Marc Rich Spills His Secrets
The fugitive financier’s biographer talks to Allan Dodds Frank about Rich’s global commodities empire, his connection to U.S. intelligence, and how he bribed world leaders.
Everyone has a favorite fugitive. Hollywood loves Roman Polanski; the Taliban worship Osama bin Laden. For me and dozens of other reporters who have intermittently chased Marc Rich over the last three decades, the commodities trader has been the man most tantalizingly on the lam.
Now comes the journalistic coup by Daniel Ammann, an intrepid Swiss business journalist who, after years of trying to interview Rich, sits down, writes him a long letter full of loaded questions, and astonishingly convinces Rich to be interviewed at length—on the record—for The King of Oil: The Secret Lives of Marc Rich. Much of Rich’s story has long been suspected, but hard to prove.
“When it comes to business, I don’t think Marc Rich has any regrets,” says Ammann of the trader who never met a head of state he believed was incorruptible. “If you are too proud,” Rich told Ammann, “you don’t do business.”
He now reveals that Rich kept Israel alive through boycotts by supplying the country with oil, much of it from its archenemies in Iran. “In the end, it was Marc Rich buying Iranian oil and selling it to Israel and South Africa,” says Ammann.
Rich is now 74, so for those who are too young to remember him, let’s just say he was one of the world’s smoothest and greatest villains. Right down to his Cuban Cohiba cigar and love for a special Spanish red wine, Rich—an American Jewish immigrant with at least three passports—was the kind of guy James Bond might have pursued… if Rich hadn’t already had Bond on the payroll.
In this era of “Big Get” celebrity interviews passing for scoops, almost nothing compares to Ammann convincing Rich to give him more than 30 hours of interviews, access to colleagues and a series of what appear to be straightforward, on-the-record answers to tough questions. Ammann, business editor of the Swiss weekly Die Weltwoche, approached Rich as a business and organizational genius. Rich told him how his trading globalized commodities and created the world market in spot oil trading by writing the rules himself.
Without remorse, the billionaire fugitive acknowledges bribing numerous heads of state, routinely breaking international embargoes, and feeding espionage tips to intelligence agencies here and abroad. Ammann’s genius is listening closely while seemingly accepting Rich’s contention everything he did was legal.
As Ammann explained to The Daily Beast over a steak-and-potatoes lunch, Rich believes “business is neutral.” That means Rich behaves as though business has no politics, because he believes no politician comes without a business agenda: his own price for awarding his country’s business.
Thanks to Ammann, we now understand how one man’s company could single-handedly and secretly smuggle enough oil out of Iran and into Israel and South Africa in the 1970s and 1980s to make all three pariah regimes happy and leave the rest of the world fuming.
Let me refresh your recollection about Rich’s importance in the United States. Bill Clinton on his last day as president pardoned Rich and his partner Pincus Green, fugitive billionaire commodities traders who had fled prosecution in the largest tax evasion and fraud case in U.S. history. The two men had set up their own business in 1974 and hit it big after becoming trading legends at Philipp Brothers, the commodities unit of Salomon Brothers on Wall Street.
Rich had roiled the United States by secretly enabling Iran to sell its oil after its new regime had seized the American Embassy and 53 hostages in 1979.
After two years under Justice Department investigation, Rich and Green, who handled the logistics of shipping commodities, decided to flee the United States in 1983. Shortly thereafter, they were indicted on 51 counts, including “trading with the enemy” and evading taxes on more than $100 million of oil trading. Rich claimed his Swiss company had structured the deals legally to circumvent complicated U.S. oil price controls.
By the time the pardon came from Clinton, Rich had been hiding out in plain sight in Zug, Switzerland, for 17 years. He almost never talked to reporters, although Brian Ross—then of NBC News—managed a brief on-camera chat in 1992 after catching Rich on the ski slopes of St. Moritz.
The prosecutor in New York was by then U.S. Attorney—soon to be New York Mayor—Rudolph Giuliani. Ammann says Giuliani, who declined to be interviewed for his book, blew a chance to get the Swiss government to arrest Rich, an assertion made to the author by a Swiss official who says he was ready to help. (Giuliani’s office declined repeated requests from The Daily Beast for comment.)
Ammann says Rich badly underestimated his ability to wiggle out of trouble in this case, even after his company paid $171 million to settle the charges it also faced. Otherwise, says Ammann, Rich had fantastic information, since his company had a better intelligence network than most governments did.
“The biggest advantage of Marc Rich and his company is that they were on the spot,” says Ammann. “They weren’t dealing from the U.S. or Switzerland. They were on the spot. Let’s say Iran after the 1979 revolution. They were there. In Angola, Cuba, Jamaica, South Africa. There were always his people working with the local authorities. The commodity trade is often done by governments so they really had the best contacts imaginable.”
When Rich was paying big bribes to buy and sell the stores of commodities from entire nations, he made sure he was paying off all the right people and depositing the money into all the right offshore bank accounts for those people, all the time. No wonder Mossad, the CIA, the KGB, and countless other intelligence agencies considered information from Rich’s network to be solid gold.
Amman says that while Clinton’s pardon was thought to be triggered by more than $1.5 million in contributions Rich’s ex-wife Denise spread around, it is more likely that pleas for clemency for Rich from Ehud Barak and Shimon Peres of Israel were more influential.
Another factor: secret help Rich may have given U.S. intelligence. Ammann says that was one of the few areas where Rich declined to answer questions: “He did not want to tell with whom he cooperated within the U.S. authorities or which branch of the U.S. government he supplied with intelligence.”
Reading Ammann gives one the mind-boggling scale of Rich’s business. Just arranging to get oil to South Africa from Iran and Russia during apartheid, Rich made $2 billion, Ammann estimates. He now reveals that Rich kept Israel alive through boycotts by supplying the country with oil, much of it from its archenemy Iran. “In the end, it was Marc Rich buying Iranian oil and selling it to Israel and South Africa” says Ammann. “Rich confirmed to me that the Iranian government perfectly knew about it and they didn’t care…Behind the scenes, they just wanted to sell their oil. They didn’t care where it was going.”
Ammann explains: “Rich was the very needed and useful intermediary. He was the one who brought their oil to the customer and converted it into foreign currencies. I really think they needed him as much as he needed them. This is sort of the principle of trading.”
(Although I covered Rich nonstop, my most important piece was a Forbes story about Rich cornering the world’s aluminum market after securing a hold on Jamaica’s ore supply. Now that Michael Manley is dead, I can reveal that he was my primary source for that story; he had denounced the deal before being elected as Jamaica’s prime minister and then claimed he held his nose as he was forced by his country’s economic circumstances to deal with Rich. See Amman’s take on pages 185-87.)
I hope Ammann will pursue more long sitdowns with Rich about his role in the collapse of the Soviet Union. To me the great untold story remains Rich’s role in the great commodities grab in Russia and the creation of the oligarch class.
Allan Dodds Frank is a business investigative correspondent who specializes in white collar crime. He also is president of the Overseas Press Club of America.