The King of Oil: The Secret Lives of Marc Richby Daniel Ammann
Billionaire oil trader Marc Rich for the first time talks at length about his private life (including his expensive divorce from wife Denise); his invention of the spot oil market which made his fortune and changed the world economy; his lucrative and unpublicized dealings with Ayatollah Khomeini's Iran, Fidel Castro's Cuba, war-ravaged Angola, and apartheid South
Billionaire oil trader Marc Rich for the first time talks at length about his private life (including his expensive divorce from wife Denise); his invention of the spot oil market which made his fortune and changed the world economy; his lucrative and unpublicized dealings with Ayatollah Khomeini's Iran, Fidel Castro's Cuba, war-ravaged Angola, and apartheid South Africa; his quiet cooperation with the Israeli and U.S. governments (even after he was indicted for tax fraud by Rudy Guiliani) and near-comical attempts by U.S. officials to kidnap him illegally.
This sure-to-make-headlines book is the first no-holds-barred biography of Rich, who was famously pardoned by Bill Clinton, and resurfaced in the news during the confirmation hearings of Attorney General Eric Holder. The King of Oil sheds stunning new light on one of the most controversial international businessmen of all time, charting Rich's rise from the Holocaust, which he fled as a young boy, to become the wealthiest and most powerful oil and commodities trader of the century. From his earliest trading days to the present, Marc Rich's story is astonishing and compelling.
“It's a psychological thriller, each page percolating with the triumphant darkness that is Marc David Rich.” Bloomberg News
“An empathetic look at the notorious Marc Rich, one of the most successful and controversial commodities traders in recent history and a key figure in the invention of the spot market. With unparalleled access to Rich, his family and associates, business journalist Ammann paints a nuanced portrait of the man vilified for trading with Iran and apartheid-era South Africa, accused of being the biggest tax fraudster in U.S. history and recipient of an infamous presidential pardon. This meticulous account sets the record straight on a reluctant public figure who lost in the court of public opinion, but escaped being tried in a court of law.” Publishers Weekly
“Is Rich a rogue or a philanthropic businessman? Ammann lets readers draw their own conclusion. This book reads like a cross between a rags-to-riches saga and a cloak-and-dagger thriller, but it's also an excellent and timely primer on the world of commodities trading within a global economy and will greatly appeal to readers interested in current events.” Library Journal
Read an Excerpt
The King of Oil
The Secret Lives of Marc Rich
By Daniel Ammann
St. Martin's PressCopyright © 2009 Daniel Ammann
All rights reserved.
The UNDISPUTED KING of OIL
Oil. Black gold. The "world's most controversial resource" has created the mighty dynasties of the Rockefellers and the Gettys. It has tempted dictators such as Saddam Hussein into acts of aggression and brought down emperors such as the shah of Iran. Even today, countries are prepared to go to war to secure access to this strategically important resource. Without oil, there would not be an airplane in the sky or a car on the road. Without oil, hospitals would cease to operate and shopping centers would remain empty. Our modern economy is unthinkable without oil. Oil is the world's most important source of energy. More important, it is the most important commodity of an industrial society. We live in the Age of Oil. We are "hydrocarbon man," whose very survival would be impossible without oil.
The spot market for oil was surely one of the most lucrative ideas of the twentieth century. Back when Marc Rich first began to snatch away a part of the global oil trade from the mighty oil corporations, crude oil cost 2 per barrel. In summer 2008 a barrel went for a record 140. Marc Rich's undertaking was revolutionary — and highly successful. In the 1970s, Rich and a handful of trusted partners single-handedly managed to break the cartel of Big Oil, a cartel that dominated every aspect of the oil trade from the well to the gas pump. They created the first fully functioning, competitive market. They invented the spot market. Thanks to the oil trade, Rich — who came to the United States as a poor Jewish refugee boy — became one of the world's richest and most powerful commodities traders. He advanced to become the "undisputed King of Oil," as one of his longtime associates referred to him.
The high point of Rich's power was soon followed by his fall from grace, a fall that cost the billionaire his reputation, his wife, and his company. Marc Rich is not known the world over as a result of his amazing entrepreneurial achievements, which were many. His name does not ring a bell because he was a unique pioneer of globalization, which he was. His name is not bound to the realization of the American dream, even though he rose from a penniless European Holocaust survivor to become one of the richest men in America by the strength of his own will.
Despite his fabulous wealth, Rich lost control over his own name. Today the name Marc Rich means the billionaire trader who fled the United States in 1983 to avoid charges of tax evasion and making illegal oil deals with Iran during the hostage crisis. Marc Rich stands for the controversial last-minute pardon he received from President Bill Clinton in January 2001, "one of the most disgusting acts of the Clinton administration," as Forbes magazine wrote. Marc Rich stands for doing business "with just about every enemy of the United States," according to Rep. Dan Burton, chairman of the House Committee on Government Reform from 1997 to 2002.
Who is this man who led a life of high stakes and high risks? Who is this man who saw wars and revolutions not as curses but as business opportunities? Who is the real Marc Rich, the man who managed to elude the agents of the most powerful nation on earth for nearly twenty years?
Although he is one of the most important and most controversial commodities traders of the twentieth century, only one biography has been written about him, nearly twenty-five years ago, and is now outdated. Perhaps this lack of coverage has something to do with the 1983 criminal proceedings that made Rich into the persona non grata that he is today. More likely it is because Rich is considered the most secretive trader of the notoriously furtive commodities trading community. For years, no one had ever seen a photograph of him. The media had to resort to artists' sketches for their reports. He systematically avoided reporters. Rich gave his last interview of significant length over twenty years ago. As a result, no one has ever succeeded in getting to know the real Marc Rich. No one has ever been able to find out his secrets.
Three years ago I decided to do just that.
"Dear Mr. Rich," I wrote in a letter in December 2006, in which I asked him for a meeting. "My aim is to get to know you better — your values, your thoughts, and your motivations." I included a long list of questions.
I wanted him to know that I did not intend to avoid the delicate subjects. I wanted to ask him why he thought it was right to do business with Ayatollah Khomeini's Iran, with Fidel Castro's Cuba, or with apartheid South Africa — with corrupt, violent, and racist governments. I wanted to hear him speak about the charges of tax evasion, which he was accused of by none other than Rudolph W. Giuliani. I wanted to know why he did not return to the United States and defend himself in court. I wanted to know why he was finally pardoned by President Bill Clinton. I wanted to ask him how he came to terms with the death of his daughter, whom he was unable to visit in the United States during her illness. Of course, I also wanted to know why and how he of all people was so successful.
In all truth, I did not expect a response. Rich had never answered these questions before. That is why I was so surprised when he agreed to a meeting. Perhaps he was pleased by the fact that as a journalist I had been following his story for over ten years. I had always tried my best to remain fair and balanced. Each time I wrote an article about Rich, I gave him the opportunity to make a statement. It came as an even greater surprise when Rich agreed to my demands for total control over the contents of this book. I insisted on the "final cut privilege." I did not want to write an "authorized account" — I wanted to do all of my own research, and naturally I wanted the freedom to write the things that he might not wish to read. Rich agreed to my terms, but he had one condition. He wanted to read my manuscript before it was sent to the publisher so that he could have the opportunity to point out any mistakes. I accepted his request on the condition that I would not be required to make changes to my manuscript if I thought I was right. After having read the manuscript, his comment was as short as it could possibly be. He thanked me in a letter for writing "a balanced report" and didn't ask for any changes at all.
My many long conversations with Rich were an important source of information for this book. As you'll see, he answered all the questions I had wanted to ask, and many more. It was the first time he had ever spoken about any of these subjects, and he only refused to answer my questions when he thought he might have a legal reason for doing so. He spoke openly about his dealings in the world's troubled regions and admitted to having made deals with Iran, South Africa, Angola, and Cuba. He spoke for the first time about the legal case against him — insisting that he never evaded paying taxes and had never broken any laws.
I interviewed dozens of oil and commodities traders from the United States, Africa, Europe, and Asia who had worked with Rich in one capacity or another during the last forty years. They told me about the milestones in Rich's life, his most important business partners, and his decisive business deals. They introduced me to the intricacies of the commodities trade. I had to accept the fact that most of them wished to remain anonymous. Commodities traders, I learned, take more pains to avoid publicity than even Swiss bankers. In this business — which often brings together clients who officially will have nothing to do with one another — discretion is one of the most important prerequisites for success. I read countless — sometimes confidential — documents concerning Rich's case and his companies.
In order to find out more about the private Marc Rich, I spoke with his daughters Danielle and Ilona as well as with his close friends, including the legendary hedge fund pioneer Michael Steinhardt. My conversation with Denise Rich, a very impressive woman, was of particular significance. She spoke frankly about her life with her former husband, their bitter divorce, and her role in obtaining Rich's pardon. Ursula Santo Domingo — Rich's first secretary, a Spanish marquesa — told me of Rich's early days as a trader. A former officer of the Israeli intelligence service, Mossad, provided insight into Rich's very special relationship to Israel and the crucial services he provided to the Jewish state. Finally, the attorneys Jack Quinn — Bill Clinton's former White House counsel — Robert F. Fink, and André A. Wicki tried to convince me of how flawed the case against their client actually was.
Naturally I spoke with Rich's opponents, such as his "nemesis," Morris "Sandy" Weinberg Jr., who as a young assistant U.S. attorney for the Southern District of New York led the investigation into Rich's dealings and wrote the indictment against him. I spoke with former U.S. Marshal Ken Hill, who for fourteen years secretly sought to detain — or even kidnap — Rich. I spoke to members of the judiciary and diplomats in the United States and Switzerland who told me off the record what they could not tell me publicly. I spoke to competitors and former employees who had fallen out with Rich.
The result of all the conversations and research is an epic story of power, morality, amorality, and ingeniousness in which many things are not as they appear. It is a story in which private lives collide with global politics. It is the saga of Marc Rich.
The BIGGEST DEVIL
It is one of the coldest mornings of the year in St. Moritz, and I'm walking to my car. The snow crunches under my feet, and my breath hangs before me in a cloud of mist. It is eight degrees below zero Fahrenheit in the world's oldest and most glamorous ski resort, and I can almost hear the air crackling. I have to scrape away a thick layer of ice from my car windows before I get in. I curse quietly under my breath to hide my nervousness, and I hope the car will start despite the bitter cold. "Please," I beg, as I turn the key. The man I have arranged to go skiing with in the Swiss Alps hates nothing more than people being late. This much I already know. Speaking of his ex-wife, when I once asked him about his divorce, he said, "She is always late. Always." There was no irony in his voice.
Arriving late is not an option. Not here and not now. In half an hour I am going to meet Marc Rich, the twentieth century's most powerful, most important, and most notorious oil trader. No one before and none since has ever been as successful as Rich, and none has stirred up such strong emotions around the world. Friends and colleagues admire him for his unique genius that virtually revolutionized international trade. Enemies despise him and consider him an unscrupulous profiteer who would sell his own grandmother — if the deal was good enough. It seems as if Marc Rich, now seventy-four years old, can only be seen in terms of black or white. The fact that he was pardoned by Bill Clinton in January 2001 has changed nothing. In fact, it had the opposite effect. The pardon, considered one of the "most notorious" in United States history, is seen by many of Rich's opponents as proof that he can buy anything, even immunity from the president of a superpower.
I want to find out who this man really is beyond all the clichés and simplifications. How did Marcell Reich, a poor Jewish refugee boy from Belgium, become Marc Rich, "one of the wealthiest and most powerful commodities traders ever to have lived," as the Financial Times put it? How did he and a handful of business partners seem to appear out of nowhere and go on to dominate global trade in oil and other commodities? What were the crucial decisions, the milestones in his unlikely career? How far did he have to go in order to reach them? What were his limits? What were his greatest successes and his worst defeats? What drives him on? What can be learned from his entrepreneurial skills?
I am lucky. My black Opel starts with a turn of the key. Only the speakers seem to have a tough time with the extreme temperatures. Mick Jagger's voice sounds strangely dull: Please allow me to introduce myself / I'm a man of wealth and taste. It is just before 8:00 A.M., and the streets are full of snow. There is not a person in sight. I drive carefully past the frozen Lake St. Moritz toward the luxurious Suvretta House, the best hotel in town. Within a span of a few days, the hotel will be taken over by the international jet set and European gentry as a fitting location for their Christmas and New Year's celebrations. Nestled among the snow-covered fir trees, the hotel seems tranquil and serene on this particular morning. A group of snowmen with red carrots for noses stands quietly by the hotel entrance.
Mick Jagger's voice echoes from the speakers. Forty years later, the Rolling Stones song "Sympathy for the Devil," written in the very symbolic year of 1968, can be heard again on nearly every radio station. I turn right and head toward the lower terminus of the Suvretta ski lift, where I am to meet the "biggest devil" — the exact term that Marc Rich used to describe himself. "I was painted as the biggest devil," he said to me without the least bit of self-pity during our last conversation in his office in the town of Zug. Those who are familiar with Rich's matter-of-fact style know that he is not prone to exaggeration.
A. Craig Copetas, who wrote the first and hitherto only biography of Rich nearly twenty-five years ago, called him "the veritable Prince of Darkness." Rich was stylized as the personification of evil, the ruthless villain, and the capitalist monster whose fingers are "sticky with the blood, sweat, and tears of the Third World." Over the years, the name Marc Rich became a symbol for greed and unscrupulousness, a chilling code that stands for everything that is wrong with "real-world capitalism."
There is a precise date for the day on which Marc Rich lost control over his own name. On September 19, 1983, a Monday, a young and ambitious United States attorney for the Southern District of New York appeared before the media. Trying hard to hide his glee, Rudolph W. "Rudy" Giuliani feverishly announced "the biggest tax fraud indictment in history." He read aloud from the indictment to the bewildered journalists and camera teams. The New York Times saw the need to describe the situation as an "unusual public display."
Giuliani accused Rich, then forty-eight, of a total of fifty-one crimes. In addition to tax evasion to the tune of at least 48 million, Rich was accused of racketeering, conspiracy, and trading with the enemy — the gravest crimes of which an upstanding citizen can be accused. It was alleged that Rich had been trading in Iranian crude oil and had ignored the U.S. embargo against Iran at a time when Americans were held hostage in Tehran. In the law library of the U.S. attorney's office, Giuliani announced that Rich and his business partner Pincus Green could spend the rest of their lives in prison for their crimes. The two businessmen had already absconded with their families to Switzerland, where the headquarters of Marc Rich + Co. AG, founded ten years prior, was located.
Since then, investigators have frequently referred to the affair as "the biggest tax fraud in American history," politicians have often described Rich as a "billionaire fugitive," and journalists have written articles about "the most wanted white-collar criminal in U.S. history" — a Google search for this wording places Marc Rich right at the top of the list. Understandably, the accusation of trading with the enemy weighs most heavily in public opinion. As the Republican Congressman Chris Shays stated when he summarized the public's mood, "A traitor to [his] country, to our country." For many, Marc Rich is quite simply an enemy of the state.
The biggest devil. I was amazed to hear these words from Marc Rich himself. He may have his strengths, but volubility is not one of them. He speaks quite deliberately and succinctly, usually in only two or three sentences. I had been warned of this. If I could manage to get anything more than a "no," "yes," or "why," I could be happy with the results. He speaks English with a barely noticeable German accent, his father's language, and with an unexpectedly soft voice. While talking he looks you straight in the eyes and scrutinizes your reaction. His handshake is as firm as his conviction that reporters mean trouble.
Excerpted from The King of Oil by Daniel Ammann. Copyright © 2009 Daniel Ammann. Excerpted by permission of St. Martin's Press.
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Meet the Author
DANIEL AMMANN is business editor of the highly regarded Swiss weekly "Die Weltwoche". He was educated at Zurich University, UC Berkeley and Fondation Postuniversitaire Internationale in Paris. In 2007 he won the Georg von Holtzbrinck Prize for Business Journalism.
Daniel Ammann is business editor of the highly regarded Swiss weekly "Die Weltwoche." He was educated at Zurich University, UC Berkeley and Fondation Postuniversitaire Internationale in Paris. In 2007 he won the Georg von Holtzbrinck Prize for Business Journalism and in 2006 the Swiss Media Award for Finance Journalism. He is the author of The King of Oil: The Secret Lives of Marc Rich.
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It's in many ways the best, I've ever read about Marc Rich! It's a compelling story.
Extremely well Written