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Exclusive: A Pardon Overheard
New transcripts reveal Clinton and Barak’s private chats about Marc Rich
By Michael Isikoff
NEWSWEEK
Aug. 27 issue — Bill Clinton’s political antennae were, as always, on high
alert. On Jan. 8, with less than two weeks to go in his presidency, Clinton
was speaking on the phone with the then Israeli Prime Minister Ehud Barak.
The subject: a possible pardon for fugitive financier Marc Rich.
“I KNOW QUITE A FEW THINGS about that,” Clinton interjected as soon
as Barak raised the matter. He had already gotten a long memo on it, Clinton
explained, and he was “working on it.” But Clinton also understood there
were risks, possibly big ones. “It’s best that we not say much about that,”
Clinton advised Barak on the subject of Rich. The Israeli leader understood.
“OK, I’m not mentioning it anyplace,” he replied.
The two leaders had no reason to believe their confidential chat
would ever become public. Yet the Clinton-Barak telephone call that evening,
like all conversations between U.S. presidents and foreign heads of state,
was monitored by a team of note takers sitting at computers in the White
House Situation Room. Last week congressional investigators probing the Rich
pardon received access to National Security Council-prepared transcripts of
three Clinton-Barak conversations that dealt with the Rich pardon. NEWSWEEK
also has reviewed the contents of the transcripts, which were edited by
archivists to exclude matters of Mideast diplomacy. The transcripts offer no
“smoking gun” showing that the former president was motivated by large
donations to his presidential library or by generous campaign contributions.
But the conversations do show that, in sharp contrast to the picture painted
by some of his former aides, Clinton was keenly aware of details of the Rich
case, and appeared determined to grant the highly questionable pardon even
though, as he admitted to Barak, there was “almost no precedent in American
history.”
On the merits, Rich’s case certainly seemed improbable from the
start. Indicted in 1983 on charges of tax fraud and racketeering, the
billionaire commodities broker had fled the country, renounced his U.S.
citizenship and moved to a heavily guarded private enclave in Switzerland
rather than face trial in the United States. In a congressional hearing in
March, a trio of former top aides—White House counsel Beth Nolan, chief of
staff John Podesta and Bruce Lindsey—all testified that they had strenuously
argued against the Rich pardon and even thought they had persuaded their
boss to reject it. But, they said, it was a last-minute appeal from Barak,
Clinton’s partner in the Mideast peace talks, that appeared to turn the
president around. “It certainly seemed he was not going to grant it, and
that Mr. Barak’s phone call had been significant,” Nolan said.
Read the transcript
The NSC transcripts tell a more complicated story. Barak first
raised the issue with Clinton more than a month earlier, on Dec. 11, 2000.
That same day Jack Quinn, Rich’s lawyer (and a former Clinton White House
counsel), submitted a thick pardon application. It included a personal
letter from Denise Rich, the financier’s ex-wife and a major Democratic
Party contributor who had already donated $450,000 to Clinton’s presidential
library. In the conversation that day, Barak described Rich as a “Jewish
American businessman” who was “making a lot of philanthropic contributions
to Israeli institutions and activities like education.” Barak acknowledged
that Rich had “violated certain rules of the game in the United States.” But
“I just wanted to let you know that here he is highly appreciated,” the
Israeli said. Clinton was hardly caught off guard. “I know about that case
because I know his ex-wife,” Clinton said, referring to Denise Rich. “She
wants to help him, too. If your ex-wife wants to help you, that’s good.”
Barak responded, somewhat inaccurately: “Oh, I know his new wife only, an
Italian woman, very young.”
Rich is a billionaire commodities trader who fled the United States after he
and his companies were indicted by federal prosecutors on numerous counts of
fraud, tax evasion and making false statements. For the past 17 years, he
has lived in Switzerland and has avoided extradition to face the U.S.
charges. He claims to have renounced his U.S. citizenship, though the State
Department says it has no formal record of a request. According to his
attorney, he holds citizenship in Spain and Israel.
His lawyer claims Rich was prosecuted under federal racketeering statutes
that are no longer used. He also says Rich faced criminal charges for what
are generally considered to be civil penalties -- punishible by fines but
not jail. The prosecutors who handled the case insist Rich could still be
prosecuted today under a different set of laws. President Clinton says he
differentiated the original charges from civil fines, and points out he made
Rich agree to retain liability for millions in potential fines as a
condition of the pardon. Prosecutors say those fines can't be recovered.
Rich hired lawyer Jack Quinn, a former Clinton White House counsel, to take
up his case. In 1999, Quinn asked Deputy Attorney General Eric Holder to
help facilitate a review of Rich's case. When the original prosecutors were
not receptive, Quinn prepared a pardon application. Quinn says he fully
informed the Justice Department of his actions, but Holder says he was only
aware of Quinn's pardon efforts at the last minute. On Jan. 19, 2001, less
than a day before Clinton issued the pardon and left office, Holder says,
the White House finally called him for his opinion on the pardon. Critics
insist he deliberately avoided scrutinizing the details.
Denise Rich, Marc Rich's ex-wife, is a major Democratic contributor. She
gave over $1 million to the Democratic party , along with personal donations
to the Clintons. Some critics believe the money was given in return for her
ex-husband's pardon. Marc Rich's lawyer denies the allegations. Other have
frowned upon the pardon because Rich is a fugitive and tried to give up his
U.S. citizenship. They say he has shown no remorse for his infractions and
is not deserving of presidential clemency.
No. Article II of the Constitution gives the president the absolute power to
grant "Reprieves and Pardons" -- except in impeachment cases. Several
lawmakers, including Sen. Arlen Specter, R-Pa., who plans to push for
legislation to this effect, hope to change the pardon process so that
Congress has limited power to overturn presidential pardons.
Printable version
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In the weeks that followed, records show, Rich’s advocates stepped
up their campaign for a pardon, arranging for a flurry of personal appeals
to Clinton—including one from Beth Dozoretz, another big Democratic
fund-raiser who had also pledged to raise $1 million for his library. So by
the time Barak raised the issue a second time, in the Jan. 8 phone call,
Clinton appeared even more receptive to the Israeli leader’s pitch. “I
believe it could be important (gap) not just financially, but he helped
Mossad [the Israeli intelligence agency] on more than one case,” the
transcript records Barak as saying. (An NSC source told NEWSWEEK that the
agency’s transcripts typically use the word “gap” when note takers cannot
make out a garbled word or sentence.) Last week House Government Reform
chair Dan Burton sent Barak a letter asking him a series of questions about
the transcripts, including what he meant by “help financially.” A Barak
spokeswoman told NEWSWEEK that the former prime minister was referring only
to charitable donations to Israeli causes, and not political contributions
to Barak or his Labor Party. Clinton ended the discussion that day by
assuring Barak, “It is a bizarre case and I am working on it.”
Glenn Braswell
This herbal remedy salesman was convicted in 1983 of perjury and conspiracy
charges stemming from false claims he made about a baldness remedy and
served time in federal prison. He and his firm, Gero Vita, face a new
investigation by federal prosecutors in Los Angeles, this time for alleged
transfers of funds to offshore accounts. The Bush campaign and Florida GOP
returned $175,000 in donations from Braswell after finding out he was a
convicted felon.
The controversy: Clinton has been faulted for granting the pardon, given the
new allegations and given the near-universal criticism of Braswell among
consumer advocates. Braswell hired Hugh Rodham, Hillary Clinton's brother,
to help solicit the pardon, and Rodham received neartly $200,000 in return.
Rodham has returned the money, but there are questions about the propriety
of his lobbying role and taking money for it.
Marc Rich
The billionaire commodities trader fled the United States to escape federal
indictments for fraud, tax evasion and making false statements. For the past
17 years, he has lived in Switzerland and has avoided extradition. His
ex-wife, Denise Rich, is a major contributor to the Democratic party and the
Clinton presidential library.
The controversy: Critics say the pardon of an apparently unrepentant
fugitive sets numerous bad precedents. Denise Rich's donations are also
under scrutiny amid allegations her influence could have prompted the
pardon.
Carlos Vignali
Sentenced in 1995 to 15 years for his role in running a major Minneapolis
cocaine ring, this son of a Los Angeles political contributor had wide
support among California officials for his release. Clinton commuted his
sentence and Vignali was freed after six years in prison.
The controversy: Hugh Rodham, Hillary Clinton's brother, worked to secure
Vignali's clemency and received a $200,000 bonus when it was granted. He
later returned the money, but there are questions about his lobbyist role.
Vignali's father's ties to Democratic fund-raising circles have also raised
concerns, and prosecutors have faulted Clinton for releasing someone they
describe as a drug kingpin.
Robert Clinton Fain and James Lowell Manning
The two Arkansas businessmen were convicted in the 1980s of tax charges.
Longtime Clinton friend Harry Thomason directed them to Clinton adviser
Harold Ickes, who directed them to his law partner, William Cunningham III,
for work on pardon requests. Cunningham was also treasurer of Hillary
Clinton's Senate campaign.
The controversy: The various ties between the men and several Clinton
associates. Sen. Clinton said she was unaware of Cunningham's work on the
men's behalf, for which he charged about $4,000 in legal fees.
Roger Clinton
Clinton pardoned his half-brother for a 1985 drug conviction, but refused to
grant clemency to several people on a list Roger Clinton gave him for
consideration, according to the former president's office. Two acquaintances
of Roger Clinton did get pardons, though they say he had nothing to do with
it.
The controversy: Roger Clinton's pardon is not in question. But
investigators want to know the full extent of his role in lobbying for — and
possibly obtaining — clemency for others.
Kalmen Stern, David Goldstein, Benjamin Berger and Jacob Elbaum
These four New York men, all Hasidic Jews, were convicted in 1999 of
stealing millions in government funds through an education scam. They
claimed they only used the money to help their community. Hillary Clinton
admitted she sat in on a meeting where their clemency requests were
discussed, and their hometown of New Square showed overwhelming — aberrant,
critics say — support for the first lady in her Senate bid.
The controversy: The U.S. attorney in Manhattan, who prosecuted the men, is
investigating Bill Clinton's commutations of the men's sentences as part of
a larger probe of Clinton's pardons.
Source: MSNBC
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Printable version
The third phone call, on Jan. 19, may be the most revealing. The
transcripts show that the two leaders spoke by phone for 22 minutes, between
2:47 and 3:09 p.m., just minutes after Clinton had cut a surprise deal to
escape criminal prosecution in the Monica Lewinsky affair by acknowledging
he had given false testimony under oath. Contrary to the accounts of his
former aides, the transcript shows it was Clinton, and not Barak, who raised
the Rich matter that afternoon. “I’m trying to do something on clemency for
Rich, but it is very difficult,” Clinton said. “Might it move forward?”
Barak asked. The president ruminated about the problems he was facing. “I’m
working on that, but I’m not sure,” he said. “There’s nothing illegal about
it, but there’s no precedent. He was overseas when he was indicted and never
came home.” Clinton concluded that the question “is not whether he should
get it or not but whether he should get it without coming back here. That’s
the dilemma I’m working through.”
Clinton solved it, at least in his own mind. By early the next
morning Justice Department officials were stunned to discover that Rich—who
until then had been on their list of “most wanted” international
fugitives—got an unconditional pardon. The conversations with Barak clearly
show Clinton—whose spokesman last week wouldn’t comment—suspected he would
take some political heat for the decision. But it’s unlikely even he foresaw
the unrelenting fury the “bizarre case” would create.
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With Dan Ephron in Jerusalem
© 2001 Newsweek, Inc.
Exclusive A Pardon Overheard.url
