His position untenable and his saga inflicting an endless parade of headache-inducing news cycles upon the White House, Secretary of Labor Alexander Acosta announced his resignation this morning. Some of the points he made in his own defense at a lengthy press conference this week seemed fair and valid, but his combination of buck-passing, contrived helplessness, and selective talking points left numerous questions unanswered. So he's out. The stomach-turning Epstein case is far from over, of course, and one gets the sense that there's much more sordidness lurking beneath its already-seedy and disturbing surface.
Without delving into every outrageous aspect of this mess, two questions continue to baffle: First, how did Epstein amass his fortune? Second, what was Sec. Acosta talking about when he reportedly told the Trump administration's vetting team that he was waved off of throwing the book at Epstein because of nebulous intelligence community interests? Let's begin with Epstein's money. The source of his prodigious resources is shrouded in confusion and opacity -- and has long been the subject of guessing games among New York's elite finance community. New York Magazine delves into one growing theory, fueled by the confounding reality that nobody within that plugged-in world seems to know virtually any Epstein investors, nor have they traded with him.
Kass was well-connected on Wall Street, where he’d worked for decades, so he began to ask around. “I went to my institutional brokers, to their trading desks and asked if they ever traded with him. I did it a few times until the date when he was arrested,” he recalls. “Not one institutional trading desk, primary or secondary, had ever traded with Epstein’s firm.” When a reporter came to interview Kass about Bernie Madoff shortly before that firm blew up in the biggest Ponzi scheme ever, Kass told her, “There’s another guy who reminds me of Madoff that no one trades with.” That man was Jeffrey Epstein. “How did he get the money?” Kass kept asking.
For decades, Epstein has been credulously described as a big-time hedge-fund manager and a billionaire, even though there’s not a lot of evidence that he is either...Naturally, this air of mystery has especially piqued the interest of real-life, non-pretend hedge-funders. If this guy wasn’t playing their game — and they seem pretty sure he was not — what game was he playing? ... Epstein was also missing another key element of a typical thriving hedge fund: investors. Kass couldn’t find any beyond Epstein’s one well-publicized client, retail magnate Les Wexner — nor could other players in the hedge-fund world who undertook similar snooping. “I don’t know anyone who’s ever invested in him; he’s never talked about by any of the allocators,” says one billionaire hedge-fund manager, referring to firms that distribute large pools money among various funds.
His career trajectory also makes little sense and offers few clues:
Epstein’s spotty professional history has also drawn a lot of attention in recent days, and Kass says it was one of the first things that raised his suspicions years ago. Now 66, Epstein didn’t come from money and never graduated from college, yet he landed a teaching job at a fancy private school (“unheard of,” says Kass) and rose through the ranks in the early 1980s at investment bank Bear Stearns. Within no time, Kass notes, Epstein was made a partner of the firm — and then was promptly and unceremoniously ousted. (Epstein reportedly left the firm following a minor securities violation.) Despite this “squishy work experience,” as Kass puts it, at some point after his quick exit, Epstein launched his own hedge fund, J. Epstein & Co., later renamed Financial Trust Co. Along the way, he began pedaling the improbable narrative that he was so selective he would only work with billionaires.
So the aforementioned theory that has emerged is that Epstein was running some sort of sex trafficking and extortion racket (possibly coupled with conservative but lucrative investments and potential tax evasion), blackmailing rich and powerful people into anonymously investing with him -- lining his pockets and insulating himself from accountability in the process. Here's at least some alleged corroboration:
If the blackmail theory sounds far-fetched, it’s worth keeping in mind that it was also floated by one of Epstein’s victims, Virginia Roberts Giuffre. “Epstein … also got girls for Epstein’s friends and acquaintances. Epstein specifically told me that the reason for him doing this was so that they would ‘owe him,’ they would ‘be in his pocket,’ and he would ‘have something on them,’” she said in a court affidavit, according to the investigative series in the Miami Herald that brought the case back to the public’s attention late last year. In the 2015 filing, Giuffre claimed that Epstein “debriefed her” after she was forced into sexual encounters so that he could possess “intimate and potentially embarrassing information” to blackmail friends into parking their money with him. She also said photographic and video evidence existed — an assertion that looms especially large now that federal investigators have found a trove of images in Epstein’s home safe.
Do the feds now have that trove of supposed photographic and video evidence? There are a few obvious holes in this overall theory, even if it's somewhat plausible on the surface. For instance, wouldn't some super rich blackmail victim have taken drastic action at some point, either blowing the whistle to authorities (think of the web of powerful sex offenders officials could have taken down under this scenario), or even resorting to violence? It seems difficult to imagine that any significant number of of wealthy and influential men allowing themselves to be endlessly fleeced by one man who'd been collecting and weaponizing their darkest secrets. But so many elements of this awful story strain credulity. Then there's this report from the Daily Beast:
Acosta is gone, but I still want to know what this was all about: https://t.co/d1XM10xzNZ— Guy Benson (@guypbenson) July 12, 2019
Epstein’s name, I was told, had been raised by the Trump transition team when Alexander Acosta, the former U.S. attorney in Miami who’d infamously cut Epstein a non-prosecution plea deal back in 2007, was being interviewed for the job of labor secretary. The plea deal put a hard stop to a separate federal investigation of alleged sex crimes with minors and trafficking. “Is the Epstein case going to cause a problem [for confirmation hearings]?” Acosta had been asked. Acosta had explained, breezily, apparently, that back in the day he’d had just one meeting on the Epstein case. He’d cut the non-prosecution deal with one of Epstein’s attorneys because he had “been told” to back off, that Epstein was above his pay grade. “I was told Epstein ‘belonged to intelligence’ and to leave it alone,” he told his interviewers in the Trump transition, who evidently thought that was a sufficient answer and went ahead and hired Acosta. (The Labor Department had no comment when asked about this.)
Asked about this angle during his presser, Acosta gave a convoluted and evasive answer: "So there has been reporting to that effect and let me say, there’s been reporting to a lot of effects in this case, not just now but over the years and, again, I would hesitant to take this reporting as fact. This was a case that was brought by our office, it was brought based on the facts and I look at the reporting and others, I can’t address it directly because of our guidelines, but I can tell you that a lot of reporting is going down rabbit holes." What does that mean? Was Epstein a spy, or at least a valuable asset? Was US intelligence exploiting his depravity because it helped ensnare connected and powerful people from around the world, furnishing exploitable leverage for gathering information?
This seems like a far-fetched conspiracy theory on its face. It's an extraordinary claim that requires extraordinary evidence -- evidence that we do not have. But if Acosta did in fact tell Team Trump that 'intelligence' was running Epstein during the mid-2000's prosecution process, that might help explain so much weirdness about this case. It also may have been a self-serving deflection. Either way, the departing Labor Secretary did not seem interested in answering questions on this subject this week. One wonders if the public will ever get satisfactory answers about any of this. Parting thought: Do the blackmail and intelligence theories fail under Occam's Razor -- or are they buttressed by it?