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Book Review of The King of Oil: The Secret Lives of Marc Rich

Of all the books that I have read so far, this one definitely would go down as one of the best and most inspiring reads ever; it is a tale of success and glory, despair and frustration when the odds are stacked up against you, and how time unravels a lot of issues shrouded in mystery and confusion.

This is the story of a man who once led a life of high stakes and high risks. Who is this man who saw wars and revolutions not as curses but as business opportunities? Who is the real Marc Rich, the man who managed to elude agents of the most powerful nation on Earth for nearly 20 years? Although he is one of the most important and most controversial commodities traders of the 20th century, only one biography has been written about him, in nearly 25 years, and is now outdated. Perhaps this lack of coverage has something to do with the 1983 criminal proceedings that made Rich into the persona non grata that he is today. More likely, it is because Rich is considered the most secretive trader of the notoriously furtive commodities trading community. For years, no one had ever seen a photograph of him. The media had to resort to artists’ sketches for their reports. He systematically avoided reporters. As a result, no one has ever succeeded in getting to know the real Marc Rich, until Daniel Ammann was able to convince him for the first ever one-to-one interview.

This book reveals why Marc Rich thought it was right to do business with Ayatollah Khomeini’s Iran, with Fidel Castro’s Cuba, or with apartheid South Africa — with corrupt, violent and racist governments. He did business with all these regimes at the height of international UN sanctions being slapped on them. Marc Rich was accused by none other than Rudy Giuliani for the largest tax fraud that the United States ever faced in its corporate history…a case that would lead to Marc Rich’s exile for more than 20 years…a case that would paint him as an international thug and villain willing to do business with any regime irrespective of the fact that they would have violated all international norms of human rights. Eventually, Marc Rich was granted a pardon by President Bill Clinton during his last days in the White House.

Besides the human element to this book, here are some of the most interesting facts that the true story of Marc Rich reveals for the very first time:

— For years, Marc Rich – who at one point was the world’s biggest and most successful commodities trader – covertly supplied strategic amounts of Iranian oil to Israel through a secret pipeline
—Marc Rich financed the operations of the Israeli intelligence service, Mossad, and served as an informal mediator between Iran and Israel
— Former mayor of New York and former federal prosecutor, Rudy Giuliani, could have had Rich arrested by the Swiss police, but he let this unique opportunity slip through his fingers
— A young and ambitious United States attorney  for the Southern District of New York Rudy Giuliani accused Marc Rich, then 48, of a total of 51 crimes including tax evasion to the tune of at least $48 million on September 19, 1983
— The American government once sent two US marshals to ‘kidnap’ Rich from Switzerland
— Rich routinely provided the US government with highly sensitive information about key people in Iran, Syria and Russia
— Busting international sanctions, Rich earned a total profit of $2 billion selling oil to apartheid South Africa
— Ex-wife Denise Rich received a total of $365 million after one of the most bitter public divorce trials
— Rich’s entourage meticulously planned the presidential pardon by Bill Clinton, deliberately passing the normal procedures

Marc Rich was born as Marcell David Reich, and was able to escape the holocaust of the Jews in Germany at a very young age. His parents left for Belgium and then the United States, ultimately to settle for a life of freedom and serenity.

The single biggest credit that goes to Marc Rich is the invention of the spot market for oil. The spot market for oil was surely one of the most lucrative ideas of the 20th century. Back when Marc Rich first began to snatch away a part of the global oil trade from the mighty oil corporations, crude oil cost $2 per barrel. In summer 2008, a barrel went for a record $140. Marc Rich’s undertaking was revolutionary. His career is tightly woven with great events in world history: Fidel Castro’s revolution in 1959; the decolonisation of Africa in the 1960s; the Yom Kippur War and the oil shock of 1974; the fall of the Shah of Persia and the seizure of power by Ayatollah Khomeini in Iran in 1979; apartheid South Africa in the 1980s; and the crumbling of the Soviet Union in the 1990s.

Since World War II, the global oil market had been dominated by the ‘Seven Sisters’, the leading multinational oil companies. This cartel of multinational oil companies took its strongest beating from Marc Rich & Co. AG, a small company founded in the Swiss town of Zug in 1974. It is as if a small software company were to suddenly wrestle away Microsoft’s market position. In next to no time, Marc Rich and his four business partners managed to achieve what all commodities traders admire and strive for: they created a new market for products that until then had been traded in very small amounts or had not been traded at all. They managed to create an independent distribution system that bypassed the Seven Sisters: the Americans Chevron, Esso (Standard Oil of New Jersey), Gulf, Mobil, Texaco, British Petroleum, and Anglo-Dutch Shell.

In the 1960s, the world of oil was quite different from what it is today. Oil was not traded according to free-market principles, and there was very little latitude for price dynamics. Oil-producing nations sold nearly all of their oil to the Seven Sisters at fixed prices agreed upon far in advance, and only 5 percent of crude oil was traded freely according to the laws of supply and demand. Marc Rich changed all that forever with the invention of the spot market.

Marc Rich was truly the King of Oil. He worked harder and was more aggressive than everybody else and often worked 18 hours a day and Sundays as well. Of course, one can criticise Marc Rich for supplying South Africa’s apartheid regime with oil. One can criticise Rich for trading with dictators of every stripe and breaking embargos while putting profit above morality. Yet, Marc Rich did a lot for humanitarian project within Switzerland, Israel and the United States.

Yet, Marc Rich was the typical example of capitalism. Everyone else, the commodities traders most of all, of course, make do with some middle way between a sense of reality and self-deception. They live in a gray area – sometimes dark, sometimes light. Sometimes it is fair and sometimes it is exploitative. The name for this gray area is capitalism.
About the author:
Daniel Ammann, the author of The King of Oil: The Secret Lives of Marc Rich, is an award-winning journalist with more than 20 years experience in newspapers, radio and television.
Daniel Ammann was born in 1963, raised in Switzerland and educated at Zurich University, UC Berkeley and Fondation Postuniversitaire Internationale in Paris. He holds an MA in Political Science, History and Constitutional Law.
In 2007, he won the renowned Georg von Holtzbrinck Prize for Business Journalism. In 2006, he was awarded the Swiss Media Prize for Finance Journalism.

The King of Oil: The Secret Lives of Marc Rich
Author: Daniel Ammann
Published by St. Martin’s Press; First Edition edition (October 13, 2009)
ISBN-10: 0312570740
ISBN-13: 978-0312570743

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