By Fiona Forde
Daniel Ammann had been knocking on Marc Rich’s door for more than seven years, but the notorious billionaire fugitive financier refused to budge. “I used to write. Then send faxes and emails, a few times a year,” the 45-year-old Swiss business journalist recalls, but the answer was always the same: “No interviews.” But all that changed in December 2006 when the infamous commodities trader who had done business with brutal dictatorships and regimes, South Africa’s among them, agreed to talk. “It’s because of age and maturity,” he would later tell Ammann.
For years he had not uttered a word on his colourful lifestyle or his controversial dealings, the liaisons he nurtured or the palms he greased, not even after Bill Clinton pardoned him on his last day in the White House and erased his name from the FBI’s wanted list.
But in the evening of his life, Rich knew it was time to tell his side of the story and he took Ammann into his confidence. Over the following two years the pair had more than 30 hours of face-to-face interviews, the product of which is The King of Oil: The Secret Lives of Marc Rich.
Rich was born to a Jewish family in Belgium in 1934, but his family fled to the US when he was seven and some years later he took up US citizenship.
He started his career as a commodities dealer with Philipp Brothers, now the commodities wing of Salomon Brothers, and over the years amassed the skill and the confidence to boldly break all the rules of the diplomatic book and start trading with various regimes and embargoed nations around the world.
He audaciously bought oil from Iran and sold it on to Israel. He also sold on to Francisco Franco during Spain’s dark years. The irony is that today he is married to the granddaughter of Dolores Ibarurri, or La Pasionaria as she is known, the staunch communist who fought hard against Franco’s dictatorship for many years.
Politics did not appear to interfere in Rich’s intimate affairs, just as it did not colour his business ties. Some years later, he turned his attention to South Africa, which was by then isolated from the world, reeling under the weight of the UN-led sanctions and crippled after the outcome of the 1979 revolution in Iran.
The mullahs in Tehran “contractually forbade its customers from delivering a single drop of oil to the apartheid state” of South Africa, as Ammann tells it in his book, so Rich stepped in to fill the breach and became the broker.
“Shortly after the Iranian revolution, the apartheid government secretly approached Fenton (Rich’s man in South Africa) in order to discuss oil deliveries, and the two parties soon came to an agreement,” according to Ammann.
It was a deal by which Rich would do extremely well, financially. South Africa was desperate and had little choice if it were to keep the engines running.
PW Botha would later admit that his government “had paid between $1-billion and $2bn each year above the normal price,” writes Ammann.
The author also points to SA parliamentary records in 1984, when it was revealed that the Strategic Fuel Fund had paid Rich $306-million above the spot market price for one large oil delivery alone.
“Oil deliveries also came from Dubai, Angola, Nigeria, Ecuador, Brunei and the Soviet Union,” says Ammann, countries that heckled apartheid with the rest of the world, but continued to do business with Pretoria behind closed doors.
“In reality profit triumphed over principles in these countries,” as he puts it. They all needed hard currency. Rich had found his niche.
“Rich was used in order to conceal the contradictions between these nations’ political rhetoric and economic deeds, and they were content to let him take the political heat,” he says.
But they paid well. According to one of Rich’s right-hand men, they made a profit of more than $2bn during the 15 years he traded in South Africa between 1979 and 1994.
According to Rich, apartheid South Africa was his “most important and most profitable” business.
“His biggest seller was Iran and maybe second to Iran for a time were Angola and Nigeria – the emerging African countries,” Ammann explains.
“Consumer-wise, I think it must have been Israel” who was his biggest trading partner. Though South Africa was not as big a consumer or buyer as Israel, it was more profitable, as apartheid was prepared to pay a huge premium for their supply.
Fifteen years on, Rich feels no remorse.
“Business is neutral,” he told the author.
“You can’t run a trading company based on sympathies”, claiming that all his dealings were above board “and completely legal according to Swiss law” – where his enterprises were listed.
Was it immoral to prop up the apartheid regime?
“We were all against apartheid,” Rich says.
“I was just doing normal business with South Africa … The South Africans needed oil, and people were reluctant to sell it to them because of the embargo. We agreed to do it because we felt it was nothing illegal,” he says, a peg upon which he hangs his claim to decency.
Did he bribe them to do business with him?
He didn’t have to, Ammann says.
“They bribed him. They paid him a huge premium on every barrel.”
What’s intriguing about Ammann’s book is not so much that Rich puts meat on the speculation surrounding his business interests all these years, rather that the end of apartheid did not mean an end of his business interests in this country.
“We continued to do oil business with the new government,” Rich told Ammann.
“It was completely normal for us to continue the business. We think in the long term.”
With whom is the big unknown, though Ammann believes the South African chapter of his business has since been closed.
Contrary to speculation and media reports, Rich is not connected in any way to Glencore – the legal successor of Marc Rich & Co – today, according to Ammann. He was forced to sell out in the early 1990s, during one of the tougher periods of his life.
By then he held a majority stake in Glencore. The company was trading in 128 countries, had 48 offices around the globe and employed 1 200 people.
“He bought and sold 1,5 million barrels of oil each day – more than the daily average output of Kuwait.
He ruled over a trading empire with an annual turnover of $30bn. The company earned anywhere from $200m to $400m in profits each year. Rich’s personal fortune was an estimated $1bn.
As the Financial Times stated in almost reverential terms, Rich was ‘one of the wealthiest and most powerful commodity traders ever to have lived’,” writes Ammann.
On paper the man looked excellent, even if he was a fugitive from justice and an infamous white-collar crime lord. In practice, however, things were not good during those years.
Apartheid South Africa was coming to an end. The Soviet Union was becoming a thing of the past. Glencore had tried to corner the tin and zinc market, but lost a fortune in the process. Rich’s long-time partner, Denise Eisenberg, was about to sue for a divorce. A pardon was nowhere in sight. And his business partners began to look at him as more of a liability than the asset he had been.
“His management forced him to sell the stake,” Ammann says.
“He was weak and they sort of put the knife in his throat. It was a bad situation and they are not on good terms today.” That was November 1994.
Seven years later Bill Clinton pardoned Rich – one of the most controversial pardons in US history after Richard Nixon’s. Successive Israeli governments and diplomats had leaned heavily on various US administrations, Ammann explains.
He was, after all, well placed to pull rank and call in his favours at the end of his business days.
The author probed him on his much-talked about intelligence links. Rich had shared some critical secrets over the years. Though he had bribed his way into many governments, he was trusted in the highest circles.
“Rich confirms that he secretly co-operated with Israel’s intelligence service Mossad and even with the US State Department, though in the end he didn’t want to go into details,” the author told Independent Newspapers.
Today Rich deals in property and oil derivatives and lives in the lap of luxury in an estate on Lake Lucern.
Like any good trader, he has not gone into retirement only into the shadows dealing today in property and oil derivatives.