Commodities Arbitrageby Crack_Smoke_Republican on 11.03.2006 [17:00 ] Brought Rich/Israel/N.Korea together. Israeli Armanent industries were probably wanted to get this cheaply."Tungsten is so strategic that it’s used in every type of armament from a bullet to a tank, and it’s the only item openly brokered between Russia and China. The power, the politics, the money is all there in that little piece of rock.” —unnamed London metals trader quoted in Copetas, Metal Men"Rich, an old hand commodities broker, was tasked with the opportunity - problem for Jewish Rich is that the N.Koreans are more wily in the trade game and didn't sell out. He's an agent that will reach out to troubled regimes to "work a deal". With a Mossad body guard in tow, just know who he is working for - so when he shows up, you'll know he's working for more than just himself.
Marc Rich and the Axis of EvilBy: Crack_Smoke_Republican on: 11.03.2006 [01:35 ] (1137 reads) Iraq, Iran, N. Korea = Global Commodities = Marc Rich = Axis of Evil. See the links between the articles listed. A picture emerges.(68769 bytes) [nc] PrintThe king of commodities has lived in Zug since 1983. Marc Rich was born in 1934 to a Jewish family who emigrated to the USA during the war. At the age of 20, he was hired by Phillips Brothers, a top global commodities trader, and then founded his own company in 1973, Marc Rich & Co.He invented spot oil trading, and reaped his first billion in profit during the second oil crisis of 1979. Wanted by the American justice system for having traded with Iran and for tax evasion, Marc Rich sought exile in Switzerland in 1983. He set up his head office in Zug, where taxes are the lowest in Switzerland.A Golden OpportunityBy Andrei LankovOne of the major reasons for the colonial fever of the early 1900s was the desire of the world's leading countries to secure isolated breeding grounds for their businesses. Once a territory became a colony, the access of other foreign capital to that economy was strictly limited. Only the colonial overlords were allowed to invest there.Japan was no exception. Once Japanese rule was established in Korea after 1905, the few foreign-owned businesses were pushed from existence in a matter of years, and by the early 1910s a vast majority of non-Japanese investors had left the country. The Japanese interests took over the streetcar network initially established by the Americans, over the waterworks that used to be run by the British, as well as over foreign-owned mines and railways.But there was one important exception _ the huge and highly profitable gold mines in Unsan, in present-day North Korea. For almost the entire colonial period the mines were operated by the Oriental Consolidated Mining Company (OCMC), registered in West Virginia, USA!The history of the OCMC is described by Donald Clark in his brilliant book ``Living Dangerously in Korea.'' It began in the mid-1890s when an American ex-pat businessman, James Morse (better known as the person behind the first Korean railway project), secured a concession for a gold mine in Unsan, near the Chinese border. The conditions were fabulous: one-quarter of the profits were to go to the Korean government, the mine did not have to pay any income tax, it had the right to harvest timber in its neighbourhood, to build roads and railways, and even hire armed guards. There was one stipulation: the mine was to be established within one year.Morse was short of funds, and he began to look for partners. His choice was Leigh Hunt, a former President of Iowa State University (then merely an agricultural college) and a Seattle journalist who was himself on the run from creditors. Somehow, Hunt managed to secure a loan of $100,000 (roughly $2.1 million today), and the project began.The mine proved to be very profitable from the beginning (during the first year of operations, it yielded $340,000). Hunt soon took over the company. First, he and his companion Fassett bought Morse out for a lump sum. Soon they employed the same strategy with the Korean government: in 1899 King Kojong agreed to sell his 25 percent holdings for a one-off payment of $100,000 and a fixed annual royalty of $12,500. In exchange, the lease was extended to 1924. Next year, for an additional $12,500 the lease was extended even further, to 1939. Thus, for a mere quarter of a million dollars (some five million dollars in present-day purchasing power) the OCMC secured 40-years rights for a mine concession complete with its own water and timber supply.Thus, it comes as no surprise that in 1901 Hunt rushed to Seattle where he hosted a special dinner for his long-suffering creditors. Each and every one was handed a check for the amount of debt, with interest added. Hunt used the Korean fortune to launch a series of spectacular and successful adventures in other, then exotic, lands (he introduced large-scale cotton production to Sudan, among other things).The agreement survived the Japanese takeover surprisingly well. The OCMC lawyers ensured that all legal documents were in good order. The OCMC also tried to cultivate good relations with the colonial administration, even maintaining a special liaison office in Seoul.Unsan gradually developed into an American frontier town in the middle of the North Korean virgin forests. It had its own power station, hospital, and a number of Western-style houses that housed ex-pats. Most of the managers, technicians, and skilled workers came from the US, usually from Leigh Hunt's native Indiana. There were some exceptions _ like the Norwegian engineer Brede Pedersen and his Japanese wife who, in 1904 gave birth to Charles Pedersen - the first Nobel Prize winner born on Korean soil.However, the life was hard. Most of the Americans worked long shifts with but one day off every two weeks. They were paid well, however _ unlike the Korean workers in the underground shafts. The miners had to work naked, 12 hours a day. This was badly paid and dangerous work _ even if, admittedly, the conditions at the other mines (Japanese- and Korean-owned) tended to be even worse.In 1939, the lease period was over, and the OCMC management faced increasing pressure from the colonial authorities. The war was coming, and there was no chance to extend the agreement. Thus, in 1939 the Unsan mines were sold to a Japanese company for six million dollars. Later, the mines played a major role in North Korean industry. But that is another story…LinkRich Made His Fortune by Breaking the RulesBy Michael DobbsWashington Post Foreign ServiceTuesday, March 13, 2001; Page A01ZUG, Switzerland — For decades, traders from all over Europe have flocked to this lakeside Alpine town, attracted by stringent privacy laws, low tax rates and guarantees ofcorporate anonymity. But none has achieved the dominance of Marc Rich, the billionaire metals dealer and indicted tax fugitive pardoned by Bill Clinton in one of the last acts ofhis presidency.At the age of 66, after a lifetime of deal-making and sanctions-breaking, Rich is the uncrowned king of Zug, a place that boasts 10,000 international companies, or roughly one corporation for every two residents. He is rarely seen but constantly talked about,his exploits buying and selling the world's natural resources becoming the stuff of legend — and scandal.During the quarter-century that he has been operating from Zug, including 17 years hiding from U.S. marshals, Rich has mastered the art of clinching a deal with everyonefrom Communist bureaucrats to Third World dictators to Iranian ayatollahs. Many of the business practices cited in his 1983 indictment for racketeering by the Southern Districtof New York — trading with pariah states, manipulating the market for huge personal gain, hiding profits in a thicket of offshore companies — are techniques that he perfected here both before and after he got into trouble in the United States.The list of countries that Rich has traded with reads like a compendium of rogue states: Iran during the hostage crisis, apartheid-era South Africa, Slobodan Milosevic'sYugoslavia, North Korea, Moammar Gaddafi's Libya, the Soviet Union under Leonid Brezhnev."He sees himself as a citizen of the world, unencumbered by the laws of sovereign nations," said Howard Safir, a former U.S. marshal, who lay in wait outside Rich's Swissresidence in 1985 in one of several futile attempts to enforce an arrest warrantagainst Rich on charges of swindling U.S. taxpayers of nearly $50 million. "His view is that everything and everyone can be bought and sold, and government is irrelevant."In keeping with his usual practice, Rich declined to be interviewed for this article, although he released a statement last month saying he did not think he could receive a fair trial in the United States. For the past few weeks, he has kept out of sight, holed upat his luxurious estate in the village of Meggen, 15 miles away, with his collection of Van Goghs, Picassos and Miros, and a breathtaking view of the mountains rising above theshimmering waters of Lake Lucerne.According to his supporters, Rich is waiting for thecontroversy generated by Clinton's pardon to blow over before speaking out. "There is nothing mysterious about him," said Georg Stucky, a former finance minister from the canton of Zug who now runs Rich's charitable foundation in Switzerland. "He is just a normal businessman who does not like publicity. He is a very shy person."Here in Switzerland's wealthiest canton, in one of the world's wealthiest countries, there is a saying that "money doesn't smell," according to local Green party leader Josef Lang, who has waged a 20-year campaign to expose alleged wrongdoing by Rich andother international traders, and their cozy links withlocal politicians. In Zug, Lang said in a tone of disgust, "you don't ask where the money comes from, you just ask how much."University DropoutHe was born Marc Reich on Dec. 18, 1934, in the Belgian city of Antwerp, the only child of a prosperous Jewish family. When the Nazis took over Belgium in 1942, the family fled to the United States, settling first in Kansas City, Mo., and then in New York, where Rich's father David went into the burlap bag business.The Korean War created huge demand for burlap bags, pushing prices sky-high and turning David Rich into a millionaire. For Marc, it was an early lesson in the economics ofscarcity. Dropping out of New York University at age 19, he set his sights on becoming a commodities trader.The company that Rich joined, Philipp Brothers, was the largest raw materials trading company in the world. He started in the mailroom but soon came to the attention of Ludwig Jesselson, a legendary trader skilled in the art of concluding long-term contracts with Third World countries. Cool, calculating and exceptionally aggressive in his deal-making, Rich quickly became a Jesselson favorite. By the late 1960s, he was his heirapparent.Then, in 1975, in an act of betrayal that is still the talk of commodities traders, Rich broke with his mentor in a dispute over bonuses. He and his partner, Pincus "Pinky" Green, quit Philipp Brothers, taking the company's most closely held secrets and ahalf-dozen of its leading traders with them. Marc Rich and Co. set up shop in a glass tower in Zug, down the street from Philipp Brothers' European headquarters.Since before they established their own company in Zug, Rich and Green have had an "odd couple" relationship that has proved highly beneficial to both men. Elegant and debonair, Rich made his reputation as a deal-maker. Green, by contrast, is the shabbilydressed logistics wizard whose skill at making the ships run on time earned him the nickname "the admiral." Rich has long been surrounded by glamorous women, including his songwriter wife Denise, whom he divorced in 1997. Green is an Orthodox Jew with an enduring marriage.The split with Philipp Brothers coincided with a seismic shift in the world's oil markets that Rich, perhaps more than any other trader, was quick to exploit. In the early 1970s,oil-producing nations rebelled against the dominance of international oil companies. Instead of selling their oil to the majors, they began marketing it through independent traders such as Rich, who is credited with virtually inventing the spot market, where oil was freely traded to the highest bidder.The oil crisis was a fabulous boon for Rich: As prices spiraled, he was able to pocket the difference between the purchase price and the sale price. But it also proved his undoing.When successive U.S. administrations introduced a series of energy pricecontrols in the 1970s, he devised a scheme for making money out of the bureaucratic confusion that prosecutors say was illegal.Under the Carter-era regulations, oil pumped under pre-1972 production agreements, called "old oil," was sold for around $6 a barrel. "New oil," by contrast, went for up to $40 a barrel. If a trader could somehow relabel old oil as new oil, he could make afortune. Evidence collected by U.S. prosecutors shows that Rich or his representatives did just that by funneling the oil through a "daisy chain," allegedly using sham invoices andPanamanian front companies, with profits deposited in offshore accounts.Morris Weinberg, the prosecutor in the case, estimates that Rich and Green concealed more than $100 million in ill-gotten profits in 1980 and 1981. While the pair denied wrongdoing and refused to produce documents relating to the case, they ended up paying about $200 million in back taxes and penalties in a partial settlement that allowed their companies to continue operating in the United States.According to the September 1983 indictment, Rich and Green were also buying large amounts of Iranian oil at a time when American diplomats were being held hostage in Tehran and U.S. citizens were prohibited from dealing with Iran. The indictment lists five such trades between July and September 1980 for more than 5 million barrels of oil valued at $186 million. In a rare 1992 interview with NBC, Rich acknowledged tradingwith Iran, "but as a Swiss company," not an American one.The government's charges were never tested in court. In the summer of 1983, at the height of the U.S. attorney's investigation, Rich left his $10 million Park Avenue apartment and fled to Zug, renouncing his U.S. citizenship in favor of Spanish and Israeli passports. (The State Department still considers him a U.S. citizen, subject to U.S. tax law.) Rich and Green remained on the Justice Department's "most wanted" fugitive list until their pardon in January. Clinton said he granted thepardon because he agreed with the arguments of Rich's lawyers that the case should have been handled in civil court rather than as a criminal case.Weinberg, now a defense attorney in Florida, says the alleged daisy-chain caper was very typical of the way Rich did business throughout the world. "There is a lawless qualityabout the way he operates," Weinberg said. "He will do whatever he needs to do to close a deal."Broken EmbargoesThe daisy-chain oil deals set a precedent for dozens of similar plays, from South America to the Middle East to Asia; the greater the bureaucratic controls over the price of oil or raw materials, the greater the potential profit. According to former traders, Richand Green specialized in Third World countries whose leaders could be easily bribed."Whenever cracks appear in the market, there are people like Marc Rich who are willing to go where nobody else will, either because of embargoes, legal restrictions or politicalproblems," said an executive for a leading oil company. "Rich has always been willing to do the kind of things that bigger, more respectable companies refuse to do."One Rich specialty was breaking embargoes — trading with international pariahs was a sure way of generating extra profits. The best documented example is apartheid-era South Africa, which relied on traders like Rich to get around a U.N. oil embargo designed to deprive the country of the one raw material it did not possess.A leading anti-apartheid watchdog organization, the Amsterdam-based Shipping Research Bureau, recorded 149 deliveries of oil to South Africa by companies linked to Rich between 1979 and 1993.The group reported that Rich was the leading supplier of oil to South Africa before the collapse of apartheid, responsible for at least 15 percent of identifiable deliveries. Some of the oil came from countries such as the Soviet Union, which were leading opponents of apartheid. Typically, Rich companies would file false shipping reports for the destination of the oil, and redirect tankers to South African ports once they were safelyat sea.According to Rich biographer Craig Copetas, Rich representatives sometimes bribed Third World leaders to turn a blind eye to the deliveries to South Africa. The payoffs were known as "chocolates.""We told the Nigerians that their oil had been going to Spain," recalled a Rich trader cited by Copetas. "One day they followed our ship 25 miles out of port and saw it hang a left instead of a right." The Nigerians were very angry but allowed themselves to be placated for "a million chocolates."Rich spokesmen declined to comment on the sanctions-busting allegations. His supporters point out that the U.N. embargo against South Africa was nonbinding, as it was never endorsed by the Security Council. Unlike the United States, Switzerlandnever joined the embargo.Another Rich technique was to control the supply of strategic metals so the price would go up. At one point, in the early 1990s, he was believed to control about 40 percent of the international aluminum market, an accomplishment that earned him the nickname "aluminum finger." He had negotiated a highly advantageous 10-year contract for virtually the entire aluminum production of Jamaica. He also used intermediaries to acquire control of several aluminum smelters in West Virginia, according to documents unearthed by the United Steelworkers of America."His modus operandi is very interesting," said Tom Juravich, professor of labor relations at the University of Massachusetts at Amherst, who wrote a book about a labor dispute that pitted Rich representatives against the steelworkers union. "He always operates in the shadows, never directly in the light of day. He doesn't just buy companies. He isinterested in controlling and manipulating the market."Not all of Rich's ventures have turned to gold. In the early 1980s, according to press accounts, he made a disastrous foray into the international tin market, buying up most of Malaysia's tin production. Prices skyrocketed, but landed with a thud after theU.S. government began selling tin from a federal stockpile. Rich was reported to have lost more than $60 million.Profiting in RussiaThe collapse of communism offered Rich new opportunities, opening up vast new markets and a host of business partners with few scruples when it came to turning a profit. According to Yugoslav and U.S. officials, Rich was active in Yugoslavia duringthe first U.N. trade embargo in 1992-95, dealing in a wide variety of commodities, from copper to oil.But it was in the former Soviet Union that he made his biggest mark. According to traders familiar with his operations, he had been active during the Soviet era, courting officials at Raznoimport, the state monopoly for commodity trading, and selling the Soviets zinc, a strategically important metal. After the Soviet Union fell apart in 1991, these relationships helped Rich become for a time the single most important Western trader in Russia."Marc Rich was way ahead of the big international corporations," said Vladimir Kvint, a leading expert on Soviet and Russian business practices at Fordham University in New York. "He was one of the initiators of barter trade with the former Soviet Union. He bought oil, aluminum, cobalt at domestic Russian prices, and then sold it at world prices,which were often 10 to 15 times higher."Anders Aslund, a Swedish economist who served as an adviser to the reformist Russian government led by Prime Minister Yegor Gaidar, said Rich was responsible for setting upmore than 100 front companies in Russia. He added that Gaidar attempted to close Rich's Moscow operation in April 1992. Although tax inspectors mounted a few raids onRich firms, the attempt was unsuccessful. In December, Gaidar was replaced by Viktor Chernomyrdin, who took a more lenient attitude.In recent years, opportunities for making huge profits in Russia have waned as domestic prices have come in line with international prices. But Rich continues to have asignificant business presence in Russia. Court documents filed last year in New Jersey show that he was trading large amounts of aluminum with the Russian Chernoi brothers, who are accused in a lawsuit by their business rivals of using mafia-style techniquesto consolidate their control over the Russian aluminum industry.Last month, Rich announced the sale of the international investment arm of his company to Crown Resources, a subsidiary of the Alfa Group, a leading Russian conglomerate with extensive oil holdings. The terms of the sale envisaged a long-term partnership. "In order to penetrate Russia these days, you have to get in bed with a Russian company," said a London trader. "As for the Russians, they gain access to the global market under a big name."Some analysts say they believe that, after a lifetime of chasing deals, Rich may simply be slowing down. "Margins are much tighter now than they used to be," said JonathanBearman, editor of Energy Compass, a leading oil industry newsletter. "The whole trading business has become much more competitive."Others see his successful campaign for a pardon as the crowning play in a career packed with similar maneuvers. "This guy is the greatest trader in the 20th century," saidWeinberg, the former prosecutor. "He orchestrated and manipulated the pardon, justlike he did all his other deals."© 2001 The Washington Post CompanyLinkThe Rich BoysAn ultra-secretive network rules independent oil trading. Its mentor: Marc RichOne brisk day last fall, globe-trotting oil executive Benjamin R. Pollner was leaving his luxury prewar apartment building on Manhattan's Park Avenue when detectives from Manhattan District Attorney Robert M. Morgenthau's office approached. They began asking him about his alleged involvement in the unfolding U.N. Oil-for-Food scandal. Pollner, a tall, lean sixtysomething who wears European-cut clothes and a world-weary visage, was taken aback, say investigators familiar with the incident.He snapped that he was in a hurry to make an overseas flight and refused to answer questions. Before hopping into a car that whisked him off to John F. Kennedy International airport, Morgenthau's investigators say Pollner delivered a parting shot: "I did nothing in New York or the U.S. that would be considered illegal." To them, Pollner was admitting he had done something wrong — just not in their jurisdiction. Pollner, who runs Taurus Petroleum mainly from offices in Geneva and London, hasn't set foot in the U.S. since, investigators believe. He didn't reply to several calls and e-mails.On the morning of Apr. 14, David Bay Chalmers Jr., 51, who owns privately held oil-trading company Bayoil U.S.A. Inc., emerged handcuffed and bleary-eyed from his high-security mansion in Houston's ritzy River Oaks neighborhood. He had just been indicted by the U.S. Attorney for the Southern District of New York for conspiracy, wire fraud, and trading with a country that supports terrorism — Iraq — during the U.N. program. Chalmers has pleaded not guilty.Another trader, Patrick Maugein, nonexecutive chairman of London's SOCO International PLC oil-trading company, has been under scrutiny by the U.N. for his alleged role in a complex oil-smuggling scheme during Oil-for-Food, the U.N. program that allowed Iraq to sell oil for humanitarian purposes during a period of strict sanctions. Although many deals were legitimate, Saddam Hussein at times demanded illegal surcharges for the right to buy oil at below-market prices. Friends of Saddam's regime allegedly received sweetheart oil allocations, investigators say. Maugein denies violating sanctions or paying illegal surcharges.LEARNING FROM EL MATADORWhat do the three men have in common, aside from their dubious deals with Iraq? They all belong to the ultrasecretive informal network of traders who dominate global independent oil trading. They don't necessarily act in concert with each other, but they often chase the same opportunities. They are the Rich Boys. All operate in the world of onetime fugitive billionaire Marc Rich, the most-wanted white-collar criminal in U.S. history until his controversial pardon on President Bill Clinton's last day in office in 2001.Rich came to prominence in the 1970s, when he worked at Phillips Bros. (later Phibro), then the biggest trader. With veteran partner Pincus "Pinky" Green, he pioneered "combat trading" — getting trading rights from countries in turmoil. Rich, called El Matador for his killer instinct, did the deals. Pinky, "The Admiral," arranged shipping.Traders soon learned the art of the Rich deal: Do whatever it takes. After Rich and Green left Phibro in 1973 to form their own company, they bought a house in the South of France and "stocked it with hookers from Paris and flew in oil guys who spent a week at their expense," says a former U.S. oil executive who knows Rich. "They got the oil contracts they wanted." A former Rich partner corroborates this. Green, who retired in 1992 after heart surgery, could not be reached for comment.Rich is notorious for trading with Iran during the hostage crisis, South Africa during apartheid, and Cuba and Libya during U.S. trade embargoes. In 1983 he fled to Switzerland after being indicted by the Justice Dept. for racketeering, trading with the enemy (Iran), dodging a $48 million corporate tax bill, and other violations that could have resulted in 300 years of jail time. Rich's companies pleaded guilty to some charges and paid about $200 million in fines, penalties, and taxes, but the case remained open until the pardon. "Rich's philosophy is that no law applies to him," says Morris "Sandy" Weinberg Jr., the former U.S. prosecutor who pursued and indicted Rich in 1983.Over the years, Rich has mentored scores of traders. Although the 70-year-old is past his peak in the business, according to industry experts, his protégés are thriving. "You could call it the University of Marc Rich," says a Senate investigator. As Alaskan and North Sea oil production declines, new supplies increasingly come from some of the most corrupt or politically unstable places on earth, such as Equatorial Guinea and Sudan. These are the new frontiers where major U.S. oil companies fear to tread because of sanctions, embargoes, and antibribery and anti-terrorism laws. But it's where these traders, many like characters out of the James Bond flick Goldfinger, make good money, especially when oil tops $60 a barrel.Governments and law enforcers have long been suspicious of some Rich Boys. In a six-month investigation, BusinessWeek has pieced together the first comprehensive look at their sprawling and deliberately elusive operations. Our findings:-- Rich has spawned the most powerful informal network of independent commodities traders on earth. He did it primarily by funding spin-offs and startups around the globe for decades, and by training scores of traders who have set up their own shops. Although Rich no longer maintains stakes in most of these outfits, he has helped create a network that, in sum, is far more formidable than his own company in the 1970s and 1980s, when it was the world's premier commodities trader.-- The Rich Boys' often controversial activities are on the rise. They buy oil from places where corruption is extensive: Some of the Rich Boys have been named in scandals in Nigeria and Venezuela. They also sell oil from pariah states to U.S. refiners.-- Although Rich testified in writing in March, 2005, to a House committee investigating the U.N. program that he was not in any way active in the Oil-for-Food program, documents suggest that he bought Iraqi oil in 2001 from various front companies, which BusinessWeek has identified. This took place just one month after his pardon. If so, it seems that Rich may have misled Congress. The CIA, the Senate, and others have concluded that from September, 2000, until September, 2002, buyers in the Oil-for-Food oil program had to pay illegal surcharges that Saddam used in part to buy weapons, though no documents show Rich made such payments. Some investigators believe Iraqi insurgents are now using that money.-- One company from which Rich bought crude during this period was a front for extremist Russian and Ukrainian organizations. All were pro-Saddam; one was a staunch supporter of North Korean dictator Kim Jong Il. Another company was tied to a major money launderer for Saddam.To reach these conclusions, BusinessWeek traced crucial connections from a number of official inquiries and documents. Key among these documents: shipping tables from the Middle East Economic Survey (MEES), the preeminent authority on tanker activity in the Middle East. These detail the ports, tankers, destinations, and buyers of Iraqi crude. Other insights came from a 2004 CIA report on Iraq, data from Switzerland's Federal Commercial Registry Office, and the many inquiries launched into Oil-for-Food. The Justice Dept., six congressional committees, a U.N. commission, Morgenthau's office, and several countries, including Switzerland, are all investigating the program. Extensive interviews with dozens of oil traders, government investigators, and energy experts around the globe helped form a clearer picture of how the network operates.Rich did not respond to numerous requests for interviews. But Thomas Frutig, CEO of his major holding company, Marc Rich + Co. Holding, denied to BusinessWeek involvement in Oil-for-Food. Frutig declined to respond to other allegations, despite repeated phone and e-mail requests. Trader Clyde Meltzer, one of Rich's business partners in the 1970s who remains close to him, says: "Marc is the most upstanding guy you'll ever meet. It's untrue he ever did anything dishonest."Rich's trading in 2001 sheds a harsh new light on his pardon, which is limited to his 1983 indictment. To revoke it would require a constitutional amendment. Even so, it's possible authorities could levy new criminal charges against Rich, who is worth up to $8 billion by some estimates, for activities not included in the pardon. A federal grand jury in New York is apparently still investigating whether any of the money Rich and other traders allegedly funneled to Saddam was used to fund terrorism. The U.S. Attorney's office declined to comment. In 2001, New York State sued Rich for tax evasion, seeking $137 million they say he owes. But given Rich's clout — he is a major philanthropist, one of Switzerland's largest taxpayers, and extremely well connected — he'll likely continue to enjoy the good life abroad.MAVERICKS IN THE MIDDLELike Marc Rich + Co. holding, most of the Rich Boys have offices in the tiny Swiss canton of Zug, with its quaint stores, Gothic architecture, and low tax rates. These maverick middlemen typically don't own or operate oil refineries or wells. Instead, they buy oil from producers, line up buyers to refine it, and charter tankers to ship it. Oil trading is often nebulous and opaque. Title to a tanker's oil, for example, may change a dozen times before the ship reaches port.Some of the Rich Boys, like Pollner and Chalmers, have never worked for Rich. They've merely done business with him or have connections to him through other traders. Typically, Rich has bankrolled or owned stakes in the traders' companies, or sold them to close associates. Among the mightiest is commodities giant Glencore International, based in a suburb of Zug, which boasts annual turnover of $72 billion, according to its financial disclosures, making it one of the world's largest private companies. Glencore owns scores of other commodities companies from Spain to Australia. Rich sold the firm to its management in 1994, and the company says it now has no connection with Rich. It is run by former Rich lieutenants Ivan Glasenberg and Willy Strothotte, according to its Web site.Companies run by the Rich Boys span the globe. Consider Netherlands-based Trafigura Group, one of the world's top trading companies. According to industry experts and investigators, it was founded in 1993 by former Rich traders with money from Rich. Experts say he invested in companies like Trafigura to expand his empire, though most contend he no longer has a stake in them. Zug-based Masefield Group was also founded by former Rich traders. In Moscow, there's Milio International Ltd., formed by Rich traders in 1997. Rich's flight to Switzerland in 1983 didn't stop him from financing companies in the U.S., among them Novarco, a White Plains (N.Y.) commodities-trading business he established in 1997. He sold its oil contracts in 2002 to Richmond (Va.)-based Dominion Resources Inc. (D ), according to company reports.Many of the Rich Boys' tactics may be hyperaggressive, but they're perfectly legal. One way they do business: exploiting opportunity in Eastern European or Third World countries in dire need of funding. Rich taught his disciples — called Lehrlings, German for apprentices — to lend cash-strapped companies money and get the right to buy their commodities, industry experts say. Last year, for example, Glencore loaned $40 million to Peru's second-largest zinc miner, Volcan Compañia Minera. Volcan agreed to sell zinc and other minerals to Glencore from 2004 to 2010.At times, some Rich boys apparently use front companies — opaque holding entities — to disguise deals. According to Senate documents, they have set up fronts with innocuous names such as Rescor Inc. or Plasco Shipping. Based in tax havens with strong banking secrecy such as Panama, Liechtenstein, and Gibraltar, they come and go like flickering harbor lights once a deal is done.David Chalmers found such companies useful in trading Iraqi crude during sanctions, according to the Senate subcommittee on permanent investigations. It alleged he routinely used a company called Italtech to do business in Iraq. The submarine-engine outfit was started in the late '80s by Chilean-Italian arms dealer Augusto Giangrandi, who headed the Bermuda subsidiary of Chalmers' Bayoil. Italtech opportunistically morphed into an oil trader in 1999. Chalmers' lawyer, Bart Dalton, says Italtech "was not a front company."Ben Pollner, law enforcement officials believe, was behind Fenar Petroleum and Alcon Petroleum, registered in Liechtenstein in 1999, according to corporate registry documents. They were among the largest oil purchasers during Oil-for-Food, together exporting $2.47 billion worth of crude, according to a report by the U.N. Independent Inquiry Committee, chaired by former Federal Reserve Chairman Paul A. Volcker. Investigators allege they paid tens of millions in illegal surcharges. The companies sold almost exclusively to Pollner's company, Taurus, MEES shows. "We've interviewed more than a dozen traders who claim that although Pollner was working on his own deals, he was often acting on behalf of Rich, too," says a senior prosecutor investigating possible Oil-for-Food violations.THRIVING IN TROUBLE SPOTSOne reason the rich boys are so busy these days is because they thrive in a world of high oil prices and scarce reserves. Big U.S. oil companies are desperate for crude yet don't want to dirty their hands getting it from global trouble spots. Says a former partner of Rich's, who requested anonymity because he routinely trades with Big Oil: "Majors don't want to touch the oil, yet they want to buy it. If you think Pablo Escobar the Colombian drug king was guilty, weren't people who used cocaine, too?" In fact, half the crude on which Oil-for-Food surcharges were paid ultimately ended up with U.S. majors, according to the Senate. Says Richard Perkins, former director of worldwide oil trading at Chevron Corp.: "The majors are the bread and butter" of traders like the Rich Boys.U.S. companies are forbidden from bribing officials. If they do, it can prove damaging. The Securities & Exchange Commission, for example, is probing Marathon Oil (MRO ), ExxonMobil (XOM ), Amerada Hess (AHC ), Chevron (CVX ), and others for allegedly bribing President Teodoro Obiang Nguema Mbasogo of Equatorial Guinea and his relatives for oil rights. The companies say they're cooperating with the SEC and that they acted lawfully.Oil majors are also under pressure to shun pariah states. For instance, there are tight limits on deals with war-torn Sudan because it backs terrorism and engages in genocide. But companies set up by the Rich Boys, including Trafigura and Glencore, are among those buying crude there, trade reports say. China is a big customer for the Rich Boys there and elsewhere. Still, says Hal C. Eren, principal attorney at Washington's Eren Law Firm and a former U.S. Treasury Dept. official, tighter controls have "created a situation that's definitely helping independent traders."Because the Rich Boys operate in such secrecy, one of the few ways to see how they work is when they get busted or investigated. For example, in Nigeria last year, Petrodel, a firm run by former top Rich trader Michael Prest, Glencore, Trafigura, and several other firms, were accused by Nigeria's state oil company of inflating shipping costs by doctoring documents. The Nigerians demanded repayments of more than $100 million. Trafigura denies the allegations and says that all past problems have been resolved. A Glencore spokesman "vigorously disputes" the charges. Petrodel officials and Prest could not be reached for comment.Some Rich Boys also have their hand in oil-rich Venezuela, whose leftist leader, President Hugo Chávez, is at odds with the Bush Administration. After an oil workers' strike in 2003, Glencore and two U.S. traders allegedly paid kickbacks to secure deals with oil monopoly Petróleos de Venezuela (PDVSA), according to The Wall Street Journal. PDVSA denied accepting bribes and Glencore denied making any illegal payments.THE SADDAM CONNECTIONSome of the most compelling details to emerge from Oil-for-Food probes revolve around Rich himself. BusinessWeek has pieced together information suggesting that, despite his denials, Rich did buy Iraqi crude from several questionable companies during the program. His name appears in shipping records compiled by MEES. These show he bought from four separate companies, starting in February, 2001: Onako Oil Co., a subsidiary of Alfa Group, one of Russia's largest conglomerates; an Egyptian company called International Company for Petroleum & Industrial Services (or INCOME, for short); and a Swiss company, Zerich, with ties to some extremist groups. The fourth, EOTC, remains a mystery. Hesham Sheta, vice-chairman of INCOME's parent company in Cairo, Egypt, International Group for Investments, confirmed that "Marc Rich has been INCOME's 'agent' oil trader since 1990" and that Rich bought Iraqi crude from INCOME in 2001. Zerich has since been liquidated. Alfa denies paying surcharges.Rich tells a different story. In March he acknowledged his company was on the U.N.'s list of "approved" crude buyers but insisted in written answers to House International Relations Committee questions that "nothing ever came of it." A committee spokesman remarked at the time: "We believe Rich knows more than he wishes to acknowledge." Marc Rich + Co.'s Frutig reiterated an earlier press statement: "Marc Rich Holdings reject all the allegations relating to its involvement in the U.N.'s Oil-for-Food program in Iraq."Even with the new information, it may be difficult for the authorities to prove that Rich did anything illegal. At the time, Saddam offered oil at cut-rate prices to his supporters, who would then sell it for a huge profit on the market. For two years leading up to September, 2002, the dictator demanded surcharges of up to 50 cents a barrel that he deposited in secret bank accounts, according to the CIA, the Volcker committee, and Senate documents.While Rich's company bought crude from companies acting on behalf of those with allocations, no documents show he paid illegal surcharges. However, allocation holders would typically "pass on the cost of that surcharge," according to a recent Senate report. "Buyers were informed of the required surcharges, and either paid them directly or reimbursed the allocation holder." Hesham denies that INCOME paid illegal surcharges.Saddam banked about $10 billion from oil surcharges and smuggling, says the U.S. Government Accountability Office. Initially it enabled him to live large, buying fleets of Mercedes and the finest wine, according to the CIA. But when pressure from the Bush Administration mounted in 2001, Saddam earmarked the money for a war chest that "is likely funding the current insurgents," says John Fawcett, an independent investigator tracking Iraqi funds who recently testified to the House Committee on Energy & Commerce.Some Rich Boys were heavy hitters in Oil-for-Food. In February, 2001, for example, the U.N. Security Council reported that Glencore bought 1 million barrels of Iraqi crude destined for the U.S. The oil was diverted to Croatia, where it was sold for a $3 million premium, that went into a secret bank account. Glencore was caught by U.N. overseers, and later agreed to refund the money to the U.N. A Glencore spokeswoman says the oil was shipped to Croatia for storage and later shipment to the U.S. A CIA report alleges that Glencore paid more than $3.2 million in surcharges to Iraq, something it denies.The numerous investigations into the U.N. program paint a complex picture of how Rich Boys allegedly work. In September, 2001, U.S. and U.N. authorities were tipped off by a Greek shipping captain, who feared his tanker chartered by Trafigura was involved in sanctions busting. Trafigura, run by former Rich traders Claude Dauphin and Eric de Turckheim, bought Iraqi oil from a Bermuda company called Ibex Energy, according to a U.N. report. Ibex was owned by another former Rich trader, Jean-Paul Cayré. SOCO's Patrick Maugein, once a top Rich trader, was close to former Iraqi Deputy Prime Minister Tariq Aziz. The CIA alleges Maugein received oil allocations that he sold through Trafigura. Maugein denies paying illegal surcharges. Maugein says he knows one of Trafigura's founders. Investigators allege he had a contract with or a stake in Trafigura, something both the company and Maugein deny. Maugein and Trafigura also deny having commercial ties to Ibex.DEALS WITH EXTREMISTSRich and those like him are so successful because they'll do business with virtually anyone if there are big bucks to be made. Both Rich and Pollner's Taurus Petroleum bought Iraqi crude in 2001 through the now-defunct Zerich, according to MEES shipping records. Zerich was a front for various groups that received oil allocations, a CIA report says.Some of them, BusinessWeek has learned, are extremists, including Ukranian and Russian outfits that strongly supported Saddam — as well as North Korean strongman Kim Jong Il. One, Russia's Peace & Unity Party, threw a birthday bash in Moscow in January, 2004, in honor of Kim. At it, Peace & Unity Chairwoman Sazhi Zaindinova Umalatova called Kim "an all-powerful treasured sword...when the imperialists are getting more undisguised in their military ambition," according to North Korea's news agency. Zerich also acted for the Ukraine Communist Party and the Ukraine Socialist Party. In all, Zerich bought $422 million worth of oil from Iraq, according to the Volcker committee.In the early 1990s after the Soviet Union collapsed, Rich quickly became the most powerful trader there. He was "a coach and sort of a godfather for several of the oligarchs," says Vladimir L. Kvint, a professor at American University's Kogod School of Business. Pollner worked for Chalmers at Bayoil then, and all of them sold Russian crude that they got through the oligarchs.Rich has long had ties to Mikhail Fridman and his mammoth Alfa Group, says Kvint. In 2001, Rich nearly sold his company to an Alfa division: Zug-based Crown Resources Corp. (now called ERC Trading). During the U.N. program both Rich and Chalmers bought oil from Alfa units, according to MEES: Onako and Tyumen Oil Co., respectively. The CIA report alleges that Alfa paid illegal surcharges to Saddam during Oil-for-Food, which Alfa denies.Rich is legendary for cultivating people in high places. Traders say he could reach practically any diplomat, oil minister, or dictator in an instant with a phone that some joked seemed surgically attached to his ear. Two of his key Mideast connections were the powerful Bakhtiar brothers, Esfandiar and Bahman. The Bakhtiars — whose father, investigators believe, headed the Shah of Iran's secret police — fled to Iraq after the Shah's ouster. Thanks to family ties, Saddam treated them like "adopted sons," says Jules B. Kroll, founder of Kroll Inc., hired by Kuwait to investigate Saddam's finances in 1991.The Bakhtiar link helped Rich forge links with the Iraqi dictator, says the Kroll report. Kroll says it obtained faxes between Rich and the Bakhtiars describing Rich's intent to trade Iraqi crude through the brothers. Over two decades, Rich traded allegedly through two companies linked with the Bakhtiars: Jaraco and Dynatrade (now owned by INCOME's parent, IGI). The Bakhtiars set up Jaraco in Geneva in 1981. In 2004, the U.S. Treasury identified Jaraco as a major money-laundering conduit for Saddam's billions. Hesham Sheta says, "One of the Bakhtiars still acts as a consultant" to IGI, which in turn owns INCOME, from which Rich bought Iraqi crude during Oil-for-Food.Rich, along with Pollner and Bayoil's Chalmers, were "very trusted by the Iraqi Oil Ministry," says Axel Busch, chief correspondent for industry newsletter Energy Intelligence. A street-smart Staten Island boy, "Pollner is considered a brilliant trader," says Busch. Cultivating relations with small refineries, particularly in the U.S., enabled him to handle big quantities of Iraqi oil by breaking it into smaller cargoes, say industry experts. Pollner, they say, began trading with Iraq before the 1991 Persian Gulf War and continued after a U.N. embargo.For his part, Chalmers had loaned money to Iraq since the 1980s and received repayment in oil, according to industry experts. The scion of a wealthy Houston oil family, Chalmers, a tight-lipped trader and tennis ace with a taste for fancy cigars, was used to rubbing shoulders with the elite. But he never worked for Rich. Indeed, his lawyer Dalton says they were always "competitors" and "didn't act together in Oil-for-Food." Still, trade reports and CIA documents show they often did deals with the same people in the same places. Chalmers' deep pockets apparently appealed to Iraq's Oil Ministry. After the U.S. lifted its embargo in May, 2003, the ministry said it would sell only to major refiners, but it still allowed two traders to get supplies — Bayoil and Taurus."EERIE" EXISTENCEThese days rich has opulent digs in several countries. He owns a palatial Moorish villa on Spain's ritzy Costa del Sol and a ski chalet in Saint Moritz, Switzerland. His powerful pals have included opera star Placido Domingo and former hedge-fund guru Michael Steinhardt, who, in a letter backing the pardon, called Rich "my friend...who has been punished enough." Former traders say Rich spends most of his time at Villa Rosa, his compound on Switzerland's glistening Lake Lucerne, surrounded by Picassos, van Goghs, and Mirós.Rich still keeps offices in Zug. "It's eerie," says a financial executive who recently paid a call. "You go up in an elevator and step into a vestibule where you're asked over an intercom if you have an appointment and whom you're there to see. If you're on the list, a security guard opens a door to another room. There you see a receptionist who scrutinizes you. Then you're escorted into another elevator that takes you to a different floor."Rich has slowed down since his pardon. He sold Marc Rich Investments in 2003 but still runs Marc Rich + Co. Holding, which has a trading operation and a real estate arm. U.S. authorities — the Justice Dept., in particular — are on Rich's case. As for some of the Rich Boys, it's possible that the U.N. or even the Swiss government, which is conducting its own investigation into Oil-for-Food, may act if they can prove wrongdoing.Maybe Rich will once again elude his pursuers. He is fast becoming a mythic persona: Word is a TV series based on his life may be in the works. And the Rich Boys — his legacy — rule.By Marcia VickersLinkMetal Men: Marc Rich and the $10 Billion Scamby A. Craig Copetasfictionwise.com"HOW did Marc Rich make over 10 billion dollars and pay so little in taxes? Journalist A. Craig Copetas has infiltrated the inner circle of the commodities market and Rich's associates to show not only how Rich pulled off the scam, becoming one of America's most wanted criminals, but also how other traders have used the same model to evade taxes as well. Currently the center of yet another great controversy, Rich was wanted for evading almost 90 million dollars in taxes and if caught, would have to potentially serve a jail term of over 300 years. METAL MEN is the story of international intrigue spanning the globe from the inside of the White House to the Kremlin. Copetas has written a brilliantly researched work that exposes the inner workings of one of country's largest scams... A commodity trader with a Midas touch, Mr. Rich from the late 1970s until the present ran a multibillion-dollar empire that stretched from Russian nickel mines through Malaysian tin deposits and into trading rooms in London, Hong Kong and New York. He owned a fleet of oil tankers, counted Henry Kissinger and Placido Domingo as his friends, and married the heiress to the Florsheim shoe fortune. He had a $9.5 million home along Spain's Costa Brava and maintained equally lavish residences in Switzerland and Israel. Mr. Rich purchased Picassos and grain silos, scooped up Hollywood studio 20th Century-Fox at one point and helped bankroll everything from the Jamaican Olympic team to the Rhodes prep school in Manhattan. Although his personal wealth is a closely guarded secret, Mr. Rich is routinely estimated to have a net worth in excess of $1 billion... But despite his wealth and power, there was one thing Mr. Rich could not do for the past 17 years: set foot on U.S. soil. For Mr. Rich, until Bill Clinton granted him a presidential pardon, was the most wanted white-collar fugitive in American history. This was a man who fled to a safe haven in Switzerland just before being indicted in 1983 on more than 50 counts of wire fraud, racketeering, trading with Iran despite a trade embargo and evading more than $48 million in U.S. income taxes. Today, he is free to return to America, his past record forever cleansed of legal stain by the pardon Mr. Clinton issued in his last day as president. The pardon has drawn sharp criticism. Former U.S. Justice Department officials have characterized it as 'outrageous' and 'disgusting.' ...This is his story. The son of a poor Jewish scrap-metal trader in Antwerp, Belgium, Mr. Rich was born as Marc Reichon Dec. 18, 1934 ... During one of his many trips back to headquarters in New York each year, he met Denise Joy Eisenberg, the heir to the Florsheim fortune. They were married in 1966, but there was no question of settling down. In 1967, Phillip Brothers transferred Mr. Rich to Madrid along with a fellow trader, Pincus "Pinky" Green, an orthodox Jew whose dirty shirts and sneakers contrasted with Mr. Rich's elegant suits and trademark flashy neckties. Together, they developed a system that allowed Philipp Brothers to bypass the major oil companies, the "Seven Sisters" who then controlled the world's oil supplies. They had invented spot oil trading ...In November 1973, Messrs. Rich and Green walked away from Philipp Brothers and started Marc Rich AG, the Swiss trading company that would become the cornerstone of Mr. Rich's empire. The company that was financed through a $2 million loan arranged by Rich's father through a Bolivian bank and a $1 million cash injection by Jacques Hacheul, a Philipp Brothers trader and also Jewish who had joined them in the mutiny."LinkNew Links Tie Pardons To Secret Israeli DealsRich Seen as Key In a Failed Offer To North KoreaBy RACHEL DONADIO and BRADLEY BURSTONFORWARD STAFFAs congressional and Justice Department investigators probe the motives behind President Clinton's pardon of Marc Rich, information uncovered by the Forward suggests that the billionaire commodities trader may have played a key role in a sensitive deal that Israel had hoped to broker with North Korea in the early 1990s.Under the deal, which was proposed by Israel in 1992 and called off at the behest of the United States in 1993, North Korea would have ceased selling Rodong long-range ballistic missiles to Middle Eastern countries in exchange for $100 million in investments and mining aid from Israel.Israel's proposal to Pyongyang was made "in tandem" with Mr. Rich, according to a 1994 report in Intelligence Newsletter, a respected insider publication based in Paris. One senior Israeli diplomat who tried to broker the Israeli-North Korea deal denied that Mr. Rich had any involvement in it. An American diplomat who urged Israel to call off the talks said he could not recall if Mr. Rich was involved. However, an account of the failed deal given by another senior Israeli diplomat strongly suggests that Mr. Rich had a role.Mr. Rich's alleged involvement in the North Korea deal could support claims by his legal team that the fugitive philanthropist was important to Israeli foreign policy. Yet the fact that the aborted arrangement involved a Communist dictatorship and was opposed by Washington could raise even more questions about the reasoning behind Mr. Clinton granting Mr. Rich and his partner Pincus Green executive clemency in January.In the early 1990s, Israel's major interest in North Korea was "to stop the supply of missiles to the enemies of Israel, particularly Libya, Iran and Iraq, which are very troublesome for us," said Asher Naim, who was involved in the deal as Israel's first ambassador to South Korea from 1992 to 1995.Israel decided that the only way to convince cash-strapped North Korea not to sell weapons — one of its only means of acquiring foreign currency — was through economic incentives. "We believed it was through finding another way for North Korea to earn about the same amount of dollars without having to sell arms," Mr. Naim told the Forward. "That was the philosophy.""We...found somebody who was willing to invest in North Korea — and I won't mention any names — who would excavate gold and other mines in North Korea," Mr. Naim said. Those investments, initially set at around $100 million, would grow over time and "guarantee" even a higher dollar income "than what they were getting from arms sales," he said.Asked if Mr. Rich was the investor in question, Mr. Naim laughed, and said he "wouldn't name" anyone. The former ambassador conceded that the investors backing Israel's side of the deal were not Israelis. "There were a couple of investors, two of them," he said.Mr. Rich's spokesman, former Mossad agent Avner Azulay, did not return calls.Eytan Bentsur, a former deputy director-general of Israel's Foreign Ministry, who traveled to Pyongyang and Beijing in 1992 and 1993 to negotiate with the North Koreans, said that Mr. Rich was not involved in the deal. "I categorically deny it," Mr. Bentsur told the Forward.Robert Gallucci, the former assistant secretary of state and America's top negotiator with North Korea, said he was not aware of Mr. Rich's role in the deal. "I do recall learning that Israel had discussions with the North Koreans that involved some exchange potentially leading to restraint in missile exports," Mr. Gallucci, now dean of Georgetown University's School of Foreign Service, told the Forward via e-mail."I also recall a lack of enthusiasm for those discussions by the U.S. in the midst of the Geneva negotiations — a view we shared with Israel," he said, referring to North Korea's threats in early 1993 to renounce the nuclear Non-Proliferation Treaty. "More than that, I don't recall, including the name Marc Rich in that connection," Mr. Gallucci said.Yet if Israel was looking for someone able to provide millions of dollars in investments plus mining expertise, Mr. Rich would have been a reliable bet."It's a logical proposition," said Scott Armstrong, a former researcher at the National Security Archive who has followed Mr. Rich's commodities trading since the 1970s, but who said he had no knowledge of the North Korea deal. "If you had a commodities situation in a sensitive political environment, among the commodities brokers — if not the first one — you would turn to would be Marc Rich," he said.Mr. Armstrong added,"anything that can be commoditized, Marc Rich would be a valuable consultant on. And the angles are difficult to play with North Korea, since there are sanctions, transportation problems, liquidity problems, guarantees, so it's very likely that they would bring him into the equation."By the early 1990s, Mr. Rich had already added mining to his commodities repertoire, in addition to crude oil, Cuban sugar and grain. Mr. Rich's companies had investments in a number of South American mines, including Peruvian silver and gold mines, the Financial Times reported in 1993.In 1988, Mr. Rich entered into a 50-50 partnership with France's Societe' des Mines et Produits Chimiques de Salsigne, the leading gold producer in Western Europe, in order to build a plant to treat tailings from the biggest gold mine in France. The plant opened in 1989.North Korea, burdened with a non-convertible currency and a weak economy after the collapse of the Soviet Union, had begun boosting its gold sales between 1989 and 1991 in order to raise hard currency, and was eager for help to develop a gold mine in its northern Unsan province.In the deal, Israel and North Korea "only talked about mining," Mr. Naim said.North Korea was "clearly interested in mining assistance," said Leon Sigal, who writes about the failed Israeli deal in his book, "Disarming Strangers: Nuclear Diplomacy with North Korea." The North Koreans assumed that "there were people the Israelis could get to help out, even if there wasn't that exact kind of mining in Israel," he said."But my guess is the gold mining may have been a pretext to open up a whole lot of other negotiations," Mr. Sigal added.Mr. Naim said that had the deal progressed according to plan, Israel would potentially have opened full diplomatic ties with North Korea. "We didn't reach that point," Mr. Naim said.In the end, Israel called off the deal in 1994, at the request of the United States. The State Department "wasn't happy" about the North Korea deal, Mr. Naim said. "They believed that our separate avenue would not succeed in their estimation, and would disrupt a more complex and general posture of the U.S. and Japan and South Korea and others who were involved" in talks with North Korea. Mr. Naim said that Israel's talks were done "with the full consent" of South Korea.Mr. Naim added that Washington was "sympathetic to our concern" and "promised" that the issue of Mideast arms sales would be raised when the U.S. opened its own subsequent talks with North Korea.In a visit to South Korea in December of 1994, then-Prime Minister Rabin said that Israel's talks with North Korea were a "major mistake." He said the North Koreans had tried to "fool" Israel by demanding more money.The North Koreans were "not very easy partners," Mr. Naim said. "We were not sure that we were getting the pro quo if we did the quid, so it was rather difficult for us to get an agreement."LinkLinkChairman of SOCO International, 1999 - presentRecipient of 25 millions barrels (via Trafigura) and 47 million (via Ibex).The 2003 SOCO website says: "Mr Maugein (age 55, Non-Executive Chairman) joined the Board in July 1999. He has developed a portfolio of private investments in several industries and is currently Chairman of the Alternative Finance Group."Numerous news reports describe him as being "close to President Jacques Chirac."In 2002, Maugein filed a claim in federal court in Denver alleging that Newmont Mining Corp., Denver, paid Vladimiro Montesinos, Peru's former spy chief, to bribe Peruvian judges to rule in favor of a 1998 case involving Minera Yanacocha SA, Latin America's largest gold mine, and, thereby, helping it win control of the mine. The case was dismissed. This case can be Googled for more info.from Therese Raphael's Wall Street Journal story:Mr. Maugein, a billionaire with close ties to Jacques Chirac, is a longtime associate of the trader and former fugitive Marc Rich, who fled to Europe in 1983 to avoid answering charges of racketeering, illegal trading and dodging a tax-bill of $48 million. (Mr. Rich was pardoned by Bill Clinton in his final hours in the White House). Mr. Maugein was also a close contact of Tariq Aziz, with whom he met regularly. He is the non-executive chairman of Soco International PLC, a publicly listed London-based petroleum exploration/production company, which goes into markets the majors tend to skip--Mongolia, Vietnam, North Korea, Libya and Yemen.Messrs. Maugein and Rui de Sousa acquired their interest in Soco through an entity called Torobex, whose shares were held by Tobex Holdings Ltd. According to Al Mada, Mr. Maugein allegedly received 25 million barrels of Iraqi crude allocations. Mr. de Sousa is also on the allocation list, down for 11 million barrels.In a statement provided to the Journal, Mr. Maugein says "there is no truth whatever" to any allegation of impropriety and that his dealings in Iraq "were conducted in a perfectly legal manner and in strict accordance" with U.N. rules. His dealings in Iraq, he suggests, were through his 10% stake in Italiana Energia e Servizi, a Mantua-based oil refinery, which is majority-owned by Mario Contini and purchased crude from Iraq under Oil-for-Food.On the Al Mada list, Mr. Maugein's name appears next to the name of Dutch-based oil trading company Trafigura (Beheer BV), which has the bulk of its operations in London. In his statement, Mr. Maugein says that "Trafigura's activities in Iraq are completely independent of that of Mr. Maugein and there is no connection at all between Mr. Maugein and the incident in 2001 involving Trafigura." The incident is the Essex oil smuggling scandal, on which the Journal carried an investigative story in May 2002. In a smuggling practice known as top-loading, 1.8 million barrels approved for sale under a U.N. contract was topped off with an additional 272,000 barrels in the summer of 2001, according to the captain of the Essex oil-tanker, who blew the whistle on the smuggling by advising U.S. and U.N. authorities. It was the second time in less than four months that the Essex had been
Thanks for sharing this AbdulMaria,IMHO, Marc Rich is probably Jew Scam Criminal #1 on the list. Here's some stuff on him -- CSR: The list of countries that Rich has traded with reads like a compendium of rogue states: Iran during the hostage crisis, apartheid-era South Africa, Slobodan Milosevic'sYugoslavia, North Korea, Moammar Gaddafi's Libya, the Soviet Union under Leonid Brezhnev."He sees himself as a citizen of the world, unencumbered by the laws of sovereign nations," said Howard Safir, a former U.S. marshal, who lay in wait outside Rich's Swissresidence in 1985 in one of several futile attempts to enforce an arrest warrantagainst Rich on charges of swindling U.S. taxpayers of nearly $50 million. "His view is that everything and everyone can be bought and sold, and government is irrelevant."
Marc Rich Linked To $9 Billion Money Laundering InvestigationBy P.K. SemlerThe Washington Times6-23-2MILAN, Italy - European prosecutors say that documents identifying Marc Rich - the American fugitive who won an 11th-hour pardon from President Clinton - have turned up during a crackdown on money laundering and the Russian mafia. While Mr. Rich has not been named as a suspect, prosecutors do not rule out issuing a subpoena or even an arrest warrant for him as their investigation develops. Magistrates in Bologna said Mr. Rich's name and companies with whom he has been affiliated repeatedly surfaced during "Operation Spiderweb," which was carried out last week by Swiss and European police forces in cooperation with the FBI. A top executive with Mr. Rich's companies said there was no link between Mr. Rich and the companies identified in the documents. The operation led to the arrests of 50 persons, and 150 more are under investigation in connection with a $500 million money-laundering ring. The probe, one of the largest in recent history, was born out of the U.S. Justice Department investigation of the Bank of New York's role in large-scale money laundering from Russia in 1999. The "Spiderweb" probe focused on the repatriation of funds from the Bank of New York and offshore centers to Russia through Italian and other European front companies. "Basically, the Russians were sending all the money that they could out of the country, and at one point, many of the same people decided they wanted to bring the money back," one Italian investigator said. "The problem was, as they had illegally sent the money out, now they had to find a way to re-launder, or make their money legal for the Russian authorities. So they decided to use friendly Italian companies to issue false invoices or send goods to Russia and make everything look more or less legit." Bologna's chief investigating magistrate, Paolo Giovagnoli, said in an interview that his office does not exclude either issuing a subpoena for Mr. Rich as a "person informed about the facts" " a warrant similar to that of an unindicted co-conspirator in the United States " or issuing an arrest warrant if incriminating evidence emerges against Mr. Rich. "Right now, we have 150 people under investigation and 50 people under arrest and would like to question these people first before naming other people as suspects. Currently, Marc Rich is not on the list of those under investigation, but his name has appeared in relationship with those who are," Mr. Giovagnoli said. "I cannot exclude that our office will issue a subpoena or arrest warrant based on the testimony of those under investigation," he said. He said he would send any evidence he uncovers linking Mr. Rich to money laundering to Swiss authorities so that they can decide whether to prosecute him. Because of his Swiss citizenship, Mr. Rich cannot be extradited from the country that he has used as his base since the 1970s, but recent changes in Swiss law have made money laundering a serious offense with heavy criminal penalties. Mr. Giovagnoli said he first wants to question Grigori Loutchansky, whose Nordex company has been linked with Mr. Rich. Mr. Loutchansky, who has Israeli citizenship, is considered by law-enforcement authorities to be a major figure in the Russian organized-crime network, Mr. Giovagnoli said. "I have an Interpol report that states that Marc Rich was one of the founding partners of Nordex," he said. According to prosecutors, Nordex, a company based in Vienna, Austria, with offices in Germany, Ireland, Lithuania, Russia, Switzerland and Ukraine, is accused of having had a central role in the money-laundering operation uncovered by the "Spiderweb" operation. In court documents in Britain, authorities maintain that Mr. Rich was a founding partner of Nordex. They say Nordex was "created by the old guard of the communist regime to allow the exodus of U.S.S.R. Communist Party funds before the Soviet Union's collapse." Mr. Loutchansky was expelled from Britain in 1994. Authorities say Mr. Rich's name also surfaces in connection with Benex, a company named in former U.S. Attorney Mary Jo White's investigation of suspected money laundering by the Bank of New York. Italian magistrates say Mr. Rich, as the principal director of Glencore International AG, had a direct relationship with Benex. Although the true owners of Benex were never conclusively identified in Miss White's investigation, Benex's offices, located on Queens Boulevard in Forest Hills, N.Y., shared the same building with two companies connected with Mr. Loutchansky. U.S. and Italian authorities say that a good part of the money laundered on behalf of the Russian mafia and businesses passed through Benex's Bank of New York account and that from June to December of 1998 there had been a number of wire transfers from the "Glencore of Rich" to Benex for a total of $178,000. Authorities were not clear whether the "Glencore of Rich" refers to Mr. Rich's Zug, Switzerland, finance and trading company Marc Rich & Co. Holding Gmbh or Glencore International AG, one the world's major commodity-trading companies with an annual turnover of $44.5 billion. Mr. Rich had sold his entire stake in Glencore in 1994, in part because of a messy divorce with his ex-wife, Denise, a songwriter and Democratic Party fund-raiser. Both Glencore International and Marc Rich & Co. Holding said they never had any dealings with either Nordex or Benex. Thomas P. Furtig, the chief executive officer of Marc Rich & Co. Holding Gmbh, said without elaboration that the company has never had ties with Nordex and that "everyone knows who are the owners of Nordex." Mr. Furtig also said that he had never heard of Benex until it was mentioned in the Italian press. Mr. Furtig later issued a written statement that "Marc Rich Holding and its subsidiary companies have never been involved in the transfer of funds or stolen assets from the Soviet Union to other countries." ___ The Observer (16Jun02) provided an update to the reporting of "Operation Spiderweb" and Igor Berezovsky and Oleg Berezovskii (surname spelled both ways). The estimated money laundering has been increased to $9 billion. That plus the estimated $15 billion in the earlier stories at Bank of New York, gets us a bit closer to the estimated total of $300 - $500 billion in loot from the FSU. ___ RFE added Nordex to this developing story... RFE reports that Nordex and Grigori Loutchansky are part of the investigation by "Operation Spiderweb", a European anti-mafia operation conducted by several police agencies. Earlier reports had linked Nordex and Grigori Emmanuilovich "Lucky Loutchano" Loutchansky to such prominent names as Marc Rich (the Mossad operative who was pardoned by President Bill Clinton), Viktor Chernomyrdin (an earlier prime minister of Russia, co-chairman of the Gore-Chernomyrdin commission, and currently ambassador to Ukraine), Vadim Rabinovich (an earlier business partner of Nordex/Loutchansky, adviser to Leonid Kuchma, and currently the president of the All-Ukrainian Jewish Congress), Yury Luzhkov the mayor of Moscow, a failed steel deal with Kazakhstan President Nursultan Nazarbayev and the Israeli Eisenberg group, and the gangster Semion Mogilevich. http://www.washtimes.com/world/20020621-417058.htm