1/24/01 10:20 a.m.
A Rich Legacy
A classic Clinton pardon.

By Roderick Boyd, managing editor, Bondweek-------------rboyd@iinews.com

olitics is a cruel sport, and often complicated. The honest spectator is often forced to acknowledge that there are trade-offs, compromises, and precious little in the way of absolutes. Until Monday morning, that is. This is when the nation awoke and realized that Clinton had pardoned Marc Rich, a man who is many things — innocent not being one of them.

Marc Rich is a man who tried to corner the world's oil market during a recession, something that is, in polite (and legal) circles called price manipulation. He is also a convicted tax cheat who paid a $150 million fine, plus penalties. To be fair, Rich is also a fugitive, who ran away to Switzerland when the IRS, FBI, and many other government agencies filed suit against him.

Most importantly though, Marc Rich is now free to be a U.S. citizen, and enjoy the privileges of living here, including the lower-than-ECU tax rates. Rich gets this because he appealed to a sitting president who has the ethical construct of phlegm when someone starts slicing up a money pie. Al Gore, not known as a straightforward guy, didn't even bother defending Clinton's fundraising practices during the presidential campaign. It couldn't have hurt that Rich's ex-wife rivals Terry McAuliffe in raising money for Democrats, people like Bill and Hilary Rodham Clinton. Far be it from me to allude to a conflict-of-interest here, but I'm guessing that Marc Rich is soon going to be buying some tables at DNC fund-raising hoe-downs in the very, very near future.

It is important to remember that Jack Quinn and his legal team are not making the argument that their client is innocent of attempting to use the world's commodity market as his personal ATM machine. His lawyers are arguing that because Marc Rich is a billionaire — as opposed to being a convict in a federal prison — he was able to hire Jack Quinn, and appeal directly to the president. At this point, Jack Quinn and his lawyers are probably the most honest people in D.C., because at least they freely admit it was about money and access and client service. It would just be nice if Clinton would admit this too.

There is no gray area here; no room for reasonable people to differ and nothing complicated about this pardon. The action is absurd, wrong-headed and — forgive the phrase — unpardonable. What makes the U.S. economy different is that there is an attempt to keep the playing field level at all times. It is not perfect, and crimes and manipulations do occur, but the guilty are sought out and prosecuted and go to jail. As opposed to, say, Switzerland, where the guilty go skiing in Gstaad. Lest the naive in our midst assume manipulation occurs frequently in the US capital markets, I have two examples to share: Salomon Brothers and Drexel Burnham Lambert. In 1991, one rogue employee submitted a false Treasury market bid to acquire a larger percentage of a Treasury bond auction than the firm was allowed. The firm was fined $650 million, never fully recovered and was sold six years later. Drexel, under Mike Milken, manipulated the price of junk bonds, was fined $650 million, bankrupted, and then liquidated, with 5,000 employees losing their jobs, along with millions of dollars worth of capital stock.

Ask yourself this: What's more serious, an efficient junk-bond market, or a fair oil market? So let's go over this again: Under President Bush in 1991, the government happily tossed 5,000 tax-paying people on the street because of the technical and regulatory violations of one man. The reason given for this was the preservation of the rule of law and the integrity of the economic system. Everyone who lived through this got a very clear message. Under President Clinton, the government pardoned a rich thief on the lam, because he hired a crony of a sitting president. This also sent a very clear message, one that cheats, corner-cutters, and swindlers will no doubt pay close attention to.

This is the ultimate Clinton legacy. It trumps Whitewater, Monica, and whatever influences the Chinese were able to peddle. Minutes before leaving office, he pardoned an uncommon criminal because he was close to the guy who covered his ample bacon during the dark days of his administration. This is nothing short of the triumph of the politics of getting-away-with-it. What a president. What a legacy.