Tension between Leon Black and his Apollo Global Management Inc. co-founder Josh Harris is boiling over, threatening to buffet the investment giant with fresh controversy.
In a filing last week in a rape and defamation case brought by a woman with whom he has admitted to having a yearslong affair, Mr. Black accused Mr. Harris of plotting his removal from Apollo in an act of revenge for being passed over to succeed Mr. Black as chief executive officer.
The private-equity titan, who stepped down as Apollo’s CEO and chairman in March 2021, further suspects Mr. Harris encouraged his ex-lover, Guzel Ganieva, to publicly accuse him of rape and harassment. Mr. Black has been assembling emails and other material to try to prove the allegations, according to people familiar with the matter and copies of some of the emails that were viewed by The Wall Street Journal.
Mr. Harris “waged a highly coordinated and orchestrated campaign to destroy Mr. Black’s professional and personal reputation,” said Mr. Black’s lawyer, Susan Estrich. Mr. Harris’s advisers “whispered to investors, placed articles and ultimately supported and encouraged an effort by Ms. Ganieva to make knowingly false claims in the courts about her relationship with Mr. Black,” she said.
Mr. Harris, who stepped down from his day-to-day role at Apollo at the beginning of this year, vehemently denies the claims.
Josh Harris vehemently denies claims he plotted Leon Black’s removal in an act of revenge for being passed over as Apollo CEO.
Photo: Jose A. Alvarado Jr. for The Wall Street Journal
“These allegations and insinuations are desperate and absurd,” a spokesman for Mr. Harris said. “Mr. Harris doesn’t know Ms. Ganieva, has never met or spoken with her or anyone representing her, has no financial or any other dealings with her or her representatives, and had no involvement of any kind in the filing of any claims by her.”
Ms. Ganieva leveled the accusations in a lawsuit against Mr. Black in June last year in New York State Supreme Court. In October, Mr. Black filed a civil RICO suit in federal court against Ms. Ganieva, her law firm and a series of John Does, alleging defamation and racketeering. He detailed his allegations against Mr. Harris in an amended filing in that suit on Monday.
“This conspiracy theory, and the idea that Josh Harris is somehow funding our client’s lawsuit or working in conjunction with Ms. Ganieva is madness,” said Jeanne Christensen of Wigdor LLP, Ms. Ganieva’s attorney.
Regardless of whether Mr. Black’s allegations have any merit, the spat could become another headache for Apollo, where Mr. Harris still sits on the board, after it was forced to endure the twin scandals of Mr. Black’s connection to disgraced financier Jeffrey Epstein and Mr. Black’s legal battle with Ms. Ganieva.
The firm has worked to move beyond the tumult, instituting a series of governance changes. Marc Rowan, the firm’s third co-founder who became CEO when Mr. Black stepped down, already has his hands full integrating the acquisition of the rest of the firm’s big insurance affiliate, Athene Holding Ltd.
“The firm has never been more aligned or better positioned to create value for all of our stakeholders,” an Apollo spokesman said. “The legal dispute playing out between two former employees is unfortunate but won’t impact our strategy, businesses, or mission.”
The controversy surrounding Mr. Black, a private-equity pioneer who built Apollo into a $481 billion behemoth, has weighed on the firm’s shares. While up, they have significantly underperformed those of its chief rivals since the October 2020 publication of a New York Times article detailing for the first time some of Mr. Black’s payments to Epstein. Some analysts also cite the Athene deal as a factor in the underperformance.
Mr. Black has obtained a number of emails from early 2021. One of them was sent to Mr. Harris by Pendral Capital President Richard Emerson, who would later get a seat on Apollo’s board that he still occupies, minutes after the firm announced Mr. Rowan would be CEO. In the email, which bears the subject line “outrageous,” Mr. Emerson criticized the board for allowing Mr. Black, who says he paid Epstein $158 million for tax and estate-planning services, to remain at the firm as chairman. Mr. Emerson stated that Mr. Harris was “the right person to be CEO.”
Mr. Harris forwarded Mr. Emerson’s email to a group of outside legal and public relations advisers, one of whom responded, “exactly.”
Mr. Emerson didn’t respond to requests for comment.
Mr. Harris, his spokesman said, “was direct with Black that his connections to Epstein were damaging the company. The notion that Mr. Harris was motivated by anything other than the best interests of the company is false—Black’s relationship with Epstein was disqualifying, plain and simple.”
The battle represents a bitter twist in one of the most successful relationships in Wall Street history. Mr. Black helped make Mr. Harris a billionaire, giving him the title of co-founder in 2007 ahead of Apollo’s planned initial public offering. Mr. Harris is worth $5.9 billion, according to Forbes, largely by virtue of his 6.4% stake in Apollo; Mr. Black’s 11.9% stake has helped put his net worth at $10.4 billion.
Apollo said in January last year that Mr. Black would step down as CEO, ceding the role to Mr. Rowan, but would remain chairman. The announcement followed a monthslong review by law firm Dechert LLP of Mr. Black’s ties to Epstein, a convicted sex offender who killed himself in 2019 while awaiting trial on charges related to sex trafficking of minors.
It came as a surprise to many within Apollo who had assumed Mr. Harris was next in line. Then, in March, after Ms. Ganieva went public with her allegations in a series of tweets, Mr. Black was forced to leave the firm entirely.
The wheels had been in motion for some time for Mr. Rowan to take over, according to people familiar with the matter. Mr. Harris, who had been overseeing Apollo’s day-to-day operations, came to Mr. Black a number of years ago asking to be made CEO, but Mr. Black turned him down given that Apollo’s business was moving toward managing assets for insurance companies, the people said—neither Mr. Harris’s nor Mr. Black’s area of expertise.
Instead, Mr. Black asked Mr. Rowan, the architect of the firm’s highly successful foray into insurance, to be CEO, but Mr. Rowan demurred. Mr. Black repeated the request in 2019 when Apollo added to its initial 17% stake in Athene, the people said. Again, Mr. Rowan declined, saying he was still focused on building the insurance business, the people said.
Mr. Black again broached the subject with Mr. Rowan in October 2020 during a five-mile walk near Mr. Black’s Bedford, N.Y., home, the people said. This time, Mr. Rowan was more amenable. The two executives discussed the idea of buying the rest of Athene and determined that Mr. Rowan should become CEO if Apollo ended up proceeding, the people said.
The last time Mr. Black spoke with Mr. Harris, during a meeting last January at Mr. Black’s Bedford home, Mr. Black told him the choice to recommend Mr. Rowan wasn’t personal, but was best for Apollo’s future, the people said.
Mr. Harris’s spokesman said that Mr. Harris supported Mr. Rowan’s ascension as CEO.
—Mark Maremont contributed to this article.
Write to Miriam Gottfried at [email protected]
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