The King of Oil: The Secret Lives of Marc Rich

frequently flew to La Paz, the capital of a country torn apart by inner conflicts, civil wars, and revolutions. David Rich joined with partners in setting up Sidec Overseas (which exported agricultural products to the United States), a travel agency, and, in the late 1950s, the American Bolivian Bank, the country’s leading private bank.
His Biggest Influence
     
    “My father had a knack for success and an uncompromising work ethic,” says Marc Rich, and the admiration can still be heard in his voice. Thanks to his father’s increased income, they were able to move out of the cramped apartment and buy a redbrick house at 429 East Seventy-second Street in the late 1940s. It cost18,000 at the time (approximately160,000 in today’s money). 11 David Rich soon received a call from Eric“Maxie” Korngold, a distant cousin from the Bronx. Aware of David’s experience dealing in burlap bags, he suggested that he should start working for the Melrose Bag & Burlap Company. The Rich family moved to Forest Hills in Queens, a neighborhood with a traditionally large Jewish population.
    Within a few years the company had been transformed into a trading concern, and it later set up headquarters on Manhattan’s exclusive Sutton Place. Its main activity was importing Bengali jute to be used in the manufacture of burlap bags. David Rich once more demonstrated his perfect sense of timing, for the early 1950s was the best time to invest in jute: Troops from Communist North Korea crossed the 38th parallel into South Korea on June 25, 1950, thus marking the beginning of the Korean War. The United States and fifteen other foreign nations intervened with UN approval in order to repel the aggressors. The three-year war offered David Rich a stroke of luck. The army needed a large quantity of burlap for making sandbags, and demand outweighed supply. The Melrose Bag & Burlap Company hit the jackpot when it became a prime defense contractor.
    Marc Rich worked in his father’s office before and after school. The booming burlap business taught the teenager two lessons: Products can be sold for a better price when there is a shortage, and crises and wars can also offer business opportunities. Rich says his father gave him security when he needed it most, whether he was fleeing from Europe, in the Moroccan internment camp, or in the new and unknown world of the United States. His father was to remain his lifelong role model. Marc would always emulate him. He wanted to prove that he had really made it, even when he had already earned hundreds of millions of dollars. The desire to make his father proud would always be one of the driving forces in Marc Rich’s life.
    He also never forgot how his father achieved his success. He made contacts, established trust, worked hard, was reliable, and adjusted quickly to changing circumstances, and he had no qualms about seizing a business opportunity when he found one.
    Thanks to the family’s increasing prosperity, Marc Rich was able to leave Forest Hills High School and attend a private school in Manhattan. He presided over the French club at the private Rhodes Preparatory School, located at 11 West Fifty-fourth Street—a school that was later attended by Dan Brown, James Caan, and Robert De Niro. Rich graduated early in 1952, having skipped a year. At the age of eighteen he made a note of his dream job in his high school yearbook: business. His 1952 report card describes him as “purposeful,” “actively creative,” “strongly controlling,” “deeply and generally concerned,” “assumes much responsibility,” and “exceptionally stable.” 12
    He enrolled at New York University in fall 1952 to study marketing but soon realized that he wanted practical experience rather than theoretical learning. A German Jewish acquaintance of his father’s secured him a job interview at Philipp Brothers, then the world’s largest trader in raw materials. Rich could not have known that Philipp Brothers would provide him with what very few people ever succeed in finding: his vocation.

 

     

The
AMERICAN DREAM
     

    M
arc Rich had mixed feelings when he walked into Philipp Brothers headquarters for the first time in spring 1954. The building was situated on Pine Street, which runs parallel to Wall Street in Manhattan’s financial district. It was the year in which the French would lose the pivotal battle of Dien Bien Phu in Vietnam, and President Dwight D. Eisenhower would announce his domino