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Pardon is back in focus for the Justice nominee

In the career of Eric H. Holder Jr., President-elect Barack Obama’s attorney general choice, there is one notable blemish: Holder’s role in the 2001 pardon of billionaire financier Marc Rich.
/ Source: The New York Times

In the much praised career of Eric H. Holder Jr., President-elect Barack Obama’s choice to be attorney general, there is one notable blemish: Mr. Holder’s complicated role in the 2001 pardon of Marc Rich, a billionaire financier who had fled the country rather than face federal tax evasion charges.

Mr. Holder’s supporters portray him as having been a relatively uninvolved bystander caught in a Clinton-era controversy, the remarkable granting of a last-minute pardon by President Bill Clinton to a fugitive from justice. But interviews and an examination of Congressional records show that Mr. Holder, who at the time of the pardon was the deputy attorney general, was more deeply involved in the Rich pardon than his supporters acknowledge.

Mr. Holder had more than a half-dozen contacts with Mr. Rich’s lawyers over 15 months, including phone calls, e-mail and memorandums that helped keep alive Mr. Rich’s prospects for a legal resolution to his case. And Mr. Holder’s final opinion on the matter — a recommendation to the White House on the eve of the pardon that he was “neutral, leaning toward” favorable — helped ensure that Mr. Clinton signed the pardon despite objections from other senior staff members, participants said.

At the same time, Mr. Holder was not the sinister deal maker that his critics made him out to be. He let himself be drawn into the case by politically influential advocates, the review of the case shows, bypassing the usual Justice Department channels for reviewing pardon applications and infuriating prosecutors in New York who had brought the initial charges against Mr. Rich and his business partner.

Most perplexing to Justice Department allies was that Mr. Holder, by his own admission, involved himself in the discussions without a full briefing from his own prosecutors about the facts of the case, according to an associate of Mr. Holder who spoke on condition of anonymity.

Reid Weingarten, a lawyer for Mr. Holder, said that Mr. Holder had done nothing improper in his handling of the Rich matter and that conversations about it were routine and largely insignificant, in part because he assumed that Mr. Rich’s lawyer, Jack Quinn, was going through normal pardon channels.

“Mr. Holder assumed that this was all being handled in the normal course,” Mr. Weingarten said, adding, “There’s no question that Quinn played him and it was astute by Quinn because he did catch Eric unawares.”

By all accounts, Mr. Holder’s role in the affair represents the biggest misstep of his career, and Mr. Obama’s aides focused on the issue before Mr. Holder was selected. Republicans on the Senate Judiciary Committee were consulted to gauge whether the pardon would prove an insurmountable hurdle.

Some Republicans in Congress are eager to revisit the Rich pardon, which was investigated at length in 2001 both by Congress and by a grand jury amid a public clamor that was fueled by hefty donations that Mr. Rich’s former wife had made to Mr. Clinton’s presidential library and to Democratic causes. Critics of the pardon also seized on reports from American intelligence officials that Mr. Rich’s oil-and-commodities company had done business with Iran, Iraq and other so-called rogue states.

“Marc Rich was a fugitive for nearly two decades, wanted by the federal government for fraud and tax evasion,” Representative Lamar Smith of Texas, the ranking Republican on the House Judiciary Committee, said Monday after the nomination was announced. Referring to Mr. Holder’s actions, Mr. Smith added, “If a Republican official had engaged in this kind of activity, he would never receive Senate confirmation.”

Senator Arlen Specter of Pennsylvania, the ranking Republican on the Judiciary Committee, said in an interview on Monday that Mr. Holder’s role in the Rich pardon would be “a big question” at his Senate confirmation hearing.

A longtime prosecutor and a former judge, Mr. Holder remains a popular figure at the Justice Department eight years after he left, and his supporters insist he was made the “fall guy” for a controversy mainly of Mr. Clinton’s making.

Both Republican and Democratic admirers say Mr. Holder’s handing of the Rich affair, which he has acknowledged was flawed, should be balanced against the bulk of his law enforcement career.

“There’s no way you can have a high-profile job in Washington like the deputy attorney general without attracting some kind of controversy,” Larry Thompson, who succeeded Mr. Holder in that post in the Bush administration, said before Monday’s announcement. “That matter has been fully investigated, and it should be put behind him.”

Janet Reno, the former attorney general who was Mr. Holder’s boss, attributes the episode in part to the fast pace of pardon requests at the end of the Clinton administration. “There wasn’t much time to vet anybody,” Ms. Reno said in an interview.

But for Mr. Holder, his role in the Rich issue actually began more than two years before the end of the Clinton administration, almost by happenstance. At a corporate dinner in November 1998, Mr. Holder was seated at a table with a public-relations executive named Gershon Kekst, who had been trying to help Mr. Rich resolve his legal troubles.

When Mr. Kekst learned that his dinner companion was the deputy attorney general, he proceeded to bring up the case of an unnamed acquaintance who had been “improperly indicted by an overzealous prosecutor,” according to the Congressional inquiry.

A person in that situation, Mr. Holder advised, should “hire a lawyer who knows the process, he comes to me, we work it out.” Mr. Kekst wanted to know if Mr. Holder could suggest a lawyer. Mr. Holder pointed to a former White House counsel sitting nearby. “There’s Jack Quinn,” he said. “He’s a perfect example.”

Months later, Mr. Rich’s advisers settled on Mr. Quinn to lead the legal efforts, which stemmed from Mr. Rich’s indictment in 1983 on charges that he evaded taxes on tens of millions of dollars in revenue. At the time, it was the biggest tax fraud case in American history. He fled to Switzerland while the investigation against him was pending.

Mr. Quinn and his legal team sought to make the case that Mr. Rich and his partner, Pincus Green, had been wrongly prosecuted by the office of Rudolph W. Giuliani, who was the United States attorney in Manhattan at the time of the indictment, and that the charges against them should best have been treated as a civil matter, not a criminal one.

One of the first people Mr. Quinn contacted was Mr. Holder, his former colleague. Mr. Quinn wanted his help in interceding with prosecutors in Manhattan, and the two men had several conversations about the topic beginning in October 1999.

Federal prosecutors in the Southern District of New York were unwilling to negotiate with Mr. Rich’s lawyers while he remained a fugitive. Mr. Holder told Mr. Quinn in one phone call in November 1999 that he believed the prosecutors’ refusal to meet with the Rich lawyer was “ridiculous,” according to notes by Mr. Quinn obtained by House government reform committee investigators as part of a three-volume report on Mr. Clinton’s pardons.

In February 2000, Mr. Quinn sent Mr. Holder a memorandum entitled “Why D.O.J. Should Review the Marc Rich Indictment.” About a month later, Mr. Holder spoke with Mr. Quinn again and told him that “we’re all sympathetic” and that the legal “equities” in the issue were “on your side.” Pressed to explain the remark when he appeared before Congress a year later, Mr. Holder said that he meant only that he thought it was “unreasonable” for prosecutors in Manhattan not to meet with Mr. Rich’s lawyers and that he was not intending to assess the merits of the case.

By the fall of 2000, efforts to re-open the criminal case were dead, and Mr. Rich’s lawyers had moved on to the idea of a pardon.

Again, Mr. Quinn turned to Mr. Holder. On Nov. 21, 2000, at the close of a meeting on a separate topic, Mr. Quinn took Mr. Holder aside, told him he was planning on filing a lengthy pardon petition with the White House and asked whether the White House should contact Mr. Holder for his opinion, according to Mr. Quinn’s account. (Mr. Holder said he did not remember the conversation but did not dispute the account.)

In a separate e-mail message that Mr. Quinn sent three days before that to other members of the Rich team, under the topic “Eric,” he wrote: “Spoke to him last evening. Says to go straight to W.H. Also says timing is good.”

For the next months, Mr. Rich’s team pressed ahead with the pardon, soliciting foreign leaders from Spain, Israel and elsewhere to speak to the White House about Mr. Rich’s philanthropic work.

Still, many White House officials remained opposed to the idea because of the precedent it would set to pardon a fugitive. Prosecutors in New York would “howl,” Mr. Holder told Mr. Quinn.

On Jan. 19, 2001, Mr. Quinn called Mr. Holder and let him know that the White House would be contacting him for his recommendation on the pardon, which he said was receiving “serious consideration.” Mr. Holder told him that he did not have a personal problem with the pardon, and Mr. Quinn quickly passed on the gist of the conversation to the White House.

Minutes later, Mr. Holder received a call from Beth Nolan, the White House counsel, who had opposed the pardon idea and was surprised to hear that Mr. Holder apparently felt differently.

Mr. Holder, according to Ms. Nolan’s testimony, told her that if the Israelis were in fact pushing for the pardon, he would find that “persuasive” and would be “neutral leaning toward” favorable.

Mr. Holder told Congressional investigators that he assumed the pardon was going to be rejected and that his comments were not intended to push it through. “I was ‘neutral’ because I didn’t have a basis to make a determination,” he testified.

But investigators for the House government reform committee, in a final report in 2002, concluded that Mr. Holder’s input on Jan. 19, 2001, had a “significant impact” in giving the Justice Department’s imprimatur, even though no formal review was conducted by the department’s pardon office. The next day, Mr. Clinton signed the pardon, setting off the final controversy of his terms. The office normally reviews all clemency applications.

After Mr. Clinton left office, a federal grand jury investigation was eventually closed with a finding that no criminal wrongdoing had occurred.