by JEFFREY ST. CLAIR
Marc Rich, the trader known as the “King of Commodities” whose controversial 2001 pardon by President Clinton just hours before he left office unleashed a political firestorm of criticism in 2001, died on Wednesday. He was 78. PHOTO/CBS
President-in-waiting Hillary Clinton has never addressed her role in the midnight pardon of billionaire fugitive Marc Rich, who died this week. In fact, she’s rarely been asked her opinion on the free pass given to one of the world’s most wanted fugitives, a man who violated embargoes against Iran and South Africa and fled the country rather than face trial in what was billed as “the biggest tax evasion case in history.” The senator has variously said that she was “unaware” of the decision and “surprised” by it. When pressed, she merely cackles.
Even though 300 pages of core documents relating to the pardon decision remain under seal at the Clinton Library, a review of the available record tells a much different story. In fact, the Rich legal team viewed Hillary as a secret weapon, and as one door after another closed on their search for a pardon they focused more and more on invoking what Rich lawyer Robert Fink called the “HRC option.”
Who is Marc Rich? And why did he need a presidential pardon?
Born in Belgium to Jewish parents, Marc Rich moved with his family to the United States to escape Hitler. Young Marc soon went to work for a commodity firm in New York called Phillip Bros, later acquired by Salomon Brothers. He soon made his mark as an oil trader and, along with his friend Pincus “Pinky” Green, he is credited with inventing spot market trading in oil, ferrous metals and sugar. Billions flowed into the firm, and the European press took to calling Rich “the Aluminum Finger.”
But Rich and “Pinky” Green felt underappreciated and underpaid. They bolted the firm, and Rich angrily vowed to “grind Phillip Bros. into oblivion.” In 1974, the pair started their own holding company, eventually known as the Marc Rich Group, and began making oil deals with Iran, Iraq and wildcatters in Texas. He and Pinky were soon billionaires and big shots in the global petrochemical trade.
Around this time, Rich courted a buxom young Jewish singer/songwriter from Worchester, Massachusetts, named Denise. He whisked her off to his seaside villa in Marbella, Spain, where the couple were married and rapidly assumed the life of international jet-setters and art collectors. It is said that Rich owns one of the largest private collections of Picasso paintings and sculptures in the world. Rich began referring to himself as a “business machine.” The years passed. Denise bore Rich three daughters and honed her songwriting skills on transcontinental flights on the family’s private jet. Saccharine pop flowed off her micro recorder , including minor hit “Frankie.” The bank accounts swelled.
Then in 1983 crisis hit the Rich family. The U.S. Attorney’s office for the Southern District of New York notified Rich and Pinky that they were under investigation for fraud, illegal oil deals with Iran and the apartheid regime in South Africa, and tax evasion. Documents were subpoenaed. Indictments were in the works. Rich hired D.C. heavy-hitter Edward Bennett Williams to fend off assaults of a vicious young prosecutor – none other than Rudy Giuliani.
When Giuliani requested that Pinkyand Rich turn over their passports and post a large bond, Williams acted indignant and personally avowed to the federal judge overseeing the case that his client was not a flight risk. Two days later, Pinky and Rich were on a plane bound for Europe. As expected, the indictments came: a 65-count charge alleging fraud, trading with the enemy (Iran), and tax evasion.
Humiliated, Williams resigned in a huff, and Rich found a succession of new lawyers over the next decade, including former Nixon attorney Leonard Garment and Lewis Scooter Libby, who would later find refuge in the awesome power of presidential privilege.
Rich’s escape from Giuliani’s clutches is the stuff of spy novels, made even more thrilling due to the fact that he almost certainly had several moles inside Giuliani’s office, U.S. law enforcement and intelligence agencies who kept him apprised of the schemes to nab him. He evaded the U.S. marshals on his tail at Heathrow Airport in England, and then later his plane bound for Finland mysteriously turned at the last moment for Sweden, once again narrowly avoiding landing in custody. Years later, Rich would also escape his captors in Germany and Jamaica, courtesy of anonymous tips to the fugitive billionaire.
The tycoon’s eventual passage to safe harbor in Switzerland went from Sweden through East Germany, aided by the notorious Wolfgang Vogel, an East German lawyer who specialized in shuttling spies into and out of Eastern Europe.
Rich dropped millions at every stop, especially in Switzerland. He and “Pinky” Green choose the town of Zuq to establish their new headquarters in a blueberry-colored office tower. Entreaties were made to Swiss officials, and money liberally dispensed.
“He bought Swiss loyalty,” says Shawn Tulley, a financial crimes reporter for Fortune magazine, who covered the Rich case. “He really put out the charm and the money.” When the U.S. Marshals finally tracked Rich down in Switzerland, they immediately petitioned the Swiss government for his extradition. Request denied. As far as the Swiss were concerned, financial crimes, especially involving taxation, were trifling concerns unworthy of governmental consideration.
When the Swiss refused to turn Rich over, the Marshals tried to kidnap the world’s most famous tax evader under the extraordinary rendition program, which has since become a staple of the Bush regime.
The Marshals set up a team outside of Rich’s mansion and his offices. But again, there was a fortuitous leak. The Swiss police approached the would-be kidnappers and told them to shut down their operation or they would be the ones sitting in jail. The Marshals retreated. Rich had found his sanctuary. He summoned Denise and the children to join him in sprawling mansion near Lucerne and then renounced his U.S. citizenship. This freed him from the nagging obligation of ever again having to worry about entanglements with the IRS over tax obligations. But it also threw the validity of his eventual pardon into question.
The exile of Marc Rich was not an idle one. Indeed, from 1983 to 1996 Rich’s fortune ballooned from a mere billion dollars to more than $7 billion. He and Pinky struck oil deals in Russia and Bulgaria (prompting accusations of fraud and thievery in both countries) and mining operations in central Asia, Africa and South America. Along the way, he sharpened the art of the political bribe. Rudy Giuliani alleges that during this period Rich tried to bribe the state of New York, offering millions to the State Department of Education in exchange for a withdrawal of the pending charges.
In order to buy alumina from the new leftist government of Jamaica for less than half the market price, Rich wired $50 million to Jamaican President Michael Manley in an hour of acute distress for the embattled ruler.
Even as he neared the top of the FBI’s Ten Most Wanted list, Rich also didn’t see any reason to abandon his operations in the United States. In fact, his hand is seen orchestrating one of the most savage crackdowns on organized labor in recent decades. In 1989, Rich secretly acquired the controlling interest in a West Virginia-based company called Ravenswood Aluminum. Ravenswood was embroiled in a tumultuous battle between management and workers at the plant when in 1990, under Rich’s long-distance orders, the company tried to bust the union. On a bitterly cold night, a private security force arrived at the plant, set up armed guards at the gates and surveillance cameras around the perimeter of the facility, and locked out 1,700 workers, all members of the Steelworkers Union. Over the ensuing weeks, the armed guards repeatedly clashed with picketing union members, fogging the air with tear gas and beating skulls with their police clubs. Soon Rich made the call to hire permanent replacement workers, for less pay and reduced benefits. The lockout went on for two more years. “It was a brutal affair,” says Dan Stidham, president of the Ravenswood union local at the time of the lockout. “I’m still pretty upset with Clinton for pardoning that guy after all we went through.”
Meanwhile, back in Lucerne, Rich was beginning to cultivate the Israeli government. He established the Rich Foundation in Tel Aviv, which would distribute more than $100 million to Israeli causes over the next decade. To oversee the foundation, Rich selected a former high-ranking Mossad official named Avner Azulay, whose ties to the intelligence agency probably never totally evaporated. Azulay was a useful conduit to Israel’s political elite. He was close to Yitzak Rabin, Ehud Barak, Shimon Peres and Ehud Olmert. A decade later, Azulay would play a key role in securing Rich’s pardon from the Clintons.
Through Azulay, Rich offered his services to the Israeli government, especially the Mossad. Indeed, according to letters from Israeli officials, Rich played the role of a “Say-Ayon,” or unpaid asset of the Mossad. In fact, Rich was subsidizing Israeli intelligence operations. He financed numerous covert missions and allowed Mossad operatives to work covertly in his offices around the world.
With experience as an international spook now added to his C.V., Rich reached out through intermediaries to both the FBI and the CIA. He offered his services to both agencies in exchange for dropping the charges against him. The CIA’s response is unknown, but the FBI was intrigued and sent the request to the Justice Department, where it was quashed.
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