Teachers unions push for investigation into Apollo's Epstein ties
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Two teachers unions this morning sent a letter to the U.S. Securities & Exchange Commission, requesting that it investigate what they believe were "misleading" statements made by Apollo Global Management to its investors, regarding the firm's relationship to Jeffrey Epstein.
Why it matters: Apollo hasn't put this to bed, five years after severing ties with firm founder and former Epstein pal Leon Black.
Driving the news: The Justice Department's most recent Epstein document dump shows that current Apollo CEO Marc Rowan had at least five scheduled meetings with Epstein, including once at Apollo's offices, and also that Epstein was at least informally advising on a potential tax inversion whereby Apollo would have redomiciled outside the U.S.
- The Financial Times first detailed the connections earlier this month, many of which are included in the unions' letter.
- Axios also discovered a 2013 request from Apollo's then-president for Epstein to meet with Apollo's executive committee, although Epstein declined.
Zoom in: It's not surprising that one of New York's largest alternative asset firms had dealings with Epstein, except that Apollo insisted in 2021 that the relationship began and ended with Black and his personal interests.
- It even hired law firm Dechert to conduct an investigation that reviewed over 60,000 documents.
- Dechert concluded that Black "did try to introduce Epstein to his co-founders [Rowan and Josh Harris] .... [N]o Apollo employee other than Black ever seriously considered hiring Epstein."
- The new documents, however, show that Black didn't just try to introduce Epstein. He introduced them, and Rowan agreed to take meetings without Black present. Including at least one that included a potential counterparty for Apollo.
Zoom out: No public documents accuse Apollo or its executives of having any awareness of, or involvement in, Epstein's sex trafficking activities.
- Instead, they raise questions about Apollo and Dechert's candor, or the quality of the investigation.
An Apollo spokesman tells Axios: "Neither Marc Rowan nor anyone else at Apollo (excluding Leon Black) had either a business or personal relationship with Jeffrey Epstein, as was confirmed by an independent, transparent and thorough investigation in 2021. There is nothing new here ... In select instances, Mr. Rowan provided information to Mr. Epstein in connection with his tax work for Mr. Black. While Mr. Epstein sought to do work with the Apollo co-founders other than Mr. Black, it was declined at every turn."
- Dechert did not return a request for comment.
Behind the scenes: The American Federation of Teachers (AFT) and the American Association of University Professors (AAUP) have some financial interests in Apollo, via underlying pension fund investments and members working at Apollo-owned portfolio companies.
- The unions' greater interest might be in drawing scrutiny to Rowan, who helped design President Trump's controversial "compact" with research universities, in exchange for continued federal funding. The unions argue in their letter to the SEC that the compact was "an oath of loyalty to the current administration."
The bottom line: Apollo's stock has more than doubled since Black left, and the firm has added hundreds of billions of dollars in AUM.
- A subsidiary of one of its portfolio companies has lost some business this month due to the scandal, but it's barely a blip on Apollo's balance sheet.
