Wednesday, February 28, 2001

Former U.S. fugitive has local ties Marc Rich pardon at center of latest Clinton controversy By Michael Mainville Two years ago, the founders of Real Estate Karlin -- now considered one of Prague's hottest real-estate development firms -- went trolling for foreign investors. Their search ended in Switzerland, where Marc Rich Real Estate agreed to become a 50 percent silent partner. But Rich, as anyone who's been following the American press knows, is no run-of-the-mill businessman -- he's a former high-profile fugitive from the United States and is now at the center of the latest controversy to engulf former President Bill Clinton. Clinton pardoned Rich during his final hours as president, 17 years after Rich fled the country to avoid prosecution on more than 50 charges of tax evasion, racketeering and illegal oil trading with Iran. But the director of Marc Rich Real Estate, Hans Jorg Brun, said he doubts the controversy surrounding Rich will have any impact on the company's success in Prague or anywhere else. "The case has been totally overblown," he said. "There's been a lot of false information with regard to what the case really is. "The accusations that you hear and read are all totally wrong. I think Mr. Rich has excellent lawyers and these lawyers, because of their history, had good access to the president," Brun said, referring to, among others, Jack Quinn, a former White House counsel who was one of Clinton's closest confidants and who Rich hired to orchestrate his pardon. "The president read the information he received, he evaluated and he came to, in my point of view, the correct conclusion." The pardon has ignited another controversy for the scandal-prone Clinton and is the subject of investigations by U.S. federal law enforcement agencies and two congressional panels. Clinton's opponents have accused him of granting the absolution because of more than $1 million in campaign and other contributions made by Rich's ex-wife, Denise Rich. In a recent New York Times opinion piece Clinton denied those charges, saying he pardoned Rich and his former business partner, Pincus Green, for "legal and foreign policy reasons" and because other oil companies that carried out similar transactions faced civil charges and not criminal ones. In the nearly two decades since he left the U.S., the Belgian-born Rich has built a formidable financial empire from his base in Zug, Switzerland, and now has an estimated net worth of more than $1 billion. He first established a highly successful trading firm specializing in oil and mineral products, Glencore International AG, which he later sold. He set up shop again with the Marc Rich Group, another international trading firm that recently announced a merger with Swiss-based Crown Resources. The 66-year-old former fugitive has been ill and is said to be thinking about retirement. Rich, however, seems to have no interest in dumping the real estate arm of his financial empire, which has interests in Spain, Portugal, Germany and now the Czech Republic. In fact, Brun said the company is very excited about the market here. "We really believe in the country," Brun said. "The country presents an excellent opportunity because of its geographic location, because of the excellent economic history it had prior to communism and, obviously, because of the future outlook with respect to the [European Union]," which the country hopes to join when the 15-nation bloc accepts its next wave of new members in 2004. Brun said Marc Rich Real Estate got involved in the Prague market because the company was impressed by the plans of Real Estate Karlin's two directors, Charles Butler and Serge Borenstein. The two men co-founded the company in 1998 and have set their sights on transforming post-industrial Prague 8 into the city's hottest office-development center. Real Estate Karlin's two projects to date, Palac Karlin and Corso Karlin -- opened in early February -- have both reached more than 90 percent occupancy. The company has three more projects scheduled to begin this year. Both Borenstein and Butler were out of the country and could not be reached for comment. Real Estate Karlin's marketing manager, Milorad Miskovic, said no one else at the company would comment. But Rich's presence hasn't raised many eyebrows with officials here. Rene Samek, a spokesman for CzechInvest, a government body that works to attract foreign investment to the country, said the government doesn't monitor the activities of foreign companies operating here. Questions raised about a company or individual's business practices in another country are not considered relevant to whether they can do business in the Czech Republic. "Foreign companies do not need to seek the government's permission in order to invest here," except in a few specific industries, such as banking, insurance and arms manufacturing, according to Samek. "And the government does not monitor the activities of foreign companies here. That would be discriminatory." At the American Embassy, an official said they were unaware of Rich's recent business activities in Prague. Michael Mainville's e-mail address is mmainville@praguepost.cz More business stories War of wills Long-standing fight between Lauder and Zelezny over TV Nova switches into high gear 'Big Bang' or just a big bust? 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