Unpardonable: Holder’s Marc Rich Shuffle
The AG nominee's 1995 lawsuit refutes his claims of ignorance about the fugitive.


Andrew C. McCarthy

On April 13, 1995, the Wall Street Journal reported Holder’s announcement that his office had obtained a settlement from a Swiss trading company called Clarendon Ltd. Rich had maintained a significant ownership interest in Clarendon, but the company had falsely represented to the government that none of its principals was disqualified from federal contracts. By concealing its link to Rich, Clarendon had induced the government to purchase its wares–coinage metal for the U.S. mint. When Holder’s office found out about Rich’s chicanery, it filed civil charges. The settlement of those charges, Holder told the Journal, ended a broader investigation his office had been conducting into Rich’s business interests.

The civil complaint filed by Holder’s office exudes familiarity with Rich. It recounts that the financier and his partners operated Switzerland-based commodity trading concerns, led by Marc Rich & Company AG (MRAG). MRAG did business in New York City through its wholly-owned subsidiary, Marc Rich & Company International (MRI). Eventually, the name of MRI was changed to Clarendon Ltd. In 1981, the complaint adds, the Justice Department began investigating MRAG and Clarendon, among other Rich companies, for tax evasion. Finally, in June 1983, Rich and his partner Pincus Green left the U.S. for Switzerland because they were “facing indictment.” Thus, the complaint states, Rich and Green were “considered fugitives by the United States government.”

As a matter of fact, Holder was apparently aware not only of the charges against Rich but also the fugitive’s brazen obstruction of justice, a detail that has gotten little recent attention. As the complaint states: “In 1982, subpoenas for the production of documents were served on [MRAG and MRI] in New York, NY. MRAG failed to produce documents in accordance with its subpoena and consequently paid $21 million in contempt fines between 1983 and 1984.” That $21 million was a consequence of a $50,000-per-day assessment imposed by a judge when Rich refused to surrender various documents demanded by a federal grand jury. Rich had begun paying the fines only after prosecutors, acting on a tip, stopped a plane en route to Europe–where Rich was evading arrest–just as it was about to take off from Kennedy airport in New York. On board were two steamer trunks loaded with documents the subpoenas had sought.

Holder’s complaint goes on to describe how, in 1984, the Defense Department notified Rich and others that they had been placed on the government’s “Consolidated List of Debarred, Suspended and Ineligible Contractors,” a suspension that remained in effect, the complaint added, “[d]ue to their fugitive status.” And even though Rich’s companies had pleaded guilty, their “plea agreement did not resolve any of the personal charges pertaining to Rich and Green.” Those, the complaint continued, remained “outstanding.”

The complaint further outlined a dizzying series of restructurings, through which Rich hid his guiding hand behind a labyrinth of corporate dissolutions, name changes, and asset swaps. It was all legerdemain: as Holder’s prosecutors pointed out, the management structure remained the same and the companies continued to share office space with Rich-controlled companies in Switzerland and the U.S.

With Rich’s role hidden, Clarendon claimed that none of its backers was “presently debarred, or declared ineligible for the award of federal contracts by any Federal Agency.” The company falsely added that no Clarendon principal was “presently indicted for, or otherwise criminally or civilly charged by a government entity.” As a result, the complaint details, “between 1988 and 1991, CLARENDON LTD. was awarded 22 coinage metal supply contracts by the procurement office of the United States Mint, with an aggregate purchase price of $45,092,820.”

To summarize: In 1995, when he was an ambitious U.S. attorney in Washington, Eric Holder knew exactly who Marc Rich was. He was sufficiently outraged by Rich’s conduct that he had his office sue a Rich-controlled company that had duped the government into awarding it a lucrative contract while Rich remained a fugitive from justice. Holder then publicly filed a complaint which unmasked Rich’s duplicity in detail. Furthermore, Holder took credit in the press for inducing Rich’s company to pay Uncle Sam a $1.2 million settlement and to concede that it should have acknowledged “Rich’s substantial indirect ownership.”

Then in 1999, when he was deputy attorney general in the Clinton administration, Holder was approached to help Rich by Jack Quinn, Rich’s attorney and a confidant of Al Gore, who was at that time running for president. Holder was hopeful that Quinn would recommend him for attorney general in a Gore administration. Abandoning the approach he’d had his subordinates take with Rich in 1995, Holder in 1999 decided Rich wasn’t so bad after all. He tried to persuade the U.S. attorney in New York to meet with Quinn to discuss settling the fugitive’s case without jail time. When that didn’t work, he helped Quinn obtain a pardon for Rich–running interference so that prosecutors would not learn a pardon was under consideration–and conveyed to President Clinton that, as DOJ’s top spokesman, he favored clemency. (As he slyly phrased it, he was “neutral leaning in favor.”)