Marc Rich

Marc Rich (born Marcell David Reich; December 18, 1934 – June 26, 2013) was a Belgian-American commodities trader, financier, and businessman. He founded the commodities company Glencore and was later indicted in the United States on federal charges of tax evasion, wire fraud, racketeering, and selling Iranian oil to Israel during the Iran hostage crisis. He fled to Switzerland at the time of the indictment and never returned to the United States.

He received a widely criticized presidential pardon from President Bill Clinton, on his last day in office. Rich had donated large sums to Israeli officials and organizations, which had pleaded extensively on his behalf. Rich's ex-wife Denise had also made donations to the Democratic Party.

Early life Rich was born in 1934 to a Jewish family in Antwerp, Belgium. In 1941 his parents emigrated with their son to the United States to escape the Nazis. They traveled via Vichy France, Spain, Portugal, and the liner Serpa Pinto.

His father opened a jewelry store in Kansas City, Missouri, then moved the family to Queens, New York City in 1950, where he started a company that imported Bengali jute to make burlap bags, and later started a business trading agricultural products and helped found the American Bolivian Bank (Banco Boliviano Americano S.A). He later attended New York University, but dropped out after one semester to work for Philipp Brothers (now known as Phibro LLC) in 1954 where he worked with Pincus Green.

Business career At Philipp Brothers, he eventually became a dealer in metals, learning about the international raw materials markets and commercial trading with poor, third world nations. He helped run the company's operations in Cuba, Bolivia, and Spain.

His tutelage under Philipp Brothers afforded Rich the opportunity to develop relationships with various dictatorial régimes and embargoed nations. Rich would later tell biographer Daniel Ammann that he had made his "most important and most profitable" business deals by violating international trade embargoes and doing business with the apartheid regime of South Africa. He also counted Fidel Castro's Cuba, Marxist Angola, the Nicaraguan Sandinistas, Muammar Gaddafi's Libya, Nicolae Ceaușescu's Romania, and Augusto Pinochet's Chile among the clients he served. According to Ammann, "he had no regrets whatsoever.... He used to say 'I deliver a service. People want to sell oil to me and other people wanted to buy oil from me. I am a businessman, not a politician.'" Iran would become Rich's most important supplier of crude oil for more than 15 years. Rich sold Iranian oil to Israel through a secret pipeline. Due to his good relationship with Iran and Ayatollah Khomeini, Rich helped give Mossad's agents contacts in Iran.

He popularised the use of letters of credit in the oil trade.

His real estate company, Marc Rich Real Estate GmbH, was involved in large developer projects (e.g., in Prague, Czech Republic). Rich and Marvin Davis bought 20th Century Fox in 1981. Due to the indictment filed against Rich for violating U.S. trade sanctions against his deals with Iran while Rich was living in Switzerland, his assets including his holding in 20th Century Fox were frozen. Davis was permitted by authorities to purchase Rich's holding and subsequently sold this to Rupert Murdoch for $232 million during March 1984.

Business Insider reported Rich had an estimated net worth of US$2.5 billion.

U.S. indictment and pardon

In 1983, Rich and partner Pincus Green were indicted on 65 criminal counts, including income tax evasion, wire fraud, racketeering, and trading with Iran during the oil embargo (at a time when Iranian revolutionaries were still holding American citizens hostage).

Learning of the plans for the indictment, Rich fled Rich's companies eventually pleaded guilty to 35 counts of tax evasion and paid $90 million in fines, narrowly evading capture in Britain, Germany, Finland, and Jamaica.

On January 20, 2001, hours before leaving office, U.S. President Bill Clinton granted Rich a controversial presidential pardon. (According to a House Committee on Government Reform report, however, "The arguments made by Garment, [William Bradford] Reynolds and Libby [in their testimony] focused on the claim that Rudy Giuliani of the SDNY was criminalizing what should have been a civil tax case.) They did not make, compile, or in any other way lay the groundwork for, or make a case for a Presidential pardon. When former President Clinton stated that they 'reviewed and advocated' 'the case for the pardons,' he suggested that they were somehow involved in arguing that Rich and Green should receive pardons. This was completely untrue". (p. 162) Former President Jimmy Carter, a fellow Democrat, said, "I don't think there is any doubt that some of the factors in his pardon were attributable to his large gifts. In my opinion, that was disgraceful." Clinton himself later expressed regret for issuing the pardon, saying that "it wasn't worth the damage to my reputation." to Clinton's political party (the Democratic Party), including more than $100,000 to the Senate campaign of the president's wife, Hillary Rodham Clinton, and $450,000 to the Clinton Library foundation during Clinton's time in office.

Clinton also cited clemency pleas he had received from Israeli government officials, including then-Prime Minister Ehud Barak. Rich had made substantial donations to Israeli charitable foundations over the years, and many senior Israeli officials, such as Shimon Peres and Ehud Olmert, argued on his behalf behind the scenes. Many leading figures of the Jewish world such as Abraham Foxman, the head of the Anti-Defamation League (ADL), whose organization had received over $250,000 from Rich over the years also wrote to President Clinton for Rich's pardon. Among other leading Jewish leaders writing to Clinton were Shlomo Ben-Ami, Israel's former foreign minister; Michael Steinhardt, a philanthropist and CEO of Steinhardt Associates; and Rabbi Irving Greenberg, chairman of the United States Holocaust Memorial Council, which oversees the U.S. Holocaust Memorial Museum. Although none of the figures other than Foxman were investigated for their support of Rich's pardon, He made similar comments off camera to CNBC's Geraldo Rivera that "Israel did influence me profoundly". Rich reluctantly acknowledged in interviews with his biographer, Daniel Ammann, that he had assisted the Mossad, Israel's intelligence service, who he said had routinely allowed intelligence agents to use his offices around the world. She stepped down before the investigation was finished and was replaced by James Comey, who was critical of Clinton's pardons and of then-Deputy Attorney General Eric Holder's pardon recommendation. Rich's lawyer, Jack Quinn, had previously been Clinton's White House Counsel and chief of staff to Clinton's vice president, Al Gore, and had had a close relationship with Holder. (Holder, however, during his Senate confirmation hearing to become Attorney General in 2009, denied that he had attempted to circumvent the standard procedures for consideration of presidential pardons.) Holder did say that he had "made mistakes" and "made assumptions that turned out not to be true" while managing the pardon request. Federal investigators ultimately found no evidence of criminal activity.

In a February 18, 2001, op-ed essay in The New York Times, Clinton (by then out of office) explained why he had pardoned Rich, noting that U.S. tax professors Bernard Wolfman of the Harvard Law School and Martin Ginsburg of Georgetown University Law Center had concluded that no crime had been committed, and that Rich's companies' tax-reporting position had been reasonable.

A New York Times editorial called the Marc Rich pardon "a shocking abuse of presidential power."

On November 1, 2016, the FBI released documents related to the pardon, stating it was an FOIA release.

Paradise Papers On November 5, 2017, the Paradise Papers, a set of confidential electronic documents relating to offshore investment, revealed that the Appleby law firm had worked for Rich and Glencore on major projects in the past, even after his indictment in 1983.

Legacy Glencore International AG was a corporate successor to "Marc Rich + Co AG." At the end of 1993, Rich lost control of the company when a disastrous attempt to corner the world zinc market led to a number of the Rich Boys insisting he give up his majority stake. After a management buyout, Marc Rich + Co was renamed Glencore on 1 September 1994.

Ivan Glasenberg was appointed chief executive in 2002. Glencore merged in 2013 with Xstrata (formerly Südelektra Holding AG) to become Glencore Xstrata, headquartered in Baar, Switzerland. Until the 2011 Glencore IPO, and the Glencore/Xstrata merger of 2013, Glencore was run as a private partnership. Following the merger, Glencore's website says that the company was founded in 1974 as Marc Rich + Co AG, and also refers to the management buyout from Marc Rich in 1993. In 2001, the Zug based Crown Resources AG, which is associated with Alfa Group, merged with the Zug-based Marc Rich & Co. Investment AG (MRI), which is the Swiss-based commodities trading arm of the Marc Rich Holding company, to create a commodities trading house. Trafigura Beheer BV, based in Netherlands, is another corporate successor, though not ever owned or directly managed by Rich. It was created in March 1993, the name acquired from an existing company registered in Amsterdam. Its founding partners, alongside Claude Dauphin, were former Marc Rich top brass. Trafigura AG is now the main office, and is located in Geneva, Switzerland.

Citizenship Although Rich believed that he had relinquished his United States citizenship when he became a citizen of Spain, an appeals court ruled in 1991 that, for purposes of U.S. law, Rich remained a citizen and therefore was still subject to U.S. income taxes. He also held Belgian, Bolivian, Israeli, and Spanish passports.

In 1985, Rich helped with the compensation to the families of the Israeli victims of the Ras Burqa massacre in the Sinai. He contributed tens of millions of dollars for the absorption of Jewish immigrants from Ethiopia and Russia, he contributed to Project Discovery, he founded the museum wing for Israeli and international art in the name of his late daughter Gabriela, he contributed to the establishment of the new building of the Tel Aviv Cinematheque called "Marc Rich Israeli Cinema Center," and the establishment of the main library at IDC Herzliya University, which bears his name. Rich was also an advocate for coexistence between Israelis and the Palestinians, establishing health and education programs in the West Bank and Gaza, as well as by fulfilling his commitment to making President's Conference contributions each year. Rich also contributed to the Center for Sloan-Catherine, The Medical Research Center at Yale University, The Rabin Medical Center, and the center of the Dana Farber Cancer Institute.

Rich created the Rich Foundation, one of the largest funds operating in Israel, which has invested more than $135 million in the last two decades. The fund was established with the assistance of Avner Azulay, who wrote to Clinton for the Rich pardon, Rich's ex-wife Denise, and his business partners, Elka Acle and Pincus Green. The fund has contributed over the years to cultural, educational, and other Israeli programs in support of Humanities and Social Sciences at Tel Aviv University, the Israel Philharmonic Orchestra, the Tel Aviv Cinematheque, the city of Beersheba, the Reichman University, the Shaare Zedek Medical Center, the Beit Berl settlement, the Tel Aviv Museum of Art, and the Israel Museum. Rich also financed the construction of the Bioengineering building at Bar Ilan University. He received the same honor from Ben-Gurion University of the Negev, Beersheba, Israel, on 18 November 2007. The Chaim Sheba Medical Center at Tel Hashomer in suburban Tel Aviv, Israel, honored Rich with the Sheba Humanitarian Award 2008. Former recipients of this award include actor Michael Douglas, actress Elizabeth Taylor, and former U.S. President Gerald R. Ford.

Personal life In 1966, Rich married Denise Eisenberg, a songwriter and heir to a New England shoe manufacturing fortune. They had three children, one of whom, Gabrielle Rich Aouad, was diagnosed with leukemia and died in Seattle aged 27, in 1996, reportedly never having been visited by her father while in treatment due to the likelihood of him being arrested if he had come to the United States. Marc Rich and Denise divorced in 1996; she continued to use the name Denise Rich. Six months later, he married German-born Italian widow Gisela Rossi; they divorced in 2005.

Rich died of a stroke on June 26, 2013, at a Lucerne hospital. He was 78 and survived by two daughters, Ilona Schachter-Rich and Danielle Kilstock-Rich. His body was buried in Israel.