-Caveat Lector-
Price Controls Provided Occasion of Sin, Clinton Provided
Occasion of Absolution
The Strange Case of Marc Rich
By Timothy P. Carney
Michael R. Carney, in New York, contributed to this report
Human Events
He wasn�t born Rich. No, he was born Marc David Reich in Belgium
in 1934 to a working-class Jewish father. Fearing the Nazis, his
family fled to America in 1942, changed their name to Rich and
tried to start life all over again.
Forty-one years later Marc Rich was fleeing again, but this time
the feared authority was not Adolph Hitler but the Assistant U.S.
Attorney for the Southern District of New York, Morris (Sandy)
Weinberg. Rich�s crimes included tax evasion, fraud, and
"trading with the enemy"�Iran, during the hostage crisis.
Rich, by now a multi-millionaire, was in Switzerland on the day
his indictment came down and decided to stay. Once again, Rich
started his life afresh, leaving his old wife Denise for a young
blond model, changing the name of one of his Swiss firms, and
starting a new business.
On January 20, President Clinton gave Rich a chance for a third
"do-over." Clinton wiped all the criminal charges off of Rich�s
record with a presidential pardon on his last day in power. The
Rich pardon has received special attention because Denise Rich
raised and donated more than $1 million to the Democratic Party
in recent years, and also provided the Clintons directly with a
$10,000 contribution to their legal defense fund and $7,300 worth
of furniture.
Even left-wing newspapers and columnists have rebuked Clinton for
pardoning Rich. Sen. Joseph (Conscience of the Senate) Lieberman
(D.-Conn.) declared himself "troubled." Bush White House lawyers
looked into overturning the pardon; and House Government Reform
Committee Chairman Dan Burton (R.-Ind.) has launched an
investigation.
The strange case started with the Emergency Petroleum Allocation
Act of 1973, which established a system of price controls on
crude oil produced in or imported to the United States. In 1980
and �81, the Energy Department classified oil that came from
wells that produce ten barrels a day or less as "stripper" oil
and exempted it from the price caps.
According to his 1983 indictment, Rich saw this regulation as a
potential gold mine, setting up a scam to have his company�s oil
relabeled "stripper" oil by a reseller, and thus seemingly
exempted from the price controls.
To hide this activity and the illegal profits it produced, says
Sandy Weinberg, the lead prosecutor in the case, Rich allegedly
had a reseller claim Rich�s profits were really its own and then
hand over the money through sham transactions to companies Rich
controlled in Panama.
This led the government to charge Rich and his partner Pincus
Green with fraud and the evasion of $42 million in taxes.
On top of that, Weinberg alleges, Rich bought crude oil from the
Ayatollah Khomeini�s Iran while Iran was holding U.S. citizens
hostage. This was in direct violation of a U.S. trade
embargo�and, in effect, helped to arm the Iranians by giving them
needed cash.
Bring all of these activities together into a concerted effort to
make illegal profits, and you�ve got what the prosecutor called
racketeering�violating federal criminal statutes designed for
busting the Mafia.
Rich�s attorneys�at the time of the investigation as well as in
the consideration of the pardon�uttered cries of
"over-prosecution." They hoped an agreement could be reached.
Rich�s and Green�s attorney, Edward Bennett Williams, met with
Weinberg a few times in 1983 to offer a deal: The companies would
pay $100 million if all charges were dropped.
This was on top of the $50,000 per day that Marc Rich was paying
in contempt of court fines for not turning over certain
documents. Every Friday Rich paid $200,000, and every Monday
$150,000. The payments eventually equaled $21 million.
Rich started paying the fines only after the Feds, following an
anonymous tip, "reeled in a plane on the runway at JFK"
(Weinberg�s words) and found it was carrying a paralegal from a
New York law firm who had checked on board with two steamer
trunks full of subpoenaed documents.
The plane was on its way to Europe.
Weinberg recounts a June 1983 meeting with Williams, in which
Williams put his feet up on the prosecutor�s desk and made the
pitch. In Weinberg�s view, and in the view of his boss,
then-U.S. Attorney Rudy Giuliani, Rich and Green deserved
nothing short of jail time. If wealthy criminals could buy their
way out of their misdeeds, the prosecutors felt, then they were
effectively above the law.
Rich and Green, according to a few sources, were in Europe at the
time of the negotiation. When Weinberg told Bennett, "No deal,"
the two businessmen decided not to come back. Three months
later, a federal grand jury handed down an indictment for fraud,
tax evasion, and trading with the enemy.
The resellers who were the main co-conspirators in the "stripper
oil" fraud were convicted and served 12 months in jail. Rich�s
companies pleaded guilty to 78 counts, and paid over $150
million, while Rich and Green remained fugitives. Attempts at
extradition failed.
That did not mean that they could not profit off the U.S.
government. As then-Rep. Bob Wise (D.-W.Va) unearthed in hearings
in the early 1990s, while Rich was a fugitive the U.S. mint was
contracting to buy metal from one of his companies.
Between fiscal years 1989 and 1992, the mint issued at least 21
separate contracts for nickel, zinc and copper to the company.
Also, in 1988, the Defense Logistics Agency lifted its bar on
contracting with the same company.
Wise characterized the scandal of dealing with the fugitive Rich
this way: "I wonder how the average American taxpayer feels when
they go to the shopping center and they reach into their pockets
to pull out some change, some coins to pay the sales tax, which
they are obligated to pay. And as they pull out that change and
put those coins on the desk, they find that the person who
provided the metal to the mint and is benefiting is accused of
evading the very taxes that the citizen is paying. I don�t think
that sits very well with the American taxpayer."
But President Clinton completely ignored standard procedures in
finally pardoning Rich. His action bypassed the Justice
Department and blindsided Mary Jo White, the U.S. attorney who
serves in the district formerly presided over by Giuliani.
Various lawyers had tried to get White to accept a plea-bargain
from Rich for years. One of these lawyers, according to the New
Yorker, was Lewis Libby, now chief of staff to Vice President
Cheney (Cheney�s office did not return calls on the matter).
But when Jack Quinn, Clinton�s former White House counsel, took
Rich as a client, things changed. Israeli Prime Minister Ehud
Barak, the Anti-Defamation League, and, of course, megafundraiser
Denise Rich all submitted letters directly to Clinton, through
Quinn, requesting a pardon.
Dan Burton and Sen. Arlen Specter (R.-Pa.) now intend to
investigate how the pardon came about. Did Clinton do it out of
the kindness of his heart, or was there another consideration?
=================================================================
Kadosh, Kadosh, Kadosh, YHVH, TZEVAOT
FROM THE DESK OF:
*Michael Spitzer* <[EMAIL PROTECTED]>
~~~~~~~~~~~~~~~
The Best Way To Destroy Enemies Is To Change Them To Friends
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