indiscretions at all.
22:49
Speaker 1: I mean, this guy's worth, what, $ 9, $ 15 billion? You're
22:52
Speaker 1: paying $ 170 million for tax advice to somebody who's not
22:54
Speaker 1: a registered financial advisor through some sketchy LLCs? I mean,
22:58
Speaker 1: did you get into the details on that? Because that
23:00
Speaker 1: just doesn't pass the... I know a lot of people
23:02
Speaker 1: who are worth a lot of money. They have a
23:04
Speaker 1: team of professionals, the wealth management firm. I mean, this
23:08
Speaker 1: guy had access to the top wealth management tax people
23:11
Speaker 1: in the history of the world. and you have somebody
23:14
Speaker 1: you can barely spell in a private email, that doesn't
23:16
Speaker 1: pass the smell test to me. I'm curious what he
23:19
Speaker 1: said to you about it.
23:21
Speaker 3: So, first of all, when the Deckard report came out,
23:24
Speaker 3: which was in January of 2021, which Leon basically asked
23:29
Speaker 3: the Apollo Special Committee of the Apollo Board of Directors
23:32
Speaker 3: to undertake, and he told me that he's basically, and
23:36
Speaker 3: this is true, he is the only person who was
23:38
Speaker 3: ever asked for an investigation to be done of his
23:42
Speaker 3: relationship with Jeffrey Epstein. I don't see Bill Gates doing that.
23:46
Speaker 3: I don't see Larry Summers doing that. Very true. Or
23:49
Speaker 3: Ehud Barak. I mean, he said he did that because
23:54
Speaker 3: he believed he did nothing wrong. Okay, so that's his
23:58
Speaker 3: view of events. Deckert basically ratified that. I wrote a
24:04
Speaker 3: piece in Vanity Fair when that Deckert report came out
24:06
Speaker 3: and said, hey, Leon, Do you think we're idiots? How
24:10
Speaker 3: could this possibly be true? You're Leon Black. You're one
24:13
Speaker 3: of the great financial minds of your generation. You're on
24:17
Speaker 3: the cover of Businessweek with a one-word headline that said ruthless.
24:22
Speaker 3: So you're aggressive, you're smart, you're brilliant. And you want
24:26
Speaker 3: everybody to know you're aggressive, smart, and brilliant. How could
24:28
Speaker 3: you have paid Jeffrey Epstein $ 158 million for something you
24:33
Speaker 3: could have paid Paul Weiss $ 5 million for? So Leon
24:36
Speaker 3: and I spent a lot of time talking about that.
24:38
Speaker 3: And again, he has his answer. I, you know, I've
24:44
Speaker 3: been through the, as much as I could, given that,
24:48
Speaker 3: of course, these $ 3 million, 3 million files dropped in
24:52
Speaker 3: and around the time that my book was closed before,
24:55
Speaker 3: when locked before publishing. There were all these crazy ranting
25:01
Speaker 3: emails from Epstein to Leon, But Leon never replied to
25:06
Speaker 3: any of them. We talked about how this all could
25:12
Speaker 3: have happened and what Epstein did for him. Look, he
25:17
Speaker 3: was an autodidact, Jeffrey Epstein. He did not graduate college,
25:22
Speaker 3: but he was somebody who managed to either hoodwink or
25:26
Speaker 3: blackmail or something a lot of rich and powerful people.
25:32
Speaker 3: He obviously his behavior with women was reprehensible. Leon and
25:37
Speaker 3: I talked about this. You know, it's, I go into
25:42
Speaker 3: it in the book. It's complex. I could, I could
25:45
Speaker 3: try to explain it to you here, but, but basically
25:48
Speaker 3: what the 158 was a payments accumulated over, you know,
25:54
Speaker 3: six or seven years. So that's number one. Sure. The
25:57
Speaker 3: tax and estate advice that related to his, his grants,
26:01
Speaker 3: which are the trust that he set up for his children,
26:04
Speaker 3: he was facing, and this is in the Decker report,
26:07
Speaker 3: something like a $ 2 billion tax bill if it weren't resolved,
26:11
Speaker 3: because apparently, now I find this hard to believe, and
26:14
Speaker 3: I said this to him, that the person who did
26:16
Speaker 3: the original grants kind of messed them up, and he
26:19
Speaker 3: was facing a $ 2 billion tax bill. I said, I
26:21
Speaker 3: found that hard to believe, but okay. And that he
26:24
Speaker 3: had shown them to other typical Wall Street tax and
26:27
Speaker 3: advice attorneys, and None of them could figure out what
26:30
Speaker 3: to do to avoid this tax bill that was staring
26:33
Speaker 3: down Leon. And he decided at that point, well, what
26:37
Speaker 3: do I have to lose? I'll mention it to Jeffrey Epstein,
26:39
Speaker 3: who was on the board of his family foundation. OK,
26:43
Speaker 3: that's weird, number one. And why would he think that
26:47
Speaker 3: Jeffrey Epstein could come up with a solution that the
26:50
Speaker 3: high-priced Wall Street lawyers couldn't come up with? Well, I
26:53
Speaker 3: was curious about that. And he laid it all out
26:56
Speaker 3: and comes down to what I call this miracle consideration.
27:00
Speaker 3: And I'll try to put it in layman's terms, which
27:02
Speaker 3: is that for some reason, which I don't understand, Leon
27:06
Speaker 3: was paid extra dividends, hundreds of millions, like as much
27:10
Speaker 3: as 400 million of dividends on his Apollo stock that
27:14
Speaker 3: he was not really entitled to. And Epstein came up
27:16
Speaker 3: with a solution. Well, if we give up those dividends,
27:19
Speaker 3: if we give those back, then that'll be the consideration, i.e.
27:24
Speaker 3: what I call the miracle consideration, for how to redraft
27:27
Speaker 3: these grants to fix them to avoid the $ 2 billion
27:31
Speaker 3: tax liability. And I mean, as crazy as that sounds,
27:36
Speaker 3: that is exactly what happened. I've seen the redrafted documents.
27:40
Speaker 3: I've talked to his attorneys at his law firms that
27:44
Speaker 3: ratified what Epstein did. As crazy as that sounds, I mean,
27:48
Speaker 3: I was like sort of thinking to myself, Please, Leon,
27:50
Speaker 3: don't tell me something that actually makes sense and justifies this.
27:54
Speaker 3: Don't share with me documents that I can see that
27:57
Speaker 3: actually verify some of the things you're saying here. But
28:03
Speaker 3: he did, and I did, and it really hasn't been challenged.
28:07
Speaker 3: The IRS hasn't challenged it. I mean, Ron Wyden, Senator
28:11
Speaker 3: Ron Wyden talks about it and challenges it, but he
28:13
Speaker 3: hasn't really come up with the goods yet. So people
28:16
Speaker 3: are still looking at this, and people are still incredulous.
28:19
Speaker 3: as to some extent I am, but the 158 was
28:23
Speaker 3: more than just this one problem that he solved for
28:27
Speaker 3: Leon or supposedly solved or effectively solved because he hasn't
28:31
Speaker 3: been charged for that $ 2 billion. And so it was
28:34
Speaker 3: like sort of a M & A fee for saving
28:37
Speaker 3: him his $ 2 billion. And then he went on to
28:40
Speaker 3: weasel himself into all sorts of other businesses that Leon
28:46
Speaker 3: was involved with and and into his family office at Elysium.
28:50
Speaker 3: And this went on for a number of years and
28:52
Speaker 3: he expected to get paid, you know, every year that
28:54
Speaker 3: he was giving this advice to Leon about, you know,
28:57
Speaker 3: how to structure his purchase of a jet or his
29:01
Speaker 3: art collection, which is, you know, basically invaluable or his
29:04
Speaker 3: boat or his apartments or his homes and all to
29:08
Speaker 3: be done in a tax efficient manner. And again, There's
29:14
Speaker 3: a lot of emails about this from Epstein to Leon
29:18
Speaker 3: in the files, but there's really no response from Leon
29:22
Speaker 3: to any of this. And basically, Leon's view is he
29:26
Speaker 3: was a raving mad lunatic who was trying to squeeze
29:31
Speaker 3: me for as much money as he could to the
29:35
Speaker 3: point where I had to cut off the relationship, which
29:38
Speaker 3: he did. And And, you know, we all know Jeffrey
29:42
Speaker 3: Epstein is dead now, and it's very hard to verify
29:46
Speaker 3: the other side of this argument. And so that's what
29:49
Speaker 3: we're left with.
29:53
Speaker 2: The Epstein piece is a comparatively small portion of the book,
29:57
Speaker 2: which uses Leon Black both to track his biography, but
30:01
Speaker 2: also to track the way that private equity has changed
30:05
Speaker 2: over the years. And this is something we've been touching
30:08
Speaker 2: on some in the show as well, in particular, how
30:12
Speaker 2: large private credit is and some potential risks that could
30:16
Speaker 2: pose to the economy could put F5 up on the screen.
30:19
Speaker 2: I think things have stabilized somewhat, but the private credit
30:22
Speaker 2: market was under stress recently. This was a recent article
30:26
Speaker 2: that says they're marking down more loans. Can you explain
30:29
Speaker 2: for people who are total laymen, what is private credit?
30:34
Speaker 2: What is the role that it's filling in the economy?
30:37
Speaker 2: And what are some of the risks that people are
30:39
Speaker 2: concerned about here?
30:41
Speaker 3: Well, that's a great question. And thank you for asking that.
30:45
Speaker 3: You know, people like to talk about Jeffrey Epstein and
30:47
Speaker 3: Leon Black all day long, which I understand, but there's
30:51
Speaker 3: definitely more to this than that. And the bigger risk
30:54
Speaker 3: that exists is in this explosion of private credit. So
30:58
Speaker 3: Long story short, essentially after the 2008 financial crisis, the
31:02
Speaker 3: big Wall Street banks are now regulated by the Federal Reserve.
31:06
Speaker 3: And then with the passage of the Dodd-Frank law, basically
31:10
Speaker 3: there were serious restrictions on the kinds of loans they
31:14
Speaker 3: could make. at the big banks and how long they
31:17
Speaker 3: could hold them on their balance sheet. Basically, they went
31:21
Speaker 3: from being in the storage business where they could hold
31:23
Speaker 3: these loans on their balance sheets for maybe, in fact,
31:26
Speaker 3: the duration of the loan, which often would be five
31:30
Speaker 3: or seven or 10 years, into the moving business where
31:33
Speaker 3: they had to syndicate those loans and move them off
31:36
Speaker 3: their balance sheets because the Fed and Congress was worried
31:40
Speaker 3: that that the last financial crisis in 2008 was basically
31:45
Speaker 3: exacerbated by the big Wall Street banks and the crappy
31:49
Speaker 3: assets they had on their balance sheets. And they wanted
31:52
Speaker 3: to say, look, no more of that. So out they go.
31:56
Speaker 3: You can't hold those loans anymore. You can't really make
31:59
Speaker 3: as many of those loans as you did before. So
32:01
Speaker 3: that created a vacuum in the market, which firms like
32:05
Speaker 3: Apollo and Blackstone and KKR and a whole rash of
32:08
Speaker 3: other private credit providers stepped in to fill. So for
32:13
Speaker 3: many years, Apollo was just like a private equity firm.
32:18
Speaker 3: It had its own variation of that. But right now,
32:23
Speaker 3: it has a trillion dollars of assets under management, 150
32:27
Speaker 3: billion of which are private equity, and 850 billion, 850
32:31
Speaker 3: billion of the 1 trillion is now private credit. So
32:34
Speaker 3: what is that? Basically, it's just, so that was an explosion.
32:38
Speaker 3: And You know, now the private credit market is said
32:42
Speaker 3: to be $ 40 trillion if you include investment grade credit,
32:46
Speaker 3: $ 2 trillion if you include just focus on sort of
32:51
Speaker 3: riskier loans, junk bonds, and other kinds of mezzanine financing.
32:56
Speaker 3: But essentially what Apollo is now doing through the capital
33:01
Speaker 3: that's generated from its insurance business called Athene, which is
33:06
Speaker 3: an annuity provider, which an annuity is basically a long-term
33:11
Speaker 3: obligation that the insurer owes to people like you and
33:17
Speaker 3: me who want a fixed rate of return on essentially
33:24
Speaker 3: for their retirements. that they are taking that capital and
33:28
Speaker 3: investing it by and large, not completely, in the senior
33:32
Speaker 3: secured debt of companies that it's lending to. And that's
33:37
Speaker 3: become a very big business on Wall Street that most
33:40
Speaker 3: people don't, as you said, don't understand or recognize because
33:44
Speaker 3: it's grown up in the years after the 2008 financial
33:48
Speaker 3: crisis and intentionally because of the architecture of Wall Street
33:53
Speaker 3: that the Fed has imposed on the big Wall Street banks.
33:56
Speaker 3: So now Apollo and Blackstone and KKR are stepping into
34:00
Speaker 3: the void that was created in the aftermath of the
34:04
Speaker 3: 2008 financial crisis. And in many ways, these firms have
34:08
Speaker 3: created a sort of symbiotic relationship with the JP Morgan.
34:15
Speaker 3: of the world where the Wall Street banks have the
34:19
Speaker 3: relationship with the companies, get paid for that relationship, but
34:24
Speaker 3: then essentially hand off the asset, which is this loan,
34:28
Speaker 3: to Apollo, which then is happy to hold it and
34:32
Speaker 3: happy to syndicate it out to other investors. So it's
34:35
Speaker 3: this flywheel, as they like to say on Wall Street,
34:38
Speaker 3: an expression I cannot stand, that sort of makes the
34:42
Speaker 3: whole thing work. And the question is, have we created
34:46
Speaker 3: a whole new potential set of risks that we're not
34:51
Speaker 3: really prepared for and don't understand? And I think that's
34:54
Speaker 3: the open question. And that's what that article that you
34:57
Speaker 3: put up goes to, because what these firms have done
35:01
Speaker 3: and what the SEC and others and the Fed has
35:07
Speaker 3: been able to allow is for these syndicated loans, these
35:10
Speaker 3: private credit loans to be sold to individual investors through
35:17
Speaker 3: publicly traded vehicles called BDCs, business development corporations, that limit
35:23
Speaker 3: to 5% a quarter the amount of money that people
35:26
Speaker 3: can take out. When some of these loans started going bad,
35:30
Speaker 3: the retail investors were wondering, hey, I want my money out,
35:33
Speaker 3: but then next thing you knew, They found out that
35:36
Speaker 3: they could only get 5% of their money out at best.
35:38
Speaker 3: And so they started clamoring and going to the media
35:40
Speaker 3: and saying, hey, what happened here? I didn't read the
35:43
Speaker 3: fine print. How can I not get my money out? Well,
35:46
Speaker 3: that's what they've signed up for.
35:47
Speaker 1: Makes sense. Yeah.
35:49
Speaker 2: It's usually not a good sign, though, when you go
35:53
Speaker 2: to essentially a bank and, hey, can I have my
35:55
Speaker 2: money back?
35:55
Speaker 1: And they're like, whoa, not today. Doesn't work like that.
35:58
Speaker 1: How about later?
36:00
Speaker 3: That's right. But of course, there's no ATM at Apollo.
36:03
Speaker 2: Right.
36:05
Speaker 3: You can't go to ATM or Athene and get your
36:08
Speaker 3: money out. You can get it out. It's going to
36:10
Speaker 3: be a penalty. But you basically signed up for seven
36:14
Speaker 3: or 10 years. Not like with an ATM, you get
36:16
Speaker 3: your money out the instant you want it, which is
36:19
Speaker 3: what happened with Silicon Valley Bank. Why that went down
36:22
Speaker 3: the tubes a few years ago is because people took
36:24
Speaker 3: their money out instantly from the ATMs. And they had
36:29
Speaker 3: all these long-term assets. They couldn't liquidate fast enough except
36:32
Speaker 3: to the discount. So- We'll see if the same version
36:36
Speaker 3: of that has been created here. That's the big mystery.
36:38
Speaker 3: That's the new thing on Wall Street that's been created
36:41
Speaker 3: that I wanted to explore in the book that people
36:44
Speaker 3: don't really fully understand yet and hasn't been fully tested.
36:47
Speaker 1: Well, sir, we really appreciate you joining us. We encourage
36:49
Speaker 1: everybody to go read the book. Obviously, you're very thorough
36:53
Speaker 1: and you have a deep amount of knowledge here. Extraordinary
36:55
Speaker 1: access here to Leon Black and to kind of the
36:57
Speaker 1: history of how this all came to be. So we
36:59
Speaker 1: appreciate your time. Thank you for joining us.
37:02
Speaker 3: Thank you for having me. And I apologize about my
37:04
Speaker 3: camera angle. All good.
37:07
Speaker 1: We made it work.
37:07
Speaker 3: Okay. Great. Thank you. Thank you both for having me.
37:12
Speaker 1: Thank you guys so much for watching. We appreciate it.
37:14
Speaker 1: Great Wednesday show for everybody tomorrow. They'll see you then.