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Clinton's eight reasons for Rich pardon

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Marc Rich (in a 1998 photo) was wanted by the U.S. government for almost 20 years for tax evasion and fraud  

WASHINGTON (CNN) - Former President Clinton cited eight reasons for his pardons of financiers Marc Rich and Pincus Green in Sunday's New York Times.

Clinton's eight-point explanation and CNN's independently gained information about each statement follow:

 • Clinton: "I understood that the other oil companies that had structured transactions like those on which Mr. Rich and Mr. Green were indicted were instead sued civilly by the government."

CNN: In subsequent cases, the Department of Justice filed civil - not criminal -- charges against oil companies that structured their transactions in ways similar to those used by Rich, sources told CNN.

But New York Mayor Rudy Giuliani, who, as a federal prosecutor filed the original case against Rich in the early 1980s, said Rich's case was not comparable, since Rich had also been indicted for mail fraud and was trading for oil with Iran when an embargo was in effect and the country was holding U.S. citizens hostage.

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 • Clinton: "I was informed that, in 1985, in a related case against a trading partner of Mr. Rich and Mr. Green, the Energy Department, which was responsible for enforcing the governing law, found that the manner in which the Rich/Green companies had accounted for these transactions was proper."

CNN: The Department of Energy said in a separate 1980s tax case against Arco, the petroleum company, should have followed the example set by the two, according to a Clinton aide.

 • Clinton: "Two highly regarded tax experts, Bernard Wolfman of Harvard Law School and Martin Ginsburg of Georgetown University Law Center, reviewed the transactions in question and concluded that the companies 'were correct in their U.S. income tax treatment of all the items in question, and [that] there was no unreported federal income or additional tax liability attributable to any of the [challenged] transactions.'"

CNN: Critics, mostly Republicans, countered that the tax experts were paid by Rich and, as such, do not represent an independent view.

 • Clinton: "In order to settle the government's case against them, the two men's companies had paid approximately $200 million in fines, penalties and taxes, most of which might not even have been warranted under the Wolfman/Ginsburg analysis that the companies had followed the law and correctly reported their income."

CNN: Again, critics responded that the tax studies were paid for by the defense attorneys.

 • Clinton: "The Justice Department in 1989 rejected the use of racketeering statutes in tax cases like this one, a position that The Wall Street Journal editorial page, among others, agreed with at the time."

CNN: Critics said, if the indictment was indeed flawed, it should have been the basis for a change in the indictment or a plea agreement, not for a pardon. Rich should have stayed to stand trial instead of leaving the country, they said.

And, by granting a pardon on the basis of a flawed indictment, these same critics said the president is implicitly questioning the fairness of the U.S. justice system.

 • Clinton: "It was my understanding that Deputy Attorney General Eric Holder's position on the pardon application was 'neutral, leaning for.'"

CNN: Holder told Congress he was neutral and leaning in favor of a pardon because he didn't realize Rich was a fugitive and had heard from the White House that prominent Israelis were backing a pardon for Rich.

He added that had he had more time to review the case and known what he knows today about it, he would have opposed it.

 • Clinton: "The applications were 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."

CNN: Though they acknowledge representing Rich, and arguing to U.S. attorneys at the time that criminal charges should be replaced by civil tax charges, the three GOP lawyers said they knew nothing about any application for a pardon.

Thus, all three Republicans have challenged Clinton's description. "This is absolutely false," Garment told CNN. "I had nothing to do with it."

"I knew nothing about it," William Bradford Reynolds told CNN. "We never, never, never had any discussions about a pardon."

"In no way, shape or form was Mr. Libby involved in the pardon of Mr. Rich," White House Spokesman Ari Fleischer told CNN.

Sources involved in the case said the three lawyers argued for a plea agreement, not for a pardon.

Libby represented Rich from 1985 to until early 2000, but was working toward a plea agreement, Fleischer said. The relationship with Rich was severed after they agreed the lawyers had reached an impasse in negotiations with the Justice Department.

But the wording of this point was slightly altered in later editions of the newspaper. It became: "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 handing in the editorial to the newspaper Friday, "the president himself noted that that was a very poorly worded sentence, and we changed it," said former White House spokesman Joe Lockhart on ABC's "This Week."

"Unfortunately, it didn't make the first edition of The New York Times. I think the second edition is much more accurate," Lockhart said.

About the three men's disavowals, Lockhart said, "It was all of their work. It was their legal analysis and their tax analysis that formed the foundation of the pardon. So ... it is incorrect to say that they were part of the pardon application. That was something that [Rich attorney] Jack Quinn did. But it was all of their work that persuaded the president that he ought to grant the pardon."

 • Clinton: "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."

CNN: Republicans and some Democrats said it's an example of the need for campaign finance reform.

"The fundamental of this is really that money is what taints this whole thing," said Sen. John McCain, R-Arizona, who made campaign finance reform a central theme of his failed bid for the Republican presidential nomination last year.

"Average Americans would not get that consideration, and I think that's obvious and that's what taints this whole thing," he said.



RELATED STORIES:
House focuses on Clinton staff in pardon probe
February 15, 2001
U.S. attorney launches criminal probe of Rich pardon
February 14, 2001
House committee investigates Rich pardon
February 8, 2001
Clinton accepts 'full responsibility' for Rich pardon
February 2, 2001
Senate pardon probe wins conditional Democratic support
February 1, 2001

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