Marc Rich

Lore & Background

Rich was born in 1934 to a Jewish family in Antwerp, Belgium. In 1941 his parents emigrated with their son to the United States to escape the Nazis, traveling via Vichy France, Spain, Portugal, and the liner Serpa Pinto. His father opened a jewelry store in Kansas City, Missouri, then moved the family to Queens, New York City in 1950, where he started a company that imported Bengali jute to make burlap bags, and later started a business trading agricultural products and helped found the American Bolivian Bank. Rich attended high school at the Rhodes Preparatory School in Manhattan and later attended New York University, but dropped out after one semester to work for Philipp Brothers in 1954 where he worked with Pincus Green.

At Philipp Brothers, he eventually became a dealer in metals, learning about the international raw materials markets and commercial trading with poor, third world nations. He helped run the company's operations in Cuba, Bolivia, and Spain. In 1974, he and co-worker Pincus Green set up their own company in Switzerland, Marc Rich + Co. AG, which would later become Glencore Xstrata Plc. Nicknamed 'the King of Oil' by his business partners, Rich was said to have expanded the spot market for crude oil in the early 1970s, drawing business away from the larger established oil companies that had relied on traditional long-term contracts for future purchases. His leveraged business model became the template for modern traders, including Trafigura, Vitol, and Glencore.

Reader's Guide

Marc Rich's significance lies in his transformation of global commodities trading and the enduring controversy surrounding his presidential pardon. He pioneered the use of letters of credit and a leveraged business model that allowed oil and raw materials to be traded with less capital and fewer assets than traditional producers required, a model that became standard for modern trading firms. His career was marked by dealings with dictatorial regimes and embargoed nations, including apartheid South Africa, Fidel Castro's Cuba, and Ayatollah Khomeini's Iran, from which he bought oil despite the American embargo and sold it to Israel through a secret pipeline. Rich's 1983 indictment on 65 criminal counts—including tax evasion, wire fraud, racketeering, and trading with Iran during the hostage crisis—was the largest tax evasion case in U.S. history at the time. His flight to Switzerland and subsequent pardon by President Bill Clinton on January 20, 2001, sparked widespread criticism, with allegations that the pardon was influenced by large donations from Rich's ex-wife Denise to the Democratic Party and by pleas from Israeli officials and Jewish leaders. Clinton later expressed regret for issuing the pardon, saying 'it wasn't worth the damage to my reputation.' Rich's legacy remains a subject of debate, illustrating the intersection of global commerce, political influence, and legal accountability.

Did You Know?

• Rich fled to Switzerland after learning of plans for his indictment and never returned to the United States, even missing his daughter's funeral in 1996.
• His ex-wife Denise Rich donated more than $1 million to the Democratic Party, including over $100,000 to Hillary Rodham Clinton's Senate campaign and $450,000 to the Clinton Library foundation.
• Rich sold Iranian oil to Israel through a secret pipeline and helped give Mossad's agents contacts in Iran.
• He and Marvin Davis bought 20th Century Fox in 1981, but Rich's assets were frozen after his indictment, and Davis later sold the holding to Rupert Murdoch for $232 million.

Notable Quotes (Wikiquote)

"Marc Rich (born Marcell David Reich, 18 December, 1934 – 26 June, 2013) was an international commodities trader, hedge fund manager, financier and businessman." — Marc Rich "As a trader you often walk on the blade. Be careful and don't step off." — Marc Rich