Linda Minor: Scooter Libby’s Client, Marc Rich
Sophists and Other Scoundrels
Part 2: Scooter Libby’s Client, Marc Rich
By Linda Minor
October 28, 2005
See Original Version With Illustrations Here: http://www.sandersresearch.com/Sanders/NewsManager/ShowNewsGen.aspx?NewsID=1102
“The man attacking my integrity and reputation – and, I believe, quite possibly the person who exposed my wife’s identity – was the same Scooter Libby who, before he came into the new administration, was one of the principal attorneys for Marc Rich, ex-fugitive. Rich is the commodities trader who was convicted of having traded petroleum with Iran in violation of sanctions imposed on that country by the United States after the seizure of the American Embassy in Tehran and the taking of more than a hundred American hostages by supporters of Ayatollah Khomeini.”
- Ambassador Joseph Wilson IV, The Cult That’s Running the Country”
They say that patriotism is the last refuge to which a scoundrel clings.
Steal a little and they throw you in jail, steal a lot and they make you king.
- Bob Dylan, “Sweetheart Like You,” Infidels, 1983
Amidst rumors that special prosecutor Patrick Fitzgerald is close to indicting White House officials in the Plame leak case are reports that Scooter Libby was Judith Miller’s source of information. Part One of this series explored Libby’s “handler,” Leonard Garment, a Brooklyn attorney who ushered Libby into three different law firms. As an attorney in one of those firms, Libby represented his wealthiest and most mysterious client—Marc Rich. As only one of a myriad of Rich’s attorneys, Libby, nevertheless, worked for the metal and oil trader for a period of eighteen years. Understanding Marc Rich is essential in understanding Scooter Libby and the financial network which invaded Iraq.
Craig Copetas, Marc Rich’s biographer, labels his subject one of the “Metal Men,” and attempts to trace Rich’s mysterious background. The Belgian Reich family fled Europe during World War II, assisted by a Jewish placement agency, and changed their surname to Rich. Marc’s father, David Rich, seems to have engaged in an assortment of secretive businesses—jewelry distribution in Kansas City, Missouri; importing burlap at Melrose Bag in the Bronx, New York; expanding into Sidec Overseas, S.A. and a diversified agricultural import company trading with Bolivia. All of this industry centers around the metal trade, Bolivia being a prime source of silver, zinc, antimony, lead, cadmium, tungsten, gold, and tin since the sixteenth century. In 1976 Bolivia added lithium, a necessary ingredient in nuclear weapons, to its stock of strategic minerals.
While his father was busy trading, young Marc was quietly attending school and going to summer camp. He graduated from the private “Rhodes School” in mid-town Manhattan in 1952, just ten years before a future commerce secretary, Ron Brown, would receive his diploma there. An advertisement for the school in 1917 (see insert) sported photographs of selected members of its illustrious faculty, which included former Harvard and Columbia professor Adolphe Cohn; Alexis I. du Pont Coleman, a scion of the gunpowder and chemicals family that owned Dupont; and Dr. Jose F. de Fernandez, recruited from New York’s Jesuit St. Francis Xavier College. Those years at Rhodes constitute the sum total of Marc Rich’s formal education, apart from a year or so of study at New York University. He dropped out of college in 1954 to begin his trading career at Hamburg-based Philipp Brothers.
Philipp’s London office first opened in 1908. A New York branch appeared in 1927, just nine years before Rich’s boss, Ludwig Jesselson, arrived there from Germany. Philipps Brothers also had close connections to Spain and to Bolivia. David Rich—allegedly in connection with his burlap bag business—traveled frequently to La Paz and even set up a bank there, the American Bolivian Bank. The physical commodities business, according to John K. Castle, “tends to be based… in Brazil, Colombia and the Ivory Coast.” It is difficult to trade physical commodities without arranging for their transportation from one place to another at a certain time.
Marc’s twenty years at Philipp Brothers was spent “buccaneering between North and South America, Africa and Europe…Copper was king at the time, and Rich was one of the metal’s crown princes…He went on to learn tungsten under the direction of Henry Rothschild and Steven Dale, a former British commando who was the tungsten expert….” Rich’s reward was a posting to the Philipp Brothers office in Madrid as manager in 1967. He used this outpost as a base through West Africa and the Middle East, and he gained contacts through his seat on the European management committee in Zug, Switzerland.
In 1960 Jesselson, assisted by his friend Andre Meyer of Lazard Freres, merged the firm with Minerals & Chemicals (Minorco). A second major change occurred in 1967—about the time Rich was arriving in Madrid—when Andre Meyer convinced Jesselson to merge with Engelhard Industries, owned by “Meyer’s friend and sometime business partner Charles Engelhard, the legendary inspiration for Ian Fleming’s Goldfinger.” Engelhard (sometimes called “The Platinum King”) also processed gold and other precious metals and lived in northwestern New Jersey’s aristocratic hunt country alongside Treasury Secretaries Douglas Dillon and Nicholas Brady—two partners in the Dillon, Read investment bank. Both Dillon, Read and Lazard Freres, as well as being favored investment arms of Rockefeller corporations and banks, were also heavily involved in investments in the State of Texas, whose favorite son (Lyndon Johnson) had been in control of the Presidency since November 22, 1963.
Engelhard’s wife was the daughter of a Brazilian diplomat. Her daughter, whom he adopted, married Samuel Pryor Reed, grandson of armaments tycoon Samuel F. Pryor. As Percy Rockefeller’s agent at Remington Arms in 1914, Pryor had a key position in mobilizing American industry, supervised by the War Industries Board, to manufacture and sell weapons to the Allies in World War I. (See “Who ‘Created’ Condi Rice?”—which explores how Eugene Meyer, Jr. and Bernard Baruch used the War Finance Corporation and the War Industries Board “to administer minerals and materiel into a massive war machine.”) It was this war profiteering which first brought Samuel Bush (George H.W. Bush’s grandfather) into government operations—as explored in “Money and Gunpowder, Part Two—A Place for Cannons”.
Liquefying the Metals Trade
The metals Marc Rich brokered prior to 1973 were strategic ones, from the aspect of national defense. Originally, such trading had to be done in the field, as it necessarily involved physical delivery of the metal at a specific location and time. Eventually, however, futures contracts were devised for most metals, allowing financial trading to take place at the commodities exchange. Before 1973, oil had never been traded on the futures markets. Things began to change in March of that year when President Nixon imposed price controls on oil. As reported in Time Magazine on March 19:
“Inflation seems once again to be getting out of hand, despite repeated assurances from the President and Treasury Secretary George Shultz that Washington retains ample authority to crack down on price boosters. There was even more concern last week after the Government reported that in February the unadjusted wholesale price index jumped 1.9%, the biggest monthly rise in 22 years. With that, in an obvious attempt to regain its credibility, the Administration reached for its vaunted ‘stick in the closet’ and re-imposed direct controls on the nation's 23 biggest oil companies.”
Little mention was made of the price controls on oil, however, as food prices continued to soar through the summer. Marc Rich, however, knew that Middle Eastern oil producers were fuming because the dollar devaluation in 1971, combined with the price controls, had resulted in a net loss of income to them. At that point, through trading contacts with the royal Pahlavi family of Iran, Rich began to ship Iranian oil to Spanish refineries. He bought $150 million worth of crude oil at $5 above spot, only to be forced to sell by his bosses in New York, who panicked before the embargo set in.
Virtually all the trading done at Phibro (as Philipp Brothers was called after the Minorco merger) was extremely secretive. Minorco, S.A. (Luxembourg) was then the international trading and investment arm of the Oppenheimer mining interests—trading in diamonds, gold and other precious materials. Engelhard and Harry Oppenheimer were bosom buddies, who first met in South Africa. Just as Engelhard played a vitally strategic role in maintaining a predictable level of necessary metals for the United States’ needs for coinage and national defense purposes, the Oppenheimer family had long performed the same functions for the British Empire.
Diamonds are Forever
Prior to the diamond discoveries in South Africa in the 1860’s, the supply of that precious gem was feared to be in danger of depletion. Author Edward Jay Epstein relates:
“According to the records of the British East India Company, Jewish traders controlled virtually the entire world diamond traffic by the end of the eighteenth century. The Brazilian fields, however, were becoming rapidly depleted of diamonds, and no more diamonds were coming out of India. Just as it appeared that the world might run out of diamonds, the South African mines were discovered in the eighteen-sixties. The ten leading Jewish merchants in London, fearing that the market would be flooded with South African diamonds, quickly formed a syndicate to buy up all of the production from these new mines. A number of the merchants in this syndicate had also acquired large stock holdings in the De Beers monopoly itself. One of the merchants who took the lead in arranging the deal with Cecil Rhodes was Dunkelsbuhler. Dunkelsbuhler brought into his London company a sixteen year old apprentice from Friedberg, Germany.”
Ernest Oppenheimer, son of a cigar merchant, was that young boy sent to South Africa as a buyer for Anton Dunkelsbuhler in 1901. “German by birth, British by naturalization, Jewish by religion, and South African by residence," he became the “prototype of the multinational businessman.” Oppenheimer created Consolidated Diamond Mines (CDM) of South West Africa in 1917 by first setting up Anglo-American Corporation of South Africa in London with some assistance from his brothers and the House of Morgan. He offered to give each major German investor shares in Anglo-American in exchange for their holdings in the “forbidden zone” in Namibia, which he held in a South African corporation. With this leverage he convinced De Beers to trade him a share of stock and a seat on the board in exchange for an interest in his properties. By 1929, he and his cousins had become a powerful force in the diamond monopoly. With support from Lord Rothschild, whose bank still owned a large block of stock in De Beers, he was named chairman and added De Beers to his Anglo-American Company.
In order to maintain the monopoly, even though demand for diamonds during the depression was nil, Oppenheimer closed his mines but continued to buy from whatever source was presented to the company. By 1937 De Beers had stockpiled some 40 million carats, about a 20-years supply. Threatened with bankruptcy, he decided to create a market himself. He first found industrial applications for poor-quality diamonds in manufacturing--diamond grinding wheel—which became an indispensable tool for mass production. Oppenheimer sent his son Harry to New York City to work with Madison Avenue strategists on a campaign touting the four “C’s” of diamond perfection—cut, color, clarity, carat—helping sales to increase more than 50 percent in two years. A new custom was declared—diamond engagement rings—with the slogan “a diamond is forever.”
The Gold Fix
London first became the world gold center in 1671 when Moses Mocatta arrived from Amsterdam. His bank, called Mocatta & Goldsmid, would begin operation in 1684, a mere ten years before the Bank of England was established. Mocatta would act as broker for buying and selling foreign gold that arrived at the Bank of England. Great Britain first adopted a formal gold standard in 1816. Nathan Mayer Rothschild had his first bullion dealings with the Bank of England in 1824; then Pixley & Abel began operating in 1852, followed the next year by Samuel Montagu & Company. Germany and the U.S. adopted the gold standard early in the 1870’s. Most countries, however, suspended gold payments once World War I commenced, and the gold standard collapsed. At war’s end in 1919 London became the center for “fixing” the price of gold twice a day in a formal meeting at the Rothschild offices in New Court, St. Swithins Lane in London.
Britain, devastated by economic depression, abandoned the gold standard in 1931, though the United States kept the price of gold fixed at $20.67 per ounce until 1933, when America prohibited gold exports, ended convertibility of dollars into gold, and mandated that all gold held by citizens be exchanged for dollars. In January 1934 the price of gold was devalued to $35 per ounce, and the gold standard resumed. London continued its fixings until the outbreak of World War II in September 1939, when they were suspended for almost fifteen years. The task of keeping the sterling price of gold at $35 per ounce became increasingly more difficult as the market grew. As early as 1961 the Bank of England had to occasionally sell from its reserves on the fix to hold the $35 per ounce. This led to the creation of the gold pool—an alliance between central banks—to maintain the $35 level. The pool worked well until 1965, when private buying of gold began to exceed mine supply, forcing central banks to sell reserves into the market to hold the price steady.
A run on gold in March 1968 resulted in suspension of gold selling in London for two weeks—reopening with prices thereafter fixed in dollars rather than sterling. The gold price, free to float, was set twice a day, morning and afternoon. London’s action was followed two years later by President Nixon, who in August 1971 repudiated the United States’ obligation to redeem its dollars in gold. By the end of 1974, gold had soared from $35 to $195 per ounce.
Gold is a stabilizing influence in global trade, useful in maintaining a level of confidence in the government’s ability to ensure the value of investments both at home and abroad. The author previously mentioned the importance of gold in an article called “Snatching the Gold.” The strategic value of other metals was discussed in “Who “Created” Condi Rice?” These two articles are part of an ongoing project by this author to describe the historical trail that has been taking America and the rest of the world into a new world order—a centralized order where local control no longer exists. Implicit in this new world order is the recognition of one absolute truism:
Power comes from controlling vital and strategic commodities. The countries which are the sources of those commodities must, therefore, be dominated and not allowed to exercise any form of independence or nationalism.
A Citizen of the World
Marc Rich fits snugly into this new world order. Jack Quinn, Rich’s lead attorney in charge of obtaining a pardon from President Clinton, explained the crime for which Rich was convicted on CNN’s Larry King program:
“This case arose out of a complicated series of oil transactions that occurred during the time when we had price controls on oil. And, in essence, what happened was that Marc Rich and major United States oil companies, including Arco, had linked domestic transactions to foreign transactions in an effort, admittedly, to circumvent those price controls. I think they were trying to do so lawfully. But what they tried to do was to find a way to get the real value out of a price of oil.”
For years Howard Safir, working for Rudy Giuliani as his New York City police commissioner and later as chief of operations for the U.S. Marshals Service, had been tracking Rich down from one country to another. Safir told Larry King: “He was hard to get because he had a great deal of influence in a lot of countries, and we were pretty much restricted to just a few countries where we could apprehend him. He had a Bolivian passport, he had a Spanish passport. The Israelis were very clear they weren't going to help us apprehend him. So it was very difficult to get him, plus he had a lot of money….You know, Marc Rich is one of those people who considers himself a citizen of the world, inconvenienced by the petty laws of nations. And the message that this sends is outrageous.”
Such “world citizenship” makes perfect sense, of course, to those persons who make their livelihood from global trade—what can best be termed the merchant adventurer class which brought us slavery, tobacco, rum, spices, and last but not least, opium. Part of the author’s research is to explore the genealogies of various members of this class of merchant traders from one generation to another to see how their accumulated knowledge and interrelationships have been used to take control of governments throughout the world and to indoctrinate others through advertising techniques and propaganda.
Keeping that purpose in mind, we can look back in our analysis of Condi Rice and notice how every aspect of her life has been managed by persons who sought to control the same type of strategic minerals traded by Marc Rich—copper, silver, gold and oil. As we indicated at that time, it was no accident that Condi was chosen for the position she holds. She fits a politically correct profile, has impressive looking educational credentials and is extremely malleable. She does what she is told and no more.
Scooter Libby fits that same mold, and he is working for the same people. Further research may reveal who hides behind that curtain.
A. Craig Copetas, Metal Men: How Marc Rich Defrauded the Country, Evaded the Law, and Became the World’s Most Sought-After Corporate Criminal (New York: HarperCollins Publishers, 2001).
Steven A. Holmes, Ron Brown: An Uncommon Life (New York: John Wiley & Sons, Inc., 2000). According to Holmes, the school was a favorite preparatory academy for sons of middle-class black families.
The Wall Street Journal, May 24, 1984.
Copetas, Metal Men, 80.
Judith Ramsey Ehrlich and Barry J. Rehfeld, The New Crowd: The Changing of the Jewish Guard on Wall Street (New York: Little, Brown and Company, 1989), 197.
This series will be continued as time permits. Interested readers are encouraged to read George Bush: The Unauthorized Biography—by Webster G. Tarpley & Anton Chaitkin—for more detail about the Pryor family’s link to the Bush network, which revolves around the Brown Brothers Harriman investment bank, Rockefeller banking and oil interests, and investments of the Payne and Whitney families.
Mark Honigsbaum, The Observer, May 13, 2001.
Edward Jay Epstein in The Rise and Fall of Diamonds: The Shattering of a Brilliant Illusion (New York: Simon and Schuster, 1982). (This book appears online at Epstein’s website.) Epstein adds: “Until the early part of the eighteenth century, the entire world's supply of diamonds came from India. The caravans that brought them across Arabia traded these rare stones to Jewish traders in Aden and Cairo for gold and silver. The traders then resold them to Jewish merchants in Venice, Lithuania, and Frankfurt. It was a natural enterprise for the Jews scattered throughout central Europe: Since they were moneylenders, they had to concern themselves with assessing, repairing, and selling gems that had been offered to them as collateral for loans. They also had close connections with the Jewish trading centers in the Ottoman Empire through which all the Indian diamonds passed…. When the Jewish diamond merchants and workers were forced by the Inquisition to flee from Lisbon and Antwerp, they resettled in Amsterdam. Since cutting factories required no equipment except for hand tools, which were portable, the Jews instantly transformed Amsterdam into the diamond center of Europe. By the middle of the seventeenth century, Jewish diamond merchants helped finance the Dutch East India Company, which organized its own trade route to India. So Amsterdam then replaced Lisbon as the port of entry in Europe for India's diamonds. Just as the fields in India began to cease yielding diamonds, more were discovered in 1725 in Brazil. The Dutch maneuvered to gain control of this traffic, but now they had to contend with the rise of British sea power. By the mid eighteenth century, the British had almost completely taken over the trade in diamonds, both from India and Brazil. As the trading center for uncut diamonds shifted from Amsterdam to London, so did the Jewish diamond merchants…. The Jewish traders sent the diamonds to cutting factories that had been re-established in Antwerp, and from there, the jewels were sold to all the royal courts of Europe. To select and evaluate these diamonds, the courts chose Jewish gem experts, who became known as ‘Court Jews.’
Transcript of Larry King February 8, 2001 broadcast at CNN website.
Safir indicated as well that in 1986 Rich “had a lawyer from East Germany offer $225 million for him and Pinky Green if the prosecutions were wiped out.”
© Sanders Research 2005