Marc Rich: Trading king and pardoned fugitive
1934-2013
MARC Rich, who has died aged 79, was the godfather of global commodity trading — and for many years a fugitive from US justice, until he was granted a pardon in the last act of Bill Clinton’s presidency.
In the early 1970s, Rich pioneered large-scale speculative buying and selling in the spot market for crude oil — “spot” meaning for immediate rather than future delivery. Contacts with the royal family of Iran enabled him to acquire huge quantities of Iranian oil in anticipation of the Opec embargo in 1973, which precipitated a tripling of the barrel price.
The potential winnings were enormous, but Rich’s then-employer, the New York trading firm of Philipp Bros, could not stomach such exposures and was not prepared to pay him what he felt he deserved.
The following year he and two colleagues left to set up on their own in the minimally taxed Swiss town of Zug. Within two years they were said to have made more than $300-million profit.
They proceeded to sell large shipments of oil to the sanctioned apartheid regime in South Africa and do business with other unsavoury regimes of the era, from Romania to Chile. There were later allegations that Rich might also have been involved in arms dealing. After the revolution in Tehran in 1979 and the subsequent taking of American hostages, his firm defied a US ban on oil trading with the regime of Ayatollah Khomeini and continued buying through a complex veil of companies. In 1983, this provoked an indictment from US federal prosecutor Rudy Giuliani (later mayor of New York), accusing Rich of evading about $48-million of taxes as well as trading illegally. Rich had already left for Switzerland and refused to return to face the charges. He was placed on the justice department’s “most wanted” list and several times narrowly avoided arrest while travelling between havens in Switzerland, Spain and Israel.
He eventually paid his US tax bill with penalties, but remained a wanted man for his Iranian dealings. In 2000, he hired highly placed Washington lawyers to try to negotiate a settlement — and they in turn approached Rich’s ex-wife, Denise, a donor to Democrat causes, hoping she might approach the president.
In November 2000, at a fundraiser for a cancer charity set up in memory of the Riches’ daughter Gabrielle, Denise presented Clinton with a golden saxophone. And later, at his White House farewell dinner, she was reported to have whispered in the presidential ear that “a pardon would mean a lot to me”.
Hours before leaving office in January 2001, Clinton obliged. He later explained that the outstanding allegations against Rich were, in his view, civil rather than criminal matters and that he had received pleas in Rich’s favour from, among others, the Israeli government. Colourful theories continued to surround both the circumstances of the pardon — which former President Jimmy Carter called “disgraceful” — and the full breadth of Rich’s business dealings. He never returned to the US.
Marcell David Reich was born on December 18 1934 in Antwerp, Belgium, where his father, David, was a door-todoor peddler. After the outbreak of World War 2 the family fled to America. They opened a jewellery store in Kansas City and later moved to New York.
Rich was educated at Rhodes Preparatory School in Manhattan and New York University, but he dropped out to take a job with Philipp Bros, then the leading trader of industrial metal commodities.
In 1966 he married Denise Eisenberg, the heiress to a shoe manufacturing fortune and later a successful writer of pop songs.
After Rich’s hasty exit from the US, the couple’s Swiss mansion was adorned with works by Picasso, Renoir and Van Gogh and they became prominent patrons of high culture.
What Denise once called “a fairytale marriage” produced three daughters. She spoke of her husband as a “loving, humane man” and not the “capitalist monster” of his international media image.
That was before he took up, in 1989, with a German-born wid- ow, Gisela Rossi. Denise’s response was ferocious: divorce proceedings culminated in 1996 in a rumoured settlement of $200-million. When asked why she was later prepared to intervene with Clinton on her ex-husband’s behalf, Denise replied: “All I thought at the time was, OK, he’s the father of my children. I’ll do it.”
Rich had by then sold his interest in his original business, Marc Rich & Co. The firm’s oiltrading activity evolved into a new venture called Trafigura, which remains a dominant player in that market. Its metals and soft commodities business, renamed Glencore, recently merged with the coal-mining group Xstrata, in which Rich was also an early investor. Relations between Rich and the management of Glencore were strained and for some years he ran a new business in direct competition.
In semi-retirement, Rich managed his $2.5-billion fortune through a private Swiss company. He made large donations to Israel — where he received several honorary awards and where he will be buried. — © The Daily Telegraph, London