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Marc Rich’s Sleazy Genius


He will forever be known as the fugitive financier even though, in the end, Marc Rich was free to travel wherever he wished. Rich, who died today in Switzerland at age 78 following a stroke, was the swashbuckling commodities trader who made boatloads of money but got crosswise with Rudolph Giuliani in the 1980s.

As the U.S. attorney for Manhattan, Giuliani indicted Rich in 1983 for allegedly violating U.S. price controls on a daisy-chain of oil deals with Iran, then failing to pay U.S. taxes on the sales. Rich fled to Switzerland hours before his indictment. He spent the next 17 years evading the Federal Bureau of Investigation and U.S. marshals trying to kidnap him to bring him back to the U.S. for trial. Bill Clinton, on his last day in office in 2001, infamously pardoned Rich, an act that will forever stain the former president, who personally benefited from hundreds of thousands of Rich family contributions to the Clinton library.

Despite this checkered past, today’s obituaries are a mix of admiration and awe for the arc of Rich’s career. He went from seven-year-old Nazi refugee to mail-room clerk to king of the commodities business. His financial acumen — London’s Telegraph today called him “a business genius who revolutionized the way the world’s raw materials are bought and sold — massive wealth, generous philanthropy and ability to outrun the law are the stuff of legend. And, yes, Hollywood will be lionizing him soon with a biopic.

So let’s focus on something else: Marc Rich’s unsavory business methods. They included bribery, backroom deal-making and nose-thumbing at the rule of law. His failure to abide by the rules, no matter which country he was living in or trading with, made him fabulously wealthy. Those practices, however, are not worth emulating, and shame on any corporate board that tolerates similar behavior.

Rich started his career shortly after World War II in the mail room at Philipp Brothers, or “Phibro,” a top global commodities trader. At the time, the oil business was tightly controlled by the oil majors, the so-called Seven Sisters. Rich figured out how to steer around the majors in the 1970s by inventing the spot oil market. It involved trading tankers of oil for immediate delivery at today’s price, versus delivery weeks in the future, with all the risk that entailed. Even when the Organization of Petroleum Exporting Countries cartel began in 1973, Rich made huge profits with spot-market trades.

He chafed at Phibro’s tight leash and started his own business, Marc Rich & Co., in Switzerland in 1974 with fellow former mail clerk, Pincus Green. It is this company that is known as Glencore Xstrata Plc today. Rich trained a global cadre of commodities traders who now control Glencore, including Chief Executive Officer Ivan Glasenberg. Glencore’s market value is now $56 billion.

By all accounts, Rich was a brilliant trader — he could foresee market hiccups and where prices were headed — but he also had a penchant for dealing with the world’s biggest despots. He didn’t rely on contracts; “my word is my bond,” he liked to say. He traded oil with Ayatollah Ruhollah Khomeini in post-revolutionary Iran and with Fidel Castro in Cuba. His partners included the strongmen rulers of Libya, Chile and Romania.

South Africa’s apartheid government was one of his best customers. Imagine how much earlier that regime might have fallen, and Nelson Mandela might have become president, if Rich hadn’t been willing to break the oil embargo?

Rich figured he was a country unto himself. He used the term “apolitical,” but really he was extra-legal — he complied with no laws, violated sanctions and paid bribes. Swiss journalist Daniel Ammann, in his 2009 biography, “The King of Oil,” wrote that Rich admitted to bribing officials in Nigeria and assisting Israel’s Mossad. When Americans were being held hostage in Iran in 1979, and a U.S. embargo was in force, Rich supplied Iran with oil.

His company quickly became one of, if not the, world’s biggest commodities traders. But it never published sales figures or earnings. Its website was a single page with a logo and address in Switzerland.

But even Rich was brought low by his penchant for the dark deal. His company invested more than $1 billion in an attempt to corner the zinc market in 1992 — and failed spectacularly when commodities slumped. The heavy losses ultimately forced him to sell out to management at a steep discount two years later. Oh — and in the just desserts department, Rich lost between $10 million and $15 million to jailed swindler Bernard Madoff.


2 Comments on "Marc Rich’s Sleazy Genius"

  1. BillT on Thu, 27th Jun 2013 4:52 am 

    This pertains to Peak Oil in what way?

  2. Arthur on Thu, 27th Jun 2013 9:54 am 

    “This pertains to Peak Oil in what way?”

    You apparently missed that he is the inventor of oil and commodity trading and founder of commodity multinational Glencore Xstrata, that’s why.

    This guy was a major league swindler, but I am pretty sure Bor can say something nice about After all the guy is going to be buried in… Israel! He fled the US, but was later pardoned by Bill C., after a few phone call from Bill’s handler in Jeruzalem, prime minister Ehud Barak. That’s how it works in the US. Marc Rich also participated in the looting of Russia by a handfull of zionist olicharchs, headed by Berezowski, until the this sucker made the mistake of his life by appointing Putin as the successor of Jeltzin. That + 9/11 are the two major reasons why the NWO is dead in the water. No doubt Berezowski committed suicide recently because of the damage he had done to the cause of the global zionist maffia. The only thing left for the maffia is trying to turn the US into the next USSR, but that is not a done deal yet, with hundreds of millions of fire arms in the country + presence of the internet, bypassing maffia media. And 9/11 is still the sword of Damocles hanging over the neck of the maffia. All it takes is a few determined Americans, who start acting like the ‘foolish mothers’ in Argentina or East-Germans in 1989 and every monday, persistently demand that the Feds release the 60 or so confiscated videos from the area surrounding the Pentagon on 9/11. The reason why the Feds confiscated the videos in the first place, was that no plane had hit the building in the first place, although it probably was intended to hit the building, hence the FBI panic reaction. Likely something went wrong with the remote control and fighters from Langley were forced to shoot the plane and it’s gassed passengers over the Atlantic.

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