The ‘Epstein scandal’ has understandably and rightly led to a focus on the sexual abuse of young women. But there is more to say about this – if I might deploy a technical term once more – ‘greedy bastard’. There will be more information leaked later I’m sure, but we already have some to be getting on with. After all, his ‘empire’ once included the largest residential property in Manhattan, two islands and three planes!
He was the grandson of Jewish immigrants and was raised in Brooklyn, New York. He graduated from high school early, excelling in maths, and briefly attended Cooper Union and New York University He failed to graduate from though and become an unqualified teacher at a private school at Dalton in New York. The children of many of New York’s elite attended this school. Epstein’s employment was terminated however, allegedly because of his lack of skills. He was then given a job at the investment banking giant Bear Sterns. His beneficiary was Alan Greenberg, who had children at the school and was soon to become CEO of Bear Sterns. Epstein made progress at Bear Sterns but left in 1981 due to a ‘trading violation’ (for which he was fined $2,500, worth nearly $9,000/£6,597 today). From this time on he became ‘a money manager for millionaires’, most notably Lex Wexner, CEO of Victoria’s Secret, and Leon Black, chair of the private equity firm Apollo Global Management Chairman (CBS). Epstein offered investment advice, estate and tax planning services to these millionaire clients. Wexner and Black supplied upwards of 75% of Epstein’s fee income between 1999 and 2018. Wexner paid J Epstein & Company $200 million until they parted ways in 2007; and Leon Black, it is estimated, parted with $170 million from 2012 to 2017. In total, Forbes has estimated that Epstein pocketed at least $360 million in dividends from his companies between 1999 and 2018, while saving himself $300 million in taxes due to the US Virgin islands jurisdiction.
JP Morgan Chase also loaned him money and regularly allowed him to withdraw large sums of cash from 1998 to 2013’. Epstein defined himself as ‘an experienced and successful financier and businessman’, an ‘entrepreneur who has built several highly profitable companies’, and ‘one of the pioneers of derivative and option-based investing’ (Forbes). In short, (i) Epstein was able to accumulate his very considerable wealth tax-free courtesy of the tax haven in the US Virgin islands (where he became a resident in 1996); and (ii) he was a significant player in what has been described as ‘casino capitalism’.
Epstein lost money too, not least in the Great Crash in 2008, but hardly to the point of hardship! It has been suggested that he also gained monies by blackmailing wealthy individuals, potentially through covert filming of sexual activities at his properties. The New York Times reported that JP Morgan, the US investment bank that retained Epstein as a client between 1998 and 2013, eventually flagged more than $1 billion of suspicious transactions linked to Epstein after his demise. He was to the end, James Sillars of Sky News reports, ‘a master of manipulation’ from the off and to the end. I have drawn heavily on Sillars’ column here.
It has been suggested that immediately prior to his alleged ‘suicide’ in 2019, his estate was worth something like $580 million (£475 million at that time) before payment of taxes and liabilities. He owned a palatial townhouse on the Upper East Side of Manhattan worth more than $50 million; a mansion in Palm Beach, Florida, worth about $12 million, a ranch in New Mexico valued at more than $17 million, and an apartment in Paris worth an estimates $8.6 million. His two private Caribbean Islands – Great St James and Little St James were valued together at $86 million following his death. His ‘1953 Trust Fund’ hid the identities of his beneficiaries. However, the US Department of Justice recently showed – there were some redactions – more than forty people were set to inherit millions of dollars each. The beneficiaries included Ghislaine Maxwell ($10 million).
As should be clear, the point of this short blog is not to rehearse once more the extent of Epstein’s appalling and sustained abuse of girls and young women, but rather to draw attention to his ill-gotten wealth and the state of contemporary rentier or asset-management capitalism that facilitated its accumulation. I will not go into the nature and properties of rentier capitalism, which I have addressed often elsewhere; but it has to be said, putting clandestine and illegal operations aside for the time being, that much of Epstein’s wealth was obtained legally, which should give us extra pause for reflection. Epstein played a system that was there – and designed – to be played.
Epstein’s schemes included, it is now being claimed, spying for the state of Israel and funding Zionist expansionism into Gaza and through the West Bank settlements. His wealth and multiple powerful – financial and sexual – contacts gave him plenty of opportunities, in other words, to extend his manipulative (and blackmailing) capacities into the worlds of national and global politics. He displayed what sociologist C Wright Mills called the ‘higher immorality’ that so often characterises the wealthy and privileged. But much of his capital accumulation occurred while the US and other governments (including the UK, which sponsors several of the world’s tax havens), ‘looked the other way’.
A key point here is that Epstein’s obscene wealth visited a sense of immunity on him: like other billionaires and millionaires he felt he was untouchable, even when trafficking and abusing young girls on an industrial scale. Moreover he actually was untouchable for far too many years. When he was eventually exposed, it is important to note that members of the economic and political elite turned on him. In a forthcoming book I have coined the term ‘sacrificial stigma’ to suggest that it can be functional for elites to occasionally turn on one of their own – to sacrifice them – to try to indicate that the problem is ‘a few bad apples’ rather than the system that delivers them. Another example is ex-Prince Andrew.
One of Epstein’s close friends, Peter Mandelson, notoriously expressed a tolerance of, and even sympathy for, the accumulation of untold ‘filthy’ riches; and he was a member of the Labour Party, even if it was of Blair’s neo-Thatcherite, neoliberal and warmongering ‘New Labour’. Mandelson was the fixer, regarded as indispensable to a succession of Labour leaders from Blair to Starmer (but excluding Corbyn). He is worthy of a ‘greedy bastards’ blog in his own right. I can feel it coming on.