-Caveat Lector-
Monday, January 29, 2001
Bill's Parting Gift May Be Hillary's Heap of Trouble
TIME Magazine
A pardon for white-collar fugitive Marc Rich triggers Bill Clinton's
last scandal — and Senator Clinton's first
BY DANIEL EISENBERG
Outraged politicians calling for congressional hearings.
Pundits railing about abuse of power. And long-suffering
Democrats trying in vain to defend their party leader. The ugly,
all too familiar scene in Washington last week almost made you
wonder if Bill Clinton had won that elusive third term. Even as
he secured an 11th-hour deal to avoid prosecution in the Lewinsky
mess, Clinton was adding a brand-new chapter to his book of
scandal.
On his last day in office, the man who understands the power of
forgiveness better than most issued a list of more than 100
pardons. Tucked in among the names was that of Marc Rich., 65,
one of the world's most wanted white-collar fugitives. In 1983,
the brilliant, rapacious commodities trader, along with his
partner, Pincus Green, was charged with an illegal oil-pricing
scheme that amounted to what might be the biggest tax swindle in
U.S. history, to the tune of almost $50 million — not to mention
trading with Iran during the hostage crisis. The latter charge
was later dropped against Rich's company but not against Rich and
Green personally. (Not everybody was as lucky as Rich; junk-bond
king Michael Milken, who was opposed by the SEC, and convicted
spy Jonathan Pollard, who has no fans in the intelligence
community, were denied pardons.)
Rich was not your typical fugitive living hand to mouth and
sleeping under bridges. Born in Belgium and fluent in English,
French, German and Spanish, he has spent the past 17 years in
Switzerland, living in splendid exile outside Zurich, protected
by a coterie of private security guards from Israel and running a
$30 billion business that brokers everything from oil and gold to
sugar and grain. Switzerland refused to extradite him. But now
that point is moot. Thanks to Clinton, the billionaire who could
have faced years in prison suddenly has a clean slate.
But Clinton's, yet again, is dirty. To many observers,
Republican and Democrat alike, the pardon was simply outrageous —
the latest egregious example of Clinton's moral turpitude.
Rich's ex-wife, New York City socialite Denise Rich, just happens
to be a major Clinton donor and fund raiser who has raked in
millions of dollars for the Democratic Party during the past
eight years. Rich's lawyer in the pardon case, Jack Quinn, was
once Clinton's general counsel. Quinn personally lobbied
Clinton, and various dignitaries — including, sources tell Time,
Israeli Prime Minister Ehud Barak and King Juan Carlos of Spain —
contacted Clinton on Rich's behalf.
"I worked a long time on that case," New York City Mayor Rudy
Giuliani, who was the lead prosecutor against Rich two decades
ago, said at a news conference last week. "What the President
did was an absolute outrage."
But it wasn't the only one. Other controversial recipients of
Clinton's parting gifts included four Orthodox Jews from New York
State who had bilked the government out of $40 million in
education aid, housing subsidies and small-business loans.
During Hillary Rodham Clinton's Senate campaign, the First Lady
visited the Skver sect in New Square, N.Y., trying, successfully,
to lock in a group that usually swings Republican. After the
Skver turned out in force for Hillary, she invited the group's
spiritual leader to the White House, where he asked the President
to lighten the men's sentences. The subsequent commutations only
heightened suspicions — vehemently denied by Clinton and the
Skver — that there was a quid pro quo for their support on
Election Day. And if that weren't bad enough, there was also the
matter of $190,000 in gifts, including $7,000 in furniture from
Denise Rich, that Bill and Hillary hauled in as they were leaving
the White House — which means that President Clinton's final
scandal is Senator Clinton's first.
But it's the Rich pardon — and especially the fact that Clinton
granted it without consulting the Justice Department — that has
generated the most heat on Capitol Hill. Though the pardon can't
be revoked, Representative Dan Burton, the Indiana Republican and
longtime Clinton critic who chairs the House Government Reform
Committee, has already started gathering documents for a hearing;
Senate Democratic leader Tom Daschle says it may be time to
re-examine the President's pardon power. Even by Clinton's own
reasoning, which he voiced in a speech two days before the
pardon, Rich did not seem to qualify. "Most of these people
should be able to vote and be full citizens," he said, "because
they've paid."
During the past two decades, Rich has paid in his own inimitable
way, doling out about $200 million to various charities. He also
made overtures toward settling with the government for as much as
$100 million. But "it was never about the money," says Morris
("Sandy") Weinberg, the original lead prosecutor alongside
Giuliani, who now practices law in Tampa, Fla. "If the biggest
tax evaders in the U.S. never did jail time, we could never
prosecute another tax case."
It's no wonder, then, that in the fall of 1999, when Quinn
contacted the U.S. Attorney's office in New York about making a
deal, he got, as he says, "the back of the hand" from U.S.
Attorney Mary Jo White. In Quinn's view, the original criminal
prosecution of Rich was flawed, making an example of him for an
offense that other oil companies had simply been fined for. But
the Justice Department wasn't buying it. Officials insisted that
no negotiations could begin until Rich went home to face the
music.
By Thanksgiving 2000, Quinn had started a new game. During a
meeting at the Justice Department on Nov. 21, he notified Deputy
Attorney General Eric Holder of his plan to file a pardon
petition with the White House. He asked Holder if he wanted a
copy. Holder, who assumed that the White House would forward the
petition to the Justice Department's pardon attorney for review,
as was customary, said he personally did not. On Dec. 11, Quinn
delivered the massive document, about the size of a phone book,
which Time has seen, to the office of White House Counsel Beth
Nolan.
This time, for reasons that haven't been explained, the White
House decided not to send the petition to Justice. While legal
and not unprecedented, the decision added to the perception that
Quinn and the White House weren't playing fair. On Jan. 5,
worried about the approaching deadline, Quinn went straight to
the top, sending a letter to Clinton that read, "I believe in
this cause with all my heart." Five days later, he forwarded a
copy of that missive to Holder, requesting his support.
Curiously, because of an address mix-up, Holder didn't receive it
until Jan. 17. By then, as Justice raced to draft a letter
expressing its disapproval of the pardon, it was too late. "The
whole thing is, you might say, Clintonesque," says a Justice
Department lawyer.
On the day before the Bush Inauguration, Quinn pleaded Rich's
case in a face-to-face meeting with Clinton. During the entire
half-hour chat, Quinn insists, only the legal issues were
discussed. Later that day, around 6:30, Quinn informed Holder
that the White House was actively considering the pardon and
asked if he had any final objections. Holder said he didn't know
enough about the case to make a judgment, but added that the
federal attorneys in New York, who hadn't been consulted yet,
were "going to howl" if it was approved. When approval came, the
only condition was that Rich waive his right to use the statute
of limitations to contest any civil penalties. "Quinn made a
strong case," Clinton told reporters last week, "and I was
convinced he was right on the merits."
The pardon case was strengthened by an extraordinary lobbying
effort. For starters, there was Denise Rich, the Grammy-nominated
songwriter and Democratic diva who throws some of the most
happening fund raisers in New York City and Aspen, Colo.,
frequented by the likes of Martha Stewart and Michael Jackson.
Despite their less than amicable divorce a few years ago — Marc
left her for a younger blond — Denise recently wrote a supporting
letter at the request of Marc's New York attorney, Robert Fink.
The daughter of Holocaust survivors, Denise has been one of the
Clintons' most loyal supporters, giving $70,000 in soft money to
Hillary's Senate race. It was Denise who held a morale-boosting,
$4 million Democratic fund raiser starring Bill Clinton at her
Fifth Avenue apartment in September 1998, one of his first
appearances after the release of the Starr report. But now the
spotlight on Denise may have become too hot; late last week she
backed out of a welcome-home party for former HUD Secretary
Andrew Cuomo, a potential New York gubernatorial candidate in
2002.
Less visible were Marc Rich's allies in Israel, where his
foundation has donated millions of dollars to museums, hospitals
and the resettlement of Soviet and Ethiopian Jews. Sources tell
Time that Barak, taking a break from the stalled Middle East
peace negotiations, spoke with Clinton several times to vouch for
Rich's "humanitarian role in Israel." Other VIPs, including
Jerusalem Mayor Ehud Olmert and former Mossad head Shabtai Shavit
also wrote letters on Rich's behalf. Shavit said Rich "used his
extensive network of contacts" to help Israeli intelligence. In
all, Clinton received more than 20 personal letters, some written
directly to the President, in favor of the pardon and an
additional 50 praising Rich's philanthropy.
Some of the institutions that wrote letters, from Sacred Heart
University in Fairfield, Conn., to Sha'are Zedek Hospital in
Jerusalem, had no idea what they would be used for. Avner
Azoulay, a former Mossad operative who runs the Rich Foundation
in Tel Aviv, had asked them to write appreciations for a book
about the foundation. "I didn't ask the writers' permission to
include their letters in the petition to the President. Why
should I? I use these letters in many other cases to show the
work we are doing," Azoulay told Time. Other Rich supporters had
financial links to his family. Michael Steinhardt, a New York
City hedge-fund manager and a former chairman of the Democratic
Leadership Council, was among those who wrote a letter in support
of his friend. His note didn't mention that, from the early 1980s
through the mid-'90s, Steinhardt managed at least $3 million for
Marc Rich, Denise Rich and her father.
That's chump change to Rich, who, since arriving in the U.S.
during World War II, has amassed a fortune estimated at well over
$1 billion. An average student and self-described "business
machine," Rich dropped out of New York University to learn the
commodities business from fellow European Jewish immigrants at
Philipp Bros. He was a quick study, thriving in the high-stakes,
split-second world of commodities trading, in which your
demanding customer might be a Third World dictator and
information is the hottest commodity of all.
Before long, this soft-spoken boy wonder had helped create a new,
hugely profitable oil-trading business for the firm, and he
wanted a bigger share of it. In 1974, when Rich and his trusted
colleague, Pinky Green, didn't get the $1 million bonuses they
had been promised, they decided to strike out on their own. As
his business took off in the late '70s and early '80s, Rich
became even bolder. He worked secretly with the Malaysian
government to drive up the price of tin and allegedly violated
international embargoes by selling Soviet oil to South Africa.
He even briefly went Hollywood, partnering with Marvin Davis to
buy 20th Century Fox.
After his flight, while the U.S. contemplated kidnapping Rich or
putting a bounty on his head, he continued his lucrative
exploits, allegedly helping Russian oligarchs plunder their
country's resources. "He considers himself a citizen of the
world, inconvenienced by the laws of nations," says Howard Safir,
the former New York City police commissioner who, as head of
operations for the U.S. Marshals Service in the '80s, tried
unsuccessfully to lure Rich to a country that would deport him.
When he arrived in Switzerland, Rich had no idea he would be
staying so long. For his 50th birthday, on a rainy day in 1984,
he threw a bash for hundreds of guests in the ornate ballroom of
Lucerne's National Hotel. Denise sang a couple of songs, and Rich
staged a mock boxing match between a clown wearing Rich's
corporate logo and another dressed as a New York City cop. Rich
seemed to have found the good life, but he could never really
enjoy it, as his onetime attorney Leonard Garment, a former
adviser to Richard Nixon, learned when he visited Rich. "I would
really like to be able just to walk down Fifth Avenue and wave to
my friends," he told Garment. Now that Clinton has granted Rich
his wish — and has to suffer the recriminations — the former
President may find himself longing for much the same thing.
=================================================================
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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