New York state officials seek $137 million in taxes from Marc Rich

Thursday, March 1st 2001, 12:00 am
By: News On 6

ALBANY, N.Y. - State tax officials said Thursday they are seeking $137 million in back taxes, penalties and interest from Marc Rich, the fugitive financier pardoned by President Clinton.

``Mr. Rich has avoided his tax payments in New York for nearly two decades while he was under federal indictment. It is now time for him to pay the piper,'' New York state Tax Commissioner Arthur Roth said in a statement.

Clinton's pardon of Rich at the very end of his presidency has prompted an investigation by Manhattan-based U.S. Attorney Mary Jo White and by congressional committees. They are looking into whether contributions to Democrats by Rich's ex-wife, socialite-songwriter Denise Rich, and others may have led to the pardon.

``We feel that Marc Rich personally benefited from his admitted fraud of at least two companies he controlled and therefore evaded personal income taxes on the money he realized through his control of those corporations,'' Roth said.

Officials said the collection action represents $26.9 million in back taxes for the years 1980-82, along with $13.5 million in penalties and $97.4 million in interest.

Rich's lawyer, former Clinton administration White House counsel Jack Quinn, has said his client was ready to return to face possible civil penalties.

Under the terms of the pardon, Rich was required to waive all legal defenses he might have planned to use in the event of civil litigation.

Rich came to Switzerland to work in the mid-1970s and was there on and off in the years that followed. He was indicted in 1983 in the United States on charges of fraud, engaging in illegal oil deals with Iran and evading more than $48 million in taxes. He remained in Switzerland for the most part after that.

Roth said the state tax department had taken no prior civil action against Rich ``in order not to jeopardize the ongoing federal investigation against him that had resulted in numerous criminal charges. Those charges were wiped out as a result of the pardon issued in January by then-President Clinton. That pardon, however, specifically left open the ability for the government to file civil actions against Rich.''

The department says Rich owes New York income taxes for the years he was a New York resident.

``We do not intend to allow Mr. Rich to shuffle or conceal assets in order to avoid this bill, Roth said.

The commissioner said the state has filed court papers that will allow it to immediately place a lien on any assets held by Rich in New York state.

Department officials said their investigation had concluded that Rich had made money from two corporations that he controlled, Marc Rich International, Ltd., and Marc Rich and Company AG, in the early 1980s when he was a state resident.

In 1984, those companies pleaded guilty to federal charges and paid $150 million to settle the cases, the department said.