Epstein donated $46 million to Les Wexner's private foundations
Before hedge fund manager Jeffrey Epstein went to jail in
Florida more than a decade ago, billionaire L Brands founder and Chairman Les
Wexner was trying to distance himself from the accused child molester.
That didn’t stop Epstein in 2008 from essentially bankrolling
one of Wexner’s first nonprofit foundations with a contribution of more than
$40 million in stock and other assets. The transactions were received only
months before Epstein was sentenced to a term in a Palm Beach County jail on a
charge of soliciting an underage prostitute.
Epstein is back in the news after his arrest Saturday on an
indictment filed by the U.S. Attorney’s Office for the Southern District of New
York which charged him with trafficking dozens of underage girls.
Some of the alleged crimes took place in a New York
townhouse once owned by Wexner. He is currently being held without bail. Wexner
was known to be one of the money manager’s few clients.
The case has reignited interest in the politically connected
businessman who was once friendly with President Donald Trump and President
Bill Clinton. And it has prompted some who received money from him to wash
their hands of it. On Wednesday, Sen. Chuck Schumer, D.-N.Y., said he would
donate $7,000 in contributions from Epstein to charity. Stacey Plaskett,
Democratic U.S. Virgin Islands congresswoman, has also decided to give her
Epstein contributions to two different charities.
Epstein provided initial financing to Wexner’s YLK
Charitable Fund more than 10 years ago, even as Wexner and his wife started to
break away from the financier after the initial accusations surfaced, according
to someone in their inner circle.
“They are both very prominent in Columbus [Ohio]” the person
told CNBC on Wednesday. “It’s just unseemly that they would associate with
someone who first was accused of things that made them extremely uncomfortable
and then he eventually pleaded guilty to those offenses,” the person said.
When asked about Epstein’s behemoth donations to the
foundation before going to jail, this person refused to comment. It is unclear
whether the Wexners will give the money away.
Just before Epstein began a 13-month jail term, his firm,
the Financial Trust Co., based in the U.S. Virgin Islands, and his own
nonprofit, The C.O.U.Q. Foundation, contributed a combined $46 million plus to
YLK , according to a 2008 990 disclosure form. Wexner became YLK’s director in
2010 and his wife Abigail was president in 2008.
It was the only contribution the Wexners received that year.
In 2009 and 2010, YLK did not receive a single donation.
Epstein’s C.O.U.Q. also gave $14 million to YLK in 2007, a
filing shows.
Epstein first financed the Wexner nonprofit with $33 million
worth of Apple stock and $5.4 million in shares of Bear Stearns Asset
Backed-Securities Overseas Ltd., a third-party company affiliated with the
now-defunct bank Bear Stearns. Outside of contributions to The Columbus
Foundation, the documents show YLK did not make any other donations from 2007
through 2010.
The assets Epstein gave the Wexners’ nonprofit helped it
have at least $10 million in short-term capital gains over the course of 2009
and 2010 as the value of some of the stocks and assets soared. Apple’s stock is
now trading at just over $200.
In late 2010, YLK announced it would transfer all of its
assets to The Wexner Family Charitable Fund, which in 2017 reported total
assets worth $208 million in fair market value, records show. Since 2010 the
Wexner fund has been actively contributing to a variety of causes.
Epstein, according to a recent report by Forbes, served in
the 1990s as a trustee of a separate group: The Wexner Foundation.
A spokeswoman for Wexner only noted he had “severed ties”
with Epstein over a decade ago and declined to comment further.
A member of Epstein’s firm hung up after CNBC identified
itself and did not return a later message requesting comment. Attorneys for
Epstein also did not return requests for comment. Calls to the Wexner
Foundation, where The Wexner Family Charitable Fund is located, along with an
email to Les Wexner’s attorney, were not returned. The treasurer of Epstein’s
current nonprofit, Gratitude America Ltd., did not return a request for
comment.
Before his massive stock distribution to the Wexner group,
Epstein told The New York Times that a Manhattan mansion Wexner bought for
$13.2 million was now his. “Les never spent more than two months there,”
Epstein told the Times in 1996. The City’s Department of Finance values the
property at $56 million and Epstein has been accused by prosecutors of engaging
in sexual acts with underage girls from 2002 to 2005 in this same New York
home.
In an interview with Vanity Fair in 2003, Wexner praised
Epstein for his understanding of politics and financial markets, giving a
glimpse into why he decided to become one of his clients.
“I think we both possess the skill of seeing patterns,”
Wexner said. “But Jeffrey sees patterns in politics and financial markets, and
I see patterns in lifestyle and fashion trends. My skills are not in investment
strategy, and, as everyone who knows Jeffrey knows, his are not in fashion and
design. We frequently discuss world trends as each of us sees them.”
While Wexner appeared to move way from Epstein after his
initial arrest, many politicians and companies have continued to accept
contributions from him or his organizations.
Gratitude America in 2016 gave $15,000 to the New York-based
all-girls school The Hewitt School and the next year, wrote a $30,000 check to
The O’Gorman Garden, a Harlem preschool, among other contributions.
After initial publication, a spokesperson for The Hewitt
School told CNBC they had already returned the Epstein contribution.
“The Hewitt School received a gift from Gratitude America
Ltd. in 2016. Upon learning of the foundation’s background several months ago,
the School immediately returned the funds,” the schools spokesperson said.
“Hewitt has had no other contact with the foundation or with anyone related to
the foundation.”
During the 2016 and 2018 election cycles, Epstein gave
Plaskett a total of three $2,700 checks to help fund her campaigns for
Congress. After initially signalling she wouldn’t give back the money, a day
later she reversed course and gave the contributions to two charities.
Before his initial conviction, Epstein also had ties to
Clinton and his family’s group, the Clinton Foundation. Epstein contributed to
Clinton’s presidential campaign and through his C.O.U.Q. nonprofit in 2006
reportedly sent $25,000 to the foundation. A spokesman for Clinton has said the
former president has not spoken with Epstein for over a decade and has no
knowledge of his alleged crimes.
It’s unclear if either Clinton, the preschool or the
foundation will return or give away these contributions. They all did not
return requests for comment.
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