Federal prosecutors in New York have opened a criminal investigation into whether fugitive commodities broker Marc Rich in effect bought a pardon with political donations and gifts that his ex-wife, Denise, gave to the Democratic Party, former President Bill Clinton and Sen. Hillary Rodham Clinton, according to sources familiar with the matter.
In a related development, Knight-Ridder Newspapers reported Wednesday that Clinton granted the pardon to Rich in part because the prime minister of Israel repeatedly pressed him to do it in reward for Rich's clandestine services to Israeli intelligence.
News of the criminal investigation prompted Rep. Dan Burton, R-Ind., chairman of the House Government Affairs Committee, which is already investigating the pardon, to delay his request that the Justice Department grant Denise Rich immunity for her testimony.
Last week, Denise Rich declined to testify before Burton's committee, citing her Fifth Amendment privilege against self-incrimination. She also declined a request this week from the Senate Judiciary Committee. Burton's committee has subpoenaed her bank records and the donor records of the Clinton library foundation.
Denise Rich, who lobbied the former president about the pardon, has contributed nearly $1 million to the Democratic Party and its candidates, $450,000 to Clinton's library fund, $70,000 to a fund to help Hillary Clinton's Senate campaign, $10,000 to the president's defense fund and $7,375 worth of furniture to the Clintons. She has denied a connection between the gift-giving and her efforts in support of the pardon.
The former president issued a statement Wednesday night saying he decided to pardon Marc Rich on the merits of the case.
"As I have said repeatedly, I made the decision to pardon Marc Rich based on what I thought was the right thing to do," Clinton said. "Any suggestions that improper factors, including fund raising for the (Democratic National Committee) or my library, had anything to do with the decision are absolutely false. I look forward to cooperating with any appropriate inquiry."
In Washington today, Hillary Clinton, when asked if she had any comment on the U.S. attorney's investigation or if she had given any thought to returning Rich contributions, replied: "We'll just let this unfold, and we'll be responsive in any way possible."
Sources familiar with the matter said Denise Rich was expecting subpoenas from the U.S. attorney's office in the Southern District of New York, which was sidestepped Jan. 20 when Clinton pardoned Marc Rich.
That U.S. attorney's office brought the case against Rich and his business partner, Pincus Green, in 1983. They were indicted by a federal grand jury on charges that they failed to pay $48 million in tax and had traded with Iran during the hostage crisis.
U.S. Attorney Mary Jo White, a Clinton appointee, issued a brief statement today, confirming that her office and the FBI "have opened an investigation to determine whether there have been any violations of federal law" in the pardons of Rich and Green.
A source said White's probe is expected to examine bank and telephone records and other documents for evidence of illegal conduct. "She is trying to determine if there was a transfer of money to buy the pardon," the source told the Associated Press.
Meanwhile, Knight Ridder Newspapers reported that despite Rich's publicized ties to Iran and Iraq, he used his business contacts throughout the Arab world to pass intelligence to Israel's foreign intelligence service, the Mossad, and to top Israeli officials.
Vincent Cannistraro, a former Middle East expert with the CIA, told Knight Ridder that the Mossad used Rich as a "conduit for financial transfers" and to pass messages to Iran when necessary.
Israeli Prime Minister Ehud Barak called Clinton at least twice to urge him to pardon Rich. The prime minister's last call came "a couple of days" before Clinton pardoned Rich in his final hours as president, a former administration official, who spoke on condition of anonymity, said Wednesday.
Other Israeli officials, including former Prime Minister Shimon Peres and former foreign intelligence chief Shabtai Shavit, also pressed Clinton to pardon Rich, who also has donated millions to Israeli charities.
Rich has assisted Israel intelligence over the years by helping to find Israeli soldiers who were missing in action in Lebanon and helping to free Jews from such countries as Ethiopia and Yemen, Knight Ridder said.
A petition asking Clinton to pardon Rich also contained a number of letters from the heads of Israeli philanthropic organizations, whose support was solicited by Avner Azulay, executive director of the Rich Foundation, a charitable entity that Rich established in Tel Aviv in 1988. Azulay is a former Mossad agent, according to government investigators. His bodyguards are former Israeli intelligence agents, the investigator said.
In a memo to Rich's lawyer, onetime White House counsel Jack Quinn, dated Jan. 4, 2001, Azulay suggested that Clinton consider pardoning Rich instead of the even more controversial Jonathan Pollard, a U.S. naval intelligence analyst who was convicted in 1987 and sentenced to life in prison for spying against the United States for Israel. Over several years, Clinton rejected repeated Israeli requests to pardon Pollard.
Azulay argued that if a pardon for Pollard would generate too much political heat, Clinton could mollify Israel by helping Rich. Using initials to refer to Pollard and Rich, Azulay wrote: "If he (Clinton) says no to JP, one more reason to say yes to MR."
Clinton has acknowledged the Israeli lobbying effort on Rich's behalf, but he has not said how much weight it carried in his decision.
The roles of Denise Rich and her friend Beth Dozoretz, a former finance chairwoman of the Democratic National Committee, in the Rich pardon campaign were described in more detail at a Senate Judiciary Committee hearing Wednesday.
Quinn testified that he encouraged both women to personally lobby the president to approve the Rich pardon. But Quinn said he never asked either woman to mention their fund raising.
And he said there was "absolutely nothing" in his conversations with the president that "remotely suggested to me that he was thinking about or was motivated by his friendships, his politics or his library."
"The notion that the president was going to be convinced to grant this pardon because of support for it from Beth Dozoretz or Denise Rich," Quinn said, "rather than because of the case we made on the law and the important support of world leaders like Prime Minister Ehud Barak of Israel, is, in my view, just untrue."
Senators of both parties criticized Quinn for lobbying his former boss and using the kinds of connections not available to average citizens. "There probably isn't one person across this country today who is familiar with this case who doesn't think that it's a question of power, connection, money, and that, in fact, is how this pardon occurred," said Sen. Herbert Kohl, D-Wis.
Sen. Charles E. Schumer, D-N.Y., said pardoning a fugitive "stands our justice system on its head and makes a mockery of it."
Sen. Arlen Specter, R-Pa., cited one Quinn phone call with the president the day before he left office as highly unusual. "The appearance of impropriety is overwhelming," he said.