Why is Leon Black still on the MoMA Board?

I guess any billionaire will do.

Dec 19, 2023

A couple of months back, I went through the online list of the Board of Trustees of the Museum of Modern Art in New York and detailed who was on it. There are a lot of billionaires, and one of them is Leon Black–friend of Jeffery Epstein and former CEO of Apollo Global Management. At one time Black was the chair of the MoMA board, but when the scale of his relationship with Epstein became clear, he voluntarily decided not to run for another chair term. Who exactly is this guy, and why is he still serving on the board of one of the most influential museums in America? (The answer is $.)

Leon Black, the former CEO of Apollo Global Management, has denied multiple allegations of rape in connection with Jeffrey Epstein's alleged sex-trafficking ring. Pictured here in 2015. — Leon Black. Image from https://www.cnn.com/2023/07/27/business/leon-black-epstein-rape-allegation/index.html

Leon Black was born in 1951 to businessman Eli M. Black and artist Shirley Lubell. In 1975, when Leon was a 24-year-old MBA student at Harvard, his father broke a window on the 44th floor of the Pan Am Building with his briefcase and jumped to his death. He did not leave a note, but it was later revealed that his company, United Brands, paid a $1,250,000 bribe to the Honduran president to receive tax breaks on banana exports. (The banana industry is super corrupt, FYI, and there is a ton of good writing on it if you are curious.) I can’t find much on his wife Shirley, which is typical for this era, but this must have been deeply horrifying for her and her family.

By 1977, Black had started working for the investment bank Drexel Burnham Lambert, where he met and became the “right-hand man”^[1] of one of their most powerful employees, Michael Milken, aka ‘The Junk Bond King.’ Junk bonds are really called high-yield bonds, and you can make more money from them because the chances of the issuer defaulting are higher. More risk = more reward. (A stock is when you buy shares in a company. A bond is when the company borrows money from you; they have to pay you back with interest, and sometimes they don’t.) According to Miriam Gottfried in the Wall Street Journal,

“Milken was once one of the most highly compensated people on Wall Street, collecting more than $1 billion from Drexel between 1983 and 1987, including more than $550 million in 1987 alone. Indicted as part of a sweeping insider-trading investigation, he pleaded guilty in 1990 to charges that included cheating Drexel clients by reporting false prices for securities they had sold, and helping a client evade taxes by creating false losses. He was fined $200 million and paid an additional $400 million in civil settlements and spent 22 months in a federal prison in Northern California.”^[2]

Milken is currently worth around 10 billion dollars and was pardoned by President Trump in 2020. And they say crime doesn’t pay! In his defense, Milken has donated a bazillion dollars to charity and has worked hard to rehabilitate his image. It is not for me to say he is a bad dude based on past financial misbehavior, but I will note that I am almost always skeptical of the moral certainty of billionaires.

Out of the ashes of Drexel, Leon Black and a few other employees created Apollo Global Management. Apollo is a private equity firm which means they buy companies (or parts of companies), preferably at reduced prices, and then make money by taking them public and selling shares (an IPO) or selling the company (or parts of the company) once the price has gone up. The worst way for a private equity firm to make a profit is to extract as much cash as they can and then get a loan on the assets that remain. At this point, it can become difficult for the company to pay back those loans and they go out of business.^[3] (This is what happened to Toy R Us–not an Apollo company.) I’ll be honest with you, as much as I love business stuff, even I got bored going through the list of companies Apollo has bought and sold. Let’s just note that they own part of Great Wolf Resorts and Albertsons, and they used to own Chuck E. Cheese.

undefined — Black owns this bust by Picasso. The dude loves art. Picture by Lucy Hogg - https://news.artnet.com/art-world/picassos-100m-bust-gem-junk-413189

Ok. So Leon Black helps start Apollo, becomes its CEO, and makes a bazillion dollars. Or 8 billion. Or 12 billion. Whatever. The difference between a bazillion and a billion is pretty thin. He LOVES art and joined the board of the Museum of Modern Art in New York in 1997 and eventually became its chair in 2018. He even bought art book publisher Phaidon Press in 2012. In 2020, his relationship with Jeffrey Epstein became public, and things started to look less great for Black. He and Epstein had been friends for over a decade before Epstein was convicted of soliciting a minor for prostitution; he had even been on the board of Black’s family foundation. While a lot of people dropped Epstein after his conviction, a lot of other people didn’t, including Black. Between 2012 and 2017, Epstein received $158 million from Black and it wasn’t until he was arrested again in 2019 for sex trafficking minors that this relationship became a problem. Black asked Apollo to run an investigation, and no improprieties were found, buuut $158 million is a lot of money, and other things were going on at the same time that made it hard for Black to fulfill his responsibilities at Apollo and MoMA.

So what exactly was Black paying for? He says it was for tax and estate planning advice. The Senate Committee on Finance had some questions about that according to Kevin T. Dugan in New York Magazine,

“‘Despite not being a certified public accountant or licensed tax attorney, Epstein was paid amounts that far exceeded what you paid other professional advisors, including some of the most high-priced legal counsel in the nation,’ wrote the committee’s chair, Senator Ron Wyden. The details are bizarre: Not only did Epstein give relatively standard advice on tax avoidance, but he apparently took credit for the ideas of other people who actually worked for Black. Much of his advice had to be vetted by Black’s own tax and legal teams — people who actually did this stuff for a living — and a portion of it was rejected for being wrong.”^[4]

Who knows what he actually paid for? But it looks kind of fishy. You know what else looks fishy? The fact he paid the U.S. Virgin Islands $62.5 million “...to be released from any potential claims arising out of the territory’s three-year investigation into the sex trafficking operation of the disgraced financier Jeffrey Epstein…” per Mathew Goldstein in the New York Times.^[5] That’s a lot of money to fork out if you haven’t done anything hinky. Then there are the three rape claims. One made by Guzel Ganieva, a former girlfriend of Black’s (he’s a cheater) was dismissed in court because she signed an NDA in 2015 and received $9.5 million. A second accusation was made by Cheri Pierson, who claims he raped her in the massage room at Jeffery Epstein’s house, and the third was made recently by a Jane Doe who is autistic and has mosaic Down’s syndrome. Black denies these charges, and since all three women are represented by the same company, Wigdor LLP, he has accused the law firm of having a vendetta against him. He’s sued to get the cases thrown out of court but to no avail in the latter two.

Black also owns this version of *The Scream* by Edvard Munch. Image from Wikimedia Commons.

So why is this dude still on the board of MoMA? Well, first of all, he hasn’t been found guilty in a court of law. Maybe he is just the dumbest dude in the world, has the worst taste in friends, and is willing to spend way too much money on things like tax advice from creepy dudes. And even though all those accusations might cast a shadow on MoMA, he’s helped them get a dozen or so pieces for their collection and donated $40 million for a film center. If they kick his ass off the board, he’s probably not going to be so generous in the future. Steve Cohen is still on the board, and he has been convicted of a crime–but “just” for financial stuff, so no biggie. I emailed MoMA to make sure the website where Black is listed on the board is up-to-date, but they did not write back. Maybe you should email them (information@moma.org) and ask too. It is within the realm of possibility that Black hasn’t done anything wrong. It’s also within the realm of possibility that his billions give him immunity from any real consequences if he has. MoMA and other museums have made a calculated bargain; they will accept ill-gotten gains to fulfill their mission of providing art access to the public. But maybe they should ask themselves if it’s worth it. Is the kind of art that costs so much that museums need to get in bed with creepers the only art that is culturally relevant? I dunno. I don’t think so.

Okay. Enough ranting for today. I’ll be back next time with a look at the new Jeff Koons documentary and how he relates to the media.

The PNW Conceptual Art Center (a conceptual art project)

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