Clinton Pardons a Billionaire Fugitive, and Questions Abound

NEW YORK —  It has become the most controversial--and mysterious--of President Clinton’s last-minute pardons: Marc Rich, a fugitive commodities trader indicted in 1983 on charges of massive tax fraud and illegal oil trading with Iran, is now free from prosecution after 17 years on the lam.

But why would a billionaire who thumbed his nose at the U.S. justice system, a businessman facing more than 300 years in prison, receive such largess? On the surface, critics charge, the pardon was a classic case of high-level connections and fat political contributions trumping justice.

Clinton confirmed over the weekend that former White House counsel Jack Quinn--who also at one time served as Al Gore’s chief of staff--lobbied him on Rich’s behalf. Normally, people seeking presidential pardons file petitions with the Justice Department, which screens them and makes recommendations. But Rich’s case was brought directly to Clinton’s attention by Quinn.

Moreover, Rich’s former wife, Denise, has given $867,000 to various Democratic Party committees since 1993--including $7,000 to Hillary Rodham Clinton and her Senate campaign committee. During his years abroad, Marc Rich has given more than $200 million to a host of charities, many in Israel. Prime Minister Ehud Barak also reportedly made a call to Clinton on Rich’s behalf.

“I’ve seen political situations that stink to high heaven, and this stinks more than most,” said Donald Alexander, a Washington attorney and former Internal Revenue Service commissioner. “This guy is a fugitive. He never stood trial. And the man who got him pardoned helped the president in a big way.”

In New York, U.S. Atty. Mary Jo White refused to comment specifically on Clinton’s last-minute pardon of Rich and his former business partner Pincus Green. But White, whose jurisdiction originally brought charges against Rich, did say that she was not aware that Clinton had been considering his appeal and added: “The facts of several of these cases in particular raise significant law enforcement concerns. The seriousness of the case is diminished, and the fact and the appearance of evenhanded justice is compromised.”

Rich’s defenders suggest that the case against him was unfair to begin with--blown out of proportion by then-U.S. Atty. Rudolph W. Giuliani, now the mayor of New York. They argue that Rich did not evade about $48 million in income taxes over oil profits, as the government charged, because his business entities were foreign corporations not subject to U.S. law.

Furthermore, they point out that his company had agreed to pay the government $150 million in fines before Rich fled the country. With the pardon, according to Rich attorney Robert Fink, there are no further charges pending against the financier and he is free to come and go. It is not clear, however, whether the 67-year-old Rich will return to the United States.

Quinn was not available for comment.

Rich’s pardon has generated a firestorm of media criticism, with newspaper editorials from coast to coast questioning Clinton’s action. And Giuliani, who framed the case against the financier, has blasted the pardon, saying it would be appropriate for Congress to examine how it was granted.

“I’m shocked. I just don’t understand a pardon for someone like this,” the mayor said. Clinton simply “wiped away” Rich’s documented tax evasion, Giuliani said, adding that Rich’s “family members raised enormous amounts of money for the president.”

As the controversy grows, Clinton himself has offered few details. Asked by reporters outside a Chappaqua, N.Y., deli this week to explain the pardon, the former president said only that the matter was “unusual,” adding: “Quinn made a strong case, and I would suggest he was right on the merits.”

The pardon has rekindled interest in the reclusive Rich, a Holocaust refugee from Belgium whose father made burlap bags in New York. In an incredible rags-to-riches story, the financier quickly rose in the world of commodities trading, to the point where his personal wealth has been estimated at several billion dollars. Ever since his flight to Switzerland, which does not grant U.S. extradition requests in tax evasion cases, he has lived a luxurious life. His far-flung trading operations, headquartered in the small town of Zug, have been estimated to generate $30 billion annually.

Meanwhile, Denise Rich also has come under intense scrutiny. A spokesman for the prominent New York socialite and successful pop songwriter earlier this week suggested she had nothing to do with the pardon. Following published statements by Marc Rich’s lawyer that she had in fact sent a letter to Clinton urging him to pardon her former husband, another publicist, Howard Rubenstein, confirmed the fact.

“Denise Rich is happy for her children that her ex-husband has been pardoned,” Rubenstein said in a prepared statement. “Of course, she supported his application. She knew about it. She supported it.”

Still, there is no love lost between the feuding couple. During a messy 1986 divorce in Switzerland, amid disclosures that Marc Rich had been carrying on affairs, Denise Rich told a magazine: “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.”

Since the divorce, Denise Rich has had a meteoric career, penning successful songs such as “Frankie” by Sister Sledge, “Don’t Waste Your Time” by Aretha Franklin and Mary J. Blige, plus other songs for artists including Celine Dion, Marc Anthony, Diana Ross, Donna Summer and many others.

She has refused to comment on the pardon but is not shrinking from the limelight. On Monday, Rich and a star-studded group of New York and Hollywood celebrities--including Caroline Kennedy Schlossberg--will host a lavish “welcome home” party at her Fifth Avenue penthouse for Andrew Cuomo, Clinton’s secretary of Housing and Urban Development who reportedly is planning to run for governor of New York.

Although the party is not a fund-raiser, Denise Rich’s past activities have heightened questions about whether her largess spurred Clinton’s pardon.

“I’ve worked with Denise for 10 years, and I don’t believe that for a second,” said Bobby Zarem, a well-known New York publicist. “There has been no close personal relationship between [Marc and Denise] for years. And I just don’t think she would ask for this pardon in exchange for what she’s done for the Democratic Party.”

Zarem conceded that Denise Rich had signed a letter urging the president to pardon her former husband, but added: “She was asked to sign that letter with a lot of people who were requesting it. And she probably thought it would be a nicer thing if he were forgiven, instead of not being forgiven.”

Others wonder whether it is really that simple. “Here’s a man who never accepted responsibility for his actions, who fled the United States, fled a criminal trial and hid out in a foreign country,” said former Securities and Exchange Commission commissioner Rick Roberts. “Unlike Michael Milken, Mr. Rich did not own up to what he had done. Yet he got a pardon and Mr. Milken did not. I don’t get it. This troubles me very deeply.”

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Times researcher Sunny Kaplan in Washington contributed to this story.