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The Australian government scrutinised an investment proposal over links to deceased sex offender Jeffrey Epstein, DFAT documents show. By Jeremy Nadel.

Australia screened US investment proposal over links to Epstein

Jeffrey Epstein.
Credit: Rick Friedman / Corbis via Getty Images

Documents obtained by The Saturday Paper under freedom of information laws show that in 2019 the Department of Foreign Affairs and Trade (DFAT) screened the American private equity firm Apollo Global Management for ties to convicted paedophile Jeffrey Epstein, in preparation for a “corporate proposal under consideration by the Australian Government”.

The details of the corporate proposal, along with the names of the public servants and several pages of the document, are redacted, making it unclear if the “corporate proposal” directly involved DFAT, or if DFAT was assisting the Foreign Investment Review Board (FIRB) to assess a conventional investment.

“When assessing applications, Treasury consults with relevant agencies, which may include DFAT,” a Treasury spokesperson said. “Treasury does not comment on the application of the foreign investment screening arrangements as they apply or could apply to particular cases.”

An Apollo spokesperson said, “We do not know what the redacted emails ... relate to”. DFAT did not provide a comment. It is not clear what determination DFAT made with regards to the corporate proposal.

The review documents relate specifically to Apollo’s then chief executive and chairman, Leon Black. In a redacted email from October 14, 2019, an executive officer of DFAT’s investment branch writes: “Mr Black has been in the US media recently in relation to his ties with Epstein, the wealthy investor accused of sex trafficking … note Black’s denials of the closeness of his ties to Epstein.”

Another email reads: “Epstein had committed serious crimes over a long period of time contemporaneously with his pursuit of ties to Black.”

The email chain’s attachments, sent from the Australian embassy in Washington, include the complete text of a Ronan Farrow story from The New Yorker detailing how Epstein directed $US5.5 million from Black to the MIT Media Lab. There is also an article by The New York Times on Epstein and Black’s shared ties to Environmental Solutions Worldwide, which both began after Epstein pleaded guilty to procurement of minors for prostitution to a Florida state court in 2008. The embassy points to “Mr Black’s efforts to distance himself from Mr Epstein”.

The Farrow story notes Microsoft founder Bill Gates also gave money to the MIT lab through his connection with Epstein. It quotes emails from the MIT Media Lab saying, “We can make it anonymous easily, unless Leon would like the credit. If Jeffrey tells you that Leon would like a little love from MIT, we can arrange that too…” The article says Black declined to comment. “A source close to him said that he did not intend for the donation to be anonymous. Black has downplayed his relationship with Epstein in recent months, describing it as limited and focused on tax strategy, estate planning, and philanthropic advice. He has declined to answer questions about business dealings with Epstein that suggest a closer relationship.”

Apollo is one of the world’s largest private equity firms. In December last year, it managed $US9.11 billion assets in Australia, including investments in real estate, infrastructure and retirement service companies.

While Black was still chair of the company, Apollo acquired IT multinational Tech Data and the infrastructure company Broadspectrum, through Ventia, a 50-50 partnership of CIMIC group and Apollo. Broadspectrum was previously known as Transfield Services and was prominent for its involvement in Australia’s offshore detention regime.

A spokesperson for Apollo said that “it does not seem possible” either the acquisition of Broadspectrum or Tech Data could be the redacted, corporate proposal in the DFAT documents. The intention to acquire Broadspectrum was announced in December 2019, and Tech Data in November 2019, and the emails are dated September and October 2019. The Foreign Investment Review Board delayed the acquisition of Tech Data without explanation.

FIRB makes decisions according to Australia’s Foreign Investment Policy and typically considers factors such as national security, competition, government policies, including tax, and the “character of the investor”.

Tania Voon, a professor of law at the University of Melbourne and former legal officer of the Appellate Body Secretariat of the World Trade Organization, said the treasurer and the review board had significant flexibility in assessing national interest. She said the policy was “broadly framed and provides guidance on those concepts” but was not defined in legislation.

“I suppose you could reasonably conclude that one reason DFAT might be sending these emails is in connection with assisting FIRB with a foreign investment application involving Apollo or related entities,” Voon said. “However, there might be other reasons. For example, I am not sure if DFAT gets involved with other proposals, for example under consideration by the ACCC.”

The Australian Competition and Consumer Commission approved Ventia’s acquisition of Broadspectrum on April 23, 2020.

“When the ACCC conducts a public merger review, it seeks views of a wide range of interested parties, which can include government departments and agencies where relevant,” an ACCC spokesperson said. “DFAT does not generally have a role of providing ‘advice’ to the ACCC in relation to merger reviews. The ACCC treats submissions and information that it receives in a merger review as confidential, so we do not comment on who has provided such submissions or information.”

Voon says the uncertainty about what DFAT reviewed is indicative of flaws in the system. “The difficulty you have had in obtaining this information reflects the transparency limitations in Australia’s foreign investment regime. Applicants themselves may also face difficulties in understanding concerns with their own applications, because of confidentiality and secrecy requirements of the Australian government.”

Black stepped down from his positions at Apollo in March this year. Two months earlier, the law firm Dechert LLP, which was hired by Apollo to independently investigate Black’s ties to Epstein, determined that Black paid Epstein $US158 million between 2012 and 2017. An Apollo press release said the payments, “were for bona fide tax, estate planning and other related services”.

Dechert said they found “no evidence that Epstein ever introduced Black, or offered to introduce Black, to any underage woman”.

Dechert said its investigation spanned two decades of Black’s life, and examined more than 60,000 documents belonging to Apollo, Black and Black’s family office and investment firm, Elysium Management, and interviewed more than 20 witnesses.

“Epstein and his entities did not invest in any Apollo-managed funds,” a securities filing that summarises Dechert’s findings reads. “However, in 2011, one of Epstein’s entities, Financial Trust Company, purchased 263,257 shares of Apollo’s stock in its initial public offering. Those shares appear to have later been transferred to a second Epstein entity, Southern Financial LLC, and appear to have been held through at least September 2019.”

The filing says Black “regularly visited Epstein’s townhouse in New York to either discuss business or to meet other prominent guests ... Black viewed Epstein as a confirmed bachelor with eclectic tastes, who often employed attractive women. However, Black did not believe that any of the women in Epstein’s employ were underage. Black has no recollection of ever seeing Epstein with an underage woman at any time.”

In a letter Black wrote to Apollo investors at the conclusion of Dechert’s investigation, he said: “I deeply regret having had any involvement with Mr Epstein.”

In September this year a woman identified only as “Jane Doe” accused Black of raping her in Epstein’s Manhattan townhouse. She alleged that in 2002 Epstein arranged for her to give Black a $US300 massage, but that Black assaulted her soon after they entered the massage room. A spokesperson for Black said the claim “is complete fiction”.

The allegation is included in documents filed in the New York Supreme Court by Guzel Ganieva, a former model with whom Black admitted to having a “consensual affair”. Ganieva filed to sue Black for defamation in June after he denied her tweets alleging that he “sexually harassed and abused” her. Ganieva alleged that Black arranged for her to have sex with Epstein in October 2008 and flew her to Epstein’s Palm Beach mansion where Epstein is accused of raping and trafficking dozens of women.

Ganieva’s suit also alleges that when she asked Black how Epstein made his money he told her: “He takes care of the little girls.”

The Manhattan District Attorney is reportedly investigating the allegations and has met with both women. Black is suing Ganieva for defamation and racketeering, claiming her suit is part of a broader attempt to extort money from him.

Given the heavy redaction of the DFAT review documents, it is possible the public will never know what proposal Black was considering in Australia.

This article was first published in the print edition of The Saturday Paper on Nov 20, 2021 as "Epstein review".

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Jeremy Nadel is a freelance reporter based in Melbourne.