July 2, 2022

Leon Black, Jeffrey Epstein, and Big Law’s Big Hypocrites

Photo-Illustration: Intelligencer; Photo: Rebecca Smeyne/The New York​ Times/REDUX

It’s been a rough couple of years for Leon Black. The founder and former CEO of private-equity powerhouse Apollo Global lost his job over his close friendship with Jeffrey Epstein, after it was revealed he paid the late sexual predator $158 million over the years for what was described in a report commissioned by Apollo as a “variety of issues related to trust and estate planning, tax, philanthropy, and the operation of” Black’s family office. Black denied knowing about any wrongdoing on Epstein’s part — according to the report, he viewed Epstein “as a confirmed bachelor with eclectic tastes” and believed that Epstein “had served his time” for a 2008 conviction for soliciting a minor for prostitution.

Things managed to get considerably worse for Black, however, when a Russian former model named Guzel Ganieva publicly alleged that she had been “sexually harassed and abused by him for years,” a claim that eventually spurred a series of increasingly convoluted legal machinations. Black denied the charge, telling Bloomberg News that he “foolishly had a consensual affair” with Ganieva and that he had “been extorted” by her for years. Ganieva then sued Black for defamation in New York state court, alleging that Black had in fact raped her, that there is “a violent, sadistic side to Black that he has shielded from public view for decades,” and that Black had trafficked her, “without her consent, to satisfy the sex needs of Epstein.” Ganieva’s lawyers later claimed to have additional evidence from a second woman, who alleges that Black raped her in Epstein’s home in New York in 2002.

Black then sued Ganieva in federal court, along with the law firm representing her, PR flack Steven Rubenstein (son of Howard), and Apollo co-founder Josh Harris. Black claimed that the group “orchestrated a conspiracy” in order to take him down “first as an attempted coup” so that Harris could become the CEO of Apollo and then, after Black “denied him that role,” to retaliate by, among other things, “weaponizing Ms. Ganieva to assassinate his character and extort” him for $100 million. (He did agree to pay her $100,000 every month for 15 years, in addition to forgiving about $1 million in prior loans, and agreeing to provide £2 million to help her obtain lawful immigration status in the United Kingdom for her and her child.)

Throughout all this, Black seemed to be working with boutique legal practitioners, such as attorney Susan Estrich (who defended Roger Ailes against charges of sexual harassment), despite losing access to the well-paid legal assistance of the large New York law firms that he grew accustomed to while working at Apollo. There was talk among some members of the white-collar bar and the financial press about whether this was actually true — and about who may have been involved in some of the behind-the-scenes maneuvering on Black’s behalf — but those rumblings went unreported in the media last year.

That changed in mid-February, when the Financial Times reported that Brad Karp — the chairman of Paul, Weiss, Rifkind & Garrison and a self-styled progressive leader in the decidedly business-friendly world of large law firms — had personally called then-Manhattan District Attorney Cy Vance on Black’s behalf last April in order to lobby the office to open a criminal investigation into Ganieva’s alleged extortion effort.

According to the FT, Vance “instructed his prosecutors to look into the matter,” and Paul, Weiss lawyers “told prosecutors they were in possession of evidence that would show Ganieva demanding millions of dollars in exchange for keeping silent about her affair with Black” — including “text messages, signed contracts, and secret tape recordings.” Vance’s prosecutors appear to have taken Karp and his colleagues aback by asking them to produce this material instead of simply taking Karp’s word that a crime had occurred based on undisclosed evidence, so Vance’s team “did not hear back for several months.” The considerable delay — which might suggest that the evidence was less than compelling — is not explained in the article, but the firm “eventually provided some documents in October,” roughly half a year after Karp’s initial call.

The FT’s story dryly described Karp’s lobbying of Vance on Black’s behalf as “an unusual assignment” for the firm and noted that Karp is “active in Democratic politics and a prominent representative of the New York business community.” The reporters also coyly noted that Paul, Weiss “has mostly operated behind-the-scenes on behalf of Black” and “has not signed any court documents related to the case” — perhaps implying what I have heard some people in white-collar circles speculate in private, which is that Paul, Weiss lawyers may have consulted on or ghostwritten some or all of the court papers filed under Estrich’s name. According to the FT, Karp had personally recruited Estrich to represent Black. Serving as shadow counsel for Black might allow him to return one of many favors that the firm, which for years has relied heavily on work from Apollo, owed the man while avoiding the taint of publicly associating with a very aggressive legal effort to push back against Ganieva — particularly at a time when some people, including many young lawyers, would regard that work as an unseemly project that could deter victims of sexual assault from coming forward.

Now is a good time to mention, as I have elsewhere, that I used to work at Paul, Weiss before working at the Justice Department, and I did some work on behalf of Apollo and one of its portfolio companies. There are some very good lawyers who work at Paul, Weiss, and I still consider some of them good friends, but the nicest thing I can publicly say about the firm as an organization is that a front-page New York Times exposé several years ago about racism at the firm actually managed to undersell the problem, which I experienced firsthand. The place is for the most part run by a collection of old white men, and some of them seem to have inferiority complexes that they work out through the treatment of their non-white colleagues and by occasionally demeaning women (who are pretty much all white at the upper echelon of the firm) behind their backs. Apparently spurred by the negative publicity from the Times, the firm has since brought in a number of prominent non-white lawyers who made their careers elsewhere, presumably paying them very handsomely for their services. The problem of racial discrimination in the legal sector is far from unique in the world of large law firms, but it is decidedly at odds with Paul, Weiss’s presentation of itself as a liberal leader in the sector — in much the same way that Karp and the firm’s effort to imprison Ganieva is.

This is not the first time that Karp and the firm’s public posturing have been in tension with the firm’s paid work and its actual internal culture — whether that is litigating a case that would get a criminal defendant killed, zealously representing fossil-fuel companies, behaving so poorly while representing one of those fossil-fuel companies that you get sanctioned by a judge, hiring lawyers who tried to ruin the life of one of the Theranos whistleblowers and fought anti-discrimination protections in the housing industry, or threatening journalists who report on the ethical lapses of the firm’s lawyers. (Fun side note: The story about Karp’s call to Vance was written by one of the journalists he had previously and unsuccessfully attempted to intimidate.)

Paul, Weiss likes to tout its pro bono work — and does a good amount of it by the standards of the profession, including, most famously, Roberta Kaplan’s successful litigation of the case that effectively legalized gay marriage before she left the firm in 2017 — but in private, Karp has been known to complain about the financial cost of these sorts of efforts while they were ongoing and their success was in doubt. Karp has also spoken publicly in support of the Me Too movement, but suffice to say that if some of the conduct that is widely discussed within the firm — concerning both him and other senior lawyers — is true, then his standing on the matter is very questionable.

The façade has a significant and underappreciated business rationale, driven by the growth of the tech sector and large law firms’ desire (including at Paul, Weiss) to market themselves as aligned with the stated values of people who control the legal budgets at places like Google, Apple, Facebook, Microsoft, Twitter, and other, less buzzy but highly profitable tech companies. Every large firm wants that business for the long run, which is why many have recently opened offices in and around Silicon Valley.
Being visibly, socially high-minded — or at least pretending to be — is key to that business plan. Working the Manhattan district attorney on behalf of a creepy billionaire is not.

The story about Karp’s work on behalf of Black may be most interesting, however, not because it is somehow unique, but because it is a very striking example of the morally and civically precarious position of the elite legal profession at a time when public norms and expectations have been shifting. It has become more common for people, young lawyers included, to ask how private-sector lawyers and other professionals can reconcile their nominal commitment to socially liberal values with the work that they choose to do for rich and powerful people and for large corporations in order to make a bunch of money. Speaking from experience, it is not a question that you are able to give much thought to while working at a large firm — in part because you do not have much time to do so, in part because very few people actually have the power (like Karp) to decide which clients and projects a large law firm takes on and to actually say no when they want to, and in part because you have strong economic and psychological incentives to avoid the issue, which is easy to do by discounting the views of people in the public and in the press as ill-informed or unsophisticated.

Many people were shocked, for instance, when Neal Katyal — a one-time acting solicitor general in the Obama administration who became relatively famous by telling MSNBC viewers that Donald Trump is about to go to prison — tried to gut a law that allows foreigners to file legal claims in U.S. courts under certain circumstances when they have been egregiously harmed in another country. Katyal was defending Nestlé against a case filed on behalf of people who claimed that they had been enslaved as children and forced to work on cocoa plantations in Ivory Coast. (He won, but not on the most aggressive theory that he had advanced.) David Boies, a once-revered Democratic lawyer, was publicly vilified for his work on behalf of Harvey Weinstein and Elizabeth Holmes, which involved tactics that, while extremely sharp-elbowed, are actually (and unfortunately) not that unusual among lawyers representing high-profile corporate figures. His law firm has been slowly shrinking ever since, with seemingly anyone with a decent book of business leaving for another firm.

Occasionally the public outrage appears either misplaced or oddly selective. Kaplan herself (with whom I am friendly) came under close scrutiny last year after aspects of her work representing one of Andrew Cuomo’s aides in the sexual-harassment investigation that led to his resignation became public. The uproar eventually led her to resign from Time’s Up and contributed to major upheaval at the organization. (So far as I can tell, and I am admittedly biased, the criticism was disproportionate at best.) Meanwhile, one of the lawyers defending Black in the state case filed by Ganieva is the semi-prominent lawyer and legal pundit Danya Perry. There is no reason to believe that she has done anything wrong as a strictly ethical matter, but she has apparently managed to avoid any public blowback for defending a billionaire accused rapist — work that might not sit well with some of the people who have read glowing coverage of her in the New Yorker or who have consumed her work as a member in good standing of the anti-Trump legal commentary set.

Of course, it is possible that Ganieva committed a crime by attempting to extort Black. That is the last line of defense for lawyers in situations like this — their client actually deserves the thing that he or she wants, however unseemly it may appear. It is often unconvincing, since superrich people always manage to find someone to represent them and that someone does not need to be you, and because the facts and legal issues tend to be thornier than they let on.

In fact in Ganieva’s case, I suspect that most everyone who has been working on Black’s behalf — Karp and others at Paul, Weiss whose names have not made it into the press, along with Estrich, Perry, and anyone else who may be quietly representing the man — understands that the extortion claim may not be airtight, since the line between “extortion” and a legitimate settlement demand can be very thin as a practical matter. If Ganieva had presented a request for $100 million to Black as the price of her forgoing some sort of legal action, that would not have been particularly unusual in this day and age except for the very large amount of money at issue (but of course, Black is unusually wealthy). Indeed, there is a passage in Black’s lawsuit that first describes Ganieva’s lawsuit against him as “economically irrational and inexplicable” — she still had nine years left on their hush-money arrangement, representing more than $10 million in guaranteed future income — and then observes that she went public “without even making a settlement demand first.” His lawyer(s) appear to have thought that this was clever, but it also underscores how routine — and how legitimate — it is for a claim of sexual misconduct to be resolved through an out-of-court financial resolution.

Needless to say, I do not know who between Ganieva and Black is telling the truth, but the possibility that Ganieva’s account may be at least partially true appears to have prompted yet another unusual turn of events. Sometime around October — when Karp and Paul, Weiss finally got around to producing the supposed evidence of Ganieva’s extortion effort half a year after they had been asked — prosecutors in Vance’s office reportedly began examining Ganieva’s allegations against Black. The timing suggests the possibility that Karp’s overture to Vance, as well as Paul, Weiss’s belated disclosure of information to the office, actually resulted in the office opening an investigation into all of the conduct at issue, not just Black’s claims against Ganieva but Ganieva’s claims against Black as well.

If that is what happened, that would have been a perfectly reasonable response by Vance’s office to the competing claims between the two, but it also would have underscored the questionable nature of Karp’s overture to Vance in the first place. By the usual standards of competent legal representation, and for reasons too obvious to state, it is not good for a lawyer to make his own client the possible target of a criminal investigation, particularly when there are separate but serious, lingering questions about why your client gave a ton of money to a truly evil human being — questions that could, in turn, implicate various criminal laws, including laws that prohibit misleading the investors of a publicly traded company through the dissemination of public misrepresentations that could affect its share price.
Maybe Black really has nothing to worry about. But it would be nice if, while the Manhattan DA’s office is at it, they could try to get to the bottom of that one too.