Chapter 1: What questions remain unanswered about Jeffrey Epstein's rise to power?
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From The New York Times, I'm Rachel Abrams, and this is The Daily. The latest release of files related to the sex offender Jeffrey Epstein left key questions about his rise to power and his connections to the president unanswered. Today, my colleague David Enrich explains how he and a team of reporters worked to fill in those mysteries and reveal the truth about Jeffrey Epstein's origins.
It's Tuesday, December 23rd. David Enrich, welcome to the show.
Thanks for having me.
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Chapter 2: How did David Enrich and his team investigate Epstein's origins?
David, I think this is probably your fourth or fifth appearance on the show this year to talk about Jeffrey Epstein. And this time we're having you back because on Friday there was obviously this massive file released from the Justice Department that, as far as I understand it, did not really advance our understanding of Jeffrey Epstein or his crimes or the people in his orbit.
Can you tell us what you think the biggest takeaways were?
It's a hard question because there were not huge takeaways. And we got lots of bits of incremental color and detail that reinforced the deep depravity of Epstein's crimes and the horrible things he was doing. We also got some new tidbits. We saw, for example, Bill Clinton
In numerous photos with Epstein and his associates, including in a swimming pool, we saw that one of Epstein's victims back in 1996 had reported him to the FBI for having child sexual abuse material. And that's a decade before we know the federal prosecutors actually started investigating Epstein. So that was definitely a new development.
Chapter 3: What were the biggest revelations from the recent release of Epstein files?
But for the most part, there was nothing here that fundamentally altered our understanding of Epstein and his network, and notably also very little about Donald Trump, whose name was barely mentioned in these files. And it was Trump's relationship with Epstein that triggered a lot of the political interest in this investigation to begin with.
Right. Just to remind people, this whole file release is coming about because of a massive pressure campaign, mostly from Democrats, but also from some within the MAGA orbit for Donald Trump and his administration to release the so-called Epstein files. Right. And that basically forced Trump to sign legislation authorizing these files to be released from the Justice Department.
Yeah, it's worth noting that the Justice Department did not do what it was legally required to do, which was release all of the files. And those files that were released were in many cases so heavily redacted that you couldn't make any sense of them.
And why didn't they release them?
The Justice Department has said that they will release the rest of the files on kind of a rolling basis over the next few weeks and that they need this additional time to be able to properly review and redact these huge quantities of materials.
Okay, so knowing that there would be this sort of staggered release, what were you expecting to get? Or maybe more importantly, what questions were you hoping that this batch of files would actually answer?
I mean, it depends on your perspective and what your interest is in this. from kind of this rags to riches story where he managed to transform himself from a working class family into an extraordinarily rich and well-connected person. And so we were wondering if there would be any revelations in these files about that. And we're just completely disappointed in that regard.
Well, the reporting that you mentioned is what I want to talk to you about because everybody's been eagerly awaiting the release of these files, right? Like, hoping perhaps that the files would address some of these enduring questions about Epstein and his crimes. And obviously, that did not happen on Friday. But...
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Chapter 4: How did Epstein transition from teaching to Wall Street?
You and our colleagues have been digging into a different period of Epstein's life, one that preceded the era of his most flagrant criminal activity that he became known for, that he was arrested for. Why was that period your focus? Why was it important in your estimation to understand the early period of Epstein's life?
Well, Epstein built an extensive sex trafficking operation all over the world, and that was really expensive, and it required the support of a lot of powerful people. And so the question for us has been, how did he get in a position where he had the money and the power and the connections to do that? This was a guy who came from a really working class background.
He grew up in Coney Island in Brooklyn. His dad was an employee of the New York City Parks Department. He was really kind of scraping by growing up and then somehow starts to climb this ladder. Right. Right. to that he was affiliated with intelligence services. And the period from basically the mid-1970s to the early 1990s, for the most part, has been just a complete black box.
And so our goal, when we started reporting on this months ago, was to try and get inside that black box and figure out how Epstein got his start. And the bottom line of how he did that was that he was an extremely successful con man. He stole, he deceived, he manipulated and he learned over and over again that he could do so basically with impunity.
So where does the story begin?
It begins in 1976. Epstein is a teacher at the Dalton School in Manhattan. And he gets invited to a reception at an art gallery. And he goes kind of grudgingly in his tongue. And at the reception, he bumps into the parent of one of his students who is impressed with his math chops.
And the parent suggests that maybe he is wasting his time being a teacher and instead should consider a career in Wall Street. And the parent then introduces Epstein to a guy named Ace Greenberg.
Very big name.
Yeah, who at the time was a top executive at Bear Stearns, which is this scrappy Wall Street investment bank. And one of the ways in which it's scrappy is that it is not going to hire Ivy League MBAs. It is looking for what Ace Greenberg likes to call PSDs, which stands for Poor, Smart, and Deeply Desirous of Being Rich. Wow. And Epstein goes in to meet Greenberg for a job interview.
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Chapter 5: What unethical behaviors did Epstein engage in at Bear Stearns?
It's true. I did lie. And the reason he lied, Epstein goes on to say, is that if he didn't lie, there is no way a firm like Bear Stearns or anyone else is going to give him a chance without having a college diploma. And Tenenbaum is so taken aback and disarmed by this honesty that he decides to give Epstein a second chance. And this is a pattern we'll see repeating over and over and over again.
It's sort of remarkable because first of all, he gets this job because in a way, Ace Greenberg is like fetishizing his lower middle class background, right? Something that would have been a disadvantage to somebody else is an advantage to Epstein. He gets his foot in the door. And then when he gets caught, he doesn't just make himself sympathetic.
He actually makes himself a victim of the institution where he's working, right? Like I had no choice but to lie. Otherwise, you big, powerful, mean Wall Street bank would never have taken a chance on me.
Yeah, and to Tenenbaum, you know, this is now, what, 40 or 45 years later, when I spoke to him, he was still kind of marveling at Epstein's knack for understanding human dynamics so well that just on the spur of the moment, he understood that that would be something that was likely to get him a second chance. And sure enough, it worked.
So what happens next?
Well, he keeps his job, and he starts very quickly climbing through the ranks at Bear Stearns. Within a few years, he has been named a limited partner, which means that he is getting paid boatloads of money at that point, something like $800,000 in today's dollars. And yet the problems still keep bubbling up. And Epstein was found to abuse his expense account.
He took a work trip to the Caribbean and charged Bear Stearns something like $10,000 on jewelry and clothing for his girlfriend. So this is after he was dating the boss's daughter. Mm-hmm. Another thing is that it turns out that he has been helping his girlfriend get early access to lucrative investment deals at Bear Stearns, which is a violation certainly of the company's rules, if not the law.
And he's helping his high school friend get a loan to buy securities at Bear Stearns, which is also a violation of company policies, if not the law. And eventually Bear Stearns gets wind of this and starts investigating. And Epstein is kind of headed for a slap on the wrist. He's likely to pay a financial penalty and also be suspended for a couple of months.
And instead of suffering that indignity, he decides to resign, saying that he's been deeply offended by the fact that he was even being investigated. So one of the many things he learned at Bear Stearns through this network of acquaintances and colleagues that he built up was basically how to act and behave as a really rich person.
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Chapter 6: How did Epstein exploit relationships to gain power?
You promised me we would get this kind of payout. Epstein rebuffs him over and over again. At one point sends him a pint of crude oil to convince him that the oil deal actually does exist. But the money is just gone, ultimately. And so this is one of Epstein's huge first killings. He walks away with what appears to be several hundred thousand dollars of money that he just stole from this guy.
And nothing really happens. And Stroll files a lawsuit against him. It bounces around the federal court system for years. Ultimately, Epstein prevails on technical grounds. And so... Epstein is now two for two. He cheated and lied at Bear Stearns and essentially got away with it. Now he's cheating and lying with this video game executive and walking away with his money once again with impunity.
And for someone like Epstein, the message there is very clear, which is that if you lie and cheat well enough and often enough and are sufficiently manipulative, you can make a real living doing this.
So he's not only learning that he can get away with it, but it sounds like he's learning that he's getting away with it at a larger level and with people who are arguably within his social network.
Yeah, that's right. And Epstein is nothing if not a very good student of fraud and thievery. And you can see him progressing from one stage of this to the next and getting more ambitious and bolder and bolder the more times he pulls this off and the more times he gets away with it.
So where does he go from here?
So Epstein around this time has been referring to himself as a financial bounty hunter, basically someone who tracks down hidden assets all over the world. And as it happens, we're in the early 1980s at this point, he is dating a Spanish actress named Ana Obregón.
And it turns out that her family has just realized that they have lost millions of dollars in the implosion of a securities firm in New York. And so they hire Epstein to track down their missing money. And he pairs up with a friend of his who's a former federal prosecutor. And together they spend the next couple of years trying to track down these missing assets.
And lo and behold, they find them. They're in a bank in the Cayman Islands. And Epstein and his buddy charter a jet, go down to Cayman. And somehow walk away with millions of dollars of these securities. They recover it and get paid a certain portion of that as a fee.
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Chapter 7: What role did Donald Trump play in Epstein's narrative?
We do see here some glimmer of cleverness that does set him apart. And so around this time, Epstein has amassed enough money that he is gone from having been kind of chased out of Bear Stearns with his tail between his legs to now he returns to Bear Stearns, this time as a valued client.
He's doing lots of trading through the firm, which produces revenue for Bear Stearns, which makes Bear Stearns very eager to keep him in its good graces. And so they start extending some favors to him.
Favors like what?
Well, one of Epstein's former managers at the firm, who is now helping to run him as a client, has a very attractive young assistant named Patricia Schmidt. And one night in 1987, the manager asks Schmidt to deliver some papers to Epstein's apartment at night. And Schmidt goes over to the apartment.
Epstein makes her tea, gives her a tour of his very nice apartment building, and invites her to come back whenever she wants to use the building's swimming pool. And Schmidt takes him up on that offer and thus begins a year-long sexual relationship between Schmidt and Epstein.
And one of the things we found in our reporting is that the same Bear Stearns manager on multiple other occasions also sent young female assistants over to Epstein's apartment and that ended up leading to sexual relationships. And Epstein seems to realize that if Bear Stearns can use women as a source of leverage, so can he.
And Schmidt, when I spoke with her, she was very clear-eyed about her role in this and that she was being used. And the way she described it to me was that I was his plaything. And Epstein perceived her as someone that's going to help him get where he wants to go.
And sure enough, we see him start to use Schmidt for other things, such as he would have Schmidt give his clients and acquaintances tours around Wall Street, bringing them into Bear Stearns, maybe take them out to a nice dinner. And so Epstein had discovered that he could use Schmidt
Attractive young women was a potent form of currency as he sought to impress and cultivate relationships with rich and powerful people whom he wanted to do business with.
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Chapter 8: What lessons can we learn from Epstein's story of impunity?
And pressure on the president is what led to the disclosure of these files, because people want to understand what evidence the government has about Jeffrey Epstein and his criminal behavior and the network in which he operated. And so I wonder, then, how are we to think about where Donald Trump fits into Epstein's early years?
Well, Epstein and Trump were operating in very similar social circles for a number of years, basically from the late 1980s into the early 2000s. They were at times apparently very close friends. And our colleague Nick Confessori has just spent months digging into this. And one of the findings in his investigation was that not only were they close friends for years—
But they were also competing with each other for young women. And Nick in his story described Epstein and Trump as being one another's wingmen. That being said, there are still a lot of unanswered questions about the exact nature of that relationship. If there were business dealings between the two of them, for example.
And it is not clear to me whether there are answers that are lurking in these as yet undisclosed Epstein files that the Trump administration is sitting on. And one way to think about this is that at the outset, what the Justice Department has been told and is required under law to release are files related to the federal investigations of Epstein over the years.
And it is not clear to me that federal investigators were doing a whole lot of investigating into the men with whom Epstein was associated, whether that's Trump or men like Leon Black or Les Wexner or people like that. And so to the extent that those were not subjects of investigation—
we're not likely to see a tremendous amount about them in these files but at the same time there's also a question of why exactly trump and his administration have been so reluctant to come clean about what is in these files to begin with and if they had just released this stuff when they said they would back early in this year we might not be talking about this anymore and the fact that they have been fighting so hard against full transparency here it does suggest that there is something in there that they want to hide
But at the same time, one of the things I've never quite understood about the Epstein files, as we have been calling them, is if there was evidence of criminal behavior on the part of Trump or any of these other notable figures, that has been in the possession of the DOJ across multiple administrations for years. And so I don't mean to come off as naive and say, like,
If the DOJ had evidence of crimes, why would they not investigate it? But I just don't quite understand why exactly we believe that it wouldn't have come out before now.
It's not self-evident that this would have already come out for at least two reasons. One reason is that, you know, it's become, I think, accepted conventional wisdom that if an administration has damaging information about its political enemies, that that will immediately be released. That is not the way justice departments have historically operated.
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