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Tuesday, December 10, 2019

Jeffrey Epstein, blackmail and a lucrative ‘hot list’

One of the revelations of the #MeToo era has been that victims’ lawyers often brokered secret deals in which alleged abusers paid to keep their accusers quiet and the allegations out of the public sphere.

By: New York Times | Updated: December 1, 2019 1:18:50 pm
Jeffrey Epstein US financier Jeffrey Epstein appears in a photograph taken for the New York State Division of Criminal Justice Services’ sex offender registry March 28, 2017 and obtained by Reuters July 10, 2019.

Written by Jessica Silver-Greenberg, Emily Steel, Jacob Bernstein and David Enrich

Soon after sex criminal Jeffrey Epstein died in August, a mysterious man met with two prominent lawyers. Towering, barrel-chested and wild-bearded, he was a prodigious drinker and often wore flip-flops. He went by a pseudonym, Patrick Kessler — a necessity, he said, given the shadowy, dangerous world that he inhabited. He told the lawyers he had something incendiary: a vast archive of Epstein’s data, stored on encrypted servers overseas.

He said he had years of the financier’s communications and financial records — as well as thousands of hours of footage from hidden cameras in the bedrooms of Epstein’s properties. The videos, Kessler said, captured some of the world’s richest, most powerful men in compromising sexual situations — even in the act of rape.

Kessler said he wanted to expose these men. If he was telling the truth, his trove could answer one of the Epstein saga’s most baffling questions: How did a college dropout and high school math teacher amass a purported nine-figure fortune? One persistent but unproven theory was that he ran a sprawling blackmail operation. That would explain why moguls, scientists, political leaders and a royal stayed loyal to him, in some cases even after he first went to jail.

Kessler’s tale was enough to hook the two lawyers, famed litigator David Boies and his friend John Stanley Pottinger. If Kessler was authentic, his videos would arm them with immense leverage over some very important people.

Boies and Pottinger discussed a plan. They could use the supposed footage in litigation or to try to reach deals with men who appeared in it, with money flowing into a charitable foundation. In encrypted chats with Kessler, Pottinger referred to a roster of potential targets as the “hot list.” He described hypothetical plans in which the lawyers would pocket up to 40% of the settlements and could extract money from wealthy men by flipping from representing victims to representing their alleged abusers.

The possibilities were tantalizing — and extended beyond vindicating victims. Pottinger saw a chance to supercharge his law practice. For Boies, there was a shot at redemption, after years of criticism for his work on behalf of Theranos and Harvey Weinstein.

In the end, there would be no damning videos, no funds pouring into a new foundation. Boies and Pottinger would go from toasting Kessler as their “whistleblower” and “informant” to torching him as a “fraudster” and a “spy.”

Kessler was a liar, and he wouldn’t expose any sexual abuse. But he would reveal something else: the extraordinary, at times deceitful measures elite lawyers deployed in an effort to get evidence that could be used to win lucrative settlements — and keep misconduct hidden, allowing perpetrators to abuse again.

Boies has publicly decried such secret deals as “rich man’s justice,” a way that powerful men buy their way out of legal and reputational jeopardy. This is how it works.

7 Men and a Headless Parrot

The man who called himself Kessler first contacted a Florida lawyer, Bradley Edwards, who was in the news for representing women with claims against Epstein. It was late August, about two weeks after the financier killed himself in a jail cell while awaiting trial on federal sex-trafficking charges.

jeffrey epstein, jeffrey epstein death, jeffrey epstein suicide, jeffrey epstein suicide case, jeffrey epstein death case, william barr, us attorney general, world news, Indian Express Prominent lawyer Alan Dershowitz, who was at one point contacted by the shadowy hacker who went by the pseudonym Patrick Kessler, in Manhattan, Nov. 11, 2015. The man claimed to have a vast digital archive of Jeffrey Epstein’s communications and financial records — as well as thousands of hours of hidden camera videos capturing some of the world’s richest, most powerful men in compromising sexual situations. (Todd Heisler/The New York Times)

Edwards, who did not respond to interview requests, had a law firm called Edwards Pottinger, and he soon referred Kessler to his New York partner. Silver-haired and 79, Pottinger had been a senior civil-rights official in the Nixon and Ford administrations, but he also dabbled in investment banking and wrote best-selling medical thrillers. He was perhaps best known for having dated Gloria Steinem and Kathie Lee Gifford.

Pottinger recalled that Edwards warned him about Kessler, saying that he was “endearing,” “spooky” and “loves to drink like a fish.” After an initial discussion with Kessler in Washington, Pottinger briefed Boies — whose firm was also active in representing accusers in the Epstein case — about the sensational claims. He then invited Kessler to his Manhattan apartment. Kessler admired a wall-mounted frame containing a headless stuffed parrot; on TV, the Philadelphia Eagles were mounting a comeback against the Washington Redskins. Pottinger poured Kessler a glass of WhistlePig whiskey, and the informant began to talk.

In his conversations with Pottinger and, later, Boies, Kessler said his videos featured numerous powerful men who were already linked to Epstein: Ehud Barak, the former Israeli prime minister; Alan Dershowitz, a constitutional lawyer; Prince Andrew; three billionaires; and a prominent chief executive.

All seven men, or their representatives, told The New York Times they never engaged in sexual activity on Epstein’s properties. The Times has no reason to believe Kessler’s supposed video footage is real.

In his apartment, Pottinger presented Kessler with a signed copy of “The Boss,” his 2005 novel. “One minute you’re bending the rules,” blares the cover of the paperback version. “The next minute you’re breaking the law.” On the title page, Pottinger wrote: “Here’s to the great work you are to do. Happy to be part of it.”

Pottinger also gave Kessler a draft contract to bring him on as a client, allowing him to use a fake name. “For reasons revealed to you, I prefer to proceed with this engagement under the name Patrick Kessler,” the agreement said.

A Victim Becomes a Hacker

Pottinger and Boies have known each other for years, a friendship forged on bike trips in France and Italy. In legal circles, Boies was royalty: He was the one who fought for presidential candidate Al Gore before the Supreme Court, took on Microsoft in a landmark antitrust case and helped obtain the right for gays and lesbians to get married in California.

But then Boies got involved with the blood-testing startup Theranos. As the company was being revealed as a fraud, he tried to bully whistleblowers into not speaking to a Wall Street Journal reporter and he was criticized for possible conflicts of interest when he joined the company’s board in 2015.

Two years later, Boies helped his longtime client Harvey Weinstein hire private investigators who intimidated sources and trailed reporters for The Times and The New Yorker — even though Boies’ firm had worked for The Times on other matters. (The Times fired his firm.)

By 2019, Boies, 78, was representing a number of Epstein’s alleged victims. They got his services pro bono, and he got the chance to burnish his legacy. When Pottinger contacted him about Kessler, he was intrigued.

On Sept. 9, Boies greeted Kessler at the offices of his law firm, Boies Schiller Flexner, in a gleaming new skyscraper at Hudson Yards on Manhattan’s West Side. Kessler unfurled a fantastic story, one he would embroider and alter in later weeks, that began with him growing up somewhere within a three-hour radius of Washington. Kessler said he had been molested as a boy by a Bible school teacher and sought solace on the internet, where he fell in with a group of victims turned hackers, who used their skills to combat pedophilia.

Kessler claimed that a technology executive had introduced him to Epstein, who in 2012 hired Kessler to set up encrypted servers to preserve his extensive digital archives. With Epstein dead, Kessler boasted to the lawyers, he had unfettered access to the material. He said the volume of videos was overwhelming: more than a decade of round-the-clock footage from dozens of cameras.

Kessler displayed some pixelated video stills on his phone. In one, a bearded man with his mouth open appears to be having sex with a naked woman. Kessler said the man was Barak. In another, a man with black-framed glasses is seen shirtless with a woman on his lap, her breasts exposed. Kessler said it was Dershowitz. He also said that some of the supposed videos appeared to have been edited and cataloged for the purpose of blackmail.

“This was explosive information if true, for lots and lots of people,” Boies said in an interview.

Boies and Pottinger had decades of legal experience and considered themselves experts at assessing witnesses’ credibility. While they couldn’t be sure, they thought Kessler was probably legit.

A Chance to Sway the Israeli Election

Within hours of the Hudson Yards meeting, Pottinger sent Kessler a series of texts over the encrypted messaging app Signal. According to excerpts viewed by The Times, Pottinger and Kessler discussed a plan to disseminate some of the informant’s materials — starting with the supposed footage of Barak. The Israeli election was barely a week away, and Barak was challenging Prime Minister Benjamin Netanyahu. The purported images said to be of Barak might be able to sway the election — and fetch a high price. (“Total lie with no basis in reality,” Barak said when asked about the existence of such videos.)

“Can you review your visual evidence to be sure some or all is indisputably him? If so, we can make it work,” Pottinger wrote.

Kessler said he would do so. Pottinger sent a yellow smiley-face emoji with its tongue sticking out. “Can you share your contact that would be purchasing?” Kessler asked.

“Sheldon Adelson,” Pottinger answered.

Adelson, a billionaire casino magnate in Las Vegas, had founded one of Israel’s largest newspapers, and it was an enthusiastic booster of Netanyahu. Pottinger wrote that he and Boies hoped to fly to Nevada to meet with Adelson to discuss the images.

“Do you believe that adelson has the pull to insure this will hurt his bid for election?” Kessler asked the next morning.

Pottinger reassured him. “There is no question that Adelson has the capacity to air the truth about EB if he wants to,” he said, using Barak’s initials. He said he planned to discuss the matter with Boies that evening.

Boies confirmed that they discussed sharing the photo with Adelson but said the plan was never executed. Boaz Bismuth, the editor-in-chief of the newspaper, Israel Hayom, said its journalists were approached by an Israeli source who pitched them supposed images of Barak but that “we were not interested.”

‘These are wealthy wrongdoers.’

The men whom Kessler claimed to have on tape were together worth many billions. Some of their public relations teams had spent months trying to tamp down media coverage of their connections to Epstein. Imagine how much they might pay to make incriminating videos vanish.

You might think that lawyers representing abuse victims would want to publicly expose such information to bolster their clients’ claims. But that is not how the legal industry always works. Often, keeping things quiet is good business.

One of the revelations of the #MeToo era has been that victims’ lawyers often brokered secret deals in which alleged abusers paid to keep their accusers quiet and the allegations out of the public sphere. Lawyers can pocket at least a third of such settlements, profiting off a system that masks misconduct and allows men to abuse again.

Boies and Pottinger said in interviews that they were looking into creating a charity to help victims of sexual abuse. It would be bankrolled by private legal settlements with the men on the videos.

Boies acknowledged that Kessler might get paid. “If we were able to use this to help our victims recover money, we would treat him generously,” he said in September. He said that his firm would not get a cut of any settlements.

Such agreements would have made it less likely that videos involving the men became public. “Generally what settlements are about is getting peace,” Boies said.

Pottinger told Kessler that the charity he was setting up would be called the Astria Foundation — a name he later said his girlfriend came up with, in a nod to Astraea, the Greek goddess of innocence and justice. “We need to get it funded by abusers,” Pottinger texted, noting in another message that “these are wealthy wrongdoers.”

A Quiet Table at the Back of the Grand Sichuan

In mid-September, Boies and Pottinger invited reporters from The Times to the Boies Schiller offices to meet Kessler. The threat of a major news organization writing about the videos — and confirming the existence of an extensive surveillance apparatus — could greatly enhance the lawyers’ leverage over the wealthy men.

Before the session, Pottinger encouraged Kessler to focus on certain men, like Barak, while avoiding others. Referring to the reporters, he added: “Let them drink from a fountain instead of a water hose. They and the readers will follow that better.” The meeting took place on a cloudy Saturday morning. After agreeing to leave their phones and laptops outside, the reporters entered a 20th-floor conference room. Kessler was huge: more than 6 feet tall, pushing 300 pounds, balding, his temples speckled with gray. He told his story and presented images that he said were of Epstein, Barak and Dershowitz having sex with women.

Barely an hour after the session ended, the Times reporters received an email from Kessler: “Are you free?” He said he wanted to meet — alone. “Tell no one else.” That afternoon, they met at Grand Sichuan, an iconic Chinese restaurant in Manhattan’s Chelsea neighborhood. The lunch rush was over, and the trio sat at a quiet table in the back. A small group of women huddled nearby, speaking Mandarin and snipping the ends off string beans.

Kessler complained that Boies and Pottinger were more interested in making money than in exposing wrongdoers. He pulled out his phone, warned the reporters not to touch it, and showed more of what he had. There was a color photo of a bare-chested, gray-haired man with a slight smile. Kessler said it was a billionaire. He also showed blurry, black-and-white images of a dark-haired man receiving oral sex. He said it was a prominent CEO.

Soup dumplings and Gui Zhou chicken arrived, and Kessler kept talking. He said he had found financial ledgers on Epstein’s servers that showed he had vast amounts of bitcoins and cash in the Middle East and Bangkok, and hundreds of millions of dollars’ worth of gold, silver and diamonds. He presented no proof. But it is common for whistleblowers to be erratic and slow to produce their evidence, and The Times thought it was worth investigating Kessler’s claims.

The conversation continued in a conference room at a Washington hotel five days later, after a text exchange in which Kessler noted his enthusiasm for Japanese whiskey. Both parties brought bottles to the hotel, and Kessler spent nearly eight hours downing glass after glass. He veered from telling tales about the dark web to professing love for “Little House on the Prairie.” He asserted that he had evidence Epstein had derived his wealth through illicit means. At one point, he showed what he said were classified CIA documents.

Kessler said he had no idea who the women in the videos were or how the lawyers might go about identifying them to act on their behalf. From his perspective, he said, it seemed like Boies and Pottinger were plotting to use his footage to demand huge sums from billionaires. He said it looked like blackmail — and that he could prove it.

‘We keep it. We keep everything.’

Was Kessler’s story plausible? Did America’s best-connected sexual predator accumulate incriminating videos of powerful men?

Two women who spent time in Epstein’s homes said the answer was yes. In an unpublished memoir, Virginia Giuffre, who accused Epstein of making her a “sex slave,” wrote that she discovered a room in his New York mansion where monitors displayed real-time surveillance footage. And Maria Farmer, an artist who accused Epstein of sexually assaulting her when she worked for him in the 1990s, said that Epstein once walked her through the mansion, pointing out pin-size cameras that he said were in every room.

“I said, ‘Are you recording all this?’” Farmer said in an interview. “He said: ‘Yes. We keep it. We keep everything.’”

During a 2005 search of Epstein’s Palm Beach, Florida, estate, the police found two cameras hidden in clocks — one in the garage and the other next to his desk, according to police reports. But no other cameras were found.

The contents of Kessler’s supposed CIA documents turned out to be easily findable using Google. At one point, Kessler said that one of his associates had been missing and was found dead; later, Kessler said the man was alive and in the southern United States. He said that his mother had died when he was young — and that he had recently given her a hug. A photo he sent from what he said was a Washington-area hospital featured a distinctive blanket, but when The Times called local hospitals, they didn’t recognize the pattern.

After months of effort, The Times could not learn Kessler’s identity or confirm any element of his back story.

“I am very often being purposefully inconsistent,” Kessler said, when pressed.

A Weinstein Cameo

On the last Friday in September, Boies and Pottinger sat on a blue leather couch in the corner of a members-only dining room at the Harvard Club in midtown Manhattan. Antlered animal heads and oil paintings hung from the dark wooden walls. The lawyers were there to make a deal with The Times. Tired of waiting for Kessler’s mother lode, Pottinger said they planned to send a team overseas to download the material from his servers. He said he had alerted the FBI and a prosecutor in the U.S. attorney’s office in Manhattan.

Boies told an editor for The Times that they would be willing to share everything, on one condition: They would have discretion over which men could be written about, and when. He explained that if compromising videos about particular men became public, that could torpedo litigation or attempts to negotiate settlements. The Times editor didn’t commit.

Boies and Pottinger later said those plans had hinged on verifying the videos’ authenticity and on having clients with legitimate legal claims against the men. Otherwise, legal experts said, it might have crossed the line into extortion.

The meeting was briefly interrupted when Bob Weinstein, the brother of Harvey Weinstein, bounded up to the table and plopped onto the couch next to Boies. The two men spent several minutes talking, laughing and slapping each other on the back.

While Boies and Weinstein chatted, Pottinger furtively displayed the black-and-white shot of a man in glasses having sex. Both lawyers said it looked like Dershowitz.

‘You don’t keep your glasses on when you’re doing that’

One day in late September, Dershowitz’s secretary relayed a message: Someone named Patrick Kessler wanted to speak to him about Boies.

The two lawyers had a long-running feud, and Dershowitz returned the call from his apartment. He also recorded it. Kessler explained his Epstein story and said he no longer trusted Boies and Pottinger.

“The problem is that they don’t want to move forward with any of these people legally,” Kessler said. “They’re just interested in trying to settle and take a cut.”

“Who are these people that you have on videotape?” Dershowitz asked.

“There’s a lot of people,” Kessler said, naming a few powerful men. He added, “There’s a long list of people that they want me to have that I don’t have.”

“Who?” Dershowitz asked. “Did they ask about me?”

“Of course they asked about you. You know that, sir.”

“And you don’t have anything on me, right?”

“I do not, no,” Kessler said.

“Because I never, I never had sex with anybody,” Dershowitz said. Later in the call, he added: “I am completely clean. I was at Jeffrey’s house. I stayed there. But I didn’t have any sex with anybody.”

What was the purpose of Kessler’s phone call? Why did he tell Dershowitz that he wasn’t on the supposed surveillance tapes, contradicting what he had said and showed to Boies, Pottinger and The Times? Did the call sound a little rehearsed?

Dershowitz said that he didn’t know why Kessler contacted him and that the call was the only time the two men ever spoke. When The Times showed him one of Kessler’s photos, in which a bespectacled man resembling Dershowitz appears to be having sex, Dershowitz laughed and said the man wasn’t him. His wife, Carolyn Cohen, peeked at the photo, too.

“You don’t keep your glasses on when you’re doing that,” she said.

Data Set (Supposedly) to Self-destruct

In early October, Kessler said he was ready to produce the Epstein files. He told The Times that he had created duplicate versions of Epstein’s servers. He laid out detailed logistical plans for them to be shipped by boat to the United States and for one of his associates — a very short Icelandic man named Steven — to deliver them to The Times headquarters at 11 a.m. on Oct. 3.

Kessler warned that he was erecting a maze of security systems. First, a Times employee would need to use a special thumb drive to access a proprietary communications system. Then Kessler’s colleague would transmit a code to decrypt the files. If his instructions weren’t followed precisely, Kessler said, the information would self-destruct.

Specialists at The Times set up a number of “air-gapped” laptops — disconnected from the internet — in a windowless, padlocked meeting room. Reporters cleared their schedules to sift through thousands of hours of surveillance footage.

On the morning of the scheduled delivery, Kessler sent a series of frantic texts. Disaster had struck. A fire was burning. The duplicate servers were destroyed. One of his team members was missing. He was fleeing to Kyiv, Ukraine.

Two hours later, Kessler was in touch with Pottinger and didn’t mention any emergency. Kessler said he hoped that the footage would help pry $1 billion in settlements out of their targets and asked him to detail how the lawyers could extract the money. “Could you put together a hypothetical situation,” Kessler wrote, not something “set in stone but close to what your thinking.”

Pottinger obliged — and walked into what looked like a trap. He described two hypotheticals, both of which were consistent with what had been discussed with The Times at the Harvard Club.

In one, which he called a “standard model” for legal settlements, Pottinger said the money would be split among his clients, the Astria Foundation, Kessler and the lawyers, who would get up to 40%. In the second hypothetical, Pottinger wrote, the lawyers would approach the videotaped men. The men would then hire the lawyers, ensuring that they would not get sued, and “make a contribution to a nonprofit as part of the retainer.”

Such legal arrangements are not unheard-of. Lawyers representing a former Fox News producer who had accused Bill O’Reilly of sexual harassment reached a settlement in which her lawyers agreed to work for O’Reilly after the dispute. But legal experts generally consider such setups to be unethical because they can create conflicts between the interests of the lawyers and their original clients.

‘I just pulled it out of my behind’

The lawyers held out hope of getting Kessler’s materials. But weeks passed, and nothing arrived. At one point, Pottinger volunteered to meet Kessler anywhere — including Ljubljana, the capital of Slovenia.

“I still believe he is what he purported to be,” Boies wrote in an email Nov. 7. “I have to evaluate people for my day job, and he seemed too genuine to be a fake, and I very much want him to be real.” He added, “I am not unconscious of the danger of wanting to believe something too much.”

Ten days later, Boies arrived at The Times for an on-camera interview. It was a bright, chilly Sunday, and Boies had just flown in from Ecuador, where, he said, he was doing work for the Finance Ministry. Reporters wanted to ask him plainly if his and Pottinger’s conduct with Kessler crossed ethical lines.

Would they have brokered secret settlements that buried evidence of wrongdoing? Did the notion of extracting huge sums from men in exchange for keeping sex tapes hidden meet the definition of extortion?

Boies said the answer to both questions was no. He said he and Pottinger operated well within the law. They only intended to pursue legal action on behalf of their clients — in other words, that they were a long way from extortion. In any case, he said, he and Pottinger had never authenticated any of the imagery or identified any of the supposed victims, much less contacted any of the men on the “hot list.”

Then The Times showed Boies some of the text exchanges between Pottinger and Kessler. Boies showed a flash of anger and said it was the first time he was seeing them.

By the end of the nearly four-hour interview, Boies had concluded that Kessler was probably a con man: “I think that he was a fraudster who was just trying to set things up.” And he argued that Kessler had baited Pottinger into writing things that looked more nefarious than they really were. He acknowledged that Pottinger had used “loose language” in some of his messages that risked creating the impression that the lawyers were plotting to monetize evidence of abuse.

Several days later, Boies returned for another interview and was more critical of Pottinger, especially the hypothetical plans that he had described to Kessler. “Having looked at all that stuff in context, I would not have said that,” he said. How did Boies feel about Pottinger invoking his name in messages to Kessler? “I don’t like it,” he said.

But Boies stopped short of blaming Pottinger for the whole mess. “I’m being cautious not to throw him under the bus more than I believe is accurate,” he said. His longtime PR adviser, Dawn Schneider, who had been pushing for a more forceful denunciation, dropped her pen, threw up her arms and buried her head in her hands.

In a separate interview, The Times asked Pottinger about his correspondence with Kessler. The lawyer said that his messages shouldn’t be taken at face value because, in reality, he had been deceiving Kessler all along — “misleading him deliberately in order to get the servers.”

The draft retention agreement that Pottinger had given to Kessler in September was unsigned and never meant to be honored, Pottinger said. And he never intended to sell photos of Barak to Adelson. “I just pulled it out of my behind,” he said, describing it as an act to impress Kessler.

As for the two hypotheticals about how to get money out of the men on the list, Pottinger said, he never planned to do what he carefully articulated. “I didn’t owe Patrick honesty about this,” he said.

Pottinger said that he had only one regret — that “we did not get the information that this liar said he had.”

He added, “I’m building legal cases here. I’m trying not to engage too much in shenanigans. I wish I didn’t, but this guy was very unusual.”

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