Epstein’s Scheme

The Wall Street Journal reported this week that the late pedophile Jeffrey Epstein may have suggested to Bill Gates that he would expose an extramarital relationship if he didn’t reimburse him for a particular expense or perhaps some other provocation. Because I like trying to figure out the mechanics of what’s going on with crises I’m not involved with, the article prompted me to think about something I’ve been stewing over since Epstein’s 2019 death: What exactly was his business model? How did this nobody from nowhere — as most of us are — get the investment accounts of some of the great titans of industry and become so wealthy?

My first speculation was that perhaps Epstein hadn’t been that rich and that his opulence was a Gatsby-esque fraud. An investigative reporter close to the matter told me I was wrong and that Epstein was worth in excess of a half-billion dollars. I believe him. It’s possible, of course, to start with nothing and get that rich, but it’s improbable. At the very least, such successful people usually have an outstanding education. Epstein did not.

A few other people in Epstein’s broader orbit told me he was an excellent investor and, most of all, “very charming.” There are lots of good investors, I thought, and plenty of charming operators, so why him? What was his unique offering?

I am not a big money player, but if I came into a fortune, I can’t imagine Epstein would be the guy I chose to invest it. I’d go to a college friend with an MBA who would connect me with investors with a more discernable history and pedigree. Yet multibillionaires and famous men chose him.

Here’s my theory: Epstein’s business model may have comprised procurement (of women) and soft blackmail. Under this construct, a titan would go to his townhouse. He’d have an assignation with someone he met there. A few weeks later, Epstein would call the titan and ask for an introduction to a potential client, perhaps a hedge fund. The titan would think, “Damn, Epstein knows what I’ve been doing in his townhouse because he arranged for the, er, happenstance. I don’t need any trouble. I’ll make the introduction and maybe give him some of my accounts to manage.”

This pattern goes on for years, decades. It snowballs. Epstein gets rich. And here’s the thing: contrary to overwrought conspiracy theories, he wouldn’t have to keep videotapes of trysts. In fact, something so ham-fisted could backfire. Being sensitive to what Epstein knew — and what he could do with it — would be enough for titans to lose sleep, throw him business, come to his parties, and make introductions. Epstein would never have to utter a single threat (he was too smooth for that). He just had to keep procuring and incrementally asking for more.

Deftness has more power than a sledgehammer. Bernie Madoff used this approach, too. He never held a gun to anyone’s head. He just softly appeared to reject new clients. Feeling inadequate, they upped their investment allotment so Madoff would accept them into his rarified world. By taking investors’ money, he made them players and insiders.

The Journal article validates that my concept of Epstein’s scheme is plausible. Gates claims never to have given Epstein a penny, which is likely accurate. Gates’s very appearance in Epstein’s orbit may have been enough to satisfy the schemer. After all, here we are years later, talking about Gates and Epstein in the same breath, which is what Epstein would have wanted — even if it misrepresents the two men’s relationship.

While we’re on conspiracies, let me throw cold water on one. I think Epstein killed himself. I’ve worked with people who have gone from Mount Olympus to the gutter. Guess what? They’re often suicidal. It’s possible for monsters to be depressed, as Epstein surely was.

Furthermore, just because motivated parties may have wanted him dead doesn’t mean they would have taken the risk to murder him. Big shots make calculations like that. Do you know how many things could have gone wrong with such an operation? It’s not like show business where Breaking Bad’s Mike Ehrmantraut slips into a hospital, injects the bad guy with a fatal poison, and sneaks out without a single witness or camera seeing anything. Plus, he and everybody in his chain remain quiet forever. It would be much cheaper and less risky to throw lawyers and flacks at it.

If anything amazes me after four decades in this business, it is how people conflate the human capacity for terrible behavior with a superhuman ability for magic. If you think conspiracies are so easy, try to pull one off. The beauty of Epstein’s likely modus operandi is that it required no magic: Just a good handle on the nature of men, financial prospecting and some social skills.