-Caveat Lector-
January 29, 2001
Records unravel $70 million trail taken by Rich
By Jerry Seper
THE WASHINGTON TIMES
Marc Rich, the fugitive financier pardoned on Inauguration Day by
President Clinton, personally devised and oversaw an elaborate
scheme to funnel to Swiss banks more than $70 million in illegal
profits from the resale of crude oil.
According to federal law enforcement authorities and government
records, Mr. Rich � as part of an extensive plot to evade U.S.
taxes and federal energy regulations � successfully hid millions
of dollars in illegal profits that he and his partner, Pincus
Green, also pardoned by Mr. Clinton, accumulated in the 1980s.
The scheme, described by authorities as one of the biggest
tax-fraud cases in U.S. history, continued over nine months while
the illegal profits were secretly being routed from the United
States to banks in Switzerland. Records show the profits had been
obtained through the purchase and later resale of $200 million of
Iranian oil after President Carter had banned trade with that
country.
Authorities said Mr. Rich diverted the cash through a series of
phony transactions involving companies he had set up in Delaware,
Connecticut, Pennsylvania, the U.S. Virgin Islands, Australia
and Switzerland. The money, on which taxes were never paid,
ended up at Marc Rich & Co. in Zug, Switzerland.
"It was Rich who personally laundered those profits off the books
in an effort to evade taxes and avoid federal energy
regulations," said one law enforcement official, who asked not to
be identified. "The evidence is clear. Had Rich ever been
brought to trial, he would have been convicted."
Mr. Rich, whose ex-wife, songwriter Denise Rich, gave $1.3
million to the Democratic Party, fled to Switzerland in 1983
after his indictment on charges of evading $48 million in taxes
and violating U.S. sanctions by trading with Iran while American
hostages were held in that country. Still a Swiss resident, he
was accused of tax fraud, racketeering and tax evasion.
Mr. Rich left the country at a time when his attorney, Edward
Bennett Williams, who has since died, was attempting to negotiate
a settlement in the case � including a June 1983 offer to pay a
$100 million fine to resolve the matter without his client
serving time in prison. Authorities said prosecutors refused the
offer because Mr. Rich and Mr.
Green were fugitives and had not agreed to return to this country
to plead guilty in court.
The Justice Department, which steadfastly declined over a 17-year
period to consider pardon requests from Mr. Rich and Mr. Green,
maintained at the time of the settlement offer that it was not
interested in closing the case without admissions of guilt by the
two men.
"Marc Rich and Pincus Green certainly became this country's
highest priority white-collar fugitives, and that really didn't
change until Inauguration Day 2001," said another law enforcement
official, who also requested anonymity.
Federal law enforcement authorities said Mr. Rich initially came
to their attention in 1981 after two Texas men pleaded guilty in
a scheme involving the illegal resale of crude oil. The two men
implicated Mr. Rich in the diversion of millions of dollars in
crude-oil profits.
A review by the FBI and federal prosecutors of thousands of
documents, along with interviews of more than 100 witnesses,
eventually led to the indictment of Mr. Rich and Mr. Green.
The indictment represented the first time the 1970 Racketeer
Influenced and Corrupt Organization (RICO) Act was used in a
major white-collar fraud prosecution. The law originally was
designed to combat organized crime groups accused of operating
continuing criminal enterprises.
Mr. Clinton said last week from his new home in Chappaqua, N.Y.,
that he granted the pardon � requested by former Clinton White
House Counsel Jack Quinn �based on the merits of the case as
argued by Mr. Quinn and denied the donations by Mrs. Rich had
anything to do with the decision.
"The only thing I would do is ask people to look at the facts.
Then I think they will agree with me," Mr. Clinton said in brief
comments to CNN.
The contributions by Mrs. Rich began in 1992 and went to Mr.
Clinton, Vice President Al Gore, the Democratic National
Committee and Sen. Hillary Rodham Clinton, New York Democrat.
She made an emotional plea to Mr. Clinton for the pardon as a
friend and an admirer.
"Let no one think exile for life is a light burden. The world we
cared about was cut off from us," she said in a letter to the
president.
The House Government Reform Committee is investigating the
pardon, although it cannot be revoked. The committee said last
week it wants to know if Mr. Clinton had an improper motive for
the pardon, if law enforcement authorities were consulted before
it was granted and if any regulations governing the lobbying of
the president were violated.
The committee also is probing what role the Clinton Justice
Department, particularly acting Attorney General Eric H. Holder
Jr., who was advised of the pardon request by Mr. Quinn in
November, took in the decision; what influence Mrs. Rich's
donations had on the pardon request; and if new charges can be
brought in the case.
Mr. Quinn, who left the White House in 1997, portrayed Mr.
Rich and Mr. Green to Mr. Clinton as "extraordinary businessmen
and philanthropists who have lived exemplary lives," adding that
they were wrongfully indicted. He also noted that the pardons
were endorsed by Israeli President Ehud Barak and former Prime
Minister Shimon Peres.
Mr. Rich holds dual citizenship in Switzerland and Israel, and
has contributed more than $100 million to charitable, cultural
and civic groups, many in Israel. Now 67, he married Gisela
Rossi in 1998 and currently lives in Meggen, Switzerland.
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