NPR.
We all know the saying it's not what you know, it's who you know.
“And so for career advancement and business success, what matters more, honing our skills”
or building our network. Well it depends, but the recently released Epstein files have shown an unprecedented detail how elite politicians, business leaders, and celebrities profit from connections. Case in point, Jeffrey Epstein giving former Israeli Prime Minister, a Houd Barak advice on how to make money after leaving political office.
They will know more about what you can do for them than you can guess. In other words, private companies will know how they want to use ex-politicians for their reputations or for the doors they can open. This is the indicator from planet money on dairy and woods. And I'm Adrian Ma, today in the show, elite power brokering.
The Epstein files have revealed extraordinary details about how many top business people and politicians operate inside an economy of favors and implicit debts. We'll learn just how much personal networks are valued compared to competency and we'll hear more of that conversation between Epstein and A Houd Barak. In government, there's a concept called the revolving door.
That's when people in the private sector go to work for the government, maybe as a regulator. Later they go back to work for the industry, they were just regulating. The door evolves around and around. Looking through the Epstein files, one thing that was striking was just how blended the networks of elite decision makers were between the public and private sectors.
And this revolving door has some problems, of course. It could mean that regulators go soft on the industry if they're hoping to later get hired by them. At the same time, it means that people in the government have industry expertise. Matilda Bomberdini is an economics professor at UC Berkeley.
Is this true expertise or is it just really because you know people in the right places and you can just direct the firm that hires you to knock on the right doors, even though maybe for society, this is not a benefit.
Matilda started to research basically agnostic about whether former public servants were
providing useful advice or were just exploiting their connections.
“Of course, again, this is hard to disentangle and so that's why we look at the data.”
We look at the aggregate data. Matilda's research gives an expert lens into what was happening in the Epstein files. So we invited her to listen in on this remarkable recording, which is a conversation between former Israeli Prime Minister Ehude Barak and Jeffrey Epstein in 2013. Epstein is giving Barak advice on how to use his power and connections to make money as
a politician about to leave politics. We started by showing Matilda a clip of Epstein talking to Barak, and in this one, Epstein is repeating a mutual friend's advice. He thought you should make a list of who has eye on use to you. This person owes me a favor, this person owes me his job, this person owes me a job.
Sort of like a log of people who are in your debt. Yeah, he has Matilda's reaction.
My first reaction is that this isn't necessarily emphasizing the expertise from truly
knowledge point of view. So that's one point for connections, zero for expertise as being valuable here. It's really just sort of emphasizing the people that are indebted to Barak. So this, to me, points more to his not a lot of expertise that he's bringing other than just the connection to specific people.
So in the sort of balance of whom you know or what you know here points to the whom. And as a researcher or on lobbying, Matilda hadn't heard people say these kinds of words so explicitly until she listened to this tape. This is really the first time I could hear it with my ears. Now if that clip suggested Barak would mostly use his connections to make money, the next clip
has Epstein shouting it. So let's listen to that one.
“How does your real advantage to for them, the fact that you know rich people in the fact that you have open it?”
So this clip Epstein is asking Barak what he brings to the table. They're talking in the context of Spanx, sovereign wealth funds and Silicon Valley companies. You're the door open. Yeah. In a way.
That's what they respect, they give them something to respect and they know me and the craftsmanship
Goes with them.
It's not really your expertise, it's your capability, but I think you're going to make
a lot of money.
“You're going to make a lot of money, you're definitely going to make a lot of money.”
You're smiling at that. I was smiling because the word opening a door was actually mentioned so I didn't do it on purpose. I mean, this is just a language that we use. Epstein seems to be assuring Barak that even if his only role is a door opener, that will
still be very valuable in companies.
And this is actually consistent with Matilda's research.
She studied payments to lobbyists who had personal connections to a lawmaker. It turned out those connected lobbyists could get paid about 9% more than others, substantially more than lobbyists who were actually experts on the topic at hand.
“Barak found plenty of opportunities to capitalize on that value.”
A few months out of this conversation, he joined the Swiss Bank Julius Baer as a special consultant. At the time, industry press said he would help the bank establish ties with wealthiest railways. Two years later, Barak became chairman of a public safety tech startup called Carbine. That year, he joined the board of a biometric startup too.
He later became chairman of a medical cannabis company and co-founded a cyber security and surveillance company called Toka. Now, Barak has defended his expertise. We reached out to Barak and a spokesperson from his office told us on his behalf that Barak has a deep background in science and technology.
“He has a master's degree from Stanford in economic and engineering systems and multiple”
decades in the military and in politics. Epstein though was emphasizing personal connections. Like in that conversation, Vladimir Putin comes up. Barak knows the Russian president personally and so Epstein encourages Barak to take advantage of that as he leaves office.
I was in the notebook. I'm going to leave government in March for a team. I'm going to be in Scandinavia or I'm planning to be in West Northern Europe. We should have dinner. But tell us a spec that underneath this conversation, Epstein is also thinking about how Barak's
connections could be useful to him. This looks more like Epstein trying to use this conversation to increase this network. That seems to be pretty wide reaching. And we are seeing just how wide that reach was. Epstein's network crossed traditional political divides from right-wing strategy, banning
to linguist and author Nome Chomsky. There have been waves of resignations over Epstein connections from the chairman of Hyatt Hotels to a leader of an elite law firm to the CEO of a Dubai port operator. There have also been arrests. The former prime minister of Norway was charged with ghost corruption, former Prince Andrew
Mount Baden Windsor, arrested on suspicion of misconduct and public office. On Monday, UK's former US ambassador, Lord Peter Madelson, was arrested with police using the same language.
It would be Barak's office told us that Barak's business activities were always within
the law. And they added many people tried to give Barak informal advice about what he could do after leaving office, including Epstein. The connections to Epstein promised will be so valuable, have turned toxic in the sunlight. Yes, it's not what you know about who you know, but now an adendom has become painfully
apparent. Be careful who that person is. The sub-sobles produce by Julia Ritchie with engineering by senior LaFraida, as factually it's quite veto-emannual, and can kind of add it to show the indicator as a production
