making $367 million a year. By 1984nhe was making enough money to viewnthe $50,000 a day fine levied on hisncompanies as a nuisance fee aiding hisnsuccessful delaying tactics in the largestnindividual tax evasion case ever.nRich settled with the government forn$210 million, while safe from personalnprosecution in Zug. But the arrogancenthat comes with more money thannGod soon had him boasting that hencould trade his way out of the loss innless than a year.nCopetas’ badly written book outlinesnRich’s crime but not its subtleties.nDuring the oil crisis. Rich would sellnOPEC oil to a domestic company fornless than the $35 market price. Innreturn, the company would sell himncontrolled $6/barrel “old” domesticncrude. Rich would then whip aroundntitle to the old oil using his ownndomestic and Panamanian companiesnuntil it lost its identity and emerged atnthe end of the chain as new oil worthnthe market price. But what Rich madenwas more than the difference betweennsix and 35 dollars; profited at everynpoint in the chain. “Marc Rich, saynthose who know him,” Copetas writes,n”would make a pact with the devil if hencould become a cartel”—which inneffect he did.nRich started trading for PhilippnBrothers in the 1950’s, and as thenfirm’s man in Castro’s Havana, henlearned the exploitation needed tonconduct business in the Third World.n”Rich more than any other Philipp’sntrader stretched the fine line betweenngraft and gift.” He used the samentechniques later when he was tradingnIranian chrome, developing intimatencontacts with high Persian ministersnand members of the Shah’s family.nThe same techniques also worked withnthe Marcos government in the Philippines,nand equally with Marxist rebelsnin Angola. The Russians, also Richnclients, defended him against U.S.npersecution with an editorial in Izvestia.nThe Iranian connections helpednRich buy crude at a $5 premium overnspot prices in 1973. He was stockpilingnin advance of the first embargo, butnPhilipp’s forced him to abandon thenposition. Frustrated, Rich quit, takingnthe best of the firm’s younger tradersnwith him, and went out and bought annoil tanker.nOil prices soared, but somehownRich was able to buy $20 OPEC oil forn$15 and sell it at spot for $24. Then$125,000 a Rich trader claims to havendeposited regularly into the codednSwiss account of an Iranian oil ministernmust have helped. By 1980 Richnwas selling ARCO 40,000 barrels a daynat an $8 premium over the officialnNigerian price (which he didn’t pay) ofn$24—and this cost ARCO less thannthe spot price for 27 million barrels.nRich even sold Nigerian oil to SouthnAfrica, and when his suppliers foundnout by following his tanker, it costn”one million chocolates to get thencontract back.” The payola—only andown payment on a $12 billionndeal—went to a transport ministernrelated to former Nigerian PresidentnShegari, “whose regime personifiedncorruption in the Third World.”nEven when the Shah died. Richnkept right on making money in Iran;ncharacteristically his traders immediatelyntook Khomeini’s oil ministers outnto lunch. Rich knew that in the 1930’snTexaco had made money by selling oilnto Franco and got away with it. In then1980’s he would do the same by buyingnfrom the enemy instead—a crimenduring the Carter Administration.nDuring the hostage crisis. Rich & Co.nbought millions of barrels of Iranianncrude at half the $40 spot price andnpaid for it with what the AyatoUahnwanted most—arms!nRich was making more money thannGod before he joined other daisychainers.nIt is a measure of his ownnarrogance, and of the way greednworked to bring about his downfall,nthat he decided to make even more byncheating the U.S. government. ButnRich could not resist. He made moneynselling the cheap oil he got from Nigerianin the U.S.; he made money onnthe cheap oil he illegally bought fromnKhomeini and sold at home; he madenmoney by getting domestic old oil at anfurther discount in return; he createdntax advantages for his domestic subsidiariesnby selling this oil at a loss to hisnPanamanian companies; he createdntax-free profits for those firms by sellingnthe old oil at a gain multiplied bynthe difference between old and newnoil; and he could even pump the newnold oil back into the chain if the spotnprice went to a premium.nIt took the Department of Energyneight years to find out what wasnnnhappening—bureaucratic stupidityncan do the work of chocolates. ButnFederal accountants finally figured outnthat more than 400 million barrels ofnold oil had disappeared, based on ancomparison of old oil bought at thenwell and the amount arriving at thenrefineries. The government responsenwas typically absurd—DOE set a 20(2a-barrelnprofit limit on old oil! At leastnRich’s prosecution brought in $210nmillion.nAs Ken Auletta explains, greed fornmore money than God turned thenheads of the respectable investmentnbankers of the house of Lehman. (Thisnis a book that can’t be put down—at anrecent meeting with an SEC official,nthe first question I was asked as anninvestment advisor was whether I hadnread it.) One Lehman partner toldnThe British Empire as anSuperpower, 1919—39nAnthony ClaytonnExplorinsj Great Britain’s globalnstanding in the decades betweennthe two world wars, AnthonvnClavton documents the Empire’snemergence as a modem “superpower”nand shows how its leadersnsought to presene peace throughnthe judicious use of militarv force,ndiplomacv, and economic pow cr.n$30.00n%n•nThe University ofnGeorgia PressnAthens, Georgia 30602nJANUARY 1987/23n