Marc Rich is in the news again

President Obama recently appointed a new White House counsel, W. Neil Eggleston.


This appointment did not require Senate confirmation, but it did kick up a bit of a fuss, and put the late financier Marc Rich back in the news. 


On his way out the White House door in January 2001, President Clinton pardoned Marc Rich, then a fugitive after criminal convictions under tax laws and the trading-with-the-enemy statute. Eggleston, portrayed here, had worked in the White House early in the Clinton administration but was back in the private sector while the Rich pardon was under consideration. He became involved in the fall-out from that pardon in a peripheral way.


I don't care about Eggleston, but the very idea of an Eggleston-Rich connection, and thus an Obama-Rich connection, has stirred up the usual hound dogs.


My own view of Rich, I have to say, is a fairly sympathetic one.


One of the connections that made it possible for Rich to create a spot market in physical oil in the 1970s -- thus making himself very "rich" indeed -- was his relationship with the government of Iran under the House of Pahlavi. Company co-founder Green spoke Farsi and was the company’s expert in Iranian matters. Through the early years of Rich + Co., the firm was buying 200,000 barrels a day.

They faced an obvious challenge, then, when Iran erupted in revolution in 1978-79. Their best contacts, such as Parviz Mina, the director of the National Iranian Oil Company, and Ali Rezai, a Senator and industrialist, had to leave the country like their Shah himself.

It was Rich’s response to that crisis that led in the end to his downfall, his long exile, and that infamous pardon. The new regime would take American hostages even as Marc Rich + Co. was working to develop new contacts in Iran, contacts that would preserve Iran as a source of supply for the spot market.

The new government there was run by people who may have known the Koran backwards and forwards, but didn't know the world oil markets, and who had driven out of town the employees of the Shah who had known that field. So they had to rely on a billionaire American Jew, Mr Rich, to show them the ropes.

Whatever else you may say about Rich, I think it clear that his creation of a spot market, in contrast tot he industry of vertically integrated corporate silos that had preceded that, was a step toward a healthier, more sustainable, world oil industry and for this Rich deserves some gratitude.


So I personally cannot hold this connection against Eggleston.