Last week, the AG removed pension trustees critical of Apollo and other Private Equity managers
While Columbus debates Leslie Wexner’s legacy, another Epstein-related name sits quietly in the background of Ohio’s teacher pension system: Apollo Global Management.
And behind Apollo’s global brand stands the uncomfortable reality that its former CEO Leon Black paid Jeffrey Epstein more than $150 million — much of it after Epstein’s 2008 conviction. The Epstein file release last week contained hundreds of references to Leon Black and, most importantly to current Apollo CEO Marc Rowan and the corporation overall. These new revelations have led to National teacher unions calling for an SEC investigation of Apollo. http://www.aft.org/sites/default/files/media/documents/2026/Letter_to_SEC_re_Apollo_Global_Management_February_17_2026.pdf Also, school parents around the country have become alarmed by Apollo-owned LifeTouch having access to millions of child photos.
• Alternative investments underperformed transparent benchmarks by approximately $8.6 billion. • STRS was paying more than $420 million per year in hidden, unreported fees to alternative managers. • Many of those alternative allocations included firms like Apollo — firms operating through opaque, no-bid private contracts shielded from public view.
And what happened next? Instead of a full-scale state investigation into the fee structure and underperformance, Ohio’s political system moved aggressively against trustees aligned with transparency — including Rudy Fichtenbaum and Wade Steen — who were ultimately removed from the STRS board after legal action involving the Ohio Attorney General’s office. Fichtenbaum and Steen were doing their fiduciary duty by bringing up the alternative losses in the Forensic Review. Fichtenbaum has been a leader for the Ohio Association of University Professors, whose national AAUP was one of the unions filing the SEC complaint on Apollo. STRS staff and the AG’s office shifted the narrative with the help of the media to focus on an investment concept QED, the trustees mentioned as a concept, and $0 invested and $0 in fees. QED was a bait and switch to take attention away from billions in alternative underperformance and hundreds of millions in hidden excessive fees paid to alternative managers including Apollo.
Meanwhile, Ohio’s paper of record operates inside the Gannett newspaper chain, whose consolidation was heavily financed by Apollo debt. Conflict of interest does not require a phone call. It requires a capital structure. If your pension coverage comes from a media chain financially intertwined with the very private equity ecosystem under scrutiny, the public deserves disclosure every time Apollo’s name appears or should appear in this case.
And here is the uncomfortable symmetry:
• Epstein’s network intersected with elite finance. • Apollo leadership is tied to Epstein through documented payments and relationships. • Apollo is a manager inside Ohio’s teacher pension alternative portfolio. • Ohio trustees pushing for exposure of alternative fee leakage are removed. • Media financially linked to Apollo ignores Forensic Audit findings that shed Apollo and other alternative managers in a negative light.
The Epstein story is not just about who flew where, who was with whom, as Ohioans are seeing with Les Wexner and Ohio State. It is about how elite finance networks protect themselves. When billions in teacher retirement wealth flow through private equity vehicles connected to executives who appear in Epstein files, and when those billions are shielded by complexity, and when trustees demanding disclosure are removed rather than supported, the question becomes unavoidable: Is STRS protecting teachers — or protecting the alternative investment industry? Ohio educators do not need press releases.
They need answers: Full disclosure of every Apollo vehicle held by STRS. Explanation on why Apollo misled Public Pensions on the extent of their Epstein involvement in 2019. Total management fees, carried interest, and transaction fees paid since 2008. Benchmark comparisons versus low-cost public alternatives. Written explanations for any underperformance relative to passive strategies.
Until that happens, the Epstein shadow will not leave this story — because the issue is not a salacious scandal. It is power. And $8.6 billion of Ohio teachers’ and taxpayers’ losses deserves more than silence.
Insurance regulation in the United States is often described as “state-based.” That sounds reassuring. Local accountability. Fifty insurance commissioners. Fifty departments. Fifty sets of eyes.
The reality is far less comforting. We have 50 separate regulators, each with its own budget constraints, political pressures, industry relationships, and transparency standards. There is no unified federal insurance regulator. No SEC-equivalent for life insurers. No ERISA-style fiduciary overlay governing retail annuities.
Instead, we have coordination through the National Association of Insurance Commissioners (NAIC). And that’s where the real story begins.
The NAIC: The Quiet Nerve Center of Insurance Regulation
While insurance regulation is technically state-based, the NAIC writes the model laws, develops solvency standards, drafts accounting rules, and coordinates national policy.
State regulators almost uniformly adopt NAIC models. When NAIC moves, the states follow.
Which means this private, membership-based organization effectively shapes the rules governing:
Trillions in life insurance reserves
Over $2 trillion in individual annuity reserves
The solvency standards protecting retirees
The accounting treatment of general account assets
The risk-based capital formulas that determine whether insurers survive or fail
And yet, for something that central, transparency has lagged far behind modern expectations.
His request is remarkably simple: If a meeting is designated “public,” then livestream it for free. Archive the recording. Post the materials.
No paywall. No $875 virtual attendance fee. No closed archive.
In his own words, Gould explains that as an annuity owner, he depends on regulators to proactively prevent insurer insolvency — yet he has no contractual rights to ensure that happens.
He is entirely dependent on regulatory competence and regulatory transparency. But if a retiree wants to virtually attend a public NAIC session, the cost can be hundreds of dollars. If he misses a meeting, the only official record may be curated minutes — which, as Gould notes, are a “summation rather than a complete transcript.”
The technology already exists. NAIC already livestreams internally. Webex links can be posted. Archiving is trivial. The barrier is not technical. It is institutional.
What Gould Is Actually Asking For
In his formal talking points submitted to the Executive Committee
, Gould outlines a proposal that would:
Livestream all public meetings without charge
Archive recordings and make them freely accessible
Post meeting materials in a timely manner
Maintain reasonable registration controls (but no payment requirement)
He notes that NAIC’s credibility depends on trust and broad stakeholder engagement — yet practical access barriers restrict participation to well-resourced entities and industry-paid lobbyists. That is the heart of the issue. If only large insurers and trade groups can afford full participation, the appearance — and perhaps the reality — becomes regulatory capture.
The Outdated Videotaping Policy
The current NAIC policy statement on videotaping dates back to 1998 and was revised in 2010. It predates the Webex era. It predates routine livestreaming. It predates modern digital transparency standards.
Federal agencies routinely livestream and archive proceedings. State legislatures do the same. City councils do the same. Why is insurance regulation different?
Why This Matters for Annuities
As argued previously in “Annuities: The ERISA Regulatory Hole No One Wants to Talk About,” retail annuities sit outside ERISA’s fiduciary framework and are governed almost entirely through state insurance regulation.
If that regulatory system is fragmented and opaque, then trillions of retirement dollars rest on a structure that is:
Non-uniform
Politically sensitive
Industry-influenced
Largely invisible to the public
Insurance companies operate through general accounts that are not benchmarked like mutual funds. Spread is undisclosed. Asset allocation is opaque. Private credit exposures are growing.
The one safeguard consumers have is solvency regulation.
If the solvency regulators operate behind velvet ropes, that safeguard weakens.
Fifty Regulators — But One Gatekeeper
The NAIC is not a federal agency. It is a standard-setting body composed of state regulators. It is deeply influential, yet structurally private.
That hybrid status creates ambiguity:
Not fully public
Not fully private
Not fully accountable
Not fully transparent
Gould’s proposal is modest. It does not change capital standards. It does not alter accounting rules. It does not weaken solvency requirements.
It simply says: If a meeting is public, let the public see it.
Transparency Is Not Anti-Insurance
Supporting this proposal is not anti-insurer. It is not anti-regulator.
It is pro-legitimacy.
In an era of:
Private credit expansion inside life insurers
Offshore reinsurance structures
Bermuda-based balance sheet engineering
Rising scrutiny of insurer asset risk
Public confidence in solvency regulation matters more than ever. If regulators are doing strong work, transparency strengthens them. If regulators are under pressure, transparency protects them.
Why I Support Peter Gould
Gould is not a hedge fund. Not a trade association. Not a plaintiff’s firm.
He is a retiree who depends on annuity contracts for income he cannot outlive.
He is asking for basic visibility into the regulatory body that determines whether his insurer remains solvent. That is not radical.
That is commonsense.
The Bigger Picture
Insurance regulation in America has always been decentralized. That is unlikely to change. But decentralization does not require opacity.
If the NAIC wants to reinforce its leadership position, it should embrace full transparency of public proceedings — livestreamed, archived, and freely accessible.
Because when trillions in retirement assets depend on solvency standards written in committee rooms, the public should not have to pay admission to watch.
Transparency is not a threat to insurance regulation. It is the only way to preserve trust in it.
New York progressives have never been shy about demanding that public pensions align with public values. They have pushed divestment from fossil fuels. They have called out Palantir. They have criticized excessive private equity fees. They have criticized investments linked to genocide in Gaza
Why is Apollo Global Management still deeply embedded in New York’s public pensions? They are worst of worst
And why has there been no serious divestment debate in Albany or City Hall, despite renewed scrutiny of Apollo’s leadership over their documented ties to Jeffrey Epstein? New and disturbing information on pedophile issues around Leon Black and ownership of school photo firm Lifetouch are in the news daily.
The Money Is Not Small
New York’s exposure to Apollo is not theoretical. It is massive and multi-vintage. Near $1 billion
According to New York State Common Retirement Fund (NYSCRF) reports and transaction disclosures:
August 2013 — Apollo Investment Fund VIII, L.P. $400 million commitment
2015 (report dated August 2015) — Apollo Natural Resources II, L.P. $400 million commitment
December 2021 — Apollo Impact Mission Fund $150 million commitment (Monthly report describes Apollo as an “existing relationship”)
December 2022 — Apollo Investment Fund X, L.P. $350 million commitment
March 2023 — Apollo Excelsior PE Co-Invest, L.P. $350 million commitment
New York City pensions—including the Teachers’ Retirement System (TRS NYC)—have also been reported to have commitments to Apollo funds.
This is not a legacy relationship winding down. It is active, expanding, and ongoing.
The Epstein Question Is Not Going Away
Leon Black paid Jeffrey Epstein more than $150 million over years, including after Epstein’s 2008 conviction. Marc Rowan and other Apollo executives have faced renewed scrutiny following document releases and calls from national organizations for regulatory review. As reported in FT, Marc Rowan lied or at best, misled public pensions on the extent of their involvement with Jeffrey Epstein.
The American Federation of Teachers (AFT) and American Association of University Professors (AAUP) have formally urged the SEC to investigate disclosures relating to Apollo executives’ contacts with Epstein. https://www.aft.org/press-release/aft-aaup-demand-sec-probe-over-apollo-execs-epstein-contacts Hopefully, this will lead to their member trustees calling for divestment nationwide.
New York is home to some of the most progressive pension governance rhetoric in the country. Yet there has been no sustained demand that:
NY Stat re-underwrites its Apollo relationship
NYC pensions conduct a public governance review
Trustees disclose how reputational risk is assessed
Progressives regularly argue that private equity extracts wealth from workers and communities.
Apollo is one of the largest beneficiaries of that structure.
If New York believes private equity fees function as a hidden tax on retirees, then the firm receiving hundreds of millions in commitments deserves enhanced scrutiny—not immunity.
Marc Rowan’s Expanding Political Role
Besides Epstein ties Marc Rowan’s reported appointment to a Trump-era Gaza advisory board adds a geopolitical dimension that many progressive voters will find troubling. Most progressives oppose the Genocide in Gaza, so this should be especially disturbing.
Public pensions must consider not only financial performance but governance risk, reputational exposure, and political entanglement.
Comptroller Candidates Have Already Set the Standard
Comptroller candidates Drew Warshaw and Raj Goyle have already called for:
Divestment from Palantir
Divestment from fossil fuels
Reduction of excessive private equity fees
Apollo Global Management is the largest private equity owner of hospitals in the United States, controlling approximately 220 facilities across 36 states through Lifepoint Health and ScionHealth Senate investigators found that Apollo holds a 97% ownership stake in Lifepoint, which pays Apollo $9.2 million annually in management fees and has paid substantial transaction fees, including a $55 million fee tied to a major acquisition These payments occurred while Apollo-owned hospitals faced service cuts, staffing reductions, declining patient satisfaction, and failure to meet legally binding capital expenditure commitments
Public Citizen and the Private Equity Stakeholder Project identify Apollo among private equity firms backing oil and gas companies drilling on federal lands since 2017, with inadequate bonding to cover potential cleanup liabilities. The report estimates that private equity-backed drillers could leave taxpayers exposed to hundreds of millions of dollars in environmental remediation costs, as bonding requirements cover only a small fraction of potential cleanup obligations
This is not a call for performative politics. It is a call for fiduciary consistency.
A proper review would require:
Public disclosure of total exposure to Apollo across all NY state and city plans
A formal board discussion of reputational and governance risk
Review of all side letters and fee structures
Independent counsel analysis of whether prior disclosures relied upon by trustees remain accurate in light of newly surfaced information
If the conclusion after such review is to maintain the relationship, so be it. But silence is not prudence.
The Political Reality
New York prides itself on progressive pension leadership. Yet Apollo continues to receive fresh commitments—Fund X in 2022, co-investments in 2023—while national headlines about executive ties to Epstein resurface. The question for Albany and City Hall is straightforward: Are New York pensions governed by values and transparency— or by inertia and access?
Yes, Les Wexner deserves scrutiny for his historic ties to Jeffrey Epstein. But while Ohio media fixates on Wexner, another name—Leon Black of Apollo Global Management—barely crosses the front page. That silence is not a coincidence. It’s a governance problem. While Lex Wexner provided a lot of seed money to Epstein, post his 2008 conviction Leon Blacks was his largest funder.
Because while Ohioans debate Wexner, Ohio taxpayers and teachers have paid hundreds of millions of dollars in fees and profit streams to Apollo through state pension investments—often via opaque, no-bid private market commitments buried in Alternative Investment schedules. And in 2026, new disclosures and calls for investigation from national labor and academic organizations have reopened questions that Ohio leaders can no longer pretend were settled in 2019. https://www.aft.org/press-release/aft-aaup-demand-sec-probe-over-apollo-execs-epstein-contacts
Wexner in the Headlines. Apollo in the Shadows.
It is widely reported that Leon Black paid Jeffrey Epstein more than $150 million over years—much of it after Epstein’s 2008 conviction. Those payments were characterized as tax and estate planning services. Internal reviews were conducted. Black stepped down. End of story, we were told.
But now the American Federation of Teachers (AFT) and American Association of University Professors (AAUP) are demanding a formal SEC probe into Apollo executives’ contacts with Epstein, citing newly disclosed documents and inconsistencies in prior representations. That is not gossip. That is a call for regulatory review.
And yet in Ohio, you would barely know this debate exists.
Why?
Ohio’s Pension Money and Apollo
Ohio’s major public retirement systems—including STRS Ohio, OPERS, and SERS and Highway Patrol—have invested repeatedly in Apollo-managed private equity and credit funds. These are typically structured as long-term, illiquid partnerships:
No public bidding process
Limited disclosure of underlying portfolio holdings
Confidential fee structures
Limited transparency into side letters and GP economics
In other words: perfect vehicles for taxpayers to be exposed to governance risk without knowing it.
If Ohio pensions have committed capital across multiple Apollo vintages—as publicly available alternative investment schedules suggest—then Ohio educators, firefighters, and taxpayers are not peripheral observers in the Apollo story. They are participants.
And here’s the uncomfortable extension: The Ohio State University endowment also participates in private markets. If Apollo exposures exist there as well, that would mean Ohio’s flagship university is financially tied to a firm still defending its executive contacts with Epstein.
That is not guilt by association. That is fiduciary exposure.
The Lifetouch Question
Apollo is not merely a Wall Street fund manager. It owns operating businesses—including Lifetouch, the school photography company that collects millions of children’s photos across America.
When a firm that profits from public pensions and owns companies interacting with children is simultaneously tied to executives who maintained contact with a convicted sex offender, fiduciaries do not get to shrug and say, “That’s someone else’s problem.”
That means the two largest Ohio newspapers covering state pensions are financially connected—directly or indirectly—to a firm profiting from those pensions. Only the Toledo Blade has given accurate coverage.
Even if no editor is ever told what to write, the conflict is obvious:
Apollo profits from Ohio pensions.
Apollo is tied to executives under renewed Epstein scrutiny.
Ohio’s major newspapers have financial relationships within Apollo’s orbit.
Ohioans deserve to ask: Who investigates the investigator when the newsroom is financially intertwined with the subject?
STRS Ohio: Will Trustees Demand Divestment?
This is where it becomes specific—and urgent.
At STRS Ohio, trustee battles have already exposed deep governance divides. AFT- and AAUP-affiliated trustees have historically clashed with gubernatorial appointees. Most recently, Ohio’s Attorney General’s office attacked AAUP representative Rudy Fichtenbaum in board disputes tied to investment transparency and governance reform.
Now that AFT and AAUP nationally have called for an SEC probe into Apollo over Epstein contacts, Ohio’s affiliated trustees face a simple question:
Will they call for Apollo divestment or at least a formal re-underwriting review?
If not, why not?
If so, will Ohio’s political leadership allow that debate—or suppress it?
Ohio Leaders Cannot Pretend This Is 2019
In 2019, many pensions declined to divest from Apollo, citing internal reviews and assurances. But new disclosures and external regulatory pressure change the fiduciary calculus.
Divestment is not about punishment. It is about:
Reassessing reputational risk
Evaluating disclosure integrity
Re-examining prior reliance on GP statements
Protecting beneficiaries from governance contagion
The duty of loyalty does not end when headlines fade.
The Hard Questions for Ohio
How much capital—current NAV and unfunded commitments—does each Ohio pension have invested with Apollo?
What total fees (management + carried interest + transaction fees) have been paid to Apollo since 2007?
Were any of those commitments made without competitive bidding?
Has STRS or OPERS re-evaluated Apollo exposure since the 2026 AFT/AAUP letter?
Do any Ohio public institutions—including OSU—have Apollo exposures?
Will trustees request executive-session briefings specifically on Apollo’s Epstein-related disclosures?
If those answers are not publicly available, that is precisely the problem.
Ohio’s Pattern of Silence
In prior Commonsense investigations, we documented how Ohio media diverted attention toward manufactured scandals while avoiding deeper structural pension issues. We saw how executive compensation ballooned while teachers bore the cost. We saw how governance critics were attacked rather than answered. While the pension scandal dwarfs that of First Energy, the culture of corruption in government and media has kept it under wraps
Now, as national attention turns again to Epstein-linked financial networks, Ohio risks repeating the same mistake: focusing on the name that dominates headlines while ignoring the one still writing checks from public pension capital.
In 2019, when Jeffrey Epstein was arrested, and the first public scrutiny fell on Leon Black — co-founder of private capital giant Apollo Global Management — many public pension funds faced a simple choice: do we continue investing with a firm deeply connected, even if indirectly, to a convicted sex offender? Almost all chose not to divest. Funds asked questions. One major plan paused new commitments. But nearly all maintained existing exposures. At the time, the narrative trustees were given — both publicly and privately — was this: by CEO Marc Rowan
What Naked Capitalism and Other Sources Showed Back in 2019–2023
In July 2023, finance observers at Naked Capitalism laid out what was already obvious from the early media coverage of the Black–Epstein ties: Leon Black had paid Epstein eye-popping sums — tens of millions of dollars annually — for “tax advice” despite Epstein having no recognized tax credentials, and there was legitimate skepticism about whether that amounted to anything more than paying for influence or access. The Senate Finance Committee was openly probing the arrangement as emblematic of how super-wealthy elites use opaque tax structures to avoid taxes altogether.
Naked Capitalism was blunt: paying $158 million to someone unlicensed for tax or estate planning — and doing so without a formal fee agreement — was not only “unseemly” but abnormal even by private-markets standards.
What the Government and Press Have Disclosed in early 2026
Appendix: The “No Relationship” Defense Is Structurally Implausible
Marc Rowan’s spokesperson now asserts that neither Rowan nor anyone else at Apollo (excluding Leon Black) had a business or personal relationship with Jeffrey Epstein. That defense hinges on a narrow semantic distinction — as if sporadic communications, returned calls, arranged meetings, and interactions involving Apollo personnel somehow do not constitute a “relationship.” But governance does not turn on wordplay. If Epstein was fielding calls from Rowan, arranging in-person meetings, communicating with Apollo colleagues, and inserting himself into matters touching corporate staff and financial structures, then the claim of “no relationship” becomes structurally implausible. At minimum, it reflects contact and operational interface during a period when Epstein was simultaneously serving as Black’s fixer across financial, reputational, and legal risk domains. For public pension fiduciaries evaluating counterparty governance, the relevant question is not whether Rowan socialized with Epstein. It is whether senior leadership had interactions with, access to, or reliance upon an individual later revealed to be deeply embedded in sensitive matters involving the firm’s co-founder. If the answer is yes — even episodically — then the categorical “no relationship” defense collapses under its own weight.
The Financial Times’ 2026 Emails Dump
In early 2026, a tranche of Department of Justice emails released as part of the Epstein files showed that Apollo’s leadership may have mischaracterized key facts:
Epstein was not just a personal advisor to Leon Black — he was given internal financial documents from Apollo executives, including current CEO Marc Rowan, and was involved in discussions over firm tax arrangements.
Epstein requested and reviewed sensitive tax receivable agreement figures and potential tax strategies for Apollo’s internal transactions, contradicting earlier Apollo statements that no business was conducted with Epstein.
Emails indicate that not just Black, but Rowan and co-founder Josh Harris, were earmarked as needing to sign off on Epstein-connected plans — placing them squarely inside matters previously described as personal affairs.
That’s a seismic shift: the firm’s public defense was personal dealings only; the record now shows Epstein engaged in substantive discussions over corporate and tax strategy involving multiple senior executives. https://www.ft.com/content/092d9e44-ec17-4da7-8b58-e43bf09113ab
In February 2016, Rowan and Epstein discussed working with Edmond de Rothschild to finance an Apollo inversion. Epstein appears to have been the conduit for the introduction to the bank.
The February 17, 2026 letter to the SEC from the American Federation of Teachers and the American Association of University Professors dramatically undercuts the premise on which many public pensions declined to divest in 2019. www.aft.org/sites/default/files/media/documents/2026/Letter_to_SEC_re_Apollo_Global_Management_February_17_2026.pdf The letter details newly released Justice Department documents showing that Marc Rowan and Joshua Harris met repeatedly with Jeffrey Epstein between 2013 and 2016, discussed matters involving Athene and potential Apollo transactions, sought Epstein’s advice on tax receivable agreements, and even involved him in introductions related to financing and bankruptcy proceedings
These disclosures stand in direct tension with Apollo’s January 25, 2021 Form 8-K https://www.sec.gov/Archives/edgar/data/1411494/000119312521016405/d118102d8k.htm and accompanying Dechert report, which asserted that Leon Black “never promoted Mr. Epstein’s services to other Apollo senior executives” and that neither Harris nor Rowan hired or consulted Epstein on personal matters. The AFT letter states plainly that the DOJ files suggest those statements were “misleading” and that investor communications currently give an “inaccurate and incomplete picture” of Apollo’s ties to Epstein . For public pension fiduciaries, this is no longer merely a reputational issue—it is a disclosure integrity issue. If the representations that underpinned the 2019 decision not to divest are now credibly challenged by federal document releases, trustees have a renewed duty to re-examine whether continued exposure to Apollo satisfies their obligations of prudence, candor, and risk oversight. The Financial Times published a paywall piece on the AFT letter on 2/17/26 https://www.ft.com/content/9f96ca88-2cee-4ca1-a076-58cf3440ac55
The “No Relationship” Defense Collapses Under Documentary Evidence
In 2019, public pension trustees were assured that Jeffrey Epstein’s relationship was personal to Leon Black, contained, historical, and irrelevant to Apollo’s institutional governance. Marc Rowan and Apollo representatives emphasized that no broader operational or business integration existed. That narrative is now irreconcilable with the documentary record.
The newly released Justice Department files, detailed in Bloomberg’s February 13, 2026 investigation, show Epstein operating not as a passive estate planner but as a “stealthy do-it-all fixer” deeply embedded in financial structuring, asset leverage, tax positioning, corporate entities, and sensitive personal matters involving Apollo’s co-founder
Why This Matters to Public Pensions
1. Pension Boards Relied on a False Premise
In 2019–2021, trustees were told:
Apollo had no corporate relationship with Epstein
Black’s payments were personal and non-business-related
Nothing in Apollo’s governance or operations was implicated
That representation was material to trustees’ fiduciary judgments — especially for those whose due diligence pointed to reputational risk, governance risk, and long-term fund performance.
Today’s evidence suggests that the premise trustees used to decline divestment was incorrect.
That’s not just a reputational wrinkle — it’s a fiduciary risk oversight failure.
2. The Naked Capitalism Frame Was Right About the Real Question
Back in 2019, commentators questioned the real value of Epstein’s services and whether the arrangement was something other than benign advice. Naked Capitalism suggested: Paying someone like Epstein $158 million, without a professional fee agreement or credentials, was implausible outside of influence, access, or other undisclosed benefits — especially when vetted tax professionals could have done similar work for a fraction of that fee. That same skepticism now resonates with the newer evidence showing Apollo executives shared sensitive tax-related information with Epstein — something that goes well beyond “advice.” https://www.nakedcapitalism.com/2023/07/former-apollo-chief-leon-black-has-more-jeffrey-epstein-splaining-to-do-with-tax-evasion-alleged-rape-of-autistic-16-year-old.html
The Broader Governance Pattern Pensions Should Recognize
This episode fits a much larger pattern — one these same pensions have repeatedly confronted in private markets: When you ask managers for transparency on governance concerns, the first answer is usually a controlled narrative. Only later, often under external pressure or legal document release, does a more complex, less flattering story emerge. This is the same dynamic you’ve documented in retirement investment analytics — where private-market disclosures are often opaque until forced into daylight.
The Fiduciary Question Trustees Must Now Ask
Not: Should we feel bad about Apollo’s historic transgressions? But: Did we make our 2019 divestment decision based on facts that were materially incorrect? If so, should we revisit that decision now?
And if Apollo’s prior disclosures were materially inaccurate:Did trustees receive updates that corrected the record at the time?Did pensions perform iterative due diligence as new facts emerged?Did funds that continued to invest explain how they evaluated the governance impact?Should pension committees reopen investment decisions in light of new evidence?
These are not political questions. They are fiduciary ones.
What Pension Fiduciaries Should Do Now
In light of the newly revealed evidence and other reporting:
1. Request Apollo to explain, in writing, the extent of Epstein’s involvement in firm matters now shown after 2019 facts. Trustees should demand transparent, verifiable responses from Apollo on: What documents were shared with Epstein . Who in Apollo communicated with Epstein . What strategic matters Epstein was consulted about. Whether Apollo’s prior statements to investors continue to be accurate 2. Re-evaluate all Apollo commitments against fiduciary standards This should include: Governance risk assessments, Reputational risk analyses, Operational due diligence, Cost/benefit of continuing exposure vs. risk mitigation 3. Consider divestment, or exit strategies where appropriate Funds that maintain significant exposure should periodically reassess whether continued involvement aligns with prudent investor standards — especially when the manager’s transparency has been called into question.
Conclusion: This Is Not Ancient History
What happened with Apollo in 2019 was not settled history. Too many trustees accepted an incomplete — and now demonstrably inaccurate — narrative. The Naked Capitalism critique back then was more than snark; it was fundamentally right about the depth and implications of the relationships at play. Pensions can no longer rely on the original premise they were given. It’s time to ask: Should we continue to invest with a manager whose senior leadership repeatedly mischaracterized material governance facts to public investors? That is the commonsense fiduciary question of 2026.
United States public pensions (confirmed in public sources)
Pennsylvania PSERS (Public School Employees’ Retirement System of PA) — PSERS board resolution for Apollo Investment Fund IX notes prior PSERS commitments to multiple Apollo partnerships and states PSERS had committed $620m to Apollo-managed partnerships since 2012 (as of that 2017 resolution).
Pennsylvania SERS maintained exposure to flagship buyout funds during Apollo Fund VI–VIII cycles.
California CalPERS (CA Public Employees’ Retirement System) — identified in SEC filings as one of Apollo’s “Strategic Investors.” Huge Holdings in billions
California CalSTRS (CA State Teachers’ Retirement System) — CalSTRS’ own Private Equity Portfolio Performance table lists multiple Apollo vehicles (e.g., Apollo Investment Fund IX; Apollo Hybrid Value Fund II; Apollo Investment Fund X) with commitments shown.
Florida State Board of Administration (Florida SBA) — Florida SBA performance report lists multiple Apollo private equity funds (e.g., Apollo Investment Fund IV, V) with commitment amounts; separate reporting also describes commitments to Apollo credit funds. Apollo Accord Fund V and VI LP
Ohio State Teachers Retirement (STRS) $600mm in Apollo Private Equity Partnerships Apollo S3 Equity and Hybrid Solutions Fund I Apollo Global Management (APO)
OPERS: Holds Apollo Global Management (APO) equity (.
Ohio SERS: Apollo Global Management , “Core Farmland Fund, LP —
Ohio Highway PatrolSHPRS: “Apollo Investment Fund” appears as a line item in ORSC report snippets (with dollar amounts shown
Virginia Retirement System (VRS) — reported commitments to Apollo vehicles (e.g., $50m in 2020 and $250m commitment reported in 2022).
Teachers’ Retirement System of Texas (TRS Texas) — reported as a major investor/LP in Apollo funds (e.g., Reuters/industry coverage of Apollo funds; PERE notes TRS Texas as a major investor in Apollo Investment Fund VIII). PE Hub
Teachers’ Retirement System of Louisiana (TRSL) — reported commitments to Apollo strategies (e.g., Apollo Natural Resources fund commitments, plus later credit commitments).
New York City Teachers’ Retirement System (TRS of the City of New York) — Reuters reported NYC pension commitments to Apollo and mentions TRS NYC’s specific commitments to Apollo funds. PE Hub
New York State Aug 2013:Apollo Investment Fund VIII, L.P. — $400 million commitment (NYSCRF report).
(Report dated 2015-08):Apollo Natural Resources II, L.P. — $400 million commitment (NYSCRF report).
Dec 2021:Apollo Impact Mission Fund — $150 million commitment (Monthly Transaction Report; also states Apollo is an “existing relationship” and notes “no placement agents”).
Dec 2022:Apollo Investment Fund X, L.P. — $350 million commitment (Monthly Transaction Report).
Mar 2023:Apollo Excelsior PE Co-Invest, L.P. — $350 million commitment (Monthly Transaction Report).
Los Angeles City Employees’ Retirement System (LACERS) — LACERS performance update document references Apollo Investment Fund VI (example of an Apollo commitment appearing in a LACERS consultant report).
TRS Illinois makes $200mm to Apollo Investment Fund X Oct.22 PE Int
South Carolina Apollo reference 2011 PE INT.
Connecticut $111mm Apollo Fund VIII chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://portal.ct.gov/-/media/ott/pdfs/2018cifcafr.pdf
Iowa hiring of Apollo Strategic Origination Partners (Dakota.com), Apollos Insurance Company, and Athene is domiciled in Iowa
New Mexico SIC → Apollo credit fund: $100M 2007 NMERB PE: Apollo Investment Fund VII (2008), $40M. Apollo Investment Fund VIII (2013, $50M.
Canada (confirmed)
CPP Investments (Canada Pension Plan Investment Board / CPPIB) — CPPIB’s own press release states it made a US$150m commitment to an Apollo private equity fund (older but directly documented).
Ontario Teachers’ Pension Plan (OTPP) — documented deal with Apollo-affiliated funds (CareerBuilder acquisition) showing direct co-investment/transaction participation alongside Apollo funds.
UK public pensions (confirmed)
London Pensions Fund Authority (LPFA) — industry pension press reports LPFA selecting Apollo (manager selection / mandate).
Cumbria Local Government Pension Scheme (LGPS) — a published LGPS alternatives holdings spreadsheet includes an “APOLLO MULTI-CREDIT FUND” line item.
Mentions Singapore fund
Apollo was Fined $53 Million by the SEC in 2016 following charges that it misled investors regarding fee practices. [iii]
In 2015 Apollo was involved in a massive pay-to-play scheme involving a trustee and CEO of CALPERS the US largest public pension. The CALPERS CEO, Buenrostro, was sent to prison and the trustee Villalobos committed suicide before serving his term. Apollo was rewarded with more investments. [iv]https://www.latimes.com/business/la-fi-villalobos-suicide-20150115-story.html
Apollo, via its debt control of Gannett, controls the main state media in many of the markets, especially state capitols of the above Public Pension Plans, like the Columbus Dispatch, Cincinnati Enquier and 12 other smaller Ohio papers. Tallahassee Democrat, Jacksonville Times Unon and 15 other Florida papers. Springfield State Journal, Peoria Journal Star, Rockford Register Star, and 10 other Illinois papers. Austin American-Statesman El Paso Times, and 6 other Texas papers. Indianapolis Star, Des Moines Register, Topeka Capital-Journal, Lansing State Journal, Jackson Clarion-Ledger, The Providence Journal
UN Human Rights Office looking into Jeffrey Epstein files pointing to a transnational “global criminal enterprise Many US pensions have signed onto the UN Global Compact on Human Rights. Investment firms like Apollo have signed as well and this could increase their risk of divestment https://news.un.org/en/story/2026/02/1166980
https://www.unpri.org/supporters LACERS Vermont Minnesota City of Chicago, ILL Treasurer, State of HI, Seatle SCERS , San Francisco, NYC Teachers, Ontario Teachers, Maryland, CALSTRS, Connecticut, CALPERS (since 27 April 2006)
“Median participant recovery: $67.79. Average plaintiff attorney fee: $1.59 million.”
And the implied message is obvious:
“The real problem in 401(k) lawsuits is the lawyers, not the fiduciary misconduct.”
That framing is not just misleading. It’s a defense narrative that flips the economics of ERISA litigation on their head.
Let’s do the math the article avoids.
What the settlement numbers actually say
Using the same figures being cited:
Total settlements: $5.3 million per case
Plaintiff fees: $1.59 million
Participant recovery: $3.71 million
That means participants received 70% of the settlement dollars.
Not the lawyers.
Now the part no one mentions:
Those settlements typically represent 10–20% of the actual damages.
That’s not speculation. That’s how settlement economics work in these cases after years of motion practice, discovery fights, and judicial hostility at the pleading stage.
If $5.3 million is ~15% of actual damages, then:
Actual participant losses ≈ $35.3 million
That’s the real number. Wall Street Defense attorneys force the participants to take $3.71 million of the $35 million taken from them.
The number they don’t want you to see
As actual damages are roughly $35 million per case, then the hidden story is this:
Defense lawyers are helping fiduciaries settle cases for 15 cents on the dollar.
That’s about $30 million per plan in losses that never get repaid.
And the trade press wants you mad at the lawyers who took a third of the clawed back 15%.
Why settlements are so small relative to damages
Because courts increasingly:
Dismiss cases before discovery,
Demand “meaningful benchmarks” that don’t exist,
Misapply standing rules,
Treat revenue sharing and proprietary funds as normal,
Block prohibited transaction claims at the pleading stage.
This forces plaintiff firms into a brutal risk calculus:
Take a discounted settlement now, or risk total dismissal later.
That is not a sign the cases lack merit.
That is a sign the legal environment is tilted.
The inversion
Here’s the real flow of money per case:
Where the money goes
Approx. amount
Participant losses
$35,000,000
Settlement paid
$5,300,000
Participant recovery
$3,710,000
Plaintiff attorneys
$1,590,000
Unrecovered losses kept by fiduciary ecosystem
~$30,000,000
And the headline focuses on the $1.59 million.
That’s the inversion.
Why this narrative exists
Because if the story were told honestly, it would read:
“401(k) fiduciaries and service providers avoided repaying $30 million per case thanks to procedural defenses and judicial pleading barriers.”
That’s not a comfortable story for an industry publication.
So instead, they write:
“Look how much the lawyers make.”
What this really shows
These cases are not evidence of plaintiff excess.
They are evidence of how hard it is to hold fiduciaries accountable under modern ERISA jurisprudence.
Despite:
Documented fee disparities,
Revenue sharing conflicts,
Proprietary fund steering,
Opaque CIT and annuity structures,
Consultant conflicts,
Participants are recovering pennies on the dollar.
And the industry wants you to blame the only people who forced any recovery at all.
The uncomfortable truth
If plaintiff firms disappeared tomorrow, participants wouldn’t keep that $1.59 million.
They would lose the entire $35 million.
Because nothing else in the system is forcing fiduciaries to return money.
Not regulators. Not consultants. Not auditors. Not recordkeepers.
Only litigation.
The punchline the industry hopes you miss
That $68 statistic is not proof lawsuits are broken.
It’s proof that:
Fiduciary breaches in 401(k) plans are so large, and recoveries so discounted, that even billions returned looks small when averaged out.
And the real scandal is not what the lawyers took.
The term “annuity whore” is a derogatory slang expression used within the financial services industry, particularly among stockbrokers, investment advisors, and insurance agents.[1] It refers to a financial professional who aggressively pushes or sells annuities to clients—often regardless of the client’s actual financial needs—primarily to capture the high upfront commissions associated with these products.[2][3]
Inside parts of the brokerage and insurance world, “annuity whore” is slang for the advisor who pushes annuities first, asks questions later—because annuities are where the money is. Not the client’s money. The advisor’s.
And in 2026, as indexing, ETFs, and fee transparency squeeze traditional commissions to dust, the least transparent corner of the financial system has quietly become the revenue engine for huge swaths of the advisory industry:
“Fiduciary advice” on the front end, insurance contract on the back end
Many of these advisors are credentialed by the CFP Board and truthfully say they are fiduciaries.
They are.
But the product they recommend:
does not disclose spread,
cannot be benchmarked like a fund,
embeds compensation inside the contract,
and, in retirement plans, can create ERISA conflicts.
That’s the fiduciary paradox.
2) Wirehouses and regional broker-dealers
At firms like Merrill Lynch, Morgan Stanley, Stifel, and Edward Jones:
There are dedicated annuity desks
Internal wholesalers
Payout grids that reward annuity production
Retirement campaigns built around “guaranteed income”
Do their 10-Ks say, “50% of this branch’s book is annuities”?
No.
They bury it in:
“commissions and fees,” “insurance revenues,” “transactional revenues.”
It’s disclosed. Just not in a way a client could ever piece together.
3) Retail retirement accounts and IRA rollovers
This is the part that almost no one measures correctly.
Annuities don’t show up in:
ETF flow tables
Mutual fund league tables
Morningstar categories
They show up on insurance company balance sheets as general account reserves.
According to the Federal Reserve Financial Accounts (Z.1):
Life insurers’ individual annuity reserves ≈ $2.8 trillion
Household life insurance & annuity entitlements ≈ $6.7 trillion
That is not fringe money. That is one of the largest pools of retirement assets in America.
There are literally thousands of different insurance products and some are worse than others. There are some responsible people in the industry calling out the worst products but they are a minority.
Why the public massively underestimates annuities
Because they are not counted like investments.
They are counted like insurance liabilities.
Which means:
No ticker
No expense ratio
No performance chart
No easy comparison
Just a crediting rate… set by the insurer… after they take their spread.
How to tell if your advisor lives off annuities
You don’t ask them.
You read what they are required to disclose.
Look up the firm on the SEC site: SEC AdviserInfo Read the Form ADV Part 2. Search for:
insurance products
annuities
revenue sharing
affiliates
Look up the broker on: FINRA BrokerCheck
Look for dual registration:
Investment adviser
Insurance agent
That combination is where the annuity money lives.
The uncomfortable truth
A very large portion of the financial advisory industry would struggle to survive on transparent fees alone.
Annuities solve three problems for advisors and firms:
High, durable compensation
Client stickiness (hard to move once placed)
A simple retirement income story
And for clients, they sound comforting:
“Principal protection”
“No volatility”
“Guaranteed income”
What almost no one asks:
What is the spread?
What is the insurer earning versus you?
How is the advisor paid inside this?
Could this be replicated cheaper with transparent investments?
Even fiduciaries sell them
This is where it gets uncomfortable for the industry.
A CFP can say, honestly:
“I am a fiduciary, and this annuity is in your best interest.”
And believe it.
Because the system never forces reconciliation between:
fiduciary duty,
opaque product economics,
and embedded compensation.
That’s the gap.
That’s the dirty secret.
Why this matters beyond retail (and why it’s explosive)
As documented at the Commonsense 401k Project, even retirement plans have quietly filled with these products. But the retail side is much bigger and has been hiding in plain sight for decades.
You can benchmark a mutual fund. You can benchmark an index fund. You can even benchmark a synthetic stable value fund—if you know what you’re doing.
But you cannot benchmark a General Account or Separate Account fixed annuity.
That is not an accident. That is the design.
And it is the reason fixed annuities do not fit inside an ERISA fiduciary framework built on comparability, measurability, and transparency.
You’ve written for years that GA/SA annuities are prohibited transactions in practice. The missing piece most fiduciaries, consultants, and courts still don’t grasp is this:
Fixed annuities have comparables in the marketplace. They do not have a legitimate benchmark.
That difference is everything.
What a benchmark actually is (and why annuities can’t have one)
From the CFA Institute’s trustee framework and the Restatement of Trusts logic applied in cases like Brotherston, a benchmark must:
Be investable
Be transparent
Use market value accounting
Allow apples-to-apples fee and performance comparison
Reflect the same risk profile
SEC-registered mutual funds do this perfectly. That’s why 401(k)s are built around them.
As your book chapter explains, fee transparency + performance transparency is the foundation of fiduciary oversight. Once disclosures improved in 2012, litigation increased, and fees fell. That is how the system is supposed to work.
And say “We already outlawed this in 1940 and 1974. How did it come back?”
The question courts and regulators should be asking
Not:
“Is this permitted by the plan document?”
But:
“Would this be permitted if this were a private trust and the beneficiary demanded the books?”
That is the fiduciary test ERISA was built on.
And it’s the test many modern retirement structures cannot pass.
Appendix: The Quiet Erosion of Trust Law Inside ERISA
The story above makes a simple point: ERISA is trust law applied to pensions. Its backbone is the Restatement (Second) of Trusts. Its cousins are the disclosure regimes of the Securities Act of 1933, the Securities Exchange Act of 1934, and the structural protections of the Investment Company Act of 1940. Congress imported those principles into the Employee Retirement Income Security Act after pension looting scandals.
This appendix addresses a harder claim:
Over time—and especially in recent years—new rules, exemptions, and litigation trends have weakened ERISA’s trust-law core, not by repealing it, but by engineering around it.
How erosion happens (without saying “weaken ERISA”)
Modern changes rarely say, “reduce fiduciary duty.” Instead, they:
Redefine what counts as adequate disclosure Long documents, layered structures, and “proprietary” claims substitute for clarity. Participants receive information, but not usable information.
Expand what can be treated as ‘prudently justified’ Illiquid, opaque, hard-to-benchmark assets are normalized inside daily-valued plans so long as a paper process exists.
Rely on exemptions and safe harbors Prohibited-transaction exemptions, rollover rules, and advice frameworks create compliance paths that dilute the bright lines trust law once enforced.
Narrow who can sue and when Litigation doctrines and standing rules reduce the practical ability of beneficiaries to challenge conflicted structures, even when trust-law principles would condemn them.
Shift oversight from structure to documentation If the file shows a process, courts increasingly defer—even when the underlying structure obscures fees, conflicts, or valuation risk.
The pattern across administrations (and visible now)
This trend did not begin with any single administration. But the current legislative and regulatory push—often framed around ESG, choice, or access to private markets—accelerates the shift from trust principles to paper compliance.
For example, proposals emphasizing “pecuniary factors only” or expanding access to private assets in retirement plans may sound participant-protective. In practice, without parallel requirements for fee transparency, independent valuation, and real benchmarking, they risk:
Making it easier to justify opaque alternatives on a “financial” rationale
Hardening the legal defense that complexity equals prudence
Further distancing ERISA practice from the Restatement’s simple tests: loyalty, prudence, disclosure, and conflict avoidance
What trust law would still ask
A chancery judge applying trust law would ask:
Can the beneficiary see the fees?
Can the beneficiary verify the value?
Can the beneficiary compare the investment to a known benchmark?
Is anyone in the chain paid more if this option is chosen?
If the answer to any of those is “no” or “we can’t disclose,” trust law’s presumption is against the trustee.
Modern ERISA practice too often presumes the opposite: if it’s disclosed somewhere and documented, it is presumed acceptable.
Why this matters for today’s reforms
When new laws or rules are proposed—whatever their stated political goal—the test should be:
Do they move ERISA closer to or farther from its trust-law roots?
If a change:
Expands opacity,
Normalizes illiquidity without valuation safeguards,
Relies on exemptions over bright lines,
Or makes challenges harder for beneficiaries,
then it functionally weakens ERISA, even if the statute’s words remain untouched.
The through-line
From 1933 to 1940 to 1974, Congress responded to financial abuse the same way: force sunlight, ban conflicted structures, empower beneficiaries.
When modern policy trends move in the opposite direction—toward complexity, exemptions, and reduced accountability—they don’t repeal those laws.
They hollow them out.
That is the quiet erosion this article warns about.
The CommonSense 401k Project 