The King of Oil: The Secret Lives of Marc Rich

Co. had fulfilled. The joint venture with Rich allowed Angola to become Africa’s second-largest oil-producing nation. “They knew nothing about the market. We taught them from the first step, no question. Afterward they were able to copy what we had done,” one of Rich’s directors told me. “We were the ones who gave them the key of knowledge.”
Jamaica Me Crazy
     
    There was a great sense of nervousness in the Jamaican department of Marc Rich + Co. in Zug on February 10, 1989. The charismatic politician Michael Manley had just been elected prime minister in Kingston. His socialist People’s National Party had won in a landslide, and Rich’s people were prepared for the worst. “We were waiting for Manley’s people to call and tell us to stay in Switzerland and not to come back to Jamaica,” said one of the traders who had feared for his future then. In those days Michael Manley was a hero of the European Left. The former union functionary cultivated an anti-imperialist rhetoric directedagainst the United States, and he openly admired Communist Cuba as a role model for his nation. One of the main themes of the election was the question of how Jamaica should handle its natural resources. The Ca rib be an island is one of the world’s largest producers of bauxite, the ore from which aluminum is won. Manley was highly critical of Jamaica’s cooperation with Marc Rich.
    Rich owed his reputation to the oil trade, but as we have seen, his company traded commodities from aluminum to zinc. Bauxite, aluminum oxide, and aluminum made up about a fourth of its income. Rich had been represented there for some years by his company Clarendon, which dealt directly with the Jamaican government. Manley’s People’s National Party had promised to stop all business with Rich and to closely reevaluate all existing government contracts with his company. Placards with photomontages were displayed at the party’s rallies depicting Marc Rich with blood on his hands. He was denounced as an archetypical exploiter and “foreign parasite.”
    Manley’s first appearance in the Jamaican parliament turned out to be a huge disappointment for Rich’s critics. He had made a mistake concerning “the Marc Rich matter,” Manley admitted during the budget debate of March 1989. His government would “of course” honor Jamaica’s contracts. 10 Rich’s critics around the world—particularly activists in the antiapartheid movement, a movement with which Manley was closely associated—were crestfallen. They had hoped that Manley would promptly turn his back on Rich. Why, they asked themselves, did Manley make such a staggering 180-degree turn?
    The simplest answer to this question was given to me by a banker who worked for Rich. “Marc Rich had saved Jamaica. He had bailed it out.” At that time, in spring 1989, officials from the International Monetary Fund (IMF) were in Kingston to inspect the government’s bookkeeping, and further IMF credit was dependent on the results of the inspection. The Ca rib be an island was as reliant on foreign loans as an addict is on his drug of choice. Jamaica was deep in debt, its balance of payments was heavily in the red, and the Jamaican dollar was steadilylosing value. In the spring of 1989 it looked as if Jamaica would flunk the inspectors’ test. Most significant, the country maintained lower currency reserves than the amounts stipulated by the IMF, which were intended to help Jamaica meet interest payments and obtain further loans. The new government was lacking45 million in hard currency, and it needed to find it fast; otherwise the IMF would stop the flow of credit into the country. Jamaica would then find itself unable to meet its payments—a development that would have devastating effects for the Jamaican economy and people.
    In the end, even socialist beggars can’t be choosers. Shortly after assuming office, Prime Minister Manley entered into talks with Clarendon’s managers. 11 They explored the idea of Rich helping Jamaica with a loan—and discovered they were preaching to the converted. The IMF forbade countries from borrowing money to cover their currency reserves, so a normal loan was out of the question. Rich’s people, however, believed the problem could be solved with a bit of “creative accounting.” They offered to give Jamaica the desperately needed45 million, but not as a loan. Instead, the money was intended as an advance payment on future aluminum oxide