Rich’s Pardon Handled Badly, Former Justice Official Says

A senior Clinton administration official acknowledged Thursday that his partial endorsement of the pardon of fugitive oil broker Marc Rich probably was a mistake as outrage in Congress deepened over former President Clinton’s controversial last-minute action.

Former Deputy Atty. Gen. Eric H. Holder Jr., testifying before the House Government Reform Committee, revealed that he told a White House lawyer the night before Clinton issued Rich’s pardon that he was “neutral, leaning toward [a] favorable” recommendation if it might help U.S. foreign policy.

Holder said he was “really struck” by the fact that then-Israeli Prime Minister Ehud Barak had weighed in heavily on behalf of a pardon for Rich, who is a citizen of Israel and has been a major donor to charitable causes there while living in exile in Switzerland.

Holder said that now, however, he realizes that he should have given much closer scrutiny to an 18-year-old tax-evasion case against Rich that is infamous in New York City legal and political circles but about which he knew very little.

“In hindsight . . . obviously, some bells should have gone off, some lights should have gone on,” he said. He added later: “Knowing everything that I now know, I would not recommend to the president that he grant the pardon.”

Holder, who likely would have become attorney general had Vice President Al Gore been elected president, was questioned relentlessly at the daylong hearing, the first official examination of the Rich pardon.

Lawmakers on both sides of the political aisle demanded to know why Clinton would have granted a pardon to a commodities broker living on the lam in Europe since 1983--and why senior Justice Department officials would have gone along with it without doing a standard review of all the facts.

They also wanted to know whether Jack Quinn, Rich’s attorney and a former counsel to the Clinton White House, exerted improper influence over Clinton in secretly lobbying for the pardon in the final days and weeks of the Clinton administration.

Republicans charged that politics and money drove the pardon, in large part because Rich’s former wife has donated about $1 million to Democratic causes and candidates.

Even Democrats--who complained that committee chairman Rep. Dan Burton (R-Ind.) has pursued a years-long political vendetta against Clinton--voiced outrage over the pardon.

Rep. Henry A. Waxman of Los Angeles, the ranking Democrat on the panel, said that Clinton showed “incredibly bad judgment” in pardoning Rich. Rep. Paul E. Kanjorski (D-Pa.) said he found the Justice Department’s handling of the matter “almost incredible.”

Democrats and Republicans also agreed on another central point: Because the pardon power granted the president by the Constitution is absolute, there is nothing that Congress can do.

“The Rich pardon is a bad precedent,” Waxman said. “It appears to set a double standard for the wealthy and powerful. And it is an end run around the judicial process.” But, he added, “under the current system, the president is allowed to make bad judgments that all of us disagree with when issuing pardons. That’s how the system works.”

As a result, lawmakers said that Thursday’s hearing was designed not to propose reforms but to shed light on a case that brought public outrage and marred Clinton’s exit from the White House.

But many of the committee members’ questions remained unanswered. Two White House advisors did not show up for the hearing and a lawyer for Denise Rich, a songwriter in New York City and the former fugitive’s ex-wife, told the committee earlier this week that she would not answer its questions about her Democratic contributions and whether they influenced her former husband’s pardon. Instead, she asserted her 5th Amendment privilege against self-incrimination.

Burton said he wants to give her immunity to testify, and he also may seek to subpoena additional witnesses in coming weeks to testify on other issues related to the pardon.

“Everything about it seems sleazy,” Rep. Christopher Shays (R-Conn.) said of the pardon. Rich “is a fugitive from justice who basically traded with the enemy,” he said, referring to Rich’s oil trading with Iran in violation of a U.S. embargo.

Under then-U.S. Atty. Rudolph W. Giuliani, federal prosecutors in New York indicted Rich and his partner, Pincus Green, in 1983 on charges of tax evasion, conspiracy and racketeering, accusing their commodities business of dodging $48 million in U.S. taxes earned in part through an illegal scheme to trade oil with Iran.

Shays asserted that Rich also traded in oil and other commodities with Libya, Iraq, South Africa and the former Soviet Union--reaping hundreds of millions of dollars--when the United States had trade embargoes against those countries.

But Quinn, who testified for nearly nine hours, offered a spirited defense of his client, who he said was the victim of “meritless” charges.

Giuliani and his prosecutors at the time--two of whom testified Thursday--brought an overly aggressive case and “constructed a legal house of cards,” Quinn said. He was particularly critical of Giuliani’s “misuse” of federal racketeering laws, saying that it went beyond the norm at the time and would never be allowed today.

Rich, who was in Europe when he was indicted, has not returned to the United States. He has renounced his U.S. citizenship and successfully fought extradition to this country from Israel and Switzerland. Asked by one lawmaker after another why Rich and Green did not return to the United States to fight the charges if their defense was so strong, Quinn said: “They were not willing to expose themselves to 300 years in jail.”

But Morris Weinberg Jr., one of the federal prosecutors who indicted Rich, offered the committee another explanation: Prosecutors had an ironclad case against Rich in what he called “the biggest tax-fraud case in the history of the United States.”

Weinberg called Quinn’s account of the case “preposterous.” He and a second prosecutor, Martin J. Auerbach, gave the committee a riveting account of their pursuit of Rich, telling how authorities intercepted two steamer trunks filled with corporate documents that had been subpoenaed in the case. Rich’s corporations ended up paying more than $200 million in fines, penalties and back taxes, but Clinton’s pardons ensure that neither Rich nor Green will ever have to stand trial on criminal charges.

Auerbach said that corrupt politics is to blame.

Quinn’s connections and the money donated to the Democrats by Denise Rich “gave Marc Rich the kind of extraordinary access to the White House and the ultimate decision-maker that virtually no one in the country . . . could have received,” he said.

Many committee members pressed Quinn about whether he had gone too far in exerting his influence in the case.

Quinn said there was no ethical conflict in representing Rich before Clinton because a five-year ban on executive branch lobbying and communication by former White House employees includes an exemption for judicial-related activities. He said that he discussed this exemption with the White House counsel’s office before speaking to Clinton about the matter.

Quinn said he was simply acting as an effective advocate for his client. Indeed, e-mail messages, letters and other documents collected by the committee show that Quinn and his fellow lawyers in the case mounted an aggressive behind-the-scenes lobbying campaign at the White House in recent months to demonstrate Rich’s good character and philanthropic ways.

Holder said that more than a year earlier he had tried to arrange a meeting with New York prosecutors to discuss a possible resolution to a case involving a client of Quinn’s named Marc Rich. But prosecutors, adamant that they would not plea bargain with a fugitive, refused. Holder said he had not heard of Rich, infuriating several members of the committee.

“Did you pick up the phone, call the CIA? They know who Marc Rich is,” said Rep. Bob Barr (R-Ga.).

White House Counsel Beth Nolan called him about the pardon on the last full day of the Clinton administration, Holder said, he was preoccupied with a host of other last-minute issues. Without much knowledge of the case, he said, he gave his “neutral, leaning toward favorable” recommendation to the White House.

“I wish there were things I would have done differently,” he said.