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Today on Forbes, how Picasso, Van Gogh, and Saison helped finance Epstein client Leon Black's billionaire lifestyle. For decades, Leon Black cultivated a reputation as one of the world's most formidable art collectors, scooping up museum worthy masterpieces.
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But ongoing revelation of Black's yearslong affiliation with Jeffrey Epstein, most notably paying him $170 million for financial and tax advice, [music] have tarnished his reputation. In March 2021, Black resigned as CEO of Apollo Global Management, the private equity firm he [music] founded, and stepped down as chair of the Museum of Modern Art Board.
The latest Epstein files show how Epstein helped Black turn his art collection into a sophisticated financial asset. Far [music] from functioning solely as a personal passion, Black's trove of Picassos, Saison, and Mones was systematically structured, valued, and leveraged so that he could borrow against it on a massive scale. Epstein helped manage and organize the collection, [music] transforming illlquid paintings into bankable collateral that could be pledged for large loans, unlocking hundreds of millions of dollars in cash.
Entities controlled by black put up $1 billion worth of artist collateral for a loan from Bank of America as of 2014, according [music] to an Epstein Files document. By 2017, the value of Black's collateralized art had grown to $1.4 billion. Some of the most valuable works [music] including Paul Seaison's Lhateau Noir worth $50 million, PA Modreion's composition C with gray and red worth $40 million, Constantine Bronush's Lemuse worth $40 million, and Claude Monet's Nymphas worth $45 million.
Black had over half a billion in loans taken out against [music] his art collection by 2016. A document dated December 2015 shows that entities controlled by Black had borrowed $631 million with one entity, Narrows LLC, accounting for $565 million. Narrows is listed as the owner of Black's Collateralized Art in additional Epstein documents from 2016 and 2017. Files titled All Art appeared to catalog his entire collection, [music] including acquisition cost, Christy's appraisals, and unrealized gains.
As of [music] 2016, Black's art was worth $3 billion with unrealized gains totaling $1 billion. A decade later, the collection is likely worth far more. New York-based fine art appraiser Sylvia Leonard Wolf estimates [music] that Black's 2017 collection would have increased in value by roughly 50%.
>> [music] >> Appraiser Bonnie Kagan says, quote, "Blue chip works like his don't lose value. It's the best of [music] the best."
It is unclear how much Black is still borrowing against his art or which pieces have been sold. A spokesperson declined to comment. "By borrowing against his multi-billion dollar portfolio, Black was able to access enormous sums while avoiding capital gains taxes, a strategy known as buy, borrow, die. He also borrowed against his [music] stake in Apollo. The firm's 2022 proxy statement shows that Black placed roughly 20% of his shares in margin accounts subject to loan arrangements, though the size of those loans is undisclosed.
The 74year-old Leon Black is worth an estimated $13.6 billion. About 6.6 [music] billion comes from art, cash, and investments, while $7 billion reflects his Apollo stake. In 2021, Apollo released a report by Decker LLP finding that [music] Black paid Epstein $158 million between 2012 and 2017 for tax, estate, and asset planning advice and unusually large sum for such services.
Black's art holdings and Epstein's role in managing them have long drawn scrutiny. The Decker report, which found no wrongdoing by Black, noted that Epstein's [music] work extended beyond conventional tax matters into blacks most valuable assets, including artwork. Epstein was involved in structuring arrangements intended to preserve and maximize their value. [music]
In 2022, Democratic Oregon Senator Ron Weiden opened a separate investigation into whether Epstein facilitated aggressive tax [music] avoidance. Black also used his collection to build goodwill with major art institutions, particularly the Museum of Modern Art, also known as MoMA. As of 2014, he had pledged $23.5 million worth of art as future gifts. In 2018, he gave $40 million in cash, leading Momma to name its film center after him and his wife Deborah. He remains a trustee on Momma's board.
Visitors to major museums often encounter Black's influence. At MoMA, visitors can view Paula Moderson Becker's 1907 self-portrait, donated by Black and fellow art collecting billionaire Ron Lauder, with whom Black coowns other works. At the Metropolitan Museum of Art, the upcoming Raphael Sublime poetry exhibition includes works once linked to Black, [music] valued at $98 million in 2017. It is unclear whether he still owns them, but the museum credits him for quote additional support.
For full coverage, check out John Hyatt's piece on Forbes.com. This is John Palmer from Forbes. Thanks for tuning in.