ARI SHAPIRO, HOST:
Accused sex trafficker Jeffrey Epstein is still dominating the news six years after his death in prison. A House committee just released a book of notes sent to Epstein for his 50th birthday. One has an outline drawing of a female body, and at the bottom appears the name Donald J. Trump with a signature. The White House insists the signature and the note are not the president's.
Separately, a New York Times investigation spent months following the money from Epstein to the country's leading bank, J.P. Morgan Chase. The article concludes that the bank enabled his crimes even as evidence against him piled up. Matt Goldstein is one of the reporters who worked on the story. Hi.
MATT GOLDSTEIN: Hi. Thanks for having me.
SHAPIRO: How valuable were Jeffrey Epstein's accounts with J.P. Morgan?
GOLDSTEIN: You know, they're valuable in the sense - obviously, he had a lot of money there. At the peak, he had about $300 million in his accounts. But you have to view him more than just the dollars. There were lots of transactions he was doing, obviously, to run his sex trafficking operation for so many years. And he was also valuable in helping to bring business to the bank because his stock and trade was connecting people. You know, it's always unclear exactly how much he did in terms of bringing new business into the bank, but clearly he was very important in making introductions to some people at the bank.
SHAPIRO: You write that he seemed to know everyone. Can you give us a couple examples?
GOLDSTEIN: Yeah, I mean, obviously, you know, it's been well-known that Leslie Wexner, who was the head of The Limited, Victoria Secret, was his No. 1 client. They had also already been a client of J.P. Morgan, but that obviously further cemented the relationship. Later on, he had connections with Sergey Brin from Google, Bill Gates, who never became a client but they were working on a potential deal for Bill Gates and his foundation. Leon Black, obviously, was a big, important client to Epstein and was a client of the bank. There's some debate over how much he introduced Benjamin Netanyahu to the bank, and Ehud Barak was also a person that he knew.
SHAPIRO: Leaders of Israel. Yeah.
GOLDSTEIN: Yeah.
SHAPIRO: You say that even before investigations into Epstein became public, warning lights should have been flashing inside J.P. Morgan. Explain why.
GOLDSTEIN: Yeah. So, you know, he really becomes essentially what they call a private bank client in 1998. And that's, like, a special kind of - it's not like you or me going to a bank and having a checking account or, like, having to call 1-800 number on our credit card if we have a problem. And by 2003, they're already seeing a lot of big cash transactions being pulled out - huge ones, as much as 175,000, 1.7 million altogether by 2004. And this was money that was going to, largely, to make payments to women and people in his social circle. And the bank had an awareness of this, of where the money was going, and that should have raised more flags internally.
SHAPIRO: So what pushback was there within the bank?
GOLDSTEIN: Well, there was pushback. Early on, it starts. There are some people on the compliance and the anti-money laundering side who start to flag some of these transactions. They write emails. They're raising concerns. But at this point, he's become a favorite and important customer of this person, Jes Staley, who's a very critical and high-rising employee at the bank. And he basically vouches for Epstein. And what you start to have is this pattern where he vouches for Epstein. He says there's no problem here. I know this guy. These things are OK. Don't worry about them. And maybe it's a little bit of human nature, but people sort of defer, also, according to his rank in the bank. So basically, the concerns don't really get elevated or go anywhere.
SHAPIRO: Did Staley respond to your request for comment for this story?
GOLDSTEIN: No, he didn't, he - which I can tell you has been consistent (laughter) throughout. Staley or his lawyers have never responded in any way.
SHAPIRO: In 2019, after Epstein was arrested in New Jersey and charged with federal sex trafficking offenses, J.P. Morgan filed a report retroactively flagging some 4,700 Epstein...
GOLDSTEIN: Right.
SHAPIRO: ...Transactions as suspicious, totaling more than a billion dollars. What was going on there? And how should those transactions have been handled in real time?
GOLDSTEIN: Yeah, I mean, that's sort of the crux here that sort of shows that it's easy, obviously, to go back in time. And, you know, J.P. Morgan will tell you, well, we did the right thing. We went back and analyzed the reports and looked at them in a fresh light. But it's also clear that they could have done this back then. I mean, to - in fairness to J.P. Morgan, they were following some of these suspicious activities, reports along the way, but not with the same kind of frequency that they should have, judged by the $1.1 billion report that they filed.
If you want to sum up the problem here, it's sort of like an institutional fail. There are people along the way on at least four different occasions who raised the point, there's a big reputational risk about us keeping him here. But no one feels they have either the power or they want to actually take that next step and say, OK, it's time to exit him from the bank.
SHAPIRO: Well, what has J.P. Morgan said in response to your reporting?
GOLDSTEIN: You know, they've stuck largely to the same party line, which has been they're very sorry about their relationship with Epstein. They're sorry that they ever did business with him and that it went on too long. But they firmly state that they had no idea they were helping to basically funnel money for his sex trafficking. And largely, they've thrown the blame on this guy Jes Staley. And they basically say they put too much faith in Staley, and if it wasn't for Staley, they would have exited him earlier. It's - you know, there's some truth to that, but it also becomes a convenient excuse, too.
SHAPIRO: So your story gives us some glimpse into the special treatment that the ultra-wealthy can receive from major banks. What's your biggest takeaway from investigating that world?
GOLDSTEIN: Yeah, like I said, it's this idea of the very close relationship nature of it. And it's sort of like we can all relate it to our own friends, that we can sometimes have blind spots about things that our friends do that we don't like or that we find hard to reconcile with. You have to be a little bit more dispassionate, particularly in terms of finance. And quite frankly, banks' jobs is to look for things like sex trafficking, to look for things like money laundering. And when you see a predominance kind of - these kind of huge, hefty transactions going on on a regular basis time and time again, at some point, someone should say, you know, we got to pull the trigger here. You know, even if we are not totally convinced he's doing something wrong, it just doesn't smell right.
SHAPIRO: That's New York Times business reporter Matt Goldstein. Thank you for joining us.
GOLDSTEIN: Thanks for having me, Ari. Transcript provided by NPR, Copyright NPR.
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