WASHINGTON -- Rep. Chaka Fattah of Pennsylvania, a rare Democratic politician willing to defend Bill Clinton these days, seemed to be reaching on CNN's "Crossfire" last Tuesday night in explaining the pardon of fugitive financier Marc Rich. "Well," he said, "the president was trying to arrange a peace settlement."
When I relayed this both to U.S. officials and sources close to defeated Israeli Prime Minister Ehud Barak, they scoffed at the notion that Rich was involved in the late Israeli-Palestinian peace process. They suggested that Fattah has a lively imagination. In truth, however, the former president's old White House aides are dispensing the "peacemaker" explanation for an otherwise inexplicable act staining Clinton's legacy.
It is not easy. Lacking the White House megaphone, Clinton struggles in making audacious justifications of unjustifiable conduct. But the effort to connect the Rich pardon with the peace process shows how seriously the fallout is hurting now that federal prosecutors are looking for possible criminal activity.
The Rich affair has created a backlash from Democratic loyalists, most of whom will not be quoted by name. "All Democrats want is for Clinton to just leave us alone," said a distraught sometime adviser to the ex-president. Veteran party donors vow they will not give another cent to the Democratic National Committee so long as Terry McAuliffe, Clinton's golfing pal and financial benefactor, is its chairman. In New York, the party faithful grumble about their new senator, Hillary Clinton.
That is why former White House aides peddle the theory that Clinton pardoned Rich in the interests of Middle East peace. Appearing with Fattah on television, Republican Rep. Lindsey Graham of South Carolina was incredulous. "I want to hear how this brings peace in the Mideast," said Graham. "I'm dying to hear that."
There is a story of sorts that goes back to 1985. On Oct. 3, an Egyptian policeman shot to death seven Israeli tourists at Ras Burqa in the Egyptian Sinai. Rich, indicted on 50 counts of tax evasion and other crimes, had avoided prosecution since 1983 by living in Switzerland. He authorized his lawyer, former Nixon presidential aide Leonard Garment, to spend $500,000 to help Egypt compensate the Ras Burqa victims. Garment cut a deal, and received a formal Egyptian acknowledgment of Rich's role.
That set off 15 years of lobbying on the billionaire fugitive's behalf, attempting to use his wealth to get square with U.S. authorities. It accelerated in 1995 with the Israeli-Palestinian peace process. Rich offered big money for investment in the West Bank and Gaza, and the Israeli government was more than interested.
A December 1997 memorandum prepared by Rich's overseas lawyers said Israeli officials gave Rich's 1995 offer to Ambassador Dennis Ross, the principal U.S. negotiator in the Mideast. The memo says that Ross rejected the offer as a "hot potato." Although he was eager for investment in the region, Ross told me last week, it was unacceptable because of Rich's fugitive status. Israel kept pressing, but Ross kept blocking acceptance.
The 1996 election takeover in Israel by the conservative Likud Party killed Rich's chances temporarily, but his lawyers did not give up. The 1997 memo argues that the decline in West Bank-Gaza investments "should make the Rich initiative even more attractive than it should have been in the past." It suggests Rich's money would promote "security and stability" in the region. The pressure for Rich intensified after Barak's election in 1999.
But none of this supports the notion that Marc Rich is part of the peace process. Samuel Berger, President Clinton's national security director, denies it. "He (Rich) had no role in the peace process," Dennis Ross told me. Somebody should have told Clinton Deputy Attorney General Eric Holder, who embarrassed himself in congressional testimony by saying he did not flatly oppose the Rich pardon because of possible "foreign policy" considerations.
The question arises why Barak pressed so hard for a pardon. It surely wasn't because Rich was an integral part of the peace process. The answer was money. Having renounced his U.S. citizenship to become an Israeli (while still in Switzerland), Rich is a major benefactor for his new country. But the story concocted by Clinton aides and pushed by Chaka Fattah was sheer fantasy.