The King of Oil: The Secret Lives of Marc Rich

authorization from the relevant governmental agency in Switzerland and would only have done business with Iraq with the explicit permission of the UN Sanctions Committee. In March 2008 the Office of the Attorney General of Switzerland came to the conclusion that, contrary to the report published in 2005 by the Independent Inquiry Committee intothe United Nations Oil-for-Food Programme, Rich’s company had not made “unauthorized payments” to Iraqi officials and was not guilty of any misconduct. 5 Although the accusations had made the headlines, only a few newspapers found the exoneration worthy of a few lines of print.
Marc Rich’s Departure
     
    By the end of 1992, eleven years after the Southern District of New York began its investigation, Rich’s image had taken a serious beating. His name had become a symbol for greedy and unscrupulous dealmakers. He had been indicted in the United States, and prosecutors pursued him all over the world. The U.S. Congress very publicly criticized his businesses. The172 million loss stemming from the failed zinc deal put him under additional financial pressure. He could no longer hide from the fact that his days as the company’s sole ruler had come to an end. “If something were to happen to Marc Rich, what would be the future of the company?” the bankers began to ask. Rich’s own traders also worried about the company’s future. “Many of us had the feeling that we might not be there the next day,” one of Rich’s traders told me. They began to pressure their boss to bring back Willy Strothotte. Although he was disliked for his arrogance, Strothotte had earned the traders’ respect. They felt that only he could stabilize the company.
    At first Rich resisted their pleas to reinstate the man who had previously tried to dethrone him, but many of the company’s senior traders threatened to leave. He was now faced with the twofold risk of losing even more good people who would most likely come back to haunt him as tough competitors. Many observers in those days were reminded of the events of 1974 when Marc Rich and Pinky Green left Philipp Brothers as a result of their own boss’s stubbornness. It was a move that had proved to be the beginning of the end for Rich’s former employer. However, Rich brought one of his greatest qualities to bear in the midst of these troubled times. According to his colleagues, Rich reacts betterthan most when faced with pressure. Even when he is personally affected, Rich is capable of sober analysis and rational action. He took the course of action that all good traders must take and put his emotions aside. He realized that he had made the wrong decision and that he now needed to—as a trader would say—turn the position.
    In early March 1993 Rich picked up the telephone and called Willy Strothotte, who was on a golfing vacation in Florida. “Come back,” Rich asked him. “I’ll come back,” Strothotte answered, “but on my terms.” Strothotte demanded that Rich give up his majority stake in the company. It was a condition that he had been prepared for—and accepted. Marc Rich was now ready to sell his life’s work. “I came to the point,” he says, “where I had enough.”
    It was a very cold and snowy day in Zug in November 1993. The thirty-nine most important people at Marc Rich + Co. crunched their way through the snow. They had traveled to Switzerland from all over the world for the meeting at the Parkhotel Zug. Willy Strothotte had summoned them all to inform them of the details of the management buyout and to vote on the future of the company. The takeover contract stipulated that Marc Rich would gradually reduce his majority stake in the company over several years. Management and high-ranking employees would in turn purchase Rich’s shares. Together with around two hundred of his employees, Rich signed the contract on November 29, 1993.
“I Was Weak”
     
    “I was weak,” Rich says about the sale of his company. It was as if he were describing a struggle in the animal kingdom. The old lion had been driven off by the younger challenger, and now the young lion had taken over the leadership of the pride. “I was weak and the others could sense it, so they took advantage,” he says and continues in German,
“Sie hielten mir das Messer an den Hals.”
“They held the knife to my throat.” Rich believes the most important reasons for his weakness were the indictment in the United States and the campaign of