The Clinton Pardons
Denise Rich
is finally getting the tidal wave of publicity she always craved, but
there’s a downside to it. Since she “It’s almost a Shakespearean tragedy,”
one of Rich’s legal advisers tells me. “She marries young and then finds
herself living abroad with a fugitive. She decides to rebuild her life
and returns to the United States. She becomes a successful songwriter.
Then her daughter dies. Now this.” Jews don’t usually pray to angels, but
Rich, who has endured more than her share of grief, fervently believes
in calling on them for everything: “I got a whole angel chorus up there
humming. I really believe angels are happiest when you’re
happy.” After she petitions her angels, she claims, her song lyrics
streak right through her. She also consults gurus and psychics, takes 30
vitamins a day, and believes in past-life regressions. “One great life I
had, I was an Indian woman who ran around giving people herbs and lived
in Native America.” As her soulful lyrics for such rhythm-and-blues
singers as Aretha Franklin, Natalie Cole, Patti LaBelle, and Mary J.
Blige might indicate, Rich also believes “there is definitely a black
person inside [of me] waiting to get out. I’m sure I was once black.”
Natalie Cole, who is a close friend, told me one night in the living
room of Rich’s New York penthouse that before Denise’s photo got
published so often, “people thought she was black.” There is no denying that Rich is a
real songwriter with a big career. “She’s not afraid to be vulnerable,”
says Cole, who co-wrote last year’s “Livin’ for Love,” a No. 1 dance
hit, with Rich. “She speaks on behalf of women. Her lyrics are about
what she imagines women have gone through, what she has gone through.”
Rich’s duet for Aretha Franklin and Mary J. Blige, “Don’t Waste Your
Time,” was nominated for a Grammy, and she has written hits for Céline
Dion and Marc Anthony, as well as the title song for the film The
First Wives Club. After a recent radio-station appearance in Jersey
City, Rich was on the phone in the backseat of a town car, chatting with
Ricky Martin’s manager in fluent Spanish. “This too shall pass,” she
said. “I want to write a song called ‘Perdoname.’ ” Although Rich may
kid about her current situation, in the months ahead she’ll need her
angels more than ever. According
to Rich, her only sister, Monique, who died of cancer at 45 in 1983, is
the angel who gave her “the gift” of her first hit, “Frankie,” a No. 1
song in Britain recorded by Sister Sledge. Rich’s mother also died of
cancer, a few years after Monique, and in 1996, Rich’s middle daughter,
Gabrielle, died at 27 of leukemia. Responding to Gabrielle’s last wish,
Rich formed a foundation to find a cure for cancer. Much of her severely
scrutinized Democratic gift giving, in fact, began as a lure to get
President Clinton to come to her biennial Angel Ball in New York. “She
has to give a few hundred thousand in order to make sure Clinton shows
up at the ball,” says Kalman Sporn, the self-described “gay Republican
businessman son of an Orthodox rabbi,” who has helped Rich organize the
events. “It’s a small price to pay to ensure he shows, and it means
celebrities give more and all the corporations buy tables.” “Gabrielle is always with me,” Rich
says, and she often wears an old suede jacket of Gabrielle’s for good
luck. “I’d give anything—I’d die—to have my daughter back. But with her
death I learned another strength inside me I didn’t know I had.” Rich is
convinced it was Gabrielle whispering in her ear from on high that
prompted her to forgive her ex-husband after a bitterly fought divorce,
and to intercede on his behalf for a pardon from Bill Clinton, an action
which has sullied her and stained Clinton’s legacy forever. The fact
that Marc Rich cheated on her after they fled to Switzerland 17 years
ago, that he participated in the biggest tax fraud in U.S. history, that
he traded with Iran during the hostage crisis and defiantly renounced
his U.S. citizenship rather than face a trial here—all that has been
washed away with a mother’s tears. As for her notorious list of gifts to
the Clintons—$7,000 worth of furniture for their Chappaqua, New York,
house; $450,000 for the Clinton Library; more than $100,000 for
Hillary’s Senate campaign; more than $1 million for the Democratic
National Committee, not to mention many millions more raised at
Democratic fund-raisers in her apartment—Rich dismisses all that airily
as a piffling amount. About the furniture for Chappaqua (two coffee
tables and two chairs), she says, “Everybody gave furniture.
There was a list going around from the decorator.” In her eyes there was no quid pro quo
whatsoever. “The truth is, there are a lot more people who gave a lot
more money. Of course it gave me access [to the Clintons],” she admits,
“but it went beyond that. There was truly a friendship with both of
them.” Since the pardon, however, she has not heard from her good
friends. Instead, Rich has joined the bruised
and swollen ranks of so many others who displayed generous impulses
toward the Clintons. She is paying fat legal fees and spending untold
hours on the various investigations into the Rich pardon, by Congress,
the F.B.I., and the U.S. attorney for the Southern District of New York,
Mary Jo White. Today Denise Rich, who spent millions and worked so hard
to erase the stigma of always being described as “former wife of the
fugitive financier,” and who briefly tasted the triumph of being able to
stick it to her ex-husband that it had been her influence that got him
pardoned, finds that he goes right on poisoning her. Overnight she has
become this year’s poster girl for campaign-finance reform and a synonym
for wretched excess. Rich
has a staff of six maids, two butlers, a cook, and a secretary, as well
as two drivers, two masseuses, a hairdresser, a trainer, a yoga
instructor, and a personal photographer on call. Her imagist often
travels with her, as does Jimmy Hester, the vice president of Denise
Rich Songs, her music company. In Manhattan, four people work for the
company, and two more are employed by her foundation. She also maintains
staffs at her houses in Southampton and Aspen. Rich’s mammoth two-story
creamy-beige marbled apartment, said to be in the $40 million range,
overlooks Fifth Avenue and Central Park, and is decorated with works by
Picasso, Chagall, Miró, Léger, Braque, Warhol, Calder, and Lichtenstein,
as well as a Julian Schnabel broken-crockery portrait of her with black
hair and larger features. A recording studio, an office, a spa, and
guest rooms are on the lower floor; there is also a rooftop garden. Two
of New York’s best-known publicists, Bobby Zarem and Howard Rubenstein,
work for her. Even for someone with a nine-figure fortune, that is a big
support team. According to Kalman Sporn, however,
“For all the influence she curries as a result of her financial
resources, she’s not a power broker. She listens to the men in her
life.” Bobby Zarem goes further: “Denise is warm and bubbly. Both men
and women can push her around and use her for their own purposes.” Jimmy
Hester says, “I wish she weren’t so kind.” Her 88-year-old father, Emil
Eisenberg, a retired shoe manufacturer and art collector from Worcester,
Massachusetts, where Rich says she grew up with “unconditional love,”
tries to keep tabs on her, but any effort to curb her spending is
futile. She donates lavishly to countless charities and is a notorious
soft touch.
Rarely idle, Rich is usually racing from one
life to another—from the songwriter who shuts herself off in a studio every day
to the party giver, the partygoer, and the New Age devotee. She is all about
multiple use: each of her activities can be cross-pollinated with the others,
and the goal is always to promote Denise, her two living daughters—Ilona, 33,
the married mother of three who in March launched her first fashion collection,
and Daniella, 26, an actress and writer—and her causes. “That’s what I’m really
about,” says Rich. “Politics goes into music, which goes into social life, which
goes into the arts, and everything connects.” After
25 years of being held down by a controlling husband, Denise Rich likes to
flaunt it. If Brad Boles is called away to do makeup for a film, he carefully
calibrates her wardrobe for each scheduled event up to six weeks in advance,
individually numbering the designer and custom-made outfits, often for as many
as three changes a day. “What if she wants to wear something before the
appointed day?,” I ask. “She can’t do it,” he answers. “I won’t let her.” The first thing Boles did when he went to work
for her in 1993 was throw out all her Charles Jourdan shoes. “Marc only allowed
her to wear a two-inch heel,” he claims. “ ‘Oh no, no, no,’ ” Boles says he told
her. “ ‘If you’re going to be in New York, you’ve got to be fabulous! You can
only wear Manolo Blahnik.’ So the next thing you know, the whole closet is
filled with Manolo Blahniks. He has the best toe cleavage.” The sexy Manolos run
about $500, but Rich doesn’t seem to mind, since recently in one of her giant
closets, which are organized by season, there were garbage bags filled with
dozens of pairs of the pricey shoes waiting to be disposed of. Rich’s appearance has also undergone a radical
transformation since her married days. “Marc kept her in shirts buttoned up to
her neck,” says Boles. Her curly hair has been straightened and highlighted, and
her features have been altered. She still has a great figure, and she has
elected to keep her own cleavage, which she is proud to display. With her big
brown eyes and superglossed lips, Rich gives the illusion of being younger than
her age, 57. The striking physical changes over the years
can be seen in dozens of neatly catalogued and dated photo albums of Denise
Rich’s parties, which show her with a mix of global statesmen, rap stars,
politicians, and B-minus tabloid celebrities—everyone from Foxy Brown and Dewi
Sukarno to Luciano Pavarotti and Mike Wallace. Bill Clinton appears at one
fund-raiser in a bright-blue shirt and yellow tie. “He’s always very relaxed
here,” Rich says. “We are not judgmental.” Noticeable in one photo of Patti
LaBelle’s birthday party in September 1998—a full year before his services were
engaged by Marc Rich to handle his pardon petition—is former White House counsel
Jack Quinn. “I’ve known Jack socially for a long time,” Rich explains, but she
says she did not recommend him to her ex-husband. There are also videos of Rich’s two Angel
Balls to support the G&P Foundation, named for Gabrielle and her Lebanese
husband, Philip Aouad. The biennial balls, given in 1998 and 2000, were among
the very few private events both President Clinton and the First Lady agreed to
chair. According to the charity’s tax returns, the first ball raised $2.3
million, but “fundraising expenses” of $855,000 ate up 37 percent of that (the
rule of thumb for nonprofits is to try to stay below 25 percent). Nobody who was
there has forgotten that evening. The seating plan was lost and celebrities had
to scramble for tables, but there was plenty to make up for it. Plácido Domingo
sang “Granada,” Dan Rather presented an award to CBS president Les Moonves, Bill
Cosby introduced President Clinton, Stevie Wonder sang “Happy Birthday” to
Milton Berle, and the Duchess of York made a speech. In 2000, with Queen Noor and Mikhail Gorbachev
scheduled to appear, Rich was in despair over Paul McCartney’s cancellation
until the day was saved by Kalman Sporn, who is a first cousin of Kalman Stern,
one of the four Hasidim [ Ultra-orthodox Jews living in ghettoes - Editor ] from New Square, New York, granted clemency by Clinton,
who are now under investigation. When I ask Sporn if the fact that his cousin’s
community voted overwhelmingly for Hillary Clinton had anything to do with the
four getting their sentences commuted, he says, “Yes, I think there is a
connection. Jews know how to show gratitude.” Through his friend Rabbi Shmuley
Boteach, the self-help author, Sporn got Boteach’s friend Michael Jackson to
replace McCartney. Jackson, whose career has never recovered since he paid in
excess of $25 million to settle a 1993 suit alleging that he had sexually abused
a 13-year-old boy, welcomed an opportunity to stand next to the president and
First Lady. That same night Rich presented Bill Clinton with a new saxophone. When first approached about getting
involved, I was highly skeptical. But, I studied the facts and the law carefully
and became convinced of both Marc’s innocence and the outrageously prejudicial
and unfair treatment of him by the then-new U.S. Attorney in New York, Mr.
Giuliani. —Jack Quinn, in a letter to President
Clinton, January 5, 2001. In
the offices of the U.S. Attorney for the Southern District of New York in
Manhattan, there are 600 locked boxes of evidence prepared for the prosecution
of Marc Rich and his partner, Pincus Green. In 1983 the two men fled to
Switzerland rather than face a 65-count indictment. Fifty witnesses, many of
whom had been granted immunity, were waiting to testify. “There were a number of
things we could have indicted on,” says Morris Weinberg, the former assistant
U.S. attorney who was the lead prosecutor. “This was the tip of the iceberg. It
just so happened the iceberg was on U.S. soil. We discovered it, we got the
evidence, and we nailed him.” In the 1970s, oil trading had been carried on
mainly among a small group of giant oil companies known as the Seven Sisters.
Marc Rich broke the market open when he persuaded Third World producers in
countries such as Iran and Nigeria to sell to him. Rich invented the spot oil
market, by trading oil both in units and in futures, just as he would any of the
many other commodities he dealt with—metals, coal, sugar, grain. Pincus Green
transported these commodities all over the globe. One oil broker tells me,
“Pinky knew how to move it, Marc knew how to trade it.” In the late 70s and 80s, the Department of
Energy (D.O.E.) controlled the price of oil by age and provenance. The
government learned that Rich was conspiring with two Texas companies, West Texas
Marketing and Listo, to convert the oil certification on his barrels and sell
them at a higher price. All these illegal trades were meticulously recorded in
two separate sets of books. Rich also had “pots” where in just six months he hid
$100 million in illegal profits. In order to “lose” those profits, as well as
evade taxes and get around the D.O.E., he washed them away in a series of phony
transactions between Listo and West Texas and his offshore companies.
The government indictment charged Rich’s
companies with evading $48 million in taxes and lying about it. In October 1984
his companies pleaded guilty to 78 felonies. The indictment also accused him of
trading with Iran when Americans were being held hostage there and charged him
with two rico (racketeering) counts of wire and mail
fraud. Though rico is no longer applied to such tax
cases, Jack Quinn referred to the counts as the “rico
sledgehammer” in congressional hearings, and used them as an example of the
overzealousness of the government in what he downplayed as essentially a tax
squabble. (Quinn failed to mention that the government in recent years agreed to
drop those charges.) Martin Auerbach, a former assistant U.S. attorney who also
prosecuted the original case, counters, “It’s not merely a tax case. Today I
believe they would be prosecuted for money-laundering—there were no
money-laundering statutes then.” At the time of his pardon, Marc Rich was still
facing 65 felony counts. From the beginning Rich threw the best legal
minds he could find at the government, beginning with the late Edward Bennett
Williams, whose Washington firm now represents Bill Clinton. They filed 17
separate motions to delay the case, and these took more than two years to
resolve. Rich and Green fled before they were indicted, but Williams always
insisted that they would show up. At one point, with contempt-of-court fines of
$50,000 a day mounting, Rich’s lawyers agreed to pay the fine and turn over
disputed documents. Instead, prosecutors received a call from inside Rich’s New
York company saying two steamer trunks full of documents were being shipped to
Switzerland that afternoon. Agents stopped the plane and hauled the trunks off
the runway. Rich let the fine run for a year, until the government served
restraining notices on his U.S. banks and customers. Then he folded, after
having accumulated $21 million in contempt fines alone. To avoid extradition from Switzerland, Rich
and Green eventually renounced their U.S. citizenship, which, according to
Morris Weinberg, made Edward Bennett Williams very unhappy. Rich became a
citizen first of Bolivia, then of Spain and Israel. In June 1983, Rudolph Giuliani was appointed
U.S. attorney for the Southern District. By then the case had been going on for
18 months. Yet of all the people involved in the prosecution, it was the specter
of Giuliani, the demon prosecutor who threatened he could put Rich away for
good, that would haunt Rich through the years. That same specter became a
powerful tool for Jack Quinn to use in lobbying Bill Clinton at a time when
Giuliani was fresh in the president’s mind as Hillary Clinton’s fierce original
opponent for a U.S. Senate seat. No matter how I’m / Beat down, broke down,
tore down, wore down, / Fed up, messed up, I still get up.
—Denise Rich’s lyrics to “Livin’ for Love.” Denise
Rich taught herself to play the guitar at Boston University, and she originally
began writing songs to communicate with her husband, who constantly put her
down. “I have a gentle soul,” she tells me. “I have difficulty with
confrontation. So it’s much easier for me to communicate through writing.” Marc expected her to stay home and entertain
his business associates. She claims he told her almost nothing about his
business. “She was the perfect wife,” says a longtime friend of theirs. “She did
everything for him.” But for years they did not get along. “She wanted to have a
career in music, and Marc didn’t take it seriously. She wanted to be an artist,
creative—she’s out there. He’s not; he was born with a phone in his hand. But it
was his way or the highway.” In 1984 it was not easy for Denise to move to
Europe with three daughters and begin life anew as the wife of a man whose
companies had pleaded guilty to 78 counts of tax evasion, wire fraud, and making
false statements, and who was one of America’s most wanted fugitives. On top of
that, Denise’s sister was dying. The Riches lived in the tax haven of Zug,
Switzerland, and had a sumptuous villa in Marbella, Spain. Heavily guarded by
former Israeli soldiers, Marc was not free to travel. But Denise was, and once
she began taking trips to promote her music, he began appearing places with a
good-looking, six-foot blonde German woman named Gisela Rossi, the widow of a
German-Italian businessman and the mother of two young boys. By 1991, Denise was spending more and more
time in New York, and in 1992 she sued for divorce in Switzerland. With the aid
of a well-known attorney, the late Max Lebedkin, she asked for a $1 billion
settlement. Marc’s first offer was about $3.6 million. In 1993, after Marc
reportedly moved Rossi into the lakeside villa outside Lucerne that he and
Denise had been constructing, Denise’s fury spilled out in an interview she gave
to a Swiss magazine: “For 25 years I was a loyal wife and dedicated mother.
People gossiped, said he was a crook. But I stood by him. He shows his thanks by
cheating on me with another woman and publicly humiliating me and my children.” As the fight wore on, all three daughters went
through health crises. “Gabrielle had cancer, one was anorexic, one had a back
operation,” Denise says. By then she was ensconced in New York and independently
wealthy. Her father had given Marc money to start his company, and in 1990, when
Denise and several partners redeemed their shares in Marc Rich & Holding Co. AG,
Denise’s 13.9 percent was worth, according to court documents, $165 million. Aaron
Richard Golub, who had delivered groceries to Denise’s house in Worcester, when
his father owned a grocery store and her father owned the shoe factory, became
her New York attorney. Golub knew that Marc Rich was a master of assets
subterfuge, and he drove Denise’s legal team to work such long hours that one
lawyer quit because her hair began to fall out. Golub tells me he had no choice:
“Marc Rich uses lawyers the way carpenters use nails. Lawyers and rabbis are his
pawns.” The prominent Washington attorney Lloyd Cutler
was hired by Denise to see how she might benefit from congressional hearings
held by Democrats in 1991 and 1992 to find out why a company owned in part by a
wanted fugitive had been able to sell $45.5 million worth of nickel to the U.S.
Mint, and why another Marc Rich company had managed to collect $55 million in
U.S. grain subsidies. The embarrassed federal government ceased doing business
with Marc Rich. After countless trips to Switzerland, Golub
felt he could pinpoint assets of Marc Rich’s totaling at least $1.4 billion.
Using Swiss law, Lebedkin got Swiss authorities to institute a criminal-fraud
case against Rich, charging that in 1988 Denise had turned over $39 million
worth of her shares to him to start a charitable foundation, and that he had not
only failed to put up his half but also used some of her money for his own
purposes. Marc’s lawyers dismissed the charges as totally without merit.
Nevertheless, when Rich was hauled into court in Zurich to testify, according to
Golub, he became so agitated that he turned cherry-red and shouted to the court,
“Scheisse” (shit). In the end the case was dismissed, because the statute
of limitations on family fraud had run out. Meanwhile, Lebedkin applied heat in
Israel, telling journalist Mody Kreitman there that Rich should watch out: “If
he goes to Israel, that’s all very well, but the last thing he needs is for the
airplane to get engine trouble and land in Cyprus.” Golub’s
strategy was to take up where the U.S. government’s case against Rich had left
off with regard to the valuation of his former U.S. company, Marc Rich
International. During his tax-fraud investigation, Rich, to avoid having his
assets seized, had “sold” controlling interest in the company to a partner and
changed its name to Clarendon. A judge saw through the ploy and did not allow it
to affect the tax-fraud charges, for which Rich paid a $159 million fine, with
money obtained through California mogul Marvin Davis for the 1984 sale of the
half of Twentieth Century Fox that Rich then owned. Once the case was settled
with the U.S. government, however, Clarendon technically remained in the hands
of a partner, and thereby out of reach of any claim to it by Denise. In 1993, Golub filed an affidavit from Denise
seeking to remove the trustees and a law firm from a trust established for the
Riches’ daughters. She claimed there was a conflict of interest, because the
firm and trustees, while advising her, were really working for Marc. The law
firm was not dismissed, and the rest of the case was still pending in May 1996,
when, on the eve of the day Marc Rich was obliged to produce his financial
records for the Swiss court, he retained a California lawyer to negotiate a
settlement with Denise’s father. The divorce became final in June 1996, while
the couple’s daughter Gabrielle, then 27, was living with Denise in New York and
undergoing chemotherapy. The terms of the settlement remain
confidential. In addition to the $165 million Denise had redeemed for her shares
in Marc Rich’s company, informed sources estimate that she collected between
$100 and $200 million in her final divorce settlement. The worst thing that can happen to you is
to lose a child. I changed so much. —Denise Rich. Gabrielle
Rich was 23 in 1993, when she felt a small lump under her jaw. Her sister Ilona
remembers a doctor telling Gabrielle not to worry about it. Six months later the
lump had progressed to stage-four Hodgkin’s lymphoma. In May 1996, Gabrielle moved from California
to her mother’s Fifth Avenue apartment to undergo a course of chemotherapy. That
July she summoned Brad Boles to her room and said, “Brad, you’re from Seattle. I
have decided to go to the Fred Hutchison Cancer Research Center there for a
bone-marrow transplant.” Denise was going to give Gabrielle her bone
marrow. “They tell you it’s like being kicked by a
horse, but it’s really like being in a very bad car accident,” Boles says of the
procedure Denise endured for her daughter. “Mommy, I’m looking at your bone
marrow—it’s the color of red wine with gold specks,” Gabrielle told her. “You’re
giving birth to me again!” Denise rejoiced and said it was a miracle.
The euphoria was temporary. Nine days later
Gabrielle developed a staph infection, and there were indications that her liver
was failing. “Denise decided she needed all the help she could get,” says Boles.
The call went out, and soon the hospital corridor was full of “Orthodox rabbis,
Buddhists praying on sacred mats, Hindus, Christians reading from Bibles.” Marc and Denise began to speak for the first
time in years. “At one point he wanted to come, and Gabrielle just didn’t want
it. God forbid something should happen to him,” Denise Rich tells me. “His pain
was so great, but I had no strength for that—to deal with his pain.” Boles says,
“There was so much speculation whether he was going to come into the country or
not, disguised as a doctor or an orderly. In the end he didn’t enter the
country. He made that choice—he decided his freedom was worth more.” Ilona tells
me, “It was really hard for him. He wanted to come back. We have a video of
Gabrielle cooking—she loved to cook—and she’s saying, ‘All I want is my dad, to
get him back—I want him to come back.’ I never showed it to him.” By August, Gabrielle had slipped into a coma,
but she came to for a moment when she heard a string quartet outside her room,
arranged for the birthday of Philip Aouad, her constant companion, who was with
her all during her illness. By early September the prognosis was so bleak that
Gabrielle’s doctors reluctantly gave in to Denise’s request to try an
alternative treatment. A liquid-vitamin formula was flown in from Germany, and
Boles got immune-system boosters from an aids doctor.
But nothing helped. Two days later, according to Boles, the doctors told Denise,
“You have to make the decision whether to put her on life support.” Boles stood outside Gabrielle’s door, and at
10:22 p.m. he heard a whooshing sound stop. “For seven minutes it was so silent
you could hear a pin drop. Then I heard this wailing and shrieking, and I knew
she had died.” Marc Rich was informed by phone. “We spoke,
but he was so devastated,” Denise says. “I didn’t find comfort in speaking to
him. My strength came from God. I had a vision of her when she died—she was
walking with my mother and sister.” Gabrielle’s death allowed Denise to come to
terms with the man she hated. She says, “After you’ve lost a child, you don’t
ask questions anymore. There’s a forgiveness that goes on after you’ve lost a
child.” Before Gabrielle left New York for Seattle,
she had asked Boles to buy a safe she could keep in her room. After her death,
Philip Aouad opened the safe to reveal a wedding ring and a note from her in a
manila envelope informing her family that the two of them had secretly married
in 1993. The next time Denise Rich saw Bill and Hillary
Clinton, in a receiving line at a 1996 White House Christmas party, they both
hugged her and told her that they too believed that nothing compared to having a
child die. That meant a great deal to her, she tells me. When Marc Rich’s head hit the pillow every
night, the last thing he saw was Ken Hill’s face.
—James Comey, assistant U.S. attorney. For
14 years, until he retired in 1997 at age 50, Ken Hill was the U.S. marshal in
charge of tracking down Marc Rich and bringing him to justice. He has never
before spoken on the record to a reporter. Hill probably knows far more about
Rich than Rich’s own family does. “The philosophy was simple: I could make a
thousand mistakes—he couldn’t make one,” Hill tells me. “The only place I could
slow him down was in his mind. I contacted anybody and everybody I could to let
him know we were on his trail.” Hill now teaches diving in Florida and observes
that spending a lot of time underwater is similar to his old occupation: “cold,
dark, and lonely.” In the first seven years alone, Hill pursued
more than 1,400 “investigative actions” and followed the activities of 37 of
Rich’s close associates and important business contacts in 33 countries.
Competitors who were “appalled by Rich’s business practices” were more than
happy to give Hill inside information. “I was shocked by the numbers of people
who came forward,” he says. “He screwed a lot of people to get where he was.”
Some had code names—Concorde, Empire, Merlin, Trader. “I was the Riddler,” Hill
tells me, “because it was always a riddle or a puzzle trying to figure out what
would or could happen next.” Some sources assisted because they found
themselves in dire straits, for example Ivan Boesky, the jailed financier, who
had moved into Rich’s former office space, and who told Hill something he never
forgot: “Just remember, there are very few people in this world who can lend
each other a billion dollars no questions asked.” Rich flourished as a lender
and a barterer with Third World and Eastern-bloc countries which were strapped
for cash or in debt, and which had commodities for collateral that Rich could
get hold of and sell for fat profits. When I inform Hill that British customs
agents recently seized a briefcase containing $1.9 million in cash which Rich
was sending to London, he replies without hesitation, “The first thing I’d do is
check which head of state or oil minister was visiting London that week.” Hill
continues, “The smoking gun is greed. This is what Marc thrived on—the greed of
those who had commodities and were in positions of influence and power.”
“He probably had every oil minister of these
countries,” says one of the world’s top independent oil traders. “From Nigeria
to Russia, everyone was on the payroll of Marc Rich. Dollar for dollar in his
time, no one, including sheikhs, had more money than Marc Rich.” He adds, “You
have no idea the strength this man had in the world economy.” “He virtually hijacked Jamaica’s economy,”
Hill says. “He involved himself with Venezuela, Angola, Romania, Yugoslavia,
Bulgaria, and North Korea.” Sources told Hill that Rich was trading with the
North Koreans, for example, through the Russians, who by the mid-90s, Hill says,
were “coming over here in droves, looking me up, looking to get revenge on him.
He was just ripping them off, manipulating their ministers and politicians
better than they were.” Rich, however, has repeatedly refused to discuss his
international business relations. Rich once was the bauxite trader in
Jamaica; he is rumored not only to have prepaid Jamaica’s debt to the
International Monetary Fund but also to have financed the country’s 1988 Olympic
bobsled team. Wherever Rich went, says Hill, he made his own rules. “I had a
South African law-enforcement contact [during the time of the trading sanctions
against South Africa]. I called and said, ‘Is it true at least 6 percent of your
oil is coming from Rich?’ He said, ‘We’ve been friends for a long time. Don’t
call me anymore.’ ” In
May 1991, Hill detained former Venezuelan president Jaime Lusinchi when he was
passing through New York’s J.F.K. Airport with his longtime female companion,
Blanca Ibañez. She was traveling on an expired tourist visa, and there was an
Interpol warrant for her extradition to Venezuela. Hill had received information
that Ibañez was a possible conduit for payments from Rich to certain officials
within the Venezuelan government, which had banned him several times—once when
it was reportedly found that boxcars he was trading to them from Brazil for
Venezuelan iron ore had actually cost $3 million less than he was charging. Hill
had hoped to enlist her aid, but he shows me a document the Immigration and
Naturalization Service received from the American Embassy in Caracas
“requesting” the I.N.S. not to detain Ibañez. “It’s a chess game, because the
I.N.S. had a piece of paper from the U.S. Embassy in Venezuela saying they’re
friends—let them go.” Hill never knew why. Hill saw a pattern over and over again whereby
“Rich through his department head would make a longtime offer for a country’s
commodity at the fair market value or higher. But there are two sides to the
deal.” The good side, Hill explains, was that the country would have its product
contracted for at a decent price and in some cases have its debts paid off as
well. In return, however, “Rich became the sole provider of energy needs, grain,
gas, oil, coal at a higher-than-fair rate, and since he controls the commodity,
he controls the country.” Then the opportunity always existed to have inside
cooperation in order to “get more of his commodity than he actually paid for.
These practices drove U.S. businessmen up the wall. How could they compete?” “No matter where I was in the world, he was
always ahead of me,” says Douglas Jaffe, who comes from a wealthy Democratic
Texas oil family and outfits private jets. “In Romania in 1990–91, he was in
control of all their resources, all their trades.” Jaffe calls Rich a
“mastermind,” who dictates to any number of “heads of state. They like him
because he gets things done, he’s practical, he understands. A lot of these guys
were thrust into their positions and have never dealt in the capitalistic world.
They’re used to the Communist Party, where orders came down from the top. He had
to go in and explain things, explain how they work.” One thing Hill learned, he says, is that Rich
never comes at anything directly. Hill was told by a competitor of Rich’s that
when Rich lost a bid to mine a metal deep in the Amazon rain forest he lent his
“silent support and perhaps a million dollars to an environmental group that
picketed and sealed the routes to and from the mine.” When the competitor did
not renew its contract, “Rich bid at half the going rate, and everyone thought
he was crazy. He then withdrew support from the environmental group, which
eventually went away.” “He’s a man who makes his greatest profits in
places where markets function badly, either because of corruption or ignorance,
or because a particular country is a pariah state or isolated by sanctions,”
says Paul Klebnikov, author of Godfather of the Kremlin, a biography of
Russian oligarch Boris Berezovsky. “He came in and became Russia’s largest
single trading partner for commodities and helped pioneer a system of fraudulent
foreign-trade deals involving setting up shell companies, double contracts with
secret kickback clauses, bank accounts in Switzerland, and whole banks set up in
the Cayman Islands and South America.” Along with the K.G.B., Klebnikov says,
Rich “served as the teacher of a new breed of corrupt Russian traders, who
looted the country’s natural resources, which ruined the economy and bankrupted
the government.” Klebnikov
quotes Rich saying in a Russian press report from the early 90s, “[We are
providing] Russian companies with investment, know-how, and help in entering the
world market at a time when other Western firms are either turning away from
Russia or making intolerable commercial demands.” “Yes, we bought for a small
amount of Russian rubles and sold for a large amount of dollars,” Artyom Tarasov,
a former member of the Russian parliament and “the first official millionaire in
Communist Russia,” tells me. Tarasov, who now resides in London, was one of
Rich’s first facilitators in Russia. A veteran of scandal himself, he says that
since the ruble was not convertible to the dollar then, “it couldn’t be
evaluated.” Therefore, there was nothing illegal in getting Soviet crude at the
insiders’ price and selling it on the world market for much more. “Rich made a
lot of money in Russia with officials, because they did not ask him to return
dollars—they asked him to return barter,” says Tarasov. “They did not know how
much he spent in Argentina to buy grain instead of oil.… The profit could reach
100 percent, 200 percent, because nobody was certain what Rich paid for
Argentine meat or Brazilian coffee.” Once the Russian Mafia—especially those in
the aluminum business—began to catch on, though, Tarasov says, Rich’s welcome
was worn out, and his company Marc Rich & Co. “had to change its name.” ‘We
had no clear tax system here, no clear regulations—that’s why everything was
done a little bit illegally,” Konstantin Borovoi, founder of the Russian
Commodities and Raw Materials Exchange, tells me. Borovoi says Rich became “sort
of an awful capitalist for Russians. He was the dangerous face of capitalism in
Russian eyes among ordinary people.” Last February, Rich sold a substantial
business to a London subsidiary of the Alpha Group, which is run by two of
Russia’s biggest oligarchs. But his “pop-up factor” in Russia, as in many other
parts of the world, is well known to U.S. intelligence. “If anybody stopped to
ask what the guy’s been doing since he left the U.S.,” says retired C.I.A.
Russia analyst Fritz Ermarth, “you’d find out he was very prominent in gray and
black markets”—particularly the aluminum market. Just as Marc Rich’s name popped up to
investigators of the notorious B.C.C.I. banking scandal in the 90s, causing him
to be listed in the appendix of the official report issued in December 1992 by
the Senate Subcommittee on Terrorism, Narcotics, and International Operations as
one whose business with the discredited bank “requires further investigation,”
his name also popped up in the murky shadows of a $2.7 billion lawsuit between
two Russian aluminum magnates filed in federal court in New York last December
by Robert Abrams, former state attorney general. “The world of aluminum trading
is filled with incredible acts of treachery, including murder, extortion,
money-laundering, bribery, and corruption of public officials,” Abrams tells me.
“Rich is a player in this whole milieu.” In many areas, Hill says, Rich “wore his
fugitivity as a badge of honor: ‘I’m not an ugly American—I’m a fugitive.’ ” In
Israel, which receives more American aid than almost any other country, and
where money-laundering is still relatively easy, Rich and Green were always
afforded full protection. Rich, with his charitable donations totaling $100
million, is one of the biggest philanthropists in Israel. At one point during the Gulf War, Hill says,
he learned that Pincus Green and his son were stuck in the King David Hotel in
Jerusalem while Scud missiles were falling around them. Hill phoned their room,
and Green picked up. “Wouldn’t it be easier to come back and surrender than go
through a Scud attack?” asked Hill. Green hung up on him. “Other white-collar
fugitives, like Eddie Antar [owner of the Crazy Eddie stores], fled to Israel,
and the authorities there were fully cooperative [with us],” Hill says. “Why
wouldn’t they help us capture those two? With Israel, it was like
staring into a black hole. The irony is, Israel was more than forthcoming in
asking for a pardon.” The only people who think Marc is a
swindler, and a crook, and a forger, is Mr. Giuliani and the Justice
Department—nobody else. —Gisela Rossi Rich. As
Marc Rich’s chauffeur drives me up to the Villa Rose, the lakeside manse just
outside Lucerne where Rich lives with his second wife, Gisela Rossi Rich, he
phones ahead and the iron gates swing open. Rich, who was born in Antwerp, Belgium,
considers himself a European, even though he was raised in Kansas City and New
York after his family, to escape Hitler, had crossed Vichy France and booked
passage in 1941 on an ocean liner from Morocco. Like Denise’s parents, they
found success in America; his father owned a burlap-bag factory. Rich’s view of
Lake Lucerne with the Alps beyond is striking, and in the house’s beige living
room with red accents, two needlepoint pillows on leopard-print chairs announce,
it’s expensive being rich and i don’t
think we’re in kansas anymore, toto. Although there are paintings by
Braque and van Gogh on the walls and the villa is luxurious, it is quieter,
smaller, and less dramatic than Denise Rich’s penthouse. Rich, who is 66, has
clearly opted not to talk to me. He has made plans to go helicopter skiing, but
he leaves his vivacious wife to deal with me in her rapid-fire English. She is
loaded for bear. Gisela Rich has a trim, wealthy air about her.
While carefully casual in jeans and loafers, without makeup or rings, she is
poised and attractive. Over a lunch that begins with Galician broth and ends
with an apple tart, she keeps emphasizing that her husband is an honorable man,
who was given “very bad legal advice” from the late Edward Bennett Williams to
“stonewall” the U.S. government. “But that doesn’t make him bad,” she says. “He
started working when he was 17, so he is in a business—very volatile, the
commodities business—based on integrity, reliability, and also trust. Nobody
ever had any lawsuit or anything with him.” The very idea that there was a calculated
campaign for a presidential pardon is absurd: “That’s the whole misconception.
Marc basically gave up on the idea through proper channels—the Justice
Department, whatever. Nothing ever worked.” In fact, she says, he was very
pessimistic when Avner Azulay, the former Mossad operative who runs the Rich
Foundation in Israel, urged the pardon route. And former White House counsel
Jack Quinn, who presented the petition to the president, was at the very least
cool to the idea. While visiting them, he said, “I don’t think this will ever
work.” Gisela
insists no money for a pardon ever changed hands between Marc and Denise,
especially any intended for the Clinton Library. “She has a life of her own in
New York. She likes the Democrats, and she contributed for years and years and
years, and that has nothing whatsoever to do with Marc. She has enough money of
her own—everybody should know that. She doesn’t need a couple hundred thousand
from Marc.” Nor, she says, has Marc’s generosity been in any way targeted to
curry favor with the dozens of V.I.P. Jews who wrote letters for his pardon
petition both in Israel and the United States. “Do you think he made all the
charitable donations in his life in the last 30 years because one day some
American president is … going to give him a pardon? That’s so far-fetched. And
the money given from Denise came from him for the pardon? That’s
ridiculous!” Why did Marc Rich want the pardon? “The main
reason is to be able to travel, to go there to see Ilona, to see Daniella, to
see the three grandchildren, who are very cute, to visit his daughter’s grave,
and to see his father’s. You always have this weight on your shoulders, not
being able to travel anywhere—even if you don’t want to. But it’s a good feeling
if you can, and that’s the only reason.” I ask her where her husband can
travel, and she answers, “Spain and Israel. That’s about it.” When I suggest people are outraged because
they consider Marc a fugitive who renounced his American citizenship and traded
with the enemy, she corrects me. “ ‘Fugitive’ is also a word which doesn’t quite
fit, because he had a Spanish passport, so he’s not a fugitive, he’s a citizen
of Spain, and he had a company in Switzerland a long time. The argument is, and
there is a point, why did he not stand trial at the time? But if you see the
media frenzy now, the hysteria, it’s almost like a lynch mob.” Marc,
she says, was afraid he would receive the maximum sentence of 360 years in jail. “Can you imagine?” she asks me. “Not even a
serial killer gets that much. Unbelievable! If you’re a child molester, you get
six months to one and a half years. I think it’s completely out of proportion.
Do they make a big fuss out of rapists, about organized tourists to child
brothels in Bangkok or in India, where American and European men go to have sex
with five-year-olds? Why are the journalists not there, shooting
through a hole in the wall and putting those guys on the front page?” Gisela maintains that they were really stunned
that he received the pardon. “I tell you frankly, when we heard it was done, we
couldn’t believe it! I said, ‘No, Marc, there must be some mistake.’ ” Avner
Azulay called with the news very early on January 20. “We were in [our house] in
Saint-Moritz, in bed. It was four o’clock in the morning.” There is a six-hour time difference between
Switzerland and Washington. According to testimony given by Justice Department
pardon attorney Roger Adams to Congress, the Pardon Office was notified about
Rich shortly after midnight. Therefore, Rich heard that he had been pardoned two
hours before anyone in the White House told the U.S. Justice Department. It was
already after six a.m. in Switzerland when someone in the White House counsel’s
office finally got around to asking Justice to obtain the F.B.I.’s
criminal-record checks on Rich and Pincus Green, who also received a pardon. The
White House said they would probably not find much, because “the two men had
been living abroad for several years.” I believe that if a political decision was
made at the highest level of this government that we go apprehend Marc Rich and
Pincus Green and use all the tools that are available to the U.S. government, we
would have Marc Rich and Pincus Green very quickly.
—Howard Safir, former director of the U.S. Marshals Service. Howard
Safir was speaking in code when he said that in 1992 before a House committee,
referring to an edict that had come down from “the highest level of the Justice
Department” instructing law enforcement not to employ “extraterritorial
renditions,” meaning not to kidnap fugitives, because it was not worth the
political fallout. Nevertheless, Ken Hill almost got Rich several times,
including once when he hid beside a runway near London’s Biggin Hill Airport,
holding an early satellite phone, with the knowledge that Rich was due to land
any moment in a private plane. “Ken called me at four a.m.,” says prosecutor
James Comey, “to tell me, ‘Damn, the fog hasn’t lifted.’ ” For years, Hill and Rich and Green played an
elaborate cat-and-mouse game. At Rich’s 50th-birthday party, according to Hill,
a boxer representing Rich knocked down a boxer representing a New York police
officer again and again. Hill once had a bottle of Rich’s favorite scotch sent
to his hotel in Saint-Moritz with a card saying, “Have a drink on me.” One year
Hill’s Christmas was ruined when British authorities received information that
two men dressed as women and resembling Rich and Green were about to land at
Biggin Hill Airport. Huge sums of money were offered to get the two
men off. Morris Weinberg says that in the early days Edward Bennett Williams
promised $100 million to the government to resolve the case. Safir claims he was
present at a spy exchange at Templehoff Airfield in West Berlin in 1986 when an
East German lawyer offered $250 million on behalf of Marc Rich. During Clinton’s
first term, Douglas Jaffe was approached by the Egyptian financier Adnan
Khashoggi to intercede for Rich. “He was prepared to pay a hell of a lot more,”
Jaffe says. “Adnan asked me, ‘Is it something you could work on?’ I said, ‘No,
it really isn’t.’ ” “Every year there was a new initiative,” says
Comey, who in 1992 joined Otto Obermaier, then U.S. attorney for the Southern
District, at a meeting in Switzerland with Rich and Green and their lawyers.
Comey says they had been led to believe that the two men were ready to plead.
“But it quickly became apparent to us they wanted to explain their enormous good
works and debate the merits of the case. Rich said, ‘I don’t want to spend a day
in jail,’ and we said, ‘We won’t make that promise.’ ” In 1992 the Russian
Interior Ministry requested a meeting in Moscow to see if Russia might help
capture Rich. U.S. officials proposed that the Russians try to lure him to their
country. “They were willing to explore the possibility,” says a Justice
Department attorney who was present, “but nothing ever came of it.” By then Rich was represented by former Nixon
White House counsel Leonard Garment and current vice-presidential chief of staff
Lewis “Scooter” Libby. Bradford Reynolds, head of civil rights at Justice under
Ronald Reagan, also worked for Rich, and for a while Robert Kennedy’s press
secretary, Frank Mankiewicz, handled Rich’s P.R. Libby has testified that over
the 11 years he did work for Rich (at three law firms) he received more than $2
million. At
one point Garment hired two tax experts, Supreme Court justice Ruth Bader
Ginsburg’s husband, Martin Ginsburg, and Harvard professor Bernard Wolfman, for
more than $70,000. They rendered an opinion that, “according to the facts given”
them—which prosecutors insist were far from complete—Rich and Green were
technically not guilty of criminal tax evasion. Comey says Garment came to see
him with a flip chart and said, “Yes, it’s true [Rich’s] companies kept two sets
of books, and it appears they desperately tried to commit a crime.” But then
their actions were compared to those of a car thief intending to steal a car:
Having larceny in his heart, he breaks into the car in the dark of night and
drives it away only to find it’s his own car! Comey adds wryly that this
argument “lacked a certain appeal.” But that opinion is pretty close to the
heart of the petition Clinton responded to with a pardon, ostensibly convinced
that Rudolph Giuliani’s original indictment was flawed and that Rich’s actions
warranted at most civil penalties. Meanwhile, rabbis from Brooklyn, where the
Orthodox Green grew up, also got involved. David Luchins, who oversaw Jewish
affairs on the staff of former New York senator Daniel Patrick Moynihan, tells
me about a warning he got from the late New York rabbi Morris Sherer. “Sherer
said he was offered a million-dollar donation to charity if someone could get
through to see Moynihan about Rich and Green.” (No one ever did.) Two other
rabbis, Ronald Greenwald, who once worked as a metal trader for Rich, and Milton
Balkany, who is currently under investigation for welfare irregularities, also
supported Rich and Green. In 1989, acting on a tip from Ken Hill, the office of
Elizabeth Holtzman, then district attorney of Brooklyn, wired a source who was
present at a meeting with Brooklyn councilman Noach Dear, who is still in
office. According to Hill, Dear had attempted to intervene in a property dispute
on behalf of Green’s family and had then “speed-dialed” Green in Europe to
discuss it. “He should never have been trying to help a fugitive,” Hill says,
although the Brooklyn D.A.’s office declined to take the matter any further.
(Dear claims the story is “pure fiction.”) Luchins adds, “However much money
Marc Rich was throwing around Israel, Pinky Green was throwing it around New
York.” Although Rich’s and Green’s “Wanted” posters
remained on the Internet until January 20, 2001, the Oklahoma City bombing in
1995 and threats of further violence took priority with U.S. marshals. Rich
never let up, however. His lawyers even offered the United States his help, both
in the drug war and in apprehending Tom Billman, another white-collar fugitive.
The last and most sophisticated campaign on Rich’s behalf, though, was launched
from Israel. I want every American to know that, while
you may disagree with this decision, I made it on the merits as I saw them, and
I take full responsibility for it. —William Jefferson
Clinton, The New York Times, February 18, 2001. Former
Israeli intelligence officer Avner Azulay laid meticulous groundwork for his
patron’s pardon. For nearly a year, as head of the Rich Foundation in Tel Aviv,
he managed an ingenious campaign on two fronts, in Israel and in the United
States, and if the House Government Reform Committee had not obtained the
E-mails of Jack Quinn, Rich’s latest factotum in Washington, the whole thing
might have gone off without a hitch. Instead, the intricate web of charities,
diplomacy, credentials, connections, and cunning suddenly unraveled. At the center of the web were Azulay’s ties to
Prime Minister Ehud Barak. In January 2000 a scathing report from Israel’s state
comptroller’s office pointed out illegal funding practices in Barak’s 1999
campaign. His One Israel party was fined $3.2 million, and a criminal
investigation was launched into the activities of his cabinet secretary, Yitzhak
“Bojie” Herzog, the son of a former president of Israel. Herzog denies
channeling money from two of Marc Rich’s foundations into two phony foundations
set up to funnel funds into Barak’s campaign. Recent reports in the Israeli
press, however, allege that at least $120,000 of Rich Foundation money went into
Barak’s coffers. Michal Herzog, Bojie’s wife, works for the Rich Foundation.
Bojie and his mother both wrote letters included in the pardon petition without
mentioning Michal Herzog’s connection to the foundation. Also
under investigation is a foundation begun by former Israeli foreign minister
Shlomo Ben Ami, who received over $100,000 from the Rich Foundation. He wrote to
Clinton on Rich’s behalf and lobbied King Juan Carlos of Spain, who also phoned
Clinton to commend Rich. The Rich Foundation donated $300,000 to former
Prime Minister Shimon Peres’s Peace Foundation—the equivalent of a presidental
library—on whose board Azulay sat. Peres phoned Clinton on Rich’s behalf. Azulay
also donated $60,000 to the cause of “moral purity in public life” through the
Israel Movement for the Quality of Government organization, and invited U.S.
ambassador to Israel Martin S. Indyk to be a speaker at the closing ceremonies
of the annual Marc Rich Seminar in Tel Aviv last December 21. Indyk’s name was
printed on the invitation, but allegedly after a reporter questioned the
appropriateness of the ambassador’s seeming to embrace the cause of a wanted
fugitive, Indyk did not show. The U.S. Embassy now says the printed invitation
was only a “rough draft.” “It’s time to move on the GOI [Government of
Israel] front,” Quinn E-mailed Marc Rich’s longtime attorney in New York, Robert
Fink, in March 2000, nine months before he personally delivered a two-inch-thick
pardon petition to the White House on December 11. The petition contained dozens
of letters from “a Who’s Who of Israeli society,” says David Luchins. It later
came out that a number of charities solicited for letters had no idea they were
for a pardon petition, and many of the letters were drafted within days of one
another, in English, a language Israeli journalist Mody Kreitman, who has
reported extensively on the pardons, says some of the signatories can’t write.
“Azulay created an outer circle based on people who did not know the real
purpose of his plan, and they wrote letters of courtesy,” Kreitman tells me.
“But in the inner circles mentioned in the E-mails [Peres, Barak, the family of
slain president Yitzhak Rabin], they knew about the plan. He created such a
small inner circle because he didn’t want it to leak.” Indeed, in an E-mail
dated January 9, Quinn states, “I think we’ve benefitted from being under the
press radar.” Simultaneously,
Azulay was persuaded to cultivate Denise Rich by Abraham Foxman, national
director of the Anti-Defamation League of B’nai B’rith, who, after receiving a
$100,000 contribution from the Rich Foundation, had dinner with Azulay in Paris
in February 2000. On March 18, after another attempt to reach out to the court
of the Southern District of New York had been rebuffed, Azulay E-mailed Bob Fink
and sent a copy to Jack Quinn: “We are reverting to the idea discussed with
Abe—which is to send DR [Denise Rich] on a ‘personal’ mission to No. 1 with a
well prepared script.” Denise Rich represented everything Bill
Clinton loved most: showbiz glitz, a penthouse that was a fabulous staging area
for entertainment and fund-raising in his and Hillary’s newly adopted home
state, unlimited largesse, and gaga admiration for him. She was definitely his
type, and she ingratiated herself immeasurably when she threw a big fund-raising
lunch for the Clintons and the Gores that brought in $3 million right after the
Starr report detailing Clinton’s affair with Monica Lewinsky was released. Her
support has never wavered. “He has so much charisma, who wouldn’t be attracted?”
Rich says. “He’s a very spiritual person.” Contrary to what Azulay has said in published
reports, Denise Rich was first approached to consider supporting the pardon late
in the spring of 2000. “Denise hesitated—her father was against getting
involved—and she struggled until summer,” says a close friend. “Meanwhile,
several friends of Marc’s kept pressuring her to use her relationship with the
president.” So did her daughters. “They did say, ‘Please help,’ ” Denise tells
me. When I suggest that some people feel she supported the pardon in order to
ensure her daughters’ full inheritance, she denies it. “All I thought at the
time was, O.K., he’s the father of my children, and if that’s what they’ve asked
me to do, I’ll do it.” On December 6, she signed a letter to President Clinton
that she had not written herself: “I support his application with all my
heart”—the last four words being exactly the same as those Jack Quinn uses in
his pardon letter to Clinton. Denise
was the trump card, but she was not enough. Knowing Clinton’s White House as
intimately as he did, Jack Quinn realized that he needed advocates deep inside
the president’s most trusted circle. He chose Arkansas lawyer Bruce Lindsey,
perhaps Clinton’s closest confidant, who quietly dates Cheryl Mills, Clinton’s
impeachment attorney, who was formerly on the staff of the White House counsel
and is now a trustee of the Clinton Foundation. Although Mills was no longer
employed at the White House, she too received the pardon petition. Rather than approach Clinton’s chief of staff,
former law professor John Podesta, who would undoubtedly have sent the pardon
petition immediately to the Justice Department Pardon Office for proper vetting,
Quinn sought out Bruce Lindsey on December 13 during a sentimental farewell
visit Clinton made to Northern Ireland. When Quinn realized that Lindsey had
reservations because Rich and Green were fugitives—the pardon application
neglected to mention that they had renounced their citizenship—he followed up
with a letter to him on December 19: “Their failure to return to New York was
not a crime and no one has ever accused them of a crime for failing to come to
the US for a trial.” In an E-mail to Azulay, Quinn said he was working the White
House counsel’s office “pretty hard.” Meanwhile, at the Justice Department,
according to Roger Adams, the pardon attorney, “none of the regular procedures
were followed.” Quinn relied primarily on his friend Deputy Attorney General
Eric Holder, one of the highest-ranking African-Americans in the U.S.
government. Widely admired, Holder was someone seen to have a limitless future.
At that time he was sending Quinn résumés of people on his staff and asking for
his help in finding them jobs after Clinton left office. Between November 2000
and the night of January 19, Quinn wrote to and spoke with Holder several times.
First he told him he would be sending the pardon application directly to the
White House. In early January he called to say he hoped Holder would say
positive things about it to the president. Finally, on January 19, Quinn told
Holder he would be called by the White House counsel’s office about the pardon.
Holder later testified to Congress that the opinion he gave, “neutral, leaning
toward favorable,” was out of foreign-policy considerations, meaning it would
help Barak. He now says he never thought a pardon would be seriously
entertained. But at no time during this period did Holder ever attempt to notify
anyone at the Justice Department office or the Southern District of New York
about the application. Quinn also turned to his friend and business
associate Beth Dozoretz, a trustee of the Clinton Library who had proudly
visited the White House 96 times in the preceding two years. A perfect character
for a Washington novel, but one you couldn’t make up, the aggressively social,
thrice-married Dozoretz, a former New York Garment District executive, had come
out of nowhere to become finance chair of the Democratic National Committee (she
was later asked to resign) and have Bill Clinton be the godfather of her adopted
daughter in a Jewish naming ceremony blessed by a swami. After pledging to raise
$1 million for the library, she solicited $450,000 of the amount from her friend
Denise Rich. Dozoretz, who is married to a psychiatrist who has made a fortune
providing mental-health services through state contracts, frequently chats with
the president on her cell phone. Although there has been much speculation about
the real nature of Dozoretz’s relationship with Clinton, her husband, Ron
Dozoretz, says she is merely a pal, another shoulder Clinton could cry on after
Monica Lewinsky messed up his place in history, and nothing else. “I’d stake my
life on it,” Dozoretz says. With her customary can-do attitude, Beth
Dozoretz, who is friendly with the Barak family and serves on the executive
committee of the American Israel Public Affairs Committee, plunged into helping
her friend Denise’s very rich former husband. She seems to have been the final
arbiter on whether or not to enlist Hillary Clinton in the pardon effort. Denise
said no to the lawyers after an E-mail from Bob Fink to Jack Quinn revealed,
“Beth warned her not to raise the issue while HRC was in ear shot.” Then Quinn
E-mailed Azulay on January 10: “DR called from Aspen. Her friend B—who is with
her—got a call today from potus [president of the United States] who said he was
impressed by JQ’s last letter and that he wants to do it and is doing all
possible to turn around the WH counsels. DR thinks he sounds very positive but
‘that we have to keep praying.’ ” Denise Rich and Beth Dozoretz were both in
Aspen, but they were not staying together, and Dozoretz has claimed the
president did not mention the resistance of the White House counsels to her.
Nevertheless, she definitely queried the president about the pardon, and like
Denise Rich she has taken the Fifth Amendment before Congress, on “stuff Denise
has told her,” according to a friend. “The president on the phone to two girls
in Aspen? Come on,” a prominent Democratic senator says to me. “It has to be sex
or the library.” Denise Rich brought the pardon up with
President Clinton at least four times: in her letter, in a second copy of the
letter sent with a cover note written by Marc Rich’s attorneys for her
signature, in a phone call, and in a brief conversation at a party at the White
House on December 20. The
petitioners knew how seriously Clinton would take a major request made by Ehud
Barak on behalf of Marc Rich. At the end of his administration, Clinton was
pushing Barak—who was locked in a difficult election he was losing—to deliver a
Middle East peace agreement, which would burnish the Clinton legacy. In
addition, Hillary Clinton was newly elected as a senator from New York, where
the Jewish constituency has an outsize influence. Though Barak originally denied
that he had petitioned Clinton, he now admits to having spoken three times on
behalf of Rich. The greatest electoral gift Clinton could have
bestowed on Barak—probably over the dead body of U.S. intelligence—was a pardon
for convicted Israeli spy Jonathan Pollard, who is a cause célèbre in Israel.
Azulay and Quinn cleverly planted the seed in Clinton’s mind that if he couldn’t
give the Israelis Pollard he should give them Marc Rich. On January 3, Quinn
E-mailed Azulay, Fink, and Kathleen Behan, the other lawyer on the case, after
yet another conversation with White House counsel Beth Nolan, who would remain
skeptical about the Rich pardon to the end: “Lastly, I told her that, if they
pardon JP, then pardoning MR is easy, but that, if they do not pardon JP, then
they should pardon MR.” On January 4, Azulay sent the following message: “I am
convinced that the President is aware releasing JP will be a big problem with
the intelligence community and Mr. R can be included in this since less
attention will be paid to him.… If he says no to JP, then this is another reason
to say yes to Mr. R.” On January 19, the Clinton White House was in
chaos. Clinton, loath to leave, had not slept in days, and his primary concern
was working out a deal with the independent counsel’s office to stave off an
indictment over his perjured testimony in the Monica Lewinsky affair. Although
Podesta and Nolan and Lindsey all later testified to Congress that they had
opposed the Rich pardon, they certainly did not argue against it vigorously
after the president received a final call from Barak, which Clinton belatedly
spun as a deciding factor. Meanwhile, when the pardon attorney Roger Adams
called the White House counsel’s office, who should answer the phone and begin
discussing pardon issues but ex-staffer Cheryl Mills, who had been invited there
by Lindsey and who also attended a final Oval Office meeting on the disposition
of the Rich pardon. Late that night the White House heard from
Justice, following an F.B.I. criminal-record check, that there might be a
problem for Rich with arms dealing. Once again the president turned to Quinn,
who denied it. Clinton simply said, “Take Jack’s word.” In congressional hearings, members queried
Quinn about his representation of Rich to his old boss the president in a case
which ultimately made the president look bad. Shouldn’t Quinn have been more
loyal? And wasn’t Quinn stretching a “revolving-door” rule that he had helped
write which barred former presidential-staff members from lobbying the White
House for five years? Quinn, when pressed on this question, countered that he
didn’t believe he was violating his own rule—there was an exception for
“criminal proceedings.” Martin Auerbach, who prosecuted the Rich case in the
U.S. Attorney’s Office, recognized the classic Marc Rich strategy: “An important
piece of Rich’s success comes from information arbitrage—knowing something the
guy across the table doesn’t know and getting the guy to betray his primary
allegiance. In this case he gets Quinn to push the definition of lobbying,
because it’s in Marc’s best interests instead of the president’s best interests,
with a package giving only one side of the story. And he’s able to time it so
precisely that it can’t be checked. What Marc Rich finally figured out is, if
you attack the pardon process the same way you attack your business, you will
achieve the same result.” Morris Weinberg adds, “It’s really why [Rich and
Green] ran—because they thought money would always resolve everything. Now, 20
years later, it appears they’re right.” Denise
Rich at first appeared to deny any knowledge of the pardon, but then reversed
herself. Jack Quinn wasted no time in telling the press that his now former
friend Eric Holder had known all about the pardon, and Holder’s weak testimony
before Congress has dimmed his shining career. Like a deadly virus escaping from
a broken vial, the Rich pardon infected everyone who touched it. After Barak lost the election, the Pollard
forces were furious. “I am disgusted,” Esther Pollard, Jonathan’s wife, told
Kreitman in the Israeli daily Yediot Ahronot. “Ehud Barak took an active
role running Jonathan as a spy when he was head of Israel’s military
intelligence.” Pollard’s sister, Carol, tells me, “I wouldn’t even want to be
associated with that pardon list.” Carol Pollard says she was solicited for a
million dollars for a pardon for her brother—“no guarantees.” “Nobody in Israel
cares about an American tax cheat—nobody,” says Zev Chafets, an Israeli
columnist for the New York Daily News. “Those people prostituted
themselves.… Why in the world would anyone do anything for him except for
money?” Denise Rich will never be free of being known
as the ex-wife of an infamous fugitive, and her usefulness as a Democratic donor
and fund-raiser is probably over. Beth Dozoretz is leaving Democratic
fund-raising altogether. The State Department has not accepted Marc Rich’s
renunciation of his citizenship, so he faces serious tax investigations by the
state of New York and the I.R.S. for the last 17 years—a sum that could run to
hundreds of millions of dollars—should he ever set foot on U.S. soil again. He
will also probably have to litigate the issue of his citizenship. Leading
Democrats are outraged that Jack Quinn, who has said he got only $330,000 for
his efforts, has put the party and President Clinton in such a compromised
position. As for the Clintons, their stock has plummeted. The Rich and other
controversial pardons not only raised the specter of new investigations for them
but also ruined Hillary Clinton’s Senate debut and any chance she may have had
to run for president in 2004. Whether conduits, conspiracies, or quid pro
quos will ever be nailed down is doubtful. Marc Rich is far too shrewd ever to
have left a real money trail, and bribery is hard to prove. Therefore, while
President Clinton’s reasons for the pardon appear indefensible, perhaps one of
his closest advisers came near the truth when he told me, “He did it for
Denise.”
The Face of Scandal
Denise Rich is all about connections: her hit songwriting powered her
social aspirations, which powered her fund-raising. Marc Rich is defined
by his money, the kind of wealth that moves governments and transcends
borders. But despite their bitter divorce, Denise says, what drove her
to seek a pardon for her ex-husband from Bill Clinton was a deeply
personal tragedy—the death of their daughter. In interviews with Denise,
with Marc’s new wife, Gisela, and with the U.S. marshal who spent 14
years trying to bring the financier to justice, the author explores the
passions behind Clinton’s farewell scandal.
by Maureen Orth
June 2001
I
have a two-word answer: Denise Rich. —Senator
John McCain, asked about the need for campaign-finance reform.
played
a key role in persuading her friend Bill Clinton to pardon her fugitive
billionaire ex-husband, Marc Rich, the songwriter and political party
giver is blinded by flashbulbs at every event she attends, but she is
also bombarded with questions: Rich, who adores the attention, eagerly
wades right up to the lenses, flashing cleavage and major jewelry, and
firmly stays on message as if no brash questions had been asked: “I’m
just here to talk about my music.… Did you see my daughter’s fabulous
fashion show?” Meanwhile, behind the scenes, her entire existence is
“being turned upside down,” according to Brad Boles, her “imagist,” who
acts as her dresser, makeup man, and confidant. “She has lawyers
examining every inch of her life under a microscope,” he says. In
February she declined to appear before Congress, invoking the protection
of the Fifth Amendment against self-incrimination. In mid-April her
lawyer labored to work out a deal to have her cooperate with the office
of the U.S. attorney for the Southern District of New York, which is
investigating President Clinton’s 11th-hour pardons. In exchange for
limited immunity, Rich is now expected to appear before the grand jury.
She will also be called before the House Government Reform Committee.