Bill's Parting Gift May Be Hillary's Heap of Trouble

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Denise Rich, Michael Jackson and the Clintons last November in New York

Outraged politicians calling for congressional hearings. Pundits railing about abuse of power. And long-suffering Democrats trying in vain to defend their party leader. The ugly, all too familiar scene in Washington last week almost made you wonder if Bill Clinton had won that elusive third term. Even as he secured an 11th-hour deal to avoid prosecution in the Lewinsky mess, Clinton was adding a brand-new chapter to his book of scandal.

On his last day in office, the man who understands the power of forgiveness better than most issued a list of more than 100 pardons. Tucked in among the names was that of Marc Rich., 65, one of the world's most wanted white-collar fugitives. In 1983, the brilliant, rapacious commodities trader, along with his partner, Pincus Green, was charged with an illegal oil-pricing scheme that amounted to what might be the biggest tax swindle in U.S. history, to the tune of almost $50 million — not to mention trading with Iran during the hostage crisis. The latter charge was later dropped against Rich's company but not against Rich and Green personally. (Not everybody was as lucky as Rich; junk-bond king Michael Milken, who was opposed by the SEC, and convicted spy Jonathan Pollard, who has no fans in the intelligence community, were denied pardons.)

Rich was not your typical fugitive living hand to mouth and sleeping under bridges. Born in Belgium and fluent in English, French, German and Spanish, he has spent the past 17 years in Switzerland, living in splendid exile outside Zurich, protected by a coterie of private security guards from Israel and running a $30 billion business that brokers everything from oil and gold to sugar and grain. Switzerland refused to extradite him. But now that point is moot. Thanks to Clinton, the billionaire who could have faced years in prison suddenly has a clean slate.

But Clinton's, yet again, is dirty. To many observers, Republican and Democrat alike, the pardon was simply outrageous — the latest egregious example of Clinton's moral turpitude. Rich's ex-wife, New York City socialite Denise Rich, just happens to be a major Clinton donor and fund-raiser who has raked in millions of dollars for the Democratic party during the past eight years. Rich's lawyer in the pardon case, Jack Quinn, was once Clinton's general counsel. Quinn personally lobbied Clinton, and various dignitaries — including, sources tell TIME, Israeli prime minister Ehud Barak and King Juan Carlos of Spain — contacted Clinton on Rich's behalf.

"I worked a long time on that case," New York City Mayor Rudy Giuliani, who was the lead prosecutor against Rich two decades ago, said at a news conference last week. "What the President did was an absolute outrage."

But it wasn't the only one. Other controversial recipients of Clinton's parting gifts included four Orthodox Jews from New York State who had bilked the government out of $40 million in education aid, housing subsidies and small-business loans. During Hillary Rodham Clinton's Senate campaign, the First Lady visited the Skver sect in New Square, N.Y., trying, successfully, to lock in a group that usually swings Republican. After the Skver turned out in force for Hillary, she invited the group's spiritual leader to the White House, where he asked the President to lighten the men's sentences. The subsequent commutations only heightened suspicions — vehemently denied by Clinton and the Skver — that there was a quid pro quo for their support on Election Day. And if that weren't bad enough, there was also the matter of $190,000 in gifts, including $7,000 in furniture from Denise Rich, that Bill and Hillary hauled in as they were leaving the White House — which means that President Clinton's final scandal is Senator Clinton's first.

But it's the Rich pardon — and especially the fact that Clinton granted it without consulting the Justice Department — that has generated the most heat on Capitol Hill. Though the pardon can't be revoked, Representative Dan Burton, the Indiana Republican and longtime Clinton critic who chairs the House Government Reform Committee, has already started gathering documents for a hearing; Senate Democratic leader Tom Daschle says it may be time to reexamine the President's pardon power. Even by Clinton's own reasoning, which he voiced in a speech two days before the pardon, Rich did not seem to qualify. "Most of these people should be able to vote and be full citizens," he said, "because they've paid."

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