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U.S. attorney launches criminal probe of Rich pardon

Jack Quinn
Attorney Jack Quinn tells senators he thinks prosecutors ignored congressional intent in pursuing charges against Marc Rich.  

In this story:

Unfair prosecution?

A regulatory dispute

Future lessons

It began with a fax

Clinton to appear


WASHINGTON (CNN) -- Sources tell CNN the U.S. Attorney for the Southern District of New York, Mary Jo White, has begun a criminal investigation into whether a transfer of money was involved in the eleventh-hour pardon of financier Marc Rich by President Clinton.

Federal officials say the investigation is focused on -- among other areas -- whether Rich bought the pardon with money funneled through his ex-wife, Denise, as campaign contributions or donations to Clinton. Those federal sources also confirm that the FBI has been brought in to assist in the investigation.

One source familiar with the original Rich case said the U.S. Attorney's office was angered that the pardon was granted and that it wanted to investigate whether there was a connection between donations given to Clinton's presidential library by Denise Rich.

Indictment: U.S. v. Marc Rich
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CNNfn's Greg Clarkin says while Congress questions Clinton officials, a U.S. attorney in New York opens investigation

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CNN's Bob Franken reports on the continuing controversy over the presidential pardon of Marc Rich

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In an indication that a federal investigation is under way, the Justice Department has asked a Congressional committee investigating Clinton's pardon of the fugitive commodities trader to delay seeking immunity of Denise Rich in order to get her to testify.

The House Government Reform Committee wants Denise Rich to testify about the donations she made to the Democratic party and to Clinton's library.

In a statement, committee chairman Rep. Dan Burton said, "It will take at least one week for the Justice Department to arrive at a final conclusion on this matter. Therefore, the committee does not anticipate taking any actions with respect to Mrs. Rich for at least one week."

Clinton said his decision to grant a pardon to financier Marc Rich was not related to fundraising or other factors.

In a statement released Wednesday, the former president said, "As I have said repeatedly, I made the decision to pardon Marc Rich based on what I thought was the right thing to do. Any suggestion that improper factors including fundraising for the DNC or my library had anything to do with the decision are absolutely false. I look forward to cooperating with any appropriate inquiry."

Quinn: Clinton thought Rich was unfairly prosecuted

Earlier today, Jack Quinn, a former White House counsel and the attorney representing Rich, told the Senate Judiciary Committee he believed Rich was unfairly prosecuted in 1983 and that President Clinton concurred.

Quinn was one of a parade of witnesses to speak before the Judiciary Committee's first hearing on the pardon that has generated wide consternation among Republicans and Democrats alike, many of whom have expressed shock that the outgoing president would pardon someone who had been a fugitive for 18 years.

Quinn presented Clinton with a request for clemency for Rich, he said, because he could not persuade federal prosecutors in New York to speak with him about the merits of the case.

Quinn said he argued the case before Clinton "on its merits," and Clinton decided to move ahead with the pardon.

He then presented a complicated argument in Rich's favor, saying Rich was unjustly prosecuted under federal racketeering statutes for violating laws on oil pricing and sales set in place by the Carter administration, but later rescinded by the Reagan administration.

Rich fled to Switzerland in 1983 as prosecutors in New York prepared federal charges of tax evasion, mail and wire fraud and participation in illegal oil deals with Iran, Iraq and Libya.

The billionaire was wanted by the Justice Department on those charges until Clinton pardoned him in the waning hours of his presidency.

A regulatory dispute

In essence, Quinn said, domestic oil transactions were subject to price controls in the late 1970s and foreign transactions were not. Additional profits had to be eked from foreign sales, Quinn said, by U.S. producers facing cash shortfalls from domestic sales.

"My client facilitated this and profited from its linkages," Quinn said. Failure to understand these complex transactions, Quinn insisted, led the tax evasion charges that brought Rich a federal indictment.

Once indicted, Rich chose to remain at his company headquarters in Switzerland, fearing he would might lose his assets, Quinn said.

Rich and ex-wife
Marc and Denise Rich made a happy couple in 1986, 10 years before their divorce.  

"Ignoring congressional intent," Quinn said, prosecutors hit Rich with a "sledgehammer" of racketeering statutes "for what amounted to what he thought was no more than a regulatory dispute."

The Justice Department has since curtailed the use of such laws in tax cases, Quinn said, adding later that when Clinton decided to grant Rich a pardon, he did so on only on the merits of the case, eschewing personal, political and financial considerations.

Rich's former wife, Denise Rich, is a major Democratic donor, and has pledged as much as $450,000 toward Clinton's presidential library and archive construction efforts in Arkansas.

Numerous critics have said the pardon gives the appearance of a quid pro quo. Clinton insists that he acted within the law and that Rich's case was compelling enough to allow him to grant a pardon.

Future lessons

As the Judiciary Committee opened its hearings Wednesday into the Rich pardon, senators said the president's constitutional authority to grant clemency should not be altered, but lessons of the proper use of pardons should be culled from panel's probe.

The Senate Judiciary Committee opens its hearing on Wednesday morning.  

"I am one of those who believes that the presidential power of the pardon under the Constitution is absolute," said Senate Judiciary Committee Chairman Orrin Hatch, R-Utah. "We need to have a full explanation of what is going on, so if there are any improprieties, they won't happen again."

"The focus of the hearing today will be the process," Hatch said.

Republican Pennsylvania Sen. Arlen Specter, the Judiciary Committee member leading the investigation, raised multiple questions in his opening statement Wednesday about whether Clinton's last-minute pardon of Rich was valid.

Specter said the Justice Department's pardons attorney, Roger C. Adams, might not have had the authority to act on the pardon after Clinton left office.

Adams, testifying shortly thereafter, described in great detail the process by which the pardon attorney's office vets applications for clemency and recommends either a full pardon to the White House counsel's office or a rejection of a clemency request.

It began with a fax

That process involves a background check by the FBI, information from the case's original prosecuting attorney, a written response from the victim or victims of the crime, if applicable, and a final review of the deputy attorney general before recommendations are made to the White House counsel.

In the Rich case, Adams testified, none of those procedures were followed. Adams told the committee he was notified of the president's intention to grant a pardon just after the stroke of midnight on the morning of January 20, just 12 hours before the end of the Clinton administration.

That fax included, among others, the names of Marc Rich and Rich's associate, Pincus Green, who was also living in Switzerland, Adams said.

Quinn testified later that he submitted the pardon application to the president in early December, about "five weeks" before January 20th.

Adams said he immediately requested "identifying information" on the two, and was told by the White House he might have trouble tracking down detailed information on them "because they had been living abroad."

Later, in the early hours of January 20, Adams said, he received confirmation from the FBI that Rich was a fugitive.

Adams said he contacted Deputy Attorney General Eric Holder about the pending pardons, and Holder told him he was aware of the requests.

Holder, also appearing before the committee, said he did not make the pardons a top priority on January 20 because he had been assigned a variety of tasks related to the transition of power from the Clinton administration to the Bush administration.

Clinton to appear?

On Tuesday, Hatch called on Clinton to testify voluntarily in the hearings.

"If I was President Clinton, I would want to come and clear the air and answer these questions that are in the mind of the public," Hatch told CNN. "This is not going to go away easily, so the best way to answer this is to be straightforward and tell the truth."

But President Bush has his own agenda to get through Congress, including a major tax cut, and the administration wants lawmakers to concentrate on his agenda rather than dive into a new probe of the former president.

"I think it's time to move on," Bush told reporters Wednesday aboard Air Force One. Bush also defended the Clintons against allegations that they and their supporters took numerous items from Air Force One as they left Washington, telling reporters the accusations were "simply not true."

Specter said Wednesday he would have to think long and hard about inviting Clinton to speak under oath before the committee.

"I would not invite the president to testify lightly," he said.

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February 8, 2001
Reports: Businessman who won pardon still under investigation
February 6, 2001
Clinton accepts 'full responsibility' for Rich pardon
February 2, 2001
Clinton accepts 'full responsibility' for Rich pardon
February 2, 2001
Senate pardon probe wins conditional Democratic support
February 1, 2001
Bush criticizes Clinton's pardon of fugitive financier
January 29, 2001
Justice Department gathers documents on pardon of fugitive
January 29, 2001
Latest question on Rich pardon: Was it valid?
January 13, 2001
Ashcroft may work with Congress on Rich probe
January 12, 2001
Burton seeks immunity for Denise Rich
January 11, 2001
Lockhart defends Clintons as GOP criticizes gifts, pardons, pranks
January 28, 2001

Senate Judiciary Committee

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