The King of Oil: The Secret Lives of Marc Rich

the Israeli-Palestinian conflict. He almost got his wish, as both sides were willing to make great compromises in the pursuit of peace. Never before had the two sides come closer to a comprehensive peace treaty—and they have never come as close since.
Rationally Right vs. Morally Bad
     
    Hardly any of Clinton’s other decisions in office were met with the same amount of extensive and prolonged criticism as his pardoning of Marc Rich. The decision raised hackles in nearly all corners of the nation, and the noise surrounding Holder’s confirmation as attorney general is proof that the controversy has not subsided. Yet hardly any politicians or journalists seem willing to seriously and impartially address the reasons for the pardon. Published reactions to the pardon reminded me of the oldsaying that journalists are like birds on a wire—if one flies away, they all fly away. The opinions were formed long ago: Marc Rich is a villain, and because he is a villain he should not have been pardoned. Seen from this perspective, it might just be true that only angels have a shot at grace. In the eyes of the public, Rich’s pardon was never really seen as rationally
wrong
—it was just morally
bad
. This type of criticism quickly gets bogged down at a moral level that does not allow for any form of counterargument.
    In retrospect it is not only true that President Clinton enjoyed the unlimited and absolute power of pardon that is guaranteed by the U.S. Constitution. It is also important to take Clinton’s words at their face value despite all of the attacks on his reputation: “I may have made a mistake, at least in the way I allowed the case to come to my attention, but I made the decision based on the merits.” 25 As I have illustrated in this chapter, Clinton had very good reasons—both political and juridical—for pardoning Marc Rich.
Tax Bargain
     
    On March 1, 2001, six weeks after Rich received his pardon, the New York Department of Taxation and Finance sent out the highest tax invoice it had ever issued, for137,827,781.90. It was addressed to Marc Rich, Kleinnaumatt 9, CH-6045 Meggen, Switzerland. “It is now time for him to pay the piper,” announced state tax commissioner Arthur Roth. 26 The State of New York was demanding26.9 million in back taxes for the years 1980 through 1982 plus13.5 million in penalties and97.4 million in accrued interest. The interest alone added up to20,000 per day. The delinquent taxes were based on the approximately100 million in oil profits that—from the State of New York’s point of view—Rich had failed to declare. Roth simultaneously froze5 million in a Citibank account belonging to Rich. He revealed his sense of humor by commenting, “Marc Rich is to asset concealment what Babe Ruth was to baseball.” No one seriously believed that Rich would ever pay off histax debts. For his part, Rich contested the state’s demands, claiming that he had already legally declared the profits in Switzerland.
    The New York revenue authorities were therefore rather surprised when Rich signaled via his lawyer that he was prepared to pay part of the debt. Ever the trader, he suggested they negotiate a sum. The New York Department of Taxation and Finance declared its willingness to negotiate—under the condition that the talks should remain a secret. To outsiders, the affair seemed to take a rather strange turn. The tax authorities, who were usually quite eager to comment on the most trivial of developments concerning Rich’s case, suddenly insisted on discretion. Could they have been embarrassed by the fact that they were negotiating a deal with the “biggest tax fraudster in the history of the United States”? Were they afraid of the public debate that might ensue if their pragmatic stance were to become widely known? Whatever the case, Rich was able to reach a good deal with the tax authorities. A tax collector confirmed to me that in November 2003 Rich transferred approximately3 million to the State of New York. No one at the New York Department of Taxation and Finance wished to officially comment on this sum for reasons of confidentiality. One of Rich’s lawyers said, “It would not be in Mr. Rich’s interest to violate an agreement [of confidentiality] he made with a government in the United States.” Naturally I wished to discuss the matter with Rich. “I paid even though the charge was completely unjustified,” Rich said. He confirmed the agreement with the New York tax