The Other Epstein Issue

Jeffrey Epstein Associated Press
Start your day with TPM.
Sign up for the Morning Memo newsletter

We know the outlines of charges that Jeffrey Epstein for years had procurers recruiting underaged girls for sex. We know the suspicions that various wealthy and powerful men in his vast social circle may have been part of this organized system of statutory rape. But there’s another part of this emerging story I want to focus your attention on – one which is distinct but may not at all be separate.

No one seems to have a clear idea of where Jeffrey Epstein’s money comes from.

The public story, such as it is, is that Epstein is some kind of hedge fund manager or he manages capital for people whose wealth is measured in the billions. But it’s not clear that that is really true. Hedge funds are notoriously opaque. When you operate at that scale there are next to no disclosure requirements, only qualified investors can participate, and if you’re really doing business with billionaires only that is a tiny, tiny community of people. He’s supposedly one of those college dropout math geniuses who sees the trading and metrics patterns no one else can and uses that skill to make millions and billions for his investors and later himself. (Epstein’s first job after dropping out of college was being hired to teach math at New York’s elite Dalton School – bizarrely, hired by Bill Barr’s dad, the then-headmaster.) But while there may not be much SEC disclosure, if you operate with that amount of capital it’s hard not to leave some footprint, which will likely be visible to others who play in those spaces. To be more concrete, if you’re making an investment move with hundreds of millions or even billions of dollars that’s going to leave a footprint that people will see even if there’s no official or public disclosure.

The simple fact is that none of the hedge fund types and private wealth managers who cater to that scale of wealth have any clear idea where Epstein’s wealth comes from and they don’t seem to think he’s really in the business they’re in. This is the gist of numerous articles on the man. But this part of the story has always or until recently been treated as part of his air of mystery rather than a key question to be answered in a broader story of criminal activity.

Recently Vicky Ward has revisited reporting she did on Epstein in Vanity Fair back in 2003. The focus of the follow up reporting has been how she found out about the abuse and assault of underaged girls and how and why Vanity Fair cut that part of the story. But the original focus of the reporting was on Epstein as a financial wizard. That part of the story is a secondary but still important part of these follow up articles. I’d recommend reading Ward’s piece in full. But the gist is that the more she poked into his story the financial part of it just didn’t add up. She didn’t really figure out what he did or where he got his money. But the public story seemed to be layer upon layer of obfuscation and fronts.

From one perspective, who cares? The point is his abuse of perhaps dozens or more girls and young women. Precisely how he made his money doesn’t matter. But the scale of the money is apparently so vast, its origins so intensely hidden and the pervasiveness of his political connections so grand that I don’t think we can be sure they’re not related in some way. The amount of wealth and the obscurity of its origin are just too great to be the product of mere discretion.

So what’s the story?

I genuinely have no idea.

Some have speculated that far from being a hedge funder he ran some sort of procurement ring for billionaires. But that doesn’t really explain the full scale of the wealth. You could make a lot of money doing this but not billions or even hundreds of millions of dollars. Nor is there a shortage of ways for extremely wealthy people to purchase sex or satisfy any variety of boutique kinks or perversions. It just doesn’t add up as an explanation.

Maybe the wealth is a sham? Maybe he’s a Trump-like figure living a conspicuously luxurious life but it’s all strung together with bailing wire and debt and sharp dealing? Maybe. The problem with that theory is that Epstein appears to have been responsible for quite a lot of philanthropy – donating big money to elite universities, funding science projects, all sorts of stuff. Perhaps this part of the equation is also overstated and is less than it appears. But at least on its face Epstein seems to have accounted for an amount of giving that even on its own required vast wealth or access to vast wealth.

Maybe it’s a Madoff type situation? A Ponzi scheme? Possibly and maybe no one would won’t to come forward now as one of his financial victims given his notoriety. But as we saw with Madoff scams on that magnitude leave a swathe of collateral damage that’s hard to hide.

I don’t want to get too far speculating because it’s just that: speculation. I haven’t read up enough on this part of the story to know all the details. But even my incomplete reading suggests that once you’ve read all of it it all adds up to no one really knows where his money comes from. But I think it’s highly likely that the answer to this mystery of where his money came from will play a central part of the story itself, related in some deep way to the alleged sexual criminality now coming to light.

Latest Editors' Blog
Masthead Masthead
Founder & Editor-in-Chief:
Executive Editor:
Managing Editor:
Associate Editor:
Editor at Large:
General Counsel:
Head of Product:
Director of Technology:
Associate Publisher:
Front End Developer:
Senior Designer: