Since this
was written, President Clinton has pardoned Marc Rich and Pinky Green, the
Russian economy has taken off, and one of Rich’s own lawyers---Vice President
Cheney’s former chief-of-staff, Lewis “Scooter” Libby---is himself a defendant
in the criminal courts. (This, in connection with the Valerie Plame
imbroglio.) What’s to be made of it all? I’m not sure.
But other than Richard Nixon, I can think of no other felon, or quasi-felon,
who has been pardoned for his crimes without having first been convicted
of them. Let’s hope this issue receives new scrutiny when Sen.
Hillary Clinton runs for higher office. (Watch this space. And
that space, too.)
*
Light snow falls through the darkness as a gray Mercedes glides out of the
driveway of one of the oldest and most spectacular mansions in Switzerland.
As the car winds its way into the mountains above the lake,
windshield wipers brushing at the snow, a man in a black cashmere coat and
a dark blue suit sits in a cone of light in the backseat, reading. Not far
behind, a chase car flirts with the Mercedes' rear bumper, surging closer
and closer, then falls back. Inside, three Israeli bodyguards scan the road,
alert for the possibility of a bounty hunter's ambush or a terrorist's kidnapping.
The man in the Mercedes
is at once honored and infamous. There is a fellowship at Oxford University
in his name, and his foundation disburses millions to worthy causes. Despite
this, indeed, despite all the good he's done, he remains a fugitive, wanted
by the FBI, Customs, the IRS, U.S. Marshals and Interpol. Should he be caught
and convicted, he could face more than 300 years In prison.
It would be helpful,
then, to know what he is reading as he leans back in the leather seat, engulfed
by darkness, luxury and paranoia. At five A.M. it is too early for the newspapers;
they'll be waiting on his desk when he arrives at the blue glass cube that
is his office building. But there are the late-night faxes, certainly, and
it may well be that among them is a message from one of his lawyers - the
best that money can buy. It could be a note from Leonard Garment, then, or
Brad Reynolds or perhaps not.
Perhaps it's a message
from his bustling Moscow office, or a copy of the most recent missive from
the secret police of the mineral-rich republic of Kazakhstan. For nearly
a year, renegade Kazakh spooks have been quietly distributing diatribes against
him to the press, accusing him of a host of crimes in an effort to discredit
his company and sabotage his business.
And in Moscow itself,
ultranationalist newspapers have published articles alleging that his commodities
business is a front for laundering drug money. He denies the allegation,
but it has its believers. His companies have an annual turnover of more than
$3 billion per year in what was formerly the Soviet Union, so the man in
the Mercedes bestrides the disintegrating Russian economy like a sumo wrestler
on a pony.
Considering
the stakes, it is hardly surprising that business rivals would stoop to slander
in an effort to knock him off. Then again, he may be studying the numbers.
As in: How many tons of aluminum are stored in his Rotterdam and Singapore
warehouses? How many board feet of timber were taken from his forests in
Chile last month? How many tons of light crude petroleum are moving across
the oceans in his tankers?
A Belgian-born American
with Spanish and Israeli citizenship (and a pending application to Switzerland),
the man in the Mercedes is Marc Rich, a billionaire over and over again,
and one of only a handful of people who might reasonably be called, in novelist
Tom Wolfe's parlance, a "master of the universe." Unlike Wall Street wheeler-dealers
who trade in the abstractions of futures contracts, stocks and bonds, Rich
is a player on the periodic table itself, buying and selling strategic quantities
of the world's raw materials - its very elements - as well as more complex
compounds (sugar, soybeans, oil, government officials). He is a titan in
the business of wholesaling the planet's natural resources to the highest
bidders.
He owns or controls
oil wells in Russia, mines in Peru and electrical supplies in England. There
are refineries in Romania, office buildings in Spain and smelters in Australia,
Iran, Sardinia and West Virginia. He has 40 offices and 1300 employees throughout
the world and is simultaneously the uncontested emperor of aluminum, a prince
of sugar, a shogun of soy, a mover and shaker of the world's markets in nickel,
lead, zinc, tin, chrome, magnesium, copper and coal.
One could go on. The
managing director of a private intelligence network in the U.K., one that
has followed Rich for more than a decade on behalf of a secretive Arab client,
says bluntly, "Marc owns Peru," and this isn't so hard to believe. With an
annual turnover in excess of $30 billion, Marc Rich & Co. AG has a larger
turnover than the GNPs of many Third World countries-including the two dozen
whose economies are said to be entirely within his hands.
Sitting in the back
of his Mercedes, it may be that he is reading Izvestia, faxed from
the Moscow office. He would agree that the Russian newspaper has behaved
responsibly in the past, defending him against the U.S. Justice Department
in a front-page editorial. But now, in the new Russia, the newspaper has
actually opened its pages to investigative reporters and other idiots. Only
recently, Izvestia reported that a $750,000 reward had been offered
by the U.S. for Rich's capture, while suggesting that he was somehow responsible
for the export from Russia of 700,000 tons of high-quality fuel oil, purchased
for a fraction of its cost. (His profit was estimated to be between $48 million
and $400 million.)
There are other allegations,
of course, and a blizzard of rumors. It is said by one of his competitors,
for example, that Rich has corrupted executives at the Finnish national oil
company and that he's using them to plunder their country's economy.
Trade unionists in
Romania accuse Rich of having banked the fortune that Nicolae Ceausescu stole,
and a freelance spook in what was formerly Ollie North's apparat insists
that Rich worked hand-in-glove with the Communist Party of the Soviet Union
to loot the U.S.S.R. of its gold reserves during the Eighties. The Senate
Foreign Relations Subcommittee on Terrorism, Narcotics and International
Relations has called for an investigation of Rich's connections to the infamous
and now defunct BCCI.
And so it goes. In
Amsterdam, the anti-apartheid Shipping Research Bureau accuses Rich of busting
UN sanctions against South Africa. In New York, the authoritative Platt's
Oilgram News reports that he made oil shipments into Serbia at the same
time the UN was preparing a blockade against that bellicose country. In London,
Private Eye suggests the billionaire has been trying to
violate similar embargoes imposed by the UN against Iraq.
But what do they
know? Can anyone really be all that bad? (Can anyone really be all that rich?)
The rumors fall like
snow past the windows of the Mercedes. But Marc Rich isn't reading rumors.
He knows the truth, and if he doesn't, he can pay to have it found. Perhaps,
for instance, he's reading the report that he commissioned on a question
of some delicacy - the report on the provenance of his blonde German girlfriend.
Avner Azulay, an Israeli private eye, was hired by Rich to find out (among
other things) if the woman's family was pro-Nazi during the war. The detective's
report brought welcome news.
And so the man in
the Mercedes can relax. It's almost dawn in the Alps, he hasn't been snatched
and his girlfriend is clean. What more could a man want?
*
What more, indeed?
To understand who
Marc Rich is, we need to know how one of the most powerful men in the world
came to be a prisoner in paradise and a capitalist in flight.
Let us, then, begin
at the beginning: Marc Rich (nee Reich) was born in Antwerp in 1934.
He came to the U.S. with his parents eight years later, arriving in 1942.
With the war in Europe behind them, the family settled in Kansas City, Missouri,
where Rich's father opened the Petty Gem Shop and earned a modest income.
Rich attended public schools (where he seems to have made no impression whatsoever
on his classmates), joined the Boy Scouts and went to summer camp in the
Ozarks. (One of his tent-mates was writer Calvin Trillin, who remembers Marc
as "the quietest kid at Camp Osceola. ")
To have been a Jew
in Kansas City in the Forties (and one, moreover, who spoke three languages
while still a child) could not have been easy. But he didn't live there for
long. The Petty Gem Shop prospered and became the diversified Rich Merchandising
Co., which Rich's father soon sold at a nice profit. In 1950 the family moved
to New York, where the elder Rich entered into a partnership to manufacture
burlap bags. With the Korean War shifting into overdrive, this proved to
be a brilliant stroke: Military requirements pushed the demand for burlap
through the roof, and the family's fortune was made.
By then, Marc was
enrolled at New York University. But as a sophomore, he was lured away from
school by an acquaintance of his father's, who wanted him to apprentice as
a commodities trader at Philipp Brothers.
In 1954 Philipp Brothers
was the biggest raw-materials trading company in the world, bridging the
gap between mining and manufacturing companies on five continents. Established
by scrap-metal merchants in Hamburg during the 1890s, the firm had expanded
to England and the U.S. in the years before World War One. By World War Two
it had become a giant with enormous influence in the Third World.
Rich began to learn
the metals-handling business while working in the traffic department at Philipp
Brothers. Like many of the other apprentices, he was the son of Jewish refugees.
Unlike them, he'd grown up in the Midwest, surrounded by goyim. His father
was a millionaire who was well-connected at Philipp Brothers itself. Marc
wore suits that the others couldn't afford, and he came to work in a red
MG TD that seemed to instill envy in all who saw it.
Four years after leaving
NYU, Rich was given his first assignment abroad. Sent to Havana
on the eve of the Cuban revolution, he found himself in a vortex of decadence
and corruption. It was a place where almost nothing worked except the bribe,
which always worked. Rich got the company's metal out of Cuba and was sent
out into the world to make even more money for Philipp Brothers. He began
to travel constantly between New York and La Paz, Cape Town and Santiago,
taking time out to get married in 1966. His wife is the almond-eyed Denise
Eisenberg, a New Englander who, like her husband, was the child of Jewish
refugees who'd made a fortune in America after the war.
Unlike Marc, however,
Denise was a rock-and-roller. He lived in a world of boardrooms dominated
by patriarchal millionaires; she was a junk-food addict who loved the movies
and was as driven to make it as a pop star as her husband would one day be
driven to corner the world's free-aluminum market.
Within a year of marrying,
Rich was placed in charge of the Philipp Brothers' office in Madrid and given
a seat on the company's European management committee. Always an insider,
he was now privy to many of the company's most closely held secrets, overseeing
virtually every trade that Philipp Brothers made on the continent. Not content
with that, he pulled off an extraordinary feat: in the late Sixties he invented
the spot market for oil.
After World War Two,
the world market was dominated by the Seven Sisters--companies that controlled
the price and production of oil from wellhead to gas pump. By tapping suppliers
in countries that had more oil than scruples - Iran was such a place - Rich
and his Philipp Brothers’ associate, Pincus "Pinky" Green, were able to buy
excess crude and sell it to refineries operating at less than capacity. In
this way, the Seven Sisters were bypassed, and a gusher was tapped.
In the spring of 1973,
Rich and Green anticipated the huge price increases that the Organization
of Petroleum Exporting Countries would impose in the autumn. Acting on tips,
possibly from sources in Israel, OPEC or the State Department, they learned
that the price of oil on the spot market would jump (in fact, it would triple).
So they bought $150 million worth of crude that spring, paying $5 a barrel
above the spot price to get it.
It was a great deal,
but a mixed blessing. The reaction at Philipp Brothers was unmitigated
terror. Rich was forced to sell the oil before the embargo took place. In
effect, the directors of Philipp Brothers cashed out before the winning hand
was played. Belatedly, they realized their mistake and gave Rich and Green
a freer rein. The resulting profits were enormous. And so were the bonuses
owed to the two traders.
Indeed, the bonuses
were so large---as unprecedented in their size as the oil deal had been risky---that
the company refused to pay. So Rich and Green bolted, taking with them a
half dozen of the firm's best traders. In 1974, armed with pledges of as
much Iranian oil as they could handle, the unlikely pair began trading as
Marc Rich & Co. AG.
From the beginning
they waged a private war against Philipp Brothers, doing everything in their
power to destroy the company. Secretaries and clerks were bribed to provide
copies of the opposition's telexes, which enabled Rich and his cohorts to
win contracts by bidding only pennies more than Philipp Brothers for tons
of metals and grains. There were even allegations that Rich's operatives
had bugged the company's headquarters in New York.
By the early Eighties,
Phibro-Salomon (Philipp's name after a merger with Salomon Brothers) was
reeling, and Marc Rich and Co. had an annual turnover in excess of $10 billion.
And yet, even while operated as a kind of pawnshop for the mineral wealth
of the Third World, Marc Rich & Co. remained an enigma. Which was exactly
the way Marc Rich wanted it.
*
To many, Rich's obsession with secrecy bordered on paranoia, but the reality
was that secrecy and profits were intimately linked. To pull off his deals,
Rich often had to rely on bribery and sanctions busting. Throughout the Seventies
and Eighties, for instance, South Africa was subject to oil embargoes imposed
by the United Nations, OPEC and the European Community in response to that
country's apartheid policy. For a commodities trader like Rich, headquartered
in neutral Switzerland, the UN embargo was made to order. The Afrikaners
were happy to pay more than $8 a barrel over spot, which meant profits of
more than $100 million on each contract Rich's company brokered.
Nor was it particularly
difficult to find a supplier. The Soviet Union needed hard currency to buy
grain and build submarines, and one way to get it was by ignoring its own
trading sanctions against an oil-thirsty country such as South Africa. With
the buyer and seller lined up, all that was necessary was to launder the
oil through a purposefully convoluted series of corporations chartered in
such venues as Monaco, Liechtenstein and the Cayman Islands. Sometimes, when
the cargo was delivered, the tanker would be scuttled and the seamen sent
home by air. Subsequent investigations would reveal that the missing ship's
owners were headquartered at a Swiss post-office box---on which the monthly
fee was overdue.
One such shipment
left the Black Sea in September 1988, sailing aboard the Dagli, a Liberian
oil tanker flying a Norwegian flag, carrying Soviet oil bought by a Greek
firm for delivery to Italy. The muddled itinerary and ownership made tracing
the vessel next to impossible. Slipping through the Dardanelles, the ship
kept on going as it passed Sicily, and continued on through the the Straits
of Gibraltar. Turning left at Tangier, it began communicating in code
and covered its name in tarpaulins. The oil was eventually delivered to Cape
Town in mid-October. According to Amsterdam's Shipping Research
Bureau, which investigated violations of oil embargoes against South Africa,
"the whole masquerade had been set up by the real buyer, Marc Rich, who made
use of a company that soon after ceased operating and another company belonging
to his empire of which no traces are left at all."
Experts estimate that
Marc Rich supplied at least eight percent of South Africa's oil needs during
the Eighties, arranging for more than 75 secret shipments from the Soviet
Union, the Persian Gulf and Brunei. The value of those shipments was in the
billions, and so were the profits. But that was only a part of Rich's payoff.
When Phibro-Salomon stopped trading with South Africa in 1985, responding
to anti-apartheid activists in the U.S., Rich quickly stepped in to fill
the gap, replacing the firm as the exclusive sales agent for one of South
Africa's largest lead mines.
The South African
trade put Rich into the sanctions-busting business in a big way. Rich must
have convinced himself that political sanctions did not apply to his operations,
or, if they did, that clever lawyers could get around them.
It’s not surprising, then, that the 1980 U.S. embargo against
Iran was viewed by Rich as an opportunity to make a killing. Laundering Iranian
oil through Panamanian fronts and sham transactions, Rich's company was able
to subvert price controls, evade taxes and move hundreds of millions of dollars
in illicit profits offshore. Unfortunately for Rich, however, the deals also
brought an indictment.
A pair of Texas oilmen,
who were themselves under indictment for falsifying the offshore origin of
what was purported to be domestic oil, offered up Marc and Pinky in return
for light sentences. Rich and his partner were each charged with 51 counts
of conspiracy, tax evasion, racketeering and trading with the enemy. Anticipating
the indictment, Rich locked the doors to his ten-room apartment on Park Avenue
and fled New York in early June 1983. A few days later, he and Denise were
ensconced in Switzerland in a mansion overlooking the town of Zug. The indictment
came down a few months later.
Although Rich and
Green each faced more than 300 years in prison, they knew they'd be safe
in the Alps. The extradition treaty between Washington and Bern was so old
that it predated the income tax itself. It covered murder, rape and mayhem,
but, the Swiss maintained, nothing in it applied to “the modern crimes” for
which Rich and Green had been accused. In essence, since neither had strangled
anyone, the billionaires were more than welcome to remain in Switzerland.
Meanwhile, and at
a cost of more than $10 million, a platoon of brand-name lawyers (Edward
Bennett Williams, Michael Tigar, Boris Kostelanetz and others) was deployed
to wage a rearguard battle in the States. There, the courts had blocked some
$50 million in payments owed to the Marc Rich group by other companies, and
the prospect of property seizures seemed likely. There was, in addition,
a contempt-of-court fine that amounted to $50,000 a day for Rich's refusal
to surrender subpoenaed documents to the U.S. Attorney's office.
Rich paid the fine
by check in twice-weekly installments, complaining from Switzerland that
if he surrendered the documents, he would be guilty of business espionage
under Swiss law. This view was echoed by the cantonal prosecutor in Zug---though,
admittedly, he sat on the boards of more than 30 of Rich's corporations and
so might not have been entirely objective.
Even as the legal
battles continued, Rich knew that one could do worse than to be rich in Zug.
With its fiscal pheromones of low taxes, bank secrecy and lax incorporation
requirements, Zug was a mecca for businesses that operate on the edge.
And Marc Rich was
in the middle of it. His mansion overlooking the Zugersee was decorated with
Picassos, a Miro and a Braque. He skied at St. Moritz, where he maintained
a luxurious chalet, and began to host a New Year's Eve party for tout l'Europe.
Placido Domingo was a guest, as were a constellation of other celebrities.
Rich attended charity balls in Geneva and Lucerne, where he gave generously
to the fight against fashionable diseases, and he caused a stir at the World
Economic Forum in Davos.
Taking a page from
the extraditables in Colombia, he bought the approval of the little
guy in Zug by pouring money into the local sports franchise, dramatically
improving the fortunes of the Zug hockey team (now one of Switzerland's best).
Nor were his philanthropies confined to Switzerland. When the Jamaicans
began to complain about Rich's hammerlock on their aluminum industry, the
fugitive billionaire responded by underwriting the costs of the country's
bobsled team at the 1988 Olympics.
Denise Rich, meanwhile,
was making it big on her own. In 1985, a Sister Sledge rendition of one of
her songs, Frankie, topped the British charts for six weeks, selling
more than 750,000 copies. Denise followed Frankie's success with her
own album, Sweet Pain of Love, which may or may not have been inspired by
her husband's pursuit of beautiful aristocrats. In any event, the fugitive
was now married to a rock star who appeared on European TV.
*
In the shadow of the Brooklyn Bridge, in a washed-out office with cipher
locks on the door and a metal detector at the entrance downstairs, a federal
marshal plotted to bust Marc Rich. Indeed, Rich and Pinky Green were the
sum of his caseload, and they occupied every hour of his day. The marshal
spoke regularly with Rich's rivals, with would-be bounty hunters, disaffected
employees and customs officials and cops in the most remote corners of the
world. He knew who Rich slept with, where he had dinner and how much he drank.
From time to time he packed a valise and went after the fugitives, but the
operations he mounted were never successful.
Learning that Rich
was en route by private jet to Helsinki, he arranged for the plane to be
met by police. Incredibly, Rich's flight made a U-turn at 20,000 feet and
headed back to Switzerland. A more ingenious plan required the cooperation
of the Jeppesen Sanderson company, which has a near monopoly on the sale
of aeronautical charts. Knowing that Rich's widespread business interests
required him to fly to some of the world's most remote places, the marshal
asked the company to tip him off whenever Rich's pilots requested new charts.
Jeppesen Sanderson refused to help. And so it went: The marshal couldn't
get the cooperation he needed, and whenever a trap was laid, Rich eluded
it. Clearly, Rich had better spies than the U.S. Marshals Service could muster.
A lesser man might
have been content to cut his losses and enjoy his millions in the Alps. But
not Marc Rich. Although his companies had been indicted on an array of serious
charges, and he himself was reduced to the status of fugitive racketeer,
Rich still wanted to do business in America. All he needed was someone to
front for him until his lawyers could reach a settlement with the Justice
Department.
The line between chutzpah
and hubris is a thin one, and Rich crossed it when he sent a trader named
Bob Tribbett to New York in May 1984, instructing him to arrange a soybean
transaction with Romania. It wasn't a big deal by Rich's standards, only
$24.5 million, but it was obviously important to him because, in the end,
it cost him millions and taught him a dangerous lesson: Fugitives are fair
game.
To complete the deal
Rich proposed, Tribbett hired Robert Whitehead, an investment banker, unaware
that Whitehead was hooked up with the FBI and the DEA, for whom he was a
contract informant. Whitehead's office suite, telephones, car and private
plane were bugged.
None of this was known
to Rich or Tribbett, who had other things on their minds, not the least of
which was an unusually sensitive transaction with Iran.
Four years earlier, when the American government left Iran
to the Ayatollah Khomeini and the mullahs, U.S. military attaches and advisors
sabotaged computerized records and equipment, including anti-aircraft missiles,
the guidance systems of which were removed by departing American advisors.
Enter Marc Rich.
According to Whitehead,
Rich used his contacts to obtain gas-fired gyroscopes from North Korea, providing
them to the Iranians as replacements for the missing guidance systems. Suddenly,
at a crucial point in the Iran-Iraq war, Iranian missiles became a factor.
It was as if Marc Rich had delivered an entire inventory of missiles to the
ayatollah's forces - long before Irangate. (It would be a year before Iranian,
Israeli and U.S. negotiators would meet in Europe for the first time to discuss
swapping Hawk missles for U.S. hostages in Lebanon.) What Rich got
in return for the gyroscopes is unknown, but putting the ayatollah in his
debt could not have hurt his position as one of the world's largest independent
oil brokers.
Meanwhile, even as
the gyroscope deal went down with Iran, Whitehead obtained a $24.5 million
loan fom the Marine Midland Bank for the soybean transaction. Tribbett says
that Whitehead was supposed to receive about $35,000 from the Marc Rich organization
for his part in the deal, but Whitehead admits that he took about $5 million
instead.
The FBI confirms that
figure as the amount that went missing on Whitehead's watch, though what
happened to the money is unclear. Tribbett suggests that Marine Midland used
the funds to cover Whitehead's other debits at the bank. Whitehead's FBI
handler has a different explanation: "To tell you the truth, I think he just
pissed it away."
In any event, Rich
found a better way to do business in the U.S. while still on the run. In
the fall of 1984, lawyers for Rich and the U.S. Attorney's office for the
Southern District of New York arrived at a compromise. Marc Rich & Co.
AG, and Clarendon, Ltd. (formerly Marc Rich International) pleaded guilty
to dozens of criminal charges, sustaining $171 million in fines (including
$21 million for contempt of court in refusing to surrender subpoenaed documents).
Rich raised the money by selling a 50 percent interest in Twentieth Century
Fox to oilman Marvin Davis, with whom he had co-owned the studio. From then
on, the U.S. government had no further claim on Rich's companies, though
Rich himself remained a wanted man.
*
Today, Rich's biggest play is under way in what was formerly the Soviet Union
and the Eastern Bloc. Brimming with natural resources, "the Wild East" is
a political and economic mess. A diverse group of ministries holds sway over
a melange of ethnic mafias, born-again capitalists, footloose KGB agents
and what used to be called "the masses." It is a world in which billions
of dollars in Soviet gold reserves have been looted by Communist Party apparatchiks,
at least three of whom are reported to have cartwheeled to their deaths from
the windows of Moscow office buildings.
The once vast reserves
of Soviet gold have dwindled toward zero, while more than 1000 tons have
been smuggled out of the country to Zurich and Tokyo aboard military cargo
planes and Aeroflot flights. Under-the-table transactions by the managers
of mines, along with clandestine shipments by factory supervisors, are now
so frequent that border republics such as Latvia and Estonia have become
major exporters of copper, nickel and aluminum--even though none of these
metals is produced in either country. Meanwhile, privatization continues
with all the deliberation of a national fire sale.
It is, in other words,
just the sort of place in which a man like Rich can make a killing. Who's
to stop him? In 1992 the Russian government considered posing a moratorium
on all business dealings with Marc Rich & Co. AG pending "a thorough
investigation." Other allegations surfaced that Rich has been illegally exporting
raw materials, bribing government officials and aiding capital flight from
the country.
Despite the official pronouncements against him, Rich has
seen his operations in the former Soviet Union grow exponentially in the
past year. Where ten employees once sufficed, 150 have now been hired, and
the company's regional turnover is in the billions. Rich and his colleagues
have stepped into the void left by the shattered Communist infrastructure,
taking over many of the functions once carried out by Soviet trading organs.
In this, the man in
the Mercedes has been abetted almost as much by his contacts as by the vaults
of currency at his command. And of those contacts, none are more colorful
or well-connected in intelligence circles than an Orthodox rabbi named Ronald
Greenwald.
A Brooklyn boyhood
chum of Pinky Green's, Greenwald is both a rabbi and a commodities dealer.
As an agent for Marc Rich in New York, he is also one of those rare spiritual
advisors who find it necessary to deny that he's a CIA agent and/or a front
for the Mossad. Affable and wry, the Reb is himself an important player in
war-torn Tajikistan, where convoys of aluminum are escorted by private armies
in the Reb's employ.
Meanwhile, there are
signs that Greenwald's persistent lobbying for Rich and Green's freedom from
their pending indictments, in tandem with the efforts of Leonard Garment
and former Justice Department official Brad Reynolds, is having an effect.
When Representative Bob Wise (D-W. Va.) convened a subcommittee hearing two
years ago on Capitol Hill, seeking to learn why the Justice Department has
been unable to nab one of the most conspicuous fugitives in the world, representatives
from Justice at first refused to appear before the subcommittee and then
stonewalled it. Wise was outraged.
"This isn't your average
miscreant who has fled the country for knocking over 15 7-Elevens and is
kicking around the dock at Marseilles;' he said. "This is Marc Rich operating
with total impunity out of a tall office building in Switzererland. Why hasn't
this been made a priority?" He noted that Rich is under indictment for trading
with the enemy and for "the biggest tax fraud in history."
Despite the seriousness
of the charges, Wise said, there seems to be "a lack of political will" to
apprehend Rich and Green. Wise pointed out that the government has yet to
publish a reward for their arrests or, for that matter, a wanted poster.
Despite the severity of their crimes, Wise noted, neither man is among the
15 most-wanted fugitives currently being sought by the U.S. Marshals Service---though
several thugs who have knocked over 7-Elevens are prominent on the list.
Calling the case "strange,"
the subcommittee criticized Justice for its "lack of relentlessness" and
cited numerous failures in the department's handling of the case. The worst
of these may well have been its failure "to ensure that, at a minimum, the
fugitives do not make money from the U.S. government."
Until recently, Rich
and his companies have continued to do business---big business---with the
U.S. government, despite Rich's status as a fugitive. The Commodity Credit
Corporation has enabled the elusive billionaire to sell American grain by
providing more than $50 million in export subsidies to one of Rich's companies.
As bizarre as this may seem, an even greater irony rests with the U.S.
Mint's reliance on Marc Rich for the copper, nickel and
zinc that it needs to (literally) “make money.” Between 1989 and 1992, the
Rich organization sold more than $45 million in metal to the Mint.
Through the efforts
of Congressmen Dan Glickman and Bob Wise, Rich is no longer doing business
with the CCC or the Mint. But not much else has changed. There is no evidence
that the Justice Department has acted on recommendations made by Congress.
On the contrary, the
only change known to have taken place is that the hardworking marshal, who
knew more about Rich and Green than perhaps anyone else in government, has
been taken off the case and reassigned to Tampa.
To anyone attending the Wise hearings, the conclusion was
virtually inescapable that Rich and Green are being protected---and not just
by the Swiss and the Colombians.
One can speculate
about the sources of Rich's protection in the federal government. He is,
after all, in an excellent position to further certain U.S. foreign policy
objectives and to satisfy various intelligence requirements in Third World
countries. It would hardly be surprising, then, if the State Department,
CIA or National Security Council were to enlist the help of a fugitive with
Rich's broad access and enormous means.
It should be remembered,
too, that Rich has a complex and intriguing relationship with the Justice
Department. When Congressman Wise questioned Justice about its contacts with
Rich's attorneys and other agents, seeking to make a deal on his behalf,
the department refused to discuss the matter. Why Justice should stonewall
Congress on behalf of a fugitive is uncertain, though few would doubt that
the wall was built to conceal the fact that Rich is working with Justice
(and quite possibly with other agencies) on what can only be called "special
projects."
In the past year or
so, the Justice Department has quietly inserted two sealed envelopes into
Rich's court file. While those envelopes are not to be opened unless Rich
is brought before the court, there can be no doubt that the contents of at
least one envelope pertain to Rich's efforts to help the Justice Department
nab other fugitives.
One such fugitive
is Tom Billman. Accused of stealing more than $100 million from a Washington,
D.C.-area S&L, Billman was apprehended in Paris last spring after leading
the authorities on an around-the-world chase that lasted more than three
years. At the time of his arrest, the globe-trotting embezzler was prominent
on the U.S. Marshals' 15 most-wanted list and living under an assumed name.
Rich's contribution
to Billman's apprehension was to hire an Israeli private eye, the same Avner
Azulay who checked out Rich's girlfriend, to help track down Billman. With
a hefty budget, Azulay paid out more than $200 an hour to private intelligence
agencies in London, New York and Washington, instructing them to track Billman's
movements and money in Europe and Asia. The information that Azulay received
was then provided to U.S. officials, and the rest (or, at least, Billman)
was history. Whether Billman's arrest was a direct result of Rich's efforts
is unknown. The Justice Department won't say, and. Rich would under no circumstances
want to take credit for helping the U.S. track down its enemies, some of
whom are his business partners.
The contents of the
second envelope are a mystery, but may have to do with rumors that Rich and
Greenwald played a key role in arranging the 1992 expulsion of East German
leader Erich Honecker from Moscow to Berlin, where, after an abortive trial,
he was permitted (for reasons of health) to leave Germany for residence in
Chile.
Asked about Honecker and Billman, Greenwald shrugs. "There
are rumors," he says with a sly smile. And then he shrugs again. "With Marc,
there are always rumors."
-30-
“King of the World,” was first published
in Playboy in February, 1994.
