Recently disclosed documents related to the late American sex offender and financier Jeffrey Epstein reveal his close and intricate relationship with the Chinese Communist Party (CCP) princelings, indicating that the vast and murky interests in China have long been an important money-making channel.
Most of Epstein’s wealth came from providing consulting services to billionaires. The emails released by the US Department of Justice provide a rare glimpse into the underground connections between foreign business groups and CCP princelings.
David Stern, a banker and businessman who previously worked at JP Morgan Chase, played a key role as Epstein’s primary agent in facilitating connections between the CCP “princelings” and state-owned enterprises, transmitting confidential information about the funding presentations of Alvin Jiang of BoYue Capital (grandson of Jiang Zemin), investment plans of the son of former Premier Wen Jiabao, and the acquisition of UK real estate companies by Chinese property developers like Evergrande.
A colleague who worked with Stern told The Wire China magazine that Stern was a “networking broker. He connected people, earning commissions from transactions.”
The colleague added, “Someone told me he was the best networker in the world, and my personal experience confirms that. He knows many (CCP) princelings.”
Epstein viewed people like Stern as “relationship agents” who could provide a shortcut for Western capital to connect with the CCP princelings and senior figures in Chinese state-owned enterprises, packaging various cross-border investment and wealth management products.
Stern worked at the Deutsche Bank’s Shanghai office in his early years and founded consulting firms like Asia Gateway in the 2000s, shifting his focus to “independent consultant/broker.”
Stern had close relationships with several “princelings” and senior figures of large state-owned enterprises, such as BoYue Capital’s Jiang Zhicheng (Alvin Jiang, Jiang Zemin’s grandson), former Ping An Insurance CEO Zeng Xiaoxiong, and collaborations with Li Botan, son-in-law of Jia Qinglin, among others.
Meanwhile, he continued to pitch various Chinese-related transactions to Epstein, including joint investments with Chinese funds overseas, managing assets for high-net-worth individuals in China, and cooperation in projects with China Investment Corporation and Chinese state-owned enterprises like Deutsche Bahn.
The CCP’s comprehensive control over various aspects of the Chinese economy and society provided an opportunity for the “princelings” to accumulate wealth through their political connections.
For foreign heavyweight investors, the rules of the game in the Chinese market are simple. A seasoned limited partner told Reuters, “It’s all about knowing the right people. That’s why you invest in a princeling fund.”
In April 2011, Stern forwarded the investment proposal for BoYue Capital’s first fund to Epstein. The proposal emphasized exclusive trading channels, referred to as a “priority-based industry network,” and set a high return target of 25%.
In the same email, Stern mentioned that the company’s two senior executives – former Ping An Insurance CEO Louis Cheung and BoYue Co-Founder Jiang Zhicheng – were his “friends.”
Jiang Zhicheng received his bachelor’s degree from Harvard in 2010 and later worked as an analyst in Goldman Sachs’ private equity division in Hong Kong. Nine months later, he left Goldman Sachs to establish BoYue Capital. On September 21, 2010, he submitted registration documents for the company in Hong Kong, listing himself as the sole director.
Stern also boasted to Epstein about his close relationships with several “princelings” and future ministerial-level individuals.
In January 2012, Stern emailed Epstein stating, “I am discussing setting up an investment tool/fund with the son of Chinese Premier Wen Jiabao. This would be a lethal blow to Morgan, but if they don’t do it, we should skip them and do it ourselves.”
“Investments could create a machine that trades through China. This perfectly aligns with another plan to manage Chinese wealth,” Stern wrote in his email.
According to The New York Times, Jamie Dimon, CEO of JPMorgan, reportedly had a dispute with Epstein and Stern around 2012. Stephen Cutler, the bank’s general counsel, complained to Stern and others about Epstein, saying, “He is not a respectable person from any angle. He should not be our client.”
However, it wasn’t until 2013, under increasing pressure from US federal regulators, that JPMorgan ultimately terminated its relationship with Epstein. Coincidentally, that same year, Stern also left the bank.
Stern joined BlueMountain Capital in 2013 and served as CEO of Barclays Bank from 2015 to 2021.
Subsequently, Stern began shifting his business focus away from China. Corporate records obtained through WireScreen show that his consulting company Asia Gateway (later renamed Witan) closed its operations in mainland China in February 2017. However, Stern still listed China as his country of residence in company documents in 2020.
Apart from business dealings, Epstein also attempted to approach China through academic and media channels, such as discussing with Hong Kong tycoon Ronnie Chan and former Harvard professor Robert Kuhn about establishing a “Tsinghua University branch” in Boston and funding Robert Kuhn to produce a scientific philosophical program with Chinese themes.
In 2012, Stern tried to help Epstein obtain a visa for China, but the visa application was denied due to Epstein’s criminal record.
In May 2016, Epstein met with Tsinghua University’s then-president Qiu Yong in New York, coordinated by Qiu Chengtong. At that time, Qiu Yong was visiting the US and had a meeting with Harvard President Drew G. Faust.
That same year, Tsinghua University invited Epstein to visit Beijing. Epstein’s assistant informed him that the visa for the visit was ready. However, due to an urgent matter at home, Epstein ultimately did not visit Tsinghua.
The long and complex web of relationships between Epstein, Stern, and various Chinese officials and business figures highlights the intricate and secretive nature of business activities between Western interests and Chinese elites. The revelations from the newly disclosed documents shed light on the extent to which influential individuals in both countries were intertwined in a network of deals and connections aimed at maximizing financial gains.