Marc Rich and then-wife Denise in a 1986 photo
Bill Clinton has portrayed the Marc Rich pardon as a favor to Israeli prime minister Ehud Barak, citing the imperative of foreign policy to justify his last-minute decision. Had he checked with his own State Department, however, he would have discovered that diplomatic experts rejected a similar plea five years ago.
According to a 1997 confidential memo released by Rich's lawyers, top Israeli authorities had tried to get the State Department in 1995 to ease the worldwide manhunt for Rich. Why? Rich had promised Israel to financially assist its economic development projects with Jordan and the Palestinian Authority. The Israelis claimed that if Rich couldn't travel freely in the region, without fear of extradition to the United States, the Jewish state would suffer. Israel and Switzerland, where Rich was based, were two places he could move without risk.
Despite the intervention of then–foreign minister Simon Peres, the secret mission failed. Dennis Ross, Clinton's top Middle East envoy, twice told Israeli officials the issue was a "hot potato" he didn't want to touch, says the memo. When Israeli diplomats pressed, they were told Ross was "skeptical" about Rich's investment promises. He also was "concerned about potential allegations that the administration was interfering with law enforcement objectives for political purposes and the possibility of being embarrassed by a disclosure that some kind of deal was made with Rich," according to the document.
The unsigned, seven-page memo was turned over by Rich's lawyers to the House committee investigating Clinton's controversial pardon on his last day in office. Rich sources said it was written by someone working on the fugitive's legal fight. It suggests the President may have found little sympathy for a pardon at the State Department if he had inquired. Last week, Clinton's national security adviser, Sandy Berger, said he also was not consulted, joining federal prosecutors in the Rich case who have complained they were shut out of the decision. It should be noted that had the State Department received the same request this winter it might have been more sympathetic, since the Clinton administration was at pains to help now defeated Israeli prime minister Barak hold on to office.
In his pardon petition to the White House, Rich submitted many supportive letters from Israeli politicians, cultural figures and even former Mossad intelligence officials — a pitch reinforced by three calls from Barak. But the earlier Israeli offensive was not publicly known until the release of the 1997 memo.
Israel launched the campaign in 1995 after Rich offered to help launch a private investment bank and other joint economic developments aimed at furthering the peace process. Israeli officials saw the international commodity trader as someone who could foster Israeli-Arab business activity. "Given Rich's ties to the oil world, he was considered particularly suited to this task," the memo says.
But Rich indicated he was "severely limited" in his ability to help because "his freedom of movement in countries outside Switzerland and Israel" was restricted. The memo says Israel decided to launch a "confidential initiative" with U.S. officials to "see whether the harshness of Marc Rich's situation could be relieved. In turn, it was anticipated that Rich could then play an important role in the economic development of the region, thereby helping to solidify the peace process."
Israeli officials first approached the Justice Department and were told the plan conflicted with prosecutorial goals. But, the memo says, DOJ would give "serious consideration" to the plea if the White House or State Department identified a U.S. interest "in allowing Israel to obtain the active participation of Rich in a Middle East initiative." Rich's representatives saw this as an opening to find a "sponsor" in the administration who believed "a greater cause would be served by finding a solution to the Marc Rich problem," according to the memo.
Ross was the first target. In July, 1995, an Israeli foreign ministry official gave him a briefing paper asking the State Department to weigh in with DOJ. Ross responded later that summer: he decided not to get involved in the issue.
That's when Peres jumped in. A vigorous advocate of the joint economic projects, he instructed Itamar Rabinovich, Israel's ambassador in Washington, to press on with the State Department. Peres himself met with Ross and the U.S. ambassador to Israel, Martin Indyk, to plead the case in person, the memo says.
Ross again declined to get involved in a September 1995 discussion with Rabinovich. The ambassador insisted on a full explanation for Ross' reluctance, and he received it at an Oct. 27, 1995, meeting with the State Department's deputy legal adviser, Jonathan B. Schwartz. He passed on concerns about Rich's sincerity as an investment partner and possible allegations of short-circuiting a prosecution.
Israeli officials still thought they could overcome those issues. But in November 1995, Schwartz told them Ross would not change his mind "probably because of his reluctance to get involved in a politically sensitive situation," says the memo. After Yitzhak Rabin's assassination, Peres became prime minister. But his interests shifted, and that phase of the Israeli campaign for Rich ended in 1996. A State Department spokesman declined to comment on the memo. Ross, Indyk and Schwartz could not be reached.