The Fear of Dying Poor
“Why was he trying to do it all again?” one of Rich’s associates of many years asked himself and told me: “He reminds me of Lot’s wife. Marc turned around.” In the First Book of Moses, Lot’s wife ignores the angel’s command and turns around to look upon the burning city of Sodom—and is transformed into a pillar of salt. “He has to trade,” one of Rich’s close friends said of his restlessness. “It’s not about making money. People like Marc Rich don’t want to earn money just to become even richer. They do it out of passion.” There is something about the feeling of success that is highly addictive. “Success is measured fairly easily in his business. It is measured by the amount of money he makes,” Rich’s friend the hedge fund pioneer Michael Steinhardt told me. These conversations reminded me of George Mallory, the English mountain climber who died while attempting to be the first person to climb Mount Everest. He is immortalized for the answer he gave when asked about his insatiable desire to climb the world’s highest mountain: “Because it is there.” When I ask Rich why it is impossible for him to stop trading, he answers, “I love business. Every dollar I make is like the very first.”
There is, however, another reason for his obsession. “Marc is afraid he could lose his entire fortune and die poor,” a friend confided in me. It is a statement that might seem absurd at first. Rich has more money than he could ever spend—even in the course of several lifetimes. He owns real estate and works of art that, regardless of whatever happens on the stock exchange, are worth tens—if not hundreds—of millions of dollars. Rich’s fear of poverty is completely illusory, yet it is a fear that Rich shares with many refugees who have experienced what it is like to lose everything. It is also a typically Jewish fear—one the entire Rich family was well aware of. As Rich’s daughter Danielle explained, “It was always made clear to us that we were lucky for what we had and that we must not take it for granted because we could not depend on it always being there. It could be lost or taken away, just like during World War II.”
Philanthropist
It was exactly this experience that also made him such a generous philanthropist. Rich has founded three charitable foundations and has donated more than 150 million during the past thirty years. Over four thousand projects in the area of education, culture, social services, scientific research, and health care primarily in the USA, Israel, Spain, and Switzerland have benefited from Rich’s philanthropy. “That is a part of our Jewish culture: When you are doing well, do charity,” one of Rich’s employees told me. “Naturally there was a charity piggy bank in the company at the end of the year. We could write on a piece of paper how much we wanted to donate to a particular organization, and the company would double the sum. It was Marc’s idea.” Another of Rich’s employees remembers how he once sat down together with Rich after receiving a promotion. “After a while Marc suddenly stuck his hand in his pocket and came out with a roll of dollars. ‘You will soon be earning a lot of money,’ he told me and put the roll in my hand. ‘Start by giving this money to the first poor man on the street.’ ”
“Wealth always means independence and comfort, of course,” Rich answered when I wanted to know what his fortune meant to him, “but it also means that I can help the less fortunate through my foundations. It’s moving and utterly satisfying to see the effects of a school or hospital in a deprived area or to help along young gifted artists, especially in the field of music.” What is he most proud of when it comes to his philanthropy? “The money has an effect and is not wasted.”
Rich’s “extraordinary” charity was one of the arguments that was used in his pardon application.7 His critics maintain that Rich became involved in philanthropy only in order to help save his reputation. “Even the good things Marc does are used against him. That really hurts,” Avner Azulay told me. He then mentioned that Rich’s first foundation was active as early as 1979—long before the indictment. “We couldn’t know then,” Azulay said sarcastically, “that decades later a President Bill Clinton would pardon him.”
The PARDON
O
n Friday, January 19, 2001, Jack Quinn was at a dinner party in Washington, D.C., when his mobile phone rang. It was only shortly past nine, but when Quinn looked at the display to see who was calling he knew the party was over for him. It was “POTUS”—the president of the United States. It was Bill Clinton’s last night in the White House, and the president wanted to speak with Quinn about the pardon application that Quinn had submitted a month ago for his clients Marc Rich and Pincus Green.
“The president had obviously read and studied the petition,” Quinn told me. He excused himself from the dinner table and made his way to an empty room. He and the president knew each other well, as Quinn had served as Clinton’s White House counsel. The conversation lasted around twenty minutes. “It was a good, thorough discussion that was entirely about the merits [of the pardon], not about the politics,” Quinn remembers. As he listened to the president speak, the words seemed to course through him like a jolt of electricity. “I persuaded the president,” he thought. “I persuaded the president that this was a case that should have been handled civilly rather than criminally.” On that evening it was clear that Clinton was seriously considering pardoning Rich and Green. However, the president had one precondition, and that was why he had called Quinn. Rich and Green would have to agree to face a civil hearing and waive their rights to avail themselves of the statute of limitations. Quinn immediately accepted the president’s terms. Clinton wanted to have a written waiver “within one hour.”
Quinn looked at his watch. It was 9:30 P.M. He immediately called Robert Fink, Rich’s lawyer in New York, explained the situation, and asked him to write up a waiver for Rich and Green in accordance with the president’s request. Fink was surprised. He had no longer expected a presidential pardon to come through. “We had no indication,” Fink later told me. He immediately sat down at the table and typed up a waiver declaration for the president on his wife’s laptop. About thirty minutes later, Fink unplugged the laptop so that he could go into the next room and print the document. The screen immediately went black. Fink had not known that his wife had removed the battery from her laptop.
“Oh my God,” Fink exclaimed. “I lost it.” He had not even bothered to save the document. He hurriedly plugged in the laptop, rebooted, and began typing a much shorter letter. The hour that the president had given him had nearly run out. Fink printed the waiver and reread what he had written. “Specifically they will not raise the statute of limitations or any other defenses which arose as a result of their absense.” A spelling mistake! Fink had written “absense” instead of “absence.” There was no longer any time to correct the mistake—a fact that still bothers him to this day. He faxed the letter as quickly as possible and nervously awaited the transmission confirmation. Nothing happened. He faxed the letter again, and this time the fax went through. Fink took a deep breath. Marc Rich had nearly missed his opportunity for a presidential pardon because of something as mundane as a missing laptop battery.
“Nothing else can go wrong,” Fink thought to himself and went to bed. At 2:00 A.M. he got a second call from Quinn. Beth Nolan, Clinton’s White House counsel, had asked him if Rich had been involved in arms trading, as claimed by the FBI’s National Crime Information Center. The president wanted to know if the information was correct. Fink waved the idea aside and told Quinn, “No way. Rich wouldn’t know a bazooka from a BB gun.” Quinn called Beth Nolan back and told her that none of Rich’s lawyers had ever heard of any “arms trading charges.” Such accusations, he added, were nothing more than rumors that had first appeared in, of all places, Playboy.1 After Nolan informed the president of the conversation, Clinton replied, “Take Jack’s word.” On the morning of January 20, 2001, President Bill Clinton granted Marc Rich and Pincus Green “a full and unconditional pardon.”
The Furor
Marc Rich was asleep in his Villa Rose in Meggen on the banks of Lake Lucerne
when the telephone began to ring. It was Saturday, January 20, around 11:00 P.M. in Switzerland, 5:00 P.M. in Washington, D.C. Rich looked at his gold Rolex. “Who could that be?” he thought to himself. Robert Fink had news that would excuse his calling at such a late hour. “I bring very good news, Marc. President Clinton pardoned you,” Fink told him. It took a moment for Rich to realize what exactly Fink had just said. After seventeen years as a fugitive and life in exile, after seventeen years of pursuit by federal prosecutors, Rich was a free man. “I was extremely pleased,” Rich said to me. “Nobody had actually expected that.” I wanted to know what he had done to celebrate on that evening. “I didn’t celebrate,” he answered. “I went back to sleep.”
At about the same time, Sandy Weinberg was sitting in front of the television in his Tampa home halfheartedly watching the inauguration of George W. Bush in the middle of a Washington downpour. Weinberg, who as an assistant U.S. attorney had led Rich’s investigation, was a dyed-in-the-wool Democrat. He had actively supported Al Gore’s candidacy, and he was deeply frustrated over the election recount fiasco in his home state of Florida. He was in an even worse mood after he received a call from Michael Isikoff, a reporter for Newsweek. “Hi, Sandy. What do you think of the pardon?” the reporter asked. “Michael Milken got pardoned?” Weinberg asked with little sign of interest. “No, Marc Rich,” Isikoff answered. “I uttered a vulgarity,” Weinberg tells me. “ ‘This is outrageous,’ I thought. ‘This is just outrageous.’ ” In a staccato voice—one, two, three, four—he proceeds to list the four points that from his point of view made it impossible for the president to pardon Rich. “One, it was the biggest tax fraud. Two, he was a fugitive. Three, he renounced citizenship in order to avoid extradition. Four, he traded with the enemy Iran. You cannot pardon a person like that,” Weinberg says.
News of Rich’s pardon spread among politicians, journalists, and judicial officials. Their reactions were unanimously negative. Rich’s case had once more taken on “historic” proportions. According to an article in the conservative National Review, the pardon was “one of the most disgraceful chapters in the history of the Justice Department. Not the modern history, the entire history.”2 For William Safire, a Pulitzer Prize–winning columnist for the New York Times, the pardon was “the most flagrant abuse of the presidential pardon in U.S. history.”3Vanity Fair even ventured to suggest that the pardon “may have damaged President Clinton’s reputation forever.”4 Those who were involved in Rich’s case were particularly disgruntled with the pardon. Rudy Giuliani was “flabbergasted.” “It took me about a day to actually absorb the fact that the President of the United States actually pardoned one of our most notorious fugitives,” he said. Howard Safir said he was “outraged because this sends a message to the criminals around the world that if you have influence, if you have money, and if you have access, you can put out a sign that says ‘Justice for Sale.’ ”5
Organizing a Pardon
Safir was right on one point. Access to the president was a decisive factor in Rich’s pardon. It was not only about getting the president’s ear but also about explaining Rich’s side of the story. The idea of seeking a presidential pardon first came up in early 2000, after U.S. Attorney Mary Jo White had again informed Rich’s lawyers that it was the “firm policy” of the Southern District of New York “not to negotiate dispositions of criminal charges with fugitives” (see chapter 13). Quinn told me that at that time he almost took the refusal as an affront. “It was like—you know—drop dead.” All attempts to have the case legally reassessed were thus doomed to failure.
“Why not try a pardon at the end of the Clinton term?” Michael Steinhardt first came up with the idea. Avner Azulay liked it. “What are the chances?” he asked Rich’s lawyers. Azulay remembers how they all just shook their heads. “Five percent, they said.” He then asked, “Do we have a five percent chance with another solution?” The lawyers were silent. “Then let’s go with the five percent,” Azulay said.
Rich agreed and gave his permission to seek a pardon. “I kept looking for solutions. I kept trying and nothing succeeded, so the pardon seemed to be a solution,” Rich told me. According to Azulay, one of Rich’s most trusted employees, the system was “blocked.” “The best lawyers created the biggest mess. They just created more aversion. Eventually, the thing developed into a legal monster. It became a political case,” Azulay explained. “There was no legal solution. That’s why it needed a political solution—an unconventional one.”
The Israeli Avner Azulay and the American Jack Quinn were the masterminds behind the application for a presidential pardon. They quickly put together a two-pronged strategy that—at least internally—was described as an “avenue of last resort.” One aspect was based on the facts; the second was personal in nature. Quinn would take care of the legal issues, write the petition, and present it to the president. Azulay would be responsible for the personal networking and would try to find as many dignitaries as possible who were willing to put in a good word for Rich and Green.
It is no stretch to say that without Quinn’s involvement, Clinton would never have pardoned Rich. Quinn had more contacts in Washington than almost anyone else—and he had a direct line to the president as a holdover from his days as Clinton’s White House counsel from 1995 to 1997. Prior to taking on his position in the White House, Quinn was Vice President Al Gore’s chief of staff—a position that made him Gore’s most important adviser. After leaving the Clinton administration, Quinn founded a public relations firm in Washington, D.C., and in late July 1999 Rich hired Quinn’s company to represent him. Quinn had been recommended to Rich by Gershon Kekst, the well-known New York communications consultant. Michael Steinhardt had asked his friend Kekst to see what he could do to help with Rich’s case. During our interview in his Madison Avenue office in Manhattan, I asked Steinhardt why he had been willing to help. “Over all these years Marc has never publicly defended himself against the most fallacious and terrible rumors. He never used the power of his wealth to carve his image,” Steinhardt explained. Kekst visited Rich in Switzerland and returned with a piece of advice for Steinhardt. “Marc should hire Jack Quinn,” he said. As would soon become clear, Quinn was an excellent choice and well worth the retainer of 55,000 per month his law firm was paid for some time.
Crucial Discretion
Avner Azulay, the second mastermind behind the pardon application, was a gifted negotiator and strategist with high-ranking contacts in Israel’s political establishment. The former Mossad officer, who had been responsible for Rich’s personal security and later went on to direct Rich’s humanitarian foundations in Israel, was the one who came up with the plan to directly petition the president for Rich’s pardon.
According to the Department of Justice, a presidential pardon is usually obtained in the following manner.6 The petition is first submitted to a special pardon attorney at the Department of Justice, who, after an initial examination, passes it on to the associate attorney general—the number three in the department—for further consideration. The attorney general then advises the president as to whether he should accept or refuse the petition. Rich’s lawyers had intended to follow this path in petitioning for Rich’s pardon. Azulay, however, had a fine nose for political and bureaucratic realities, something he had developed while working for Israel’s intelligence service. He recognized the risk in the lawyers’ plan. “If we do this, the story would immediately explode in the media,” Azulay told Rich’s lawyers. He advised, “We have to bypass the bureaucratic channel.” Rich had a bad reputation, and many even considered him “the biggest devil,” as Rich himself says. If it were to become widely known that he was seeking a presidential pardon, his people could no longer control what would happen next.
Rich’s lawyers decided that it was legally possible to go around the Department of Justice and take their petition directly to the president. “The pardon attorney doesn’t like it, the attorney general doesn’t like it, but it is legal,” they said.
In late October 2000, only three months before Clinton’s final day in the White House, Rich’s lawyers made the definite decision to take this avenue of last resort. “I tell you we didn’t have a sophisticated plan. It was rather a cowboy mission,” Azulay assured me. Rich’s legal team, including the experienced New York attorney Bob Fink, began to put together a petition. Discretion was of the utmost importance. “We tried to keep a low profile,” Fink told me. “I was concerned that the petition would become public. If it did the press would start to attack.”
The King of Oil: The Secret Lives of Marc Rich Page 26