The Scooter Libby-Marc Rich connection

As I pointed out on Friday, you can make a lot of money being a mob lawyer, but in return you normally have to sacrifice your ambitions for positions of power and trust in the government. Nobody would allow John Gotti's lawyer to become "Dick Cheney's Dick Cheney," but, until very recently, there were few vocal objections to I. Lewis Libby, the long-time lawyer for world-class mobster Marc Rich, being a key player in the White House for the last half decade. Why the double standard?

Jim Pinkerton writes in Newsday:

... Sen. Hillary Rodham Clinton of New York flailed at Libby, declaring the alleged actions of Vice President Dick Cheney's now-former chief of staff to be "reprehensible."

Clinton must be careful, however, because Libby's past legal career is closely intertwined with her husband's presidency. During the 1980s and 1990s, Libby was a lawyer for Marc Rich.

And if you don't remember Marc Rich, you will be reminded of him soon enough. He's the American financier who skipped out of the United States in 1983, one step ahead of a $48-million tax bill and a 51-count indictment for various skullduggeries, including trading with Iran amidst the American hostage crisis. As Rich's lawyer over the next two decades, Libby collected, by his own estimate, some $2 million in fees.

Wait, there's more. In January 2001, outgoing President Bill Clinton gave Rich a pardon. Interestingly, Rich's ex-wife, Denise, donated more than a million dollars to Democratic causes around then, including $70,000 to Hillary Clinton's 2000 Senate campaign and $450,000 to the Clinton Foundation.

Libby denied having anything to do with the pardon effort, but admitted he had called Rich on January 22, 2001 - which is to say, after he started working for Cheney - to congratulate him on his getting off. And Libby's powerful presence inside the White House - his title was assistant to George W. Bush as well chief of staff to Cheney - might help explain why the incoming Bush administration failed to pursue obvious threads of corruption trailing out of President Clinton's pardon of Rich and other dubious figures.

For his part, Rich shows no signs of behaving better. Still wheeling and dealing out of Switzerland, he is a featured nogoodnik in the new UN report on Saddam Hussein and the UN's corrupt Oil for Food program. Which is to say, investigators might wish to look into any continuing Libby-Rich links.

Back in 2001, Clinton wrote in the NYT to explain his pardon of Rich:

7) the case for the pardons was reviewed and advocated not only by my former White House counsel Jack Quinn but also by three distinguished Republican attorneys: Leonard Garment, a former Nixon White House official; William Bradford Reynolds, a former high-ranking official in the Reagan Justice Department; and Lewis Libby, now Vice President Cheney's chief of staff;

After first scoffing at Clinton's citation of Libby's involvement, Byron York changed his tune in National Review Online after he listened to Libby's testimony:

Bad Night for the GOP: Lewis Libby comes to Marc Rich’s defense.

March 2, 2001 8:55 a.m.

Lewis Libby, a top Republican lawyer who is now vice president Dick Cheney's chief of staff, told the House Government Reform Committee last night that he agreed with much of Bill Clinton's widely discredited op-ed article outlining the former president's reasons for pardoning fugitive tax evader Marc Rich.

In a session that stretched late into the evening, Libby, who represented Rich for several years ending in the spring of 2000, told the committee he believes Rich is not guilty of the tax and racketeering charges filed by federal prosecutors in 1983. Libby also said he "quite possibly" would have considered applying for a pardon for Rich had Rich asked him to do so.

Libby, who said his law firms collected as much as $2 million for representing Rich, testified he had nothing to do with the application that led to clemency for Rich. He declined to say whether he approved of the decision to pardon Rich, but he conceded that he called Rich on January 22, two days after the pardon, to "congratulate him on having reached a result that he had sought for a long time." Libby testified he made the call from his home to make clear that he was calling in a personal capacity, and not as a representative of the Bush administration.

In a particularly damaging exchange with Pennsylvania Democrat Paul Kanjorski , Libby agreed that Rich might be characterized as a traitor for fleeing the country and renouncing his American citizenship. Kanjorski asked Libby why he would call a traitor to congratulate him on his good fortune in winning a pardon. Visibly uncomfortable, Libby had no answer.

For Republicans, Libby's testimony was a sour endnote to what had been a long day of revelations that made President Clinton's decision to pardon Rich seem even more inexplicable than previously thought.

Pinkerton served in the Reagan and first Bush White Houses, but I think he's being naive to think that the Libby-Rich connection will be given much of an airing in the press. They've had close to five years to discuss it and it's never gotten any traction.

Why not?

Clinton argued in defense of his pardon for Rich:

(8) finally, and importantly, many present and former high-ranking Israeli officials of both major political parties and leaders of Jewish communities in America and Europe urged the pardon of Mr. Rich because of his contributions and services to Israeli charitable causes, to the Mossad's efforts to rescue and evacuate Jews from hostile countries, and to the peace process through sponsorship of education and health programs in Gaza and the West Bank.

That appears to be plausible. Newsweek's Michael Isikoff broke a story in August 2001 based on transcripts of phone conversations between Clinton and Israeli Prime Minister Ehud Barak:

Barak first raised the issue with Clinton on Dec. 11, 2000, the same day Jack Quinn, Rich's newly hired lawyer (and former Clinton White House counsel) submitted a thick pardon application that included a personal letter from Rich's ex-wife Denise requesting the pardon be granted.

In that first conversation, Barak described Rich as a "Jewish American businessman" who was "making a lot of philanthropic contributions to Israeli institutions and activities like education."

Barak acknowledged that Rich had "violated certain rules of the game in the United States." But "I just wanted to let you know that here he is highly appreciated," the Israeli leader said. Clinton was not caught off guard by the information. "I know about the case because I know his ex-wife. She wants to help him, too. If your ex-wife wants to help you, that's good."

Barak raised the issue of a Rich pardon a second time on Jan. 8, 2001, with less than two weeks left in Clinton's presidency. "I believe it could be important (gap) not just financially, but he helped Mossad [the Israeli intelligence agency] on more than one case." [The word "gap" is typically used when note-takers cannot make out a garbled word or sentence.]

Clinton, who described the case as "bizarre," warned Barak: "It's best that we not say much about that." "Okay, I'm not mentioning it anyplace," Barak said.

In their third conversation, on Jan. 19, transcripts show the two leaders spoke by phone for 22 minutes, between 2:47 p.m. and 3:09 p.m., and that it was Clinton and not Barak who raised the Rich matter that afternoon.

"I'm trying to do something on clemency for Rich, but it is very difficult," Clinton said. "Might it move forward?" Barak asked. The president ruminated about the problems he was facing.

"I'm working on that, but I'm not sure. There's nothing illegal about it, but there's no precedent. He was overseas when he was indicted and never came home."

Clinton concluded that the question "is not whether he should get it or not, but whether he should get it without coming back here. That's the dilemma I'm working through."

The Forward newspaper of New York (formerly the Jewish Daily Forward), which provides better coverage of this kind of issue than the mainstream media, reported in 2003:

Marc Rich, the pardoned tax fugitive, has given away more than $100 million in the last two decades, according to an elegant, hard-bound history of his philanthropic work issued recently by his foundation.

It turns out, though, that even if recipients returned every penny, it still might not be enough to settle his tax bill. New York state tax authorities told the Forward that a two-year-old warrant seeking $137 million from Rich in unpaid state taxes and fines remains outstanding.

The billionaire financier is best known as the recipient of a controversial January 2001 pardon from then-president Bill Clinton. Rich had fled the United States for Europe in 1983 shortly before a grand jury indicted him on charges that he and his associates plotted to evade $48 million in federal taxes and violated sanctions against Iran while Americans were being held hostage there.

But the Switzerland-based Rich Foundation for Education, Culture and Welfare is highlighting another side of Rich's activities during the last two decades. In recent months, it has mailed out approximately 1,000 copies of a hard-bound, 105-page commemorative book detailing 20 years of Rich's charitable work. The book has been sent to other foundations, non-profit organizations and journalists around the world, said Avner Azulay, the Rich Foundation's Israel-based managing director, in an e-mail to the Forward.

Between 1981 and 2001, Rich's foundations gave approximately $115 million to nearly 1,200 organizations in more than 50 countries, according to the book. The majority of Rich's giving — $60.2 million — has been in Israel, where he has funded a diverse array of cultural, educational, social welfare and Jewish-Arab coexistence projects. Rich has also given widely to both Jewish and non-Jewish causes in Latin America and Europe, and he donated $395,000 to fund projects, such as public-health efforts, in the Palestinian territories....

Azulay, a former Mossad agent, said that questions about Rich's legal issues and personal matters are "irrelevant to the Rich Foundation's activity, before or after the pardon." Rich did not reply to an e-mail seeking comment.

One of Rich's most prominent gifts was to Birthright Israel, the $210 million Jerusalem-based partnership between Jewish communities around the world, the Israeli government and Diaspora Jewish philanthropists that has brought 40,000 young Jews on trips to Israel since 2000. As one of its philanthropic partners, Rich pledged $5 million to the program.

Rich, who has renounced his American citizenship, has been more modest in his giving to programs in the United States — such gifts total only $3.7 million...

Only 17 American Jewish groups and institutions are listed in the commemorative book as having received funding for American-based projects, including, among others, several yeshivas, the Center for Jewish History in New York and the Anti-Defamation League.

Rich's giving, and the suspicion that it contributed to the willingness of prominent American Jews and Israeli officials to support his clemency effort, sparked an uproar in some segments of the American Jewish community.

Rabbi Eric Yoffie, president of the Union of American Hebrew Congregations, blasted those who had supported Rich's pardon appeal after accepting his money. Writing in a February 2001 opinion article, the Reform leader argued that the fugitive's supporters "were bought" by his philanthropy.

Prominent individuals associated with Birthright Israel wrote to the president urging him to pardon Rich. So did the ADL's national director, Abraham Foxman, whose organization received $250,000 from Rich. Foxman later declared at a press conference that it had "probably" been a mistake to lobby Clinton for the pardon...

A new round of publicity regarding the pardon appeared to be avoided late last month, when U.S. District Judge Gladys Kessler upheld the right of the Bush administration to deny public access to records on the 177 pardons and commutations Clinton approved on his last day in office.

My published articles are archived at iSteve.com -- Steve Sailer