Epstein Island’s Billionaire Owner Is Battling Zealous Voyeurs

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2:15This is definitely one of those times. Here goes. The latest reports from Little St. Jeff's, the notorious Caribbean hideaway of Jeffrey Epstein are startling. One recent visitor was allegedly hogtied naked. Would-be interlopers on jet skis have been chased away. Another apparently was bound with duct tape and assaulted in the presence of police officers. All right. That's why you had to read them. Yeah. I mean, this will catch your attention. This is written by Shri Natarajan and Ava Benny Morrison. Shri is, of course, Bloomberg News chief Wall Street correspondent. Ava is Bloomberg News senior legal reporter.

2:47This duo putting out a great story, as we said, among the most read on the Bloomberg. They both join us here in our Bloomberg Interactive Brokers Studio. What the heck is going on on Little St. James? It's just this weird world of Epstein that doesn't seem to leave us. And in many ways, this is really what the Epstein story has become. We thought the release of the Epstein files from the Justice Department would in some ways quell all the conspiracy theories. Instead, what seems to have happened, it's only fanned those conspiracy theories. And we're in this space where it has become this crazy cultural phenomenon.

3:23And now you have all these people trying to get on to Little St. James, the island where Epstein famously hosted all his famous friends and where he's accused of having committed some of his worst crimes. That island is actually now owned by a Wall Street billionaire, a distressed debt founder of Black Diamond, Stephen Deckoff. You know, that is a business where you need to have sharp elbows and he's grown up in that rough and tumble business. But now he is so frustrated with this continuous stream of unwanted visitors, intruders, trespassers, whatever you want to call them, that the island's property on behalf of the owner is willing to go out there and say that they have been carrying out citizen arrest and they will continue to carry out citizen arrest.

4:06Just think about that for a moment for a top Wall Street businessman to be out there saying that and then imagine how crazy that situation must be. So, Ava, talk a little bit about the people who are finding themselves. I don't want to call everybody a conspiracy theorist, but they're the folks, you know, big social media followings in some cases. They're essentially have campaigns. Some people think Jeffrey Epstein is actually still alive. There are drones flying over this island. What do they hope to find? That's right. We've seen a whole host of characters going down to the island, including the man who runs an anti-trafficking nonprofit from Tennessee who found himself restrained with duct tape when he tried to plant a flag with the name of his organization on the top of a hill on the island.

4:56I spoke to his wife yesterday who described the ordeal, said that he was held in an underground bunker for several hours and he was blindfolded until police arrived and freed him. And, you know, he expected that he was going to be trespassing, but the way that he explained it was he got a little bit excited when he got to the shore and he decided, you know what, let's climb the hill, let's erect this flag, let's take back the island and let's raise awareness to Epstein's island. I think there's been plenty of attention on the Epstein case already. And, you know, we've seen other people who have gone down there just to collect social media content.

5:33You know, one YouTuber in particular posted a 20-minute or so video, you know, detailing his journey through St. Thomas, getting on a boat, going out there, swimming, clamoring over rocks, trying to get onto the shore. So it's, you know, people have various reasons for going down there, but it's certainly annoying the owners. I have to tell you, I think I did a deep dive somewhere on social where I followed somebody who went to it with a drone or something. And I was curious. You're part of the problem. Who has not climbed over a fence that you weren't that was locked? I'm just saying. All of us, Carol.

6:06Yeah. Thank you. No, come on. But she's she's she missed out on telling you the best part of that YouTube video story. The guy spent all this time, all this energy to try and get onto the island, gets on a jet sea, wades into waste deep water, is about two meters, three meters from getting onto the beach where he's stung by a sea urchin and then has to abort his mission. Still got 30 million views on YouTube. Tells you enormous interest. But is that what it's about? Is that what's fueling this? Is it the idea of influencers, social media stars going directly to their audiences? is the interest that, you know, people far and wide have about this place that's motivating these people to go and do this?

6:49I think for some people, there's just this intense fascination in the Epstein story. And like you mentioned before, some people believe that he didn't commit suicide in prison in 2019. One of the people that I spoke to yesterday, when he went down to the U.S. Virgin Islands, he had pamphlets saying, is Epstein alive and offering a reward for information. And so that was part of his motivation for going there. So, you know, we've seen a kind of whole host of reasons and then people like proudly documenting these journeys on social media. Well, I think what's interesting is the more we learn and we might ultimately never know everything, right?

7:27Because Epstein, I mean, as far as we all know, he's gone, right? He, you know, so I just think it's trying to piece this together. I want to go back to policing the island. Is he allowed to police the island, the individual who owns it now? Well, the spokesperson certainly come out and said, we have been lawfully restraining them, or at least they've been saying that we have carried out citizens arrest and we will continue to carry out citizens. Hog-tieing someone? Is that okay? No, they haven't copped to the fact that they hog-tied anyone. All they're saying is they haven't mistreated anyone who has threatened the safety of the people who were lawfully on the island.

7:59So make of that what you will. But also, if you have to think about the apparatus out there it is a collection of islands so to get someone from one of the bigger islands the police force to come and apprehend someone could possibly take a few hours and in that time you're potentially in the hands of the island personnel the estate folks who are actually on that island every single day but i think the bigger point really here is that what all this this has done is just added this exclamation point to the epstein craziness to some ways and And taking the spotlight away from what really is a ghastly story, even if you think about this island, it is not some sort of adventure thrill that you should be going out there to seek.

8:40It is a place where some really terrible things have been alleged to have happened. Well, and I think about the other elements in the story, schoolchildren playing a game like it does get bizarre. And let's not forget, right, exactly what has happened or certainly what seems to we have heard certainly from from victims. Additionally, another part of the story is the amazing amount of wealth that Jeffrey Epstein had and the assets that he had and what has happened to those assets. I've seen I've seen newspapers do videos going to an abandoned plane, for example. I think it was the 727 that Jeffrey Epstein flew on for a lot of years.

9:18And there's massive interest in that. What about the real estate? because you guys go into that in this story about who's bought other real estate and why this island was of interest to to buyers even if it was at a big discount it's one of the most confounding parts especially at a discount it's one of the more confounding parts of the story right if you have that kind of money to spend 50 60 70 million dollars i'm sure there are a ton of opportunities to choose from it's not just the island we're talking about when you think about the sale of the epstein townhouse on the upper east side on 71st street it was actually a former senior Goldman trading executive, Michael Daffy, who bought that house for about less than 50 % of the asking price, to be fair to him.

9:57At the time, he said that he'd never met the owner of the house, and he was doing it because he believed in the future of New York City. It was kind of post-pandemic. I think it was 2021. It was post-pandemic, but I'm sure there could have been other ways to express his belief in the future of the city, or maybe he really has a really good reason to buy that townhouse. But But the fact is that people have not shied away from Epstein-related properties. I don't know if they bargained for the fact that Epstein would still be such a central part of our culture and politics and whatnot. But here we are.

10:34Yeah, I am just kind of also blown away that you say that there's Epstein-themed tourism being a theme that people want to see his former properties. But I will say, going back to what Tim says, and this we think about too, it's like the accumulation of money, understanding the Epstein story, the property, was it out west or, you know, like it's just things keep cropping up to, to make it the ranch, right? The ranch. It's just, there's so much more that we're realizing there's a lot of money here. And as we continue here at Bloomberg to follow the money and try to figure out the story and this kind of web of people that he knew.

11:11I don't know. Hopefully we get the full story. Well, yeah, I guess, Ava, what, what sort of puts it to rest ever? Is that a possibility? I don't think so. I think there was such a groundswell to get these files released. And people were hoping that there was going to be answers in there about, I think, some grand cover up and some of the elites who had been protected. It doesn't seem like there was any evidence of that from what we've seen. So I think there is still a sense among at least some people that they haven't got the answers that they want. So they want the documents that have been redacted or the documents that have been held back that have victims information in it.

11:51So I think we're just not going to get to a point where everyone is satisfied. These stories that are always among the most to write. I think about the story we did about the black card, the Centurion card, Amex card by Max Abelson that we talked about. Again, you know, tracking the money and understanding a little bit more, another snippet of Jeffrey Epstein's world. Thank you guys so much. We really appreciate it. It was a story we wanted to cover. Srinath Arajan and Ava Benny Morrison. Srinath Arajan, of course, Bloomberg News Chief Wall Street Correspondent Ava, Bloomberg News Senior Legal Reporter.

12:20You can find this story. Just check it out. It's on the Bloomberg and also at Bloomberg.com. Stay with us. More from Bloomberg Businessweek Daily coming up after this.

12:33You're listening to the Bloomberg Businessweek Daily podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business App. Or watch us live on YouTube. Well, let's stay on China because the country appeared to ramp up missile production last year by the most since Xi Jinping became president back in 2013. This is according to a Bloomberg analysis that mapped out the sector's finances for the first time. It is today's Big Take. It's one of the most read stories on the Bloomberg Terminal. You can check out the story and more from Bloomberg to Big Take at Bloomberg.com slash Big Take and on the Bloomberg Terminal.

13:11Jerry Doyle is with us. Jerry's one of the editors on the piece. He's Bloomberg News Global Defense Editor. He joins us from London. Jerry, welcome. So the team reviewed the corporate filings of every listed Chinese company that mentioned either of the nation's two leading state owned missile makers at least once per year in that period. What did you find? Well, we found an increase in revenue over that time, and an especially sharp increase in revenue last year. Now, what that tells us is that China is not particularly forthcoming with information about the size of its nuclear arsenal, what it's building, how fast it's building it.

13:50So this serves as an interesting and useful proxy for telling us what is happening with China's missile arsenal. And last year was a spectacularly large year for that. You know, what's important for us to mention the backdrop here, I mean, that is, of course, the war in Iran and the depletion of U.S. missiles over that same period of time. What's the implication here, especially with regard to what China could do with Taiwan? Well, it's certainly having a larger arsenal of these conventional missiles certainly gives them more leverage over the region, gives them the ability to strike around the South China Sea, be able to hit bases in Japan, to be able to hit Guam, to be able to hit ships.

14:34And that sort of might, in a conflict scenario, make them feel as though they have more control, more leverage, and perhaps be emboldened to try more military adventurism. Hey, Jerry, one thing I wonder, too, is this because you guys do include some numbers in the program. I mean, in the story, the Pentagon estimates that China has at least 3 ,150 ballistic missiles, 300 ground launch cruise missiles as of 2024. And what you guys point out, it's respectively 147 percent and 50 percent increase from 2015 when the U.S. started systematically disclosing estimates on Beijing's missile arsenal. Is the story not just about the entire number, but just the ramp up, the growth?

15:18That's what you guys really picked up on. And that's pretty significant and maybe telling. Yeah, I think so. And, you know, Xi Jinping has sort of overseen a dramatic modernization of China's military. The missiles are a part of that. They've also built more aircraft, more advanced aircraft. Their navy is expanding at high speed. So these missiles are just a piece of the puzzle. But what they do, and perhaps the fast expansion last year, shows us that they're very serious about trying to project their power farther from China than they ever have before. What about when it comes to nuclear weapons?

15:57Well, that's the big question. Now, China has a strict no first use policy that they stated. And they've also stated in the past that they don't want a nuclear arsenal that is any larger than what they need to provide a deterrent for their adversaries. In other words, a big enough nuclear arsenal that nobody will risk a nuclear war with China because the response will be too painful. Now, how big that number is, only China knows. But we do know that they're building more ICBMs. They rolled out new types of ICBMs at the military parade last year. They're digging, constructing new missile silos.

16:34So that expansion is happening in terms of their nuclear arsenal and their ICBM capability. Intercontinental ballistic missiles, right? Just to clarify. Hey, having said that, how sophisticated are their weapons? Because I know when we talk about U.S. defense companies, I mean, the production, so much of the manufacturing right here, like we are really careful about our defense technology, our military technology. So how sophisticated, Jerry, is what the Chinese are doing? Well, I think their newest weapons are very sophisticated. They incorporate technologies that everybody's trying to pursue, things like hypersonic glide vehicles, things like being able to strike a ship moving at sea, you know, things with longer range, different stages, being able to maneuver on the way to their target.

17:24So there's no reason to think that their newest missiles aren't highly capable. Now, they did start building their ballistic missile arsenal decades ago. So they do have quite a few sort of lower tech, shorter range, less accurate missiles in their arsenal as well. Ultimately, though, as with any serious weapon, the only way to find out how well it works is to see it used in a war. And, you know, one hopes we don't. Jerry, you know, here in the U.S., we don't have an exact measure of what's referred to as magazine depth because for, you know, national security reasons that the government doesn't tell us that.

18:04Do we have any idea what it is in China? And also sort of answer the question about really about the ecosystem that the team found in making these. The only reference point I have is the United States, where there are these large publicly traded companies. They report earnings. We can see how much these things cost. It's different in China with state-owned firms and private companies. That's right. There are state-owned companies that are entirely controlled by the state. There's also a large network of private companies or companies that have state investment in them. And this is all part of the civil military fusion, which is a concept that China has embraced under Xi as part of this military modernization program.

18:49The idea is you can get all of industry mobilized together towards one goal, whether it's making aircraft or missiles or ships, you can be more productive. So there is less of a divide. There's more of a meld, certainly in terms of output and goals between China's state and the private industry. And as a result, they're able to turn out a tremendous amount of stuff. We're talking about missiles, but the Navy has expanded at an extremely rapid pace as well. Just in terms of sheer numbers, they're near the top of the chart, if not at the top of the chart. Gosh, I feel like the big takeaway, I know this is the Bloomberg big takeaway, it's just everyone around the world is just beefing up their defense.

19:34Jerry, thank you so much. So glad we could spend some time with you. Jerry Doyle, he's Bloomberg News Global Defense Editor. of course, joining us from London. Check out the story. It's on the Bloomberg and at bloomberg.com. Stay with us. More from Bloomberg Business Week Daily coming up after this.

19:52You're listening to the Bloomberg Business Week Daily podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube. We just spoke with Haley Sachs, also known as Mrs. Dow Jones, the author of the new book, Future Rich Person. Carol, she talked a little bit about the anxiety that these young people, I just have to say these young people because I'm no longer a young person, are feeling about the economy in a world where everyone in the workforce is thinking about AI and how it will affect their careers.

20:26You don't have to be a young person to be concerned about how AI is going to affect your career. No, I think everybody's asking and trying to understand what truly will be the impact of AI. Some folks say it's going to create jobs, net-net. It's just there's going to be some dislocation in the labor market. But I think it's safe to say to be asking this question is a smart one. Yeah, John Connors has been asking this question. He's looked into this. He's the CEO of Boathouse. It's an advertising, marketing, and communications firm. He joins us from Boston this afternoon. John, we wanted to talk to you because your firm spoke with 150 Fortune 1000 CEOs, included a survey about AI.

21:00Are they deploying AI and investing in AI so they can get rid of us? No, I think much to the contrary. I think our data indicates that they'll continue to be hiring. They see talent as key to the growth, and they see talent as key to being able to implement AI. So on both of those fronts, I think we'll see more hiring from them. So how do you justify the spend? because the spend is so big that some folks out there argue the only way to see payoff is if you reduce a workforce. Yeah. I think, well, you know, the number one thing they care about is growth. And so I think they're worried about being depositioned.

21:41The other piece that we saw a lot in the data was their confidence in their strategy. So as we've seen this uncertainty over the last few years, I think one of the really interesting pieces was we're seeing they're much more certain in their strategies going forward. They're much more confident in their role of driving performance, but they're concerned on the operational side. So they view AI and the talent they're going to need to bring on for AI as the pathway to get that growth. Hey, John, one thing I'm wondering is companies who are spending and employing and deploying more AI services in their offices across the board, how are they measuring?

22:18Are they putting systems in place to kind of measure the ROI and the productivity that they get by an employee who is being able to access some of these AI solutions? I think it's still anecdotal for the most part, Carol. I think what we're seeing, originally we saw a lot, like last year, we saw a lot of marketing-focused investment in AI. This year, customer service, operations, IT continue to be the pieces. So you're starting to see sort of a little bit more of a shift towards sort of operational efficiency on the AI side as the early pieces before the revenue drivers on AI. Yeah, it's interesting.

22:58You guys have a lot of clients in health care and financial services, but you said the survey, from what I understand, wasn't just focused on those areas. It was much more broad-based. Is that fair? That's fair, yeah. That's about, it basically represented the entire economy from a company standpoint, with about 55 % of the companies being public and the rest being private. Any nuances in terms of the data for certain sectors? I'm just curious. I mean, I feel like when it comes to healthcare, folks think this could be a very big impact, but time will tell. We're not quite there yet. But tell me what you found, if there's any nuances.

23:32Yeah, we actually really probed the difference between public and private companies. You know, the samples and the patterns were really consistent across both. Both were sort of net holding steady on staff and or growing on staff. So I think the efficiency play is one of those narratives that through history, as you know, we like to come back to machines going to replace man. But I think it's in this individual data set, we're not seeing that. But machines replace some men. That's reallocation. Yeah, like, I mean, we could go through different parts of the Industrial Revolution or, you know, the idea that we're not driving around in horses and buggies.

24:11Check out a car factory in China where they don't even have lights on because there's no people in there, right? The dark, so-called dark factories. Exactly. Yeah. So who gets replaced and sort of who doesn't? Yeah, I think scale, we start, we'll sort of continue to see scale and we'll continue to see the high end, sort of the curators. I think being in the middle is a dangerous spot. So I think we'll see the middle get replaced and we'll push people to the scale ends of the spectrum and to the high value ends of the spectrum. What should we be doing? And I use the term we loosely. I mean, everybody listening and watching right now who work in the so-called knowledge economy.

24:52What should we be doing to be safe? That's a good question. I think the piece is, I don't think my advice is that different than most in the sense of, I just keep experimenting, right? Because I think the piece we're seeing across all these CEOs, well, I guess the one piece would be translate your CEO well, right? I think one of the pieces of data that you saw in the study was CEOs' confidence in their impact on performance in their organizations. We, McKinsey had some data that it was CEOs drive about 45 % of performance. In our study, they believe they drive even a much greater percent of performance, right?