The King of Oil: The Secret Lives of Marc Rich

to prefinance production in several countries. In return it was rewarded with exclusive, long-term contracts. It was a policy that Marc Rich would later hone to perfection. (See Chapter 14 .)
    The revolution’s leaders froze one such loan that Philipp Brothers had made to Cuba—a substantial loan of1.2 million for a pyrite mine. To put it in context, Philipp Brothers recorded6 million in pretax profit in 1959. What was to be done? Rothschild immediately suggested sending his young assistant Marc Rich to Havana. The company had a tradition of placing significant trust in young employees and assigning them to extremely difficult tasks. Rich was familiar with the Latin American mentality and by now spoke fluent Spanish.
    So the twenty-four-year-old Rich flew to Havana shortly after the revolution in order to negotiate with the new regime. The ensuing talks were to drag on for six months. His negotiating style was determined yet civil. He used all the tricks in the wily trader’s book. He knew that he had to find a solution that was agreeable to both sides. “It’s only a good deal when the two signatories are laughing together at the table. That’s the only way a partnership can have any future. Otherwise it’s the only deal you’ll make,” he explained to me.
    Rich analyzed the situation. What did Castro and his government need most of all? They needed hard currency. They needed international contacts. They needed jobs. Castro must want to continue production at the pyrite mine, which would both ensure jobs and bring currency into the country. Rich thus devised a creative solution that initially appeared foolhardy. “I offered to inject fresh money,” he tells me on a ski lift between descents in St. Moritz. “The Cubans liked the idea. It allowed them to continue with the pyrite mine. I was able to recover the entire amount of our initial investment.”
    Castro aroused a great deal of sympathy at the start of the revolution, even in the United States. In contrast to Che Guevara, whom Rich remembers as “energetic and lively,” he did not behave like an orthodox Marxist or a friend of the Communist Soviet Union. Yet the regimesoon revealed its ideological inflexibility. Rich grew increasingly skeptical as he witnessed political developments in Cuba with his own eyes. “I don’t understand why they became Communists,” he tells me on the ski lift. “OK, they wanted to change what the corrupt Batista regime had done, but I saw how the Communists took over everything with an iron fist. There was virtually no opposition; people just accepted it.” He shakes his head in disbelief and repeats, “I don’t understand how they got taken in by Communism. It was so bad for people.”
    “Cuba really put Marc Rich to the test,” an acquaintance told me. “What can he do, what can’t he do. Does he have ideas? Is he creative? Can he handle the pressure?” Rich’s critics place the emphasis elsewhere. Biographer A. Craig Copetas quotes an anonymous “former traffic manager” who was supposed to have said, “Marc cut his teeth in Havana, and the experience shaped his character because it taught him that being illegal was okay under certain conditions.” 3
    Despite the embargo, Rich never stopped trading with the Cuban regime. The Cohiba cigars he smokes with such pleasure are not the only evidence of this. Rich flew regularly to Havana until the February 1962 trade embargo. Cuban business was subsequently conducted via the Madrid office. The most important raw materials Rich traded with Cuba up to the mid-1990s were initially pyrite and copper. These were followed by manganese ore—important for steel production—and nickel. His company later bought sugar from Cuba and delivered Venezuelan or Russian oil. Rich once even chartered the
Monviso,
the same freighter on which he had escaped with his parents from France to Morocco, to transport pyrite from Cuba to Italy. In 1991 a Cuban defector claimed that Rich’s company had conducted negotiations with Fidel Castro’s son about mining uranium in Cuba. 4 Rich denies this claim and maintains the talks revolved solely around lead and zinc deposits.
    After Cuba, Rich was the man to watch at Philipp Brothers; he was the company’s rising star. Over the next few years he moved around the globe, staying six months in India, six months in Amsterdam, always on the lookout for a deal as he traveled from Congo-Brazzaville to Senegal (“Therewasn’t a lot of