August 22, 2011--Elton's Gig

It has taken me a while, but I have finally been able to locate one job a billionaire created as the result of tax policies and loopholes that assure he pays a smaller percentage of his income in taxes than his secretary. This is justified, it is claimed, because the ultra-rich are "job creators." With their extra untaxed money they invest in new businesses that employ more people.

To test this hypothesis, let's take multi-billionaire Leon Black as an example.

In 1990 he founded Apollo Global Management LLC, a private equity investment firm. It specializes in leveraged buyout transactions and purchases of distressed securities, especially those that involve corporate restructuring and industry consolidations--i.e., firing people to make companies more profitable. As of today, Apollo manages over $72 billion of investor money in its private equity funds and other financial vehicles making it one of the largest private equity firms in the world. Among the most notable companies owned by Apollo are AMC Entertainment, Claire's, Caesars Entertainment Corporation, Norwegian Cruise Line, and Coldwell Banker and Century 21 Real Estate.

So Mr. Black has a lot of money and thus you can only imagine how he spent his recent 60th birthday. In case you can't . . .

He threw himself quite a bash. Three million dollars' worth at his oceanfront estate in Southampton, Long Island.

In attendance were his former Drexel Burnham Lambert boss, the convicted felon Michael Milken; hedge fund mogul Julian Robertson; Lloyd Blankfein, CEO of Goldman Sachs, who contributed to bringing down the economy; New York Mayor Mike Blumberg, whose net worth is at least $19 billion; and, why-was-he-there, Chuck Schumer, who is the senator most devoted to making sure hedge fund operators continue to be taxed at the low capital gains rate.

Perhaps they were there to rub elbows with Howard Stern and another convicted felon and Leon Black's Hampton's neighbor, Martha Stewart.

As a way to protect his own cred among his proudly-déclassé listeners, Stern the day, after the party, said:

"Leon throws some good parties because Leon's worth like twenty gazillion, like twenty billion or something crazy; and for him, you know, a billion for him is like ten dollars to us."

Not exactly "us," Howard. For you maybe, who SiriusXM Radio pays $80 million a year to interview porn stars. In your world a few hundred million may be chump change. For the rest of us a gazillion is real money.

In any case, what do you get when you spend $3.0 million on a party for yourself?

A full moon, the New York Times reported (see link). Though I thought a full moon doesn't require hiring a caterer. On the other hand, for cash you can transform your backyard into a nightclub, as Leon did by having a stage built over his swimming pool. And you can serve an endless buffet of crab cakes and steak while your guests get to sit on rented puffy couches and pillows.

And you can put on some spiffy entertainment.

In Leon's case, Elton John.

For a million, a million-and-a-half, his usual fee for such gigs, Sir. Elton belted out "Your Song," "Benny and the Jets," and of course, "Candle in the Wind." Just like at you-know-who's funeral.

All this because buyout-artist Black only has to pay 15 percent in taxes.

As Howard Stern said, "Oh, I wish I was Leon Black's child."

Actually, Howard, you are.