- The Washington Times - Tuesday, January 30, 2001

The federal prosecutor who brought charges against pardoned fugitive financier Marc Rich yesterday decried as an "empty promise" a pledge by Mr. Rich to return to the United States to face civil penalties in the country's largest tax-fraud case.
"What civil penalties?" asked Morris Weinberg Jr., who won a multicount 1983 indictment against Mr. Rich on charges of racketeering, tax evasion and violations of federal energy regulations for trading oil with Iran while Americans were being held hostage in that country.
"The civil penalties already have been extracted, $200 million worth," said Mr. Weinberg, a Democrat hired as an assistant U.S. attorney in New York during the Carter administration. "They were corporate liabilities and were already handled through plea agreements. This is about as big an empty promise as can be made."
President Bush yesterday said he was "troubled" by the pardons of Mr. Rich and his business partner, Pincus Green, but would not challenge the "inviolate" power of his predecessor, Bill Clinton, to grant the pardons.
"I would not have made that decision," Mr. Bush said. "But nevertheless, he was the president. He had the right to do so, to make that decision, and he did. And I'm going to protect that privilege not only for me but for future presidents as well."
Earlier, White House press secretary Ari Fleischer told reporters that while Bush administration lawyers had explored the question of whether they could challenge the pardons, the president decided not to pursue the matter.
"There's a bigger issue involved here, and that is the president's constitutional prerogatives are unfettered when it comes to pardons," Mr. Fleischer said.
Justice Department lawyers had determined that the Bush administration might be able to invalidate the pardons by refusing to allow them to be served formally on Mr. Rich, Mr. Green or their attorneys. That review now has ceased.
Mr. Weinberg, now in private practice in Tampa, Fla., said he was "outraged" by the pardons. He noted that, notwithstanding offers to pay civil penalties, the case was never about money. He said the evidence was "overwhelming" that Mr. Rich and Mr. Green conducted the biggest tax fraud in U.S. history and deserved to be sent to prison.
"If told the true merits of this case, no president would legitimately consider a pardon for these two guys," he said. "They openly flouted the system, during the investigation they tried to secrete evidence out of the country, they sought to renounce their citizenship, and they refused to come back to the United States to answer the charges.
"What in that qualifies them for a pardon?" asked Mr. Weinberg. "I would dare say that these are the two most undeserving persons ever granted a pardon."
Mr. Rich fled to Switzerland in 1983 after being indicted on racketeering, tax and fraud charges in the diversion of more than $70 million in illegal profits to Swiss banks from the resale of crude oil. He was accused of evading $48 million in taxes and violating U.S. sanctions by trading with Iran while Americans were held hostage in that country.
But, according to government records, companies owned by Mr. Rich and Mr. Green pleaded guilty in 1984 to tax evasion and under a plea agreement paid fines totaling $200 million to settle all pending civil liabilities. Mr. Weinberg said the plea agreement erased any pending civil liabilities and made Mr. Rich's offer moot.
"Our position was and remains that we cannot and will not be bought off," he said.
Mr. Weinberg's comments came in response to statements over the weekend by Washington lawyer Jack Quinn, the former Clinton White House counsel representing Mr. Rich, who said his client wanted to return to face civil penalties.
Mr. Quinn told reporters that Mr. Rich would not invoke statute of limitation claims and "will and should face any assertions that he owes civil penalties." He also said the government's charges were improper and that questionable transactions were the fault of Swiss companies associated with Mr. Rich.
The former White House lawyer was not available yesterday for comment.
The pardons for Mr. Rich and Mr. Green were among 140 issued by Mr. Clinton on his last day in office. Mr. Rich, whose ex-wife, songwriter Denise Rich, gave $1.3 million to the Democratic Party, now lives with his new wife, Gisela Rossi, in Meggen, Switzerland. He operates Marc Rich & Co. in Zug, Switzerland.
Mr. Rich's offer to settle outstanding liabilities in the case, according to authorities, is not the first time he has come forward to negotiate a deal. In 1983, he agreed to turn over financial records the government had subpoenaed. However, the documents instead were secretly loaded into two steamer trunks aboard a Swissair flight to Switzerland.
The August 1983 smuggling attempt occurred after what authorities said was a week of around-the-clock negotiations between prosecutors and Mr. Rich's attorney, the late Edward Bennett Williams.
In what came to be known as the "steamer trunk affair," the Swissair flight was stopped by FBI agents on the runway at John F. Kennedy Airport in New York, containing the documents Mr. Rich had promised to turn over. The records had been sought under a contempt citation issued by a federal judge. Mr. Rich eventually paid $21 million in contempt fines.
Shortly after the airport seizure, Mr. Rich fled to Switzerland leaving in the wake of a second offer by his attorney, Mr. Williams, that Mr. Rich would pay $100 million to resolve the criminal case without going to prison. Prosecutors refused the offer because Mr. Rich and Mr. Green were fugitives and had not agreed to plead guilty in court.
The government's tax-fraud case outlined a scheme in which Mr. Rich oversaw the diversion of more than $70 million in illegal profits to Swiss banks from the resale of crude oil. The plot was aimed at evading U.S. taxes and federal energy regulations.
The scheme continued over nine months while the illegal profits were secretly routed from the United States to Swiss banks. Records show the profits had been obtained through the purchase and later resale of $200 million of Iranian oil after President Carter had banned trade with that country.
Authorities said Mr. Rich diverted the cash to Marc Rich & Co. through a series of phony transactions involving companies he had set up in Delaware, Connecticut, Pennsylvania, the U.S. Virgin Islands, Australia and Switzerland.
The House Government Reform Committee is investigating whether Mr. Clinton had an improper motive in issuing the pardon, whether law enforcement authorities were consulted and whether any regulations governing the lobbying of the president were violated.


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