Marc Rich - U.S. Indictment and Controversial Pardon

U.S. Indictment and Controversial Pardon

In 1983 Rich and Green were indicted by then-U.S. Federal Prosecutor (and future mayor of New York City) Rudolph Giuliani, on illegal trading with Iran and charges of tax evasion. At the time it was the biggest tax evasion case in U.S. history. They were indicted while they were in Switzerland. The pair failed to return to the U.S. following the indictment, and were on the Federal Bureau of Investigation's Ten Most-Wanted Fugitives List for many years.

In 1989 the U.S. Justice Department ceased using statutes of the Racketeer Influenced and Corrupt Organizations Act in tax cases such as the one in which Rich and Green were indicted, and relied instead on civil lawsuits. However, Marc Rich remained on page 1 of the Justice Department's Most Wanted International Fugitives.

On 20 January 2001, hours before leaving office, Clinton granted Rich a presidential pardon

As Denise Rich had made large donations to the U.S. Democratic Party and the Clinton Library during Clinton's time in office, Clinton's critics alleged that Rich's pardon had been bought. Marc Rich had made substantial donations to Israeli charitable foundations. Clinton explained his decision by noting that similar situations were settled in civil, not criminal court, and cited clemency pleas from Israeli government officials, including then-Prime Minister Ehud Barak. Federal Prosecutor Mary Jo White was appointed to investigate. She stepped down before the investigation was finished and was replaced by James Comey. Comey was critical of Clinton's pardons and Eric Holder's pardon recommendation. According to Rich's attorney, Holder advised to circumvent standard procedures and to submit the pardon petition directly to the White House.

As a condition to the pardon, it was made clear that Rich would drop all procedural defenses against any civil actions brought against him by the U.S. upon his return there. That condition was consistent with the position that his alleged wrongdoing warranted only civil penalties, not criminal punishment. As of November 2010, Rich has not returned to the U.S. During hearings after Rich's pardon, Lewis "Scooter" Libby, who had represented Rich from 1985 until the spring of 2000, denied that Rich had violated the tax laws but criticized him for trading with Iran at a time when that country was holding U.S. hostages.

In his 18 February 2001 op-ed essay in The New York Times, Clinton (by then out of office) explained why he pardoned Rich, noting that U.S. tax professors Bernard Wolfman of the Harvard Law School and Martin Ginsburg of Georgetown University Law Center, concluded that no crime was committed, and that Rich's companies' tax-reporting position was reasonable. In the same essay Clinton listed Libby as one of three "distinguished Republican lawyers" who supported a pardon for Marc Rich.

Clinton's pardon was also supported by Spain's King Juan Carlos I. Speculation about another rationale for Rich's pardon involves his alleged involvement with the Israeli intelligence community. Rich claims he provided valuable information to the Mossad, Israel’s intelligence service.