Rich Donated to Olmert, Sold Arab Oil to Israel

Yossi Melman and Uriya Shavit - Ha'aretz - February 21, 2001

Fugitive millionaire Marc Rich was pardoned by former U.S. President Bill Clinton in part because several Israeli officials claimed he gave money to humanitarian causes, was a donor to Jerusalem Mayor Ehud Olmert's 1994 mayoral campaign war chest and was a major broker of oil to Israel in the 1970s and 1980s, Ha'aretz learned yesterday.

Among those urging Clinton to pardon Rich - his pardon was one of Clinton's last acts as president - were several key Israeli lawyers-cum-politicians, such as Ya'acov Ne'eman and Avner Shaki. Rich paid them hundreds of thousands of dollars to help beat back a U.S. request that Israel extradite him in the mid-1980s.

Rich gave Olmert $25,000 during the Likud politician's 1994 campaign for mayor of Jerusalem. According to the State Comptroller's report on contributions to city election campaigns in 1994, Rich's gift to Olmert was worth NIS 70,500 at the time, and the money came from Switzerland. Rich has long lived in Switzerland - despite taking Israeli citizenship in the 1980s - apparently to avoid extradition to the United States.

The Olmert contribution contradicts what Rich told Ma'ariv only two years ago - that he prefers to "leave that to people who live in the country."

Olmert's office yesterday did say that, when Olmert recommended Clinton pardon Rich, "he did not check his list of contributors from seven years earlier. In any case, Mr. Olmert believes that Marc Rich's contributions to Jerusalem over the years justified the recommendation."

Rich was also one of the leading suppliers of oil to Israel, sources told Ha'aretz. According to them, by the late 1970s, Rich's eponymous holding company was selling oil to all Israel's petroleum companies. The oil came from the spot market and Arab states, the sources said.

Until now, all references to Rich's help for Israel focused on how he helped the Mossad win freedom for Jews in distressed countries, but sources say Rich earned tens of millions of dollars from his brokerage of oil to Israel.

Rich's representative in Israel for those oil deals was Dov Ben Dror, who between the 1950s and 1970s held a series of key posts in the Finance Ministry and was, for a time, responsible for the state's acquisition of oil. He was among the founders of the Eilat-Ashkelon oil pipeline and its subsidiary, Trans Asiatic, which was a joint venture between the state of Israel and the Shah of Iran, importing oil from Iran to Israel. Ben Dror went on to run the "Israel trade portfolio" of the company from Switzerland, the sources said.

According to these same sources, Rich was also instrumental in Israel's acquisition of what the sources called "special strategic supplies" during the 1991 Gulf War.

Other sources emphasized that Rich's connections with the Mossad ran much deeper than what has so far been published.

Rich has been a fugitive from U.S. justice since the 1980s for alleged evasion of some $200 million in taxes, as well as alleged illegal trade with Iran while that country was holding Americans hostage in the late 1970s.

In 1984, the U.S. Justice Department sent a "red notice" to Israel, requesting Rich's arrest, but sources here say it did not include an extradition request. Rich hired several prominent lawyers, for hundreds of thousands of dollars, to use their resources in the United States on his behalf. Among those hired were Amnon Goldenberg, a former legal advisor to the Mossad; Avner Shaki, a former minister of religious affairs; and Ya'acov Ne'eman, who would go on to become finance minister and former Prime Minister Benjamin Netanyahu's government.

Rich's associates in Israel used their influence with the U.S. Department of Justice to delay formal discussions of the U.S. red-notice arrest request.

Indeed it took 10 years, until 1994, before Israel formally replied to the American request, with the response that because the "red notice" did not include a request for Rich's extradition, nor a copy of the charges against him, Rich could not be arrested in Israel.

Furthermore, said the Israeli response, the charges against Rich were fiscal and not fraud, and therefore the extradition treaty between the two countries did not cover his case.

  • See Also: The Clemency Page