LUCERNE, Switzerland (Reuters) - Billionaire Marc Rich, who invented oil trading and was pardoned by President Bill Clinton over tax evasion, racketeering and busting sanctions with Iran, died on Wednesday in Switzerland aged 78.
Rich fled the Holocaust with his parents for America to become the most successful and controversial trader of his time and a fugitive from U.S. justice, enjoying decades of comfortable privacy at his sprawling Villa Rosa on Lake Lucerne.
Belgian-born Rich, whose trading group eventually became the global commodities powerhouse Glencore Xstrata, died in hospital from a stroke, spokesman Christian Koenig said.
At the cream-painted, red-roofed villa, with views of the nearby mountains and grounds sloping down to the banks of the lake, security guards and other staff could be seen but there was no sign of family members.
“He will be brought to Israel for burial,” Avner Azulay, managing director of the Marc Rich Foundation, said by telephone. Rich will be buried on Thursday at Kibbutz Einat cemetery near Tel Aviv.
Many of the biggest players in oil and metals trading trace their roots back to the swashbuckling Rich, whose triumph in the 1970s was to pioneer a spot market for crude oil, wresting business away from the world’s big oil groups.
To his critics, he was a white-collar criminal, a serial sanctions breaker, whom they accused of building a fortune trading with revolutionary Iran, Muammar Gaddafi’s Libya, apartheid-era South Africa, Nicolae Ceausescu’s Romania, Fidel Castro’s Cuba and Augusto Pinochet’s Chile.
In interviews with journalist Daniel Ammann for his biography, “The King of Oil”, the normally obsessively secretive Rich admitted to bribing officials in countries such as Nigeria and to assisting the Israeli intelligence agency, Mossad.
Explaining Rich’s route to riches in an interview with Reuters in 2010, Ammann said: “He was faster and more aggressive than his competitors. He was able to recognise trends and seize opportunities before other traders. And he went where others feared to tread - geographically and morally.”
A U.S. government web site once described Rich more simply, as “a white male, 177 centimeters in height ... wanted by the Federal Bureau of Investigation, the U.S. Customs Service and the U.S. Marshall Service.” In 1983, he was on the FBI’s 10 most wanted list indicted for tax evasion, fraud and racketeering. At the time, it was the biggest tax evasion case in U.S. history.
Rich, who valued trust, loyalty, secrecy and persistence, always insisted he did nothing illegal and among those who lobbied Clinton on his behalf for his pardon were Israeli political heavyweights Ehud Barak and Shimon Peres.
On learning of the indictment plans, Rich fled to Switzerland to escape the charges, which included exploiting the U.S. embargo against Iran, while it was holding U.S. hostages, to make huge profits on illicit Iranian oil sales.
“Marc Rich is to asset concealment what Babe Ruth was to baseball,” said Arthur J. Roth, New York state commissioner of taxation and finance.
He remained under threat of a life sentence in a U.S. jail until Clinton pardoned him during the last chaotic days of his presidency, a move that provoked moral outrage and bewilderment amongst some politicians.
Clinton later said he regretted granting the pardon, calling it “terrible politics.”
“It wasn’t worth the damage to my reputation,” he told Newsweek magazine in 2002.
Rudolph Giuliani, a former New York mayor and a prosecutor on the Rich case, said: “I’m shocked that the president of the United States would pardon him.”
Clinton said the fact that Rich’s ex-wife, Denise, had donated funds for his presidential library was not a factor, but he had acted partly in response to a request from Israel.
In one biography, “Metal Men: Marc Rich and the 10-billion-dollar Scam,” author A. Craig Copetas described Rich as “a beautifully sinister executive who could frame deals with the artistry of a pool shark”.
Rich inherited his business acumen from his father, who became a millionaire by setting up an agricultural trading firm after emigrating to the United States.
Rich, who was born Marcell David Reich in Antwerp on December 18, 1934, started his career at Philipp Brothers, a top global commodities trader after World War Two.
Posted to Madrid in the late 1960s, he found ways to bypass the “Seven Sisters” major oil companies which controlled world oil supplies, and is credited with inventing spot oil trading, which involves sale or purchase for immediate delivery.
While at Phibro, Rich foresaw the huge price increases imposed by the Organisation of Petroleum Exporting Countries in 1973, earning big profits for the firm. However, he became infuriated by his pay and trading strictures.
He left in 1974 with a fellow graduate of the Phibro mailroom, Pincus “Pinky” Green, and set up Marc Rich and Co AG in Switzerland, a firm that would eventually become Glencore Xstrata Plc (GLEN.L).
His aim, according to Copetas, was “to grind Philipp Bros. into oblivion,” and he poured all his anger and ambition as well as his charm and gracious client demeanour into the new venture.
It became a highly successful trading firm and a much feared adversary in energy, metals, minerals, grains and sugar markets.
Rich later sold that company, which became Glencore International AG, and set up the Marc Rich Group. Rich was known for charitable donations through his Doron Foundation and to Zurich’s Jewish community.
Glencore Xstrata Chief Executive Ivan Glasenberg said. “He was a friend and one of the great pioneers of the commodities trading industry, founding the company that became Glencore.”
As well as his villa on the Swiss lake, Rich maintained houses in Marbella in Spain and in Israel.
Rich described himself as a keen tennis player, skier, alpinist and patron of the arts. Those who knew him said in private Rich was calm and charming with a sense of humour.
In later years, Rich’s fortune dwindled after his property portfolio was hit by the Spanish housing crisis.
“I invested a lot of money there and because of the crisis also lost a lot, at least on paper,” he told Swiss economic magazine Bilanz. Forbes put his wealth at $2.5 billion.
Rich told one magazine that he had a “strange feeling” about an investment with financier Bernard Madoff and “got out with everything”, although he said he lost some money through “indirect participation”.
Rich once told Fortune magazine he was a normal person with an image problem. “I’ve been portrayed in a horrible way,” he said, “as a workaholic, a loner, a money machine. It’s not a true picture.”
Ken Hill, a U.S. Marshall who hunted Rich around the world for more than a decade, once said Rich profited from greed.
“The smoking gun is greed,” he said. “This is what Marc thrived on - the greed of those who had commodities and were in positions of influence and power.” (Additional reporting by David Brunnstrom, Ron Bousso, Caroline Copley, Emma Thomasson, Clara Ferreira-Marques, Dmitry Zhdannikov, Emma Farge, Tom Miles; writing by Peter Millership; editing by Philippa Fletcher)