An indignant Bill Clinton denied on Thursday that he pardoned the fugitive financier Marc Rich in return for political donations, but a criminal investigation into the controversial pardon began, and it seems certain to keep the latest Clinton scandal on the boil for a while.
Clinton issued his denial as a federal prosecutor in New York was authorized by the justice department to investigate whether money played a part in the pardoning of Rich on Jan. 20.
PHOTO: AP
US attorney Mary Jo White, a Clinton appointee, is expected to examine bank and telephone records for evidence of illegal conduct by Rich and his supporters, as well as by Clinton himself.
"As I have said repeatedly, I made the decision to pardon Marc Rich based on what I thought was the right thing to do," Clinton's statement said. "Any suggestions that improper factors, including fundraising for the Democratic national committee or my library had anything to do with the decision, are absolutely false. I look forward to cooperating with any appropriate inquiry."
White's office and the FBI said that they had opened a joint investigation to find out if federal laws were breached.
Clinton and some of his closest former colleagues are now braced for at least three intensifying investigations into the pardons, which were issued just two hours before he left the White House.
White's is likely to become the most important. She runs the federal prosecution office in New York, which was once run by the New York mayor, Rudolph Giuliani.
Giuliani secured the original 51-count indictment of Rich in September 1983 on charges of arms trading, fraud and US$48 million tax evasion. The case is still the biggest tax evasion prosecution in US history.
White was not consulted about the Rich pardon and was reportedly "livid" when news of it emerged.
Rich and his co-defendant Pincus Green fled to Switzerland before the case went to court more than 17 years ago and both men have remained there ever since, while continuing to expand their hugely profitable commodities trading businesses.
The US authorities have been involved in regular talks for the past 17 years to try to resolve the Rich case, but proposed deals have fallen through because Rich refused to serve a jail sentence.
Early last year White refused to negotiate with Rich, saying that it would "give defendants an incentive to flee [from the US]."
Rich has now abandoned his US citizenship. In 1993 his 27-year marriage to the former Denise Eisenberg broke up.
The key issues in the new investigation are why and how Clinton added Rich's name to the list of 141 presidential pardons.
After Denise Rich returned to the US with her three daughters in the mid-1990s, she made a glittering career as a Manhattan socialite and a courtier at the Clinton White House, and became a major donor to the Democratic party.
She gave it more than US$500,000, and pledged at least US$450,000 to Clinton's presidential library fund. Some reports, denied by both sides, say her library pledge is far larger and could be as high as US$10 million.
Last year she also gave a set of two coffee tables and upholstered chairs to the Clintons, worth US$7,735, which the former presidential couple took with them when they left the White House.
Such support raises the question of whether Denise Rich tried to buy her former husband's pardon.
So far she has refused to testify on the grounds that she might incriminate herself.
Other issues under scrutiny are the means employed by Rich and his US lawyer Jack Quinn to orchestrate the behind-the-scenes lobbying which led to the pardon and, in particular, how the justice department and White's office were kept in ignorance of it.
Quinn says he focused his main effort on Rich's behalf by using his own access to the White House as a former counsel there and by encouraging prominent Israelis to pressure Clinton.
The former head of Israel's Mossad spy agency, Avner Azulay, said that former prime ministers Ehud Barak and Shimon Peres both spoke personally to Clinton about Rich's proposed pardon.
Azulay said he believed Clinton granted the pardon because of Rich's role in helping Jews get out of Ethiopia and Yemen.
The presidential pardon power is enshrined in the constitution. In all, Clinton issued 395 pardons in eight years, compared with 393 issued by Ronald Reagan in his two White House terms.
Meanwhile, three of Clinton's closest White House aides will be subpoenaed for the next House hearing into Rich's pardon, officials said.
The panel on Thursday asked the three aides -- former chief of staff John Podesta, lawyer Beth Nolan and adviser Bruce Lindsey -- to testify at their first hearing last week, but none of them appeared. This time the committee plans to issue subpoenas to ensure their presence at the March 1 hearing, officials said.
The questioning will reach into the Bush administration this time, a committee source said, with the committee likely to call Vice President Dick Cheney's chief of staff, Lewis "Scooter" Libby, one of Rich's former lawyers.
The House Government Reform Committee also asked Clinton and Rich to release all their aides and lawyers from any executive privilege so they can testify at the committee's March 1 hearing without betraying any confidentiality oaths.
"We're also asking ... Rich, if he has nothing to hide, to let his counsel speak freely and that goes for the documents that have been claimed by them as well," committee spokesman Mark Corello said.
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