Avner Azulay
“They offered to send him an aircraft?” Avner Azulay pricked up his ears when Rich told him of his plans to fly to Moscow. “This didn’t sound kosher to me.” We were drinking coffee in a stylish hotel in the center of Lucerne in the heart of Switzerland. “I only trust once,” he warned me before our interview began. He wanted to know everything about me before I was allowed to ask him any questions. Azulay, a good-looking man in his early seventies with warm eyes and silver hair, was responsible for Rich’s security for many years. He was paid to be suspicious and ask the right questions. “Who is going to protect you in Russia?” he asked Rich and raised a cause for concern. “They don’t have any laws there just after the fall of the Soviet Empire. And don’t forget, they would do anything to please the Americans.”
Rich grudgingly canceled his trip to Moscow—which turned out to have been a wise decision. Azulay’s instincts had once again proven accurate, and he later found out that the entire affair had been a clever plan to lure Rich to Russia. Of all people, the Israeli acquaintance—a former intelligence agent—had unknowingly been used by American agents. They had successfully smuggled a mole into Rich’s network. Rich had almost made the one mistake that Ken Hill was hoping for. “We tried luring him to countries where he could have been extradited,” the former U.S. marshal confided. “Did Rich have close calls? We certainly think so.”
Rich’s ability to evade the agents of the most powerful nation in the world for nearly twenty years was largely due to Azulay’s good instincts and experience. Azulay was the perfect candidate, a former colonel in the Israeli Defense Forces and a high-ranking Mossad agent who had worked undercover in Spain during the 1970s, a time when Spain had no diplomatic ties with Israel. He was later assigned to one of the most difficult regions in the intelligence world: Lebanon. He had a top-secret base in Beirut, and he was smuggled in and out of the country by sea. It was during this time that Azulay met Ehud Barak, who was the head of Israeli military intelligence and would later become the prime minister of Israel.7
In 1983–84, after having resigned from the Mossad, Azulay was advising a Spanish bank on how to deal with Basque terrorists when he was introduced to Marc Rich. Rich engaged his services during the time of Giuliani’s indictment against him. “He had security problems. He had business intelligence problems,” Azulay remembers and explains how he went about determining Rich’s security vulnerabilities. “It’s not magic. It’s about accurately evaluating each situation. For example, when Marc was invited to somewhere, I used to ask, ‘How did the invitation come about? Who made the invitation? Who is behind the invitation? What is the reason for the invitation? Does it make sense to you?’ It’s all about assessing what is plausible.” Azulay had access to the best of security and intelligence networks. He personally knew many European intelligence officials, as he had cooperated with them in the past.
Rich was well aware that he could be arrested in many of the countries he visited and extradited to the United States. He therefore was very careful when planning his travels. He avoided taking regular scheduled flights where possible. He preferred to fly by private jet—but never his own plane, as this would have been much too dangerous. The registration number would have served as a flashing red beacon to the world’s police authorities. If Rich flew to South America or the Ca rib be an, he had to be extremely careful that his plane avoided U.S. airspace. He always registered in hotels under an assumed name. For a time, Rich rode in a bulletproof Mercedes in Switzerland. A small team of bodyguards—battle-hardened Israelis at first, and later a group of specially trained Swiss—accompanied him everywhere. A sophisticated surveillance system allowed the driver and license plate of every car that approached Rich’s residence to be recorded and registered. The local police were notified for the slightest of reasons. The system even prevented a mentally ill Canadian, who was obsessed by the media reports on Marc Rich and who had killed his own parents, from penetrating the private Rich residence.
Pitiful Attempts
Rich’s private security team simply had an edge on the U.S. government’s multiagency task force. In the fall of 1987 a U.S. marshal assigned to the project barely missed apprehending Rich in France after Rich canceled a meeting with an African oil minister.8 Agents apparently tried to trick Rich into flying to Düsseldorf, Germany, for a business meeting, but his private plane never arrived, “leaving U.S. authorities stewing at the airport.”9 In September 1991 the FBI and Interpol attempted to arrest Rich in Finland. Pertti Ruoho, a Finnish manager of the oil concern Neste, had told agents that Rich was flying to Helsinki in order to purchase large amounts of his company’s stock.10 Ruoho promised to provide Rich’s itinerary. Finnish police spent the whole weekend feverishly checking passenger lists and passports, but Rich’s name could not be found. The U.S. Marshals Service believes to this day that Rich’s plane diverted to Sweden at the very last minute after he had somehow received a warning.
Another hot tip had Rich traveling to Jamaica, where he had extensive business dealings, but “we missed him by a day or two,” said Howard Safir.11 Rich laughs and shakes his head when I mention this story to him in the Glashof restaurant: “I don’t believe it. I was in Jamaica in 1966 during my first honeymoon. It was raining all the time, and I stepped on a sea urchin. I’ve never been there again.”
In the face of their obvious failure to capture Rich and Green, prosecutors desperately followed every lead that came their way. The hunt for Marc Rich at times seemed almost pitiful, as classified police documents show. On May 5, 1992, a U.S. citizen thought he saw a sign welcoming “Mr. Rich” at Moscow’s Sheremetyevo II International Airport. He dutifully reported what he had seen to the police. A welcome sign for a Mr. Rich? Reason enough for Mary Jo Grotenrath, associate director of the Office of International Affairs, to phone Boris Senchukov at the Russian bureau of Interpol the following day. According to police logs marked CRITICAL URGENT and FOR POLICE/COURT USE ONLY, Grotenrath requested Senchukov’s assistance in determining whether Rich was actually in Moscow, saying, “Your assistance in this most urgent matter is greatly appreciated.” Nothing came of this.
A fax dated February 21, 1992, and marked URGENT also casts a rather poor light on the U.S. investigation. Donald S. Donovan, assistant director at the U.S. National Central Bureau of Interpol, sent the fax to Don Ward, the deputy director of the U.S. Marshals. “Our criminal police have found out the above subject [Marc Rich] set up a branch of the ‘Marc Rich’ Company at address as follows: Stepanska 34, Prague 1, Czechoslovakia,” it said. This explosive piece of information, apparently of the utmost urgency, had already been officially published in Prague’s commercial register six months previously.
In their desperation, federal agents even sought out the assistance of Josef Lang. Lang, a former Trotskyist and ultra-left member of the Swiss parliament, was a well-known local critic of Rich. Lang once described the United States as a “warmonger” and its presidents as “death-penalty barbarians.” True to the Arabic proverb “The enemy of my enemy is my friend,” the FBI approached Lang in 1992. Lang was invited to the fourteenth floor of 26 Federal Plaza in Manhattan, the headquarters of the FBI’s New York field office. There two agents tried to persuade him to recruit informants working among the mechanics at Zurich’s airport. They hoped he could tip them off when Rich was due to leave the country. “I had to say, ‘Sorry, I am a politician, not a private eye.’ Besides, it was against Swiss law,” recounts Lang.12 The fact that the FBI agents repeatedly referred to the 750,000 reward on Rich’s head did nothing to sway the Swiss politician.
Although the exact amount of the reward was never officially mentioned, the fact that it existed was known the world over. The U.S. government broadcast an International Crime Alert over the entire globe on the Voice of America. The alert promised, “The U.S. will pay a reward for information that leads to the arrest of Marc David Rich. The U.S. guarantees that all reports will be investigated and all information will
be kept confidential. If appropriate, the U.S. is prepared to protect in formants by relocating them.” This made Rich a target for bounty hunters, kidnappers, and envious competitors. There were even rumors that European terrorists had offered to catch Rich for money and deliver him to U.S. authorities.13
The U.S. government expended 19.2 man-years at a level of “GS/GM 13 or higher” (more than 1.5 years of experience) between the years of 1984 and 1990 in order to apprehend Rich. In other words, the equivalent of three people worked full-time on the hunt for the fugitive trader. In this same period, 55,000 was spent on travel expenses alone.14
Yet it was all for nothing. Rich was always just a step or two ahead of his pursuers. Rich did nothing to hide his business successes, his riches, or even his ridicule of the authorities. He celebrated his fiftieth birthday at the Grand Hotel National in Lucerne, where two of Switzerland’s most famous clowns appeared onstage for a rather special boxing match. The clown wearing a Marc Rich logo on his back went after the other clown, dressed as a member of the NYPD, with an oversized rubber hammer. The three hundred guests, who had traveled from every corner of the globe to attend the party, loved this bit of slapstick.
Secret Protection?
It must have infuriated Rich’s pursuers. Rich was listed on the FBI’s Most Wanted list between Victor Gerena, wanted for armed robbery, and Eric Rudolph, the abortion clinic and Atlanta Olympic Park bomber, but Rich could nevertheless continue to do business all over the world. He traveled “extensively,” as the police documents stated—Spain, Portugal, Belgium, Bolivia, Great Britain, Eastern Europe, Israel, Scandinavia, and the former Soviet Union.
“What are the reasons that the most powerful government in the world cannot apprehend some of its most notorious fugitives?” asked an exasperated Rep. Robert E. Wise (D–West Virginia).15 “This isn’t your miscreant who has fled the country for knocking over fifteen 7-Elevens and is kicking around the dock at Marseilles. This is Marc Rich operating with total impunity out of a tall office building in Switzerland. And why hasn’t this been made a high priority?”16 Such questions led to hearings by the House Committee on Government Operations, then led by Michigan Democrat John Conyers, in spring 1992.17
Rich’s lasting ability to escape from his pursuers led to the suspicion that someone was protecting him. The best proof was that Howard Safir’s plans to snatch Rich in Switzerland were betrayed to Swiss police. One can assume that Rich (or those surrounding him) regularly received information that enabled him to avoid arrest, although this is officially denied by all sides. “I’m very sure the Mossad helped him,” Ken Hill told me in Florida. Jean Ziegler, a former UN special envoy and member of the Swiss parliament, stated that Rich enjoyed “secret protection in the Swiss Administration, particularly in the Federal Department of Justice and Police.”18
Ken Hill, the man who was on Rich’s trail for fourteen years, sees no more room for doubt. The former U.S. marshal understands that Rich was a valuable business partner for a number of countries. He was much too important for them to forgo his services and turn him over to the Americans. “I mean, he was a key element in providing commodities to many nations in Europe and Asia,” Hill told me. “Don’t forget, there are only a few people that can loan one billion dollars to each other. This is a very exclusive club, a very strong network. This privilege turned out to be a safety net for him. He must have got the protection of [intelligence] services.” Such statements help explain the fact that the United States did not receive the cooperation it had hoped for from a number of countries. The prosecutors submitted requests for provisional arrests to several countries, all of them members of Interpol, but none of these requests was successful. “He was hard to get because he had a great deal of influence in a lot of countries,” Howard Safir confirmed.19
“Crusade Against Me”
“Other nations did not share the U.S. view and consequently refused to be instrumentalized for their crusade against me,” Rich says calmly. When I ask if he had been tipped off and protected, Rich’s answer is as short as it is telling. “Maybe,” he says, smiling, before taking another sip of wine.
Even today, hardly anyone realizes that employees at the U.S. State Department, who naturally were aware of the government’s international activities, were in direct personal contact with Rich, as I will show later, even though he was considered a fugitive and was at the same time being pursued by other government agencies. In the powder keg of the Middle East, of particular strategic importance to the United States, Rich was actually considered an active diplomatic asset.
The gumshoes in the field were also aware of this. Howard Safir proved particularly outspoken and blunt. “I have found that the biggest impediment to operational law enforcement is having to deal through the bureaucracy of the State Department,” he stated in his testimony before the Committee on Government Operations. He criticized certain “policy restraints” and stated that in his opinion the failures to apprehend the fugitives were due to the lack of support at the highest levels of government: “I believe that if a political decision was made at the highest levels of this government that we were going to apprehend Marc Rich and Pincus Green and use all of the available tools, that we would have Marc Rich and Pincus Green very quickly.” The Committee on Government Reform came to the same conclusion: “The United States lacked the political will to effect the return of these fugitives.”20 At the same time, it lacked the political will to settle the case.
CLANDESTINE TALKS
T
he group that came together on July 28, 1992, in Zurich was an illustrious one. Fittingly, they chose to meet in the best hotel in town, the luxurious Grand Hotel Dolder perched high above summery Lake Zurich and set against the backdrop of the perpetual snow of the Swiss Alps. Leonard Garment, Marc Rich’s well-connected Washington lawyer, believed the time had come to have another go at persuading the prosecutors to discuss a settlement in the Rich affair.
Eleven years had passed since Sandy Weinberg had been put on the Marc Rich case. In the meantime, both the U.S. attorney and the assistant U.S. attorney responsible for the case had changed. Weinberg had left the post in 1985 to work as a lawyer in Florida. The Rich case had been a first-class springboard into an extremely lucrative career in corporate law. Weinberg, by the way, still refers to it in his own publicity material: “As a 32-year-old prosecutor, he led the prosecution against international financier Marc Rich and his network of commodity trading companies in one of the most celebrated tax fraud cases in U.S. history. Mr. Weinberg was able to unravel Rich’s complicated fraud scheme and successfully battle against his team of veteran lawyers from the best firms in the country.”1 Giuliani, for his part, had left public office and become a partner in a law firm after failing to be elected mayor of New York in 1989. He would win four years later.
Leonard Garment, the former White House counsel for Richard Nixon, was hoping that their successors would see the case less emotionally. He was hoping they would be more prepared to concede what he regarded as fundamental weaknesses in the case against Rich. In November 1990 Garment contacted Giuliani’s successor, Otto G. Obermaier. “The dispute and the accompanying threats and publicity ballooned beyond all legitimate proportion,” Garment wrote in a twenty-page memo to Obermaier. “The case involves many disturbing features, but at its core are transactions which were not criminal. It employed an unprecedented use of RICO that resulted in the defendant’s capitulation, without trial, to the government’s charges. . . . The circumstances of the case, the consequences of its outcome, and the extraordinarily important questions of criminal law enforcement it poses, justify considering such a review.”2
Secret Meeting with Marc Rich
Obermaier actually agreed to discuss the case with Garment, and he was even willing to travel to Switzerland to meet Marc Rich in person. Traveling to a foreign country to negotiate with a defendant was a highly unusual step for a U.S. attorney to take. It awakened Rich’s hopes that Obermaier was amenable
to negotiations. These expectations were reinforced by the fact that Obermaier was being accompanied by Assistant U.S. Attorney James Comey.
That is how Obermaier and Comey came to be sitting around a table with Marc Rich, Leonard Garment, and André A. Wicki, Rich’s Swiss attorney, in the Grand Hotel Dolder in Zurich at lunchtime on Tuesday, July 28, 1992. Before getting down to business, the adversaries ate Zürcher Geschnetzeltes mit Rösti, a local specialty consisting of a ragout of veal and mushrooms in a cream sauce served with hash browns. After lunch, Garment and Wicki set out their client’s position (see chapter 10). “Because the case was billed as the ‘biggest tax fraud case’ in history, we asked the prosecutors to review the Wolfman-Ginsburg tax analysis. We once more offered to make the [tax] professors available to address any flaws the Southern District might find in their analysis,” Wicki recounted to me. “It was easy to talk to them,” Rich recalls. His side presented their four most important arguments: the tax professors’ conclusion that Rich’s firms had correctly declared all of their earnings and deducted the right amount of taxes; the lawyers’ view that the “draconian” racketeering statute was a “sledgehammer,” inappropriate in the circumstances; the fact that all comparable cases had been pursued in the civil rather than the criminal courts; and the Department of Energy’s conclusion in a related case that the transactions being objected to by the prosecution had been correctly accounted for by Rich’s firms.
“Obermaier and Comey listened patiently,” says Rich. “At first I thought the meeting was positive.” The atmosphere may not have been exactly friendly, but relations were characterized by mutual respect for the first time in eleven years. The parties even arranged to meet for a second time the next day. Then Obermaier said, “Our hands are tied.” The government, the prosecutor said, had a rigid policy against negotiating with fugitives. They would not be able to review the validity of the underlying tax charges unless Rich first returned to the United States and faced trial. Like Weinberg and Giuliani before him, U.S. Attorney Obermaier took the position that Rich would have to face jail before any other terms and conditions could be discussed, and the government would not provide any guarantees as to the sentences the defendants would receive.
The King of Oil: The Secret Lives of Marc Rich Page 18