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Marc Rich Pardon: Congressional Hearings on Controversial Clinton Decision Continue

Aired February 8, 2001 - 2:20 p.m. ET


JOIE CHEN, CNN ANCHOR: Also on Capitol Hill, they're talking about those last-minute pardons issued by former President Clinton, the subject of a congressional hearing that's under way at this hour. House committee members are focusing on that most controversial case: that of financier Marc Rich. You see one of Mr. Rich's lawyers, Jack Quinn, who is speaking before the committee, and faces some rather sharp questioning throughout the hearing today.

CNN's Bob Franken is covering that hearing. He joins us now -- Bob.

BOB FRANKEN, CNN CORRESPONDENT: Questions, Joie, about whether, as former White House counsel, he improperly used his personal connections with President Clinton to bypass normal procedures, and, in fact, misrepresented to President Clinton the gravity, according to the Republicans, of the crimes of Mark Fischer (ph), leading the president to give him a pardon.

Jack Quinn has been asking a -- he's been asked a variety of questions about that all day. And he's taking more now. (JOINED IN PROGRESS)

JACK QUINN, COUNSEL TO MARC RICH: ... they never did anything wrong, either from a DOE point of view or an IRS point of view. But it was my understanding when I made that commitment that the Department of Energy could reopen the matter if it chose too, and that, for example, if they concluded now, contrary to their earlier conclusion that Rich improperly accounted, that there could be penalties that would attach to that. For example, for aiding and abetting the misreporting of these transactions to the agency.

So the commitment was made in good faith. I don't know what the outcome of that proceeding might be or whether it would take place.

REP. STEVEN C. LATOURETTE (R-OH), OHIO: Let me say, I don't have any problem with what you did in good faith. The question is, the president was concerned about whether this guy was a fugitive. No, he's not a fugitive. The president apparently said, even after reading all this stuff, knowing he's not a fugitive, I would like him to be subject to something. And so he got a letter saying, OK, if he comes back, he'll waive the statute of limitations. I guess I'd go back to you gentlemen. What did the president get when he got that letter saying that he was going to waive the statute of limitations.

MORRIS WEINBERG, FORMER ASSISTANT U.S. ATTORNEY: He got an empty promise, because there is no individual civil liability for what this indictment was about that I am aware or ever was aware of.

I mean, as far as the individuals were concerned, in my opinion it was never about money. It was about money as far as the corporations were concerned, but when Mr. Williams, when Edward Bennett Williams came into my office before the indictment and offered $100 million to resolve everything and have no charges against Rich and Green, I told him then, and I think the offices told every other lawyer that came in for Marc Rich since then, that it wasn't about money for them. And that promise, like some of the other things in the application, just is very empty.

LATOURETTE: Mr. Auerbach?

MARTIN AUERBACH, FORMER ASSISTANT U.S. ATTORNEY: Related and beyond this, the civil liabilities were fully extinguished. They were corporate liabilities, they were fully extinguished in 1984.

And a number of times Mr. Quinn has referred to ARCO and to the Department of Energy's treatment of ARCO. And I'd make several points.

First of all, ARCO cooperated with our investigation. They were a cooperating witness, and Congress has specifically provided for different treatment for people who cooperate.

AUERBACH: Second, with respect to the excerpts that appear at Tab E in the pardon application, that are extracts from the Department of Energy proceedings, they refer to the fact that Marc Rich and Co. International accounted for transactions on their books in a particular way.

Thank you.

REP DAN BURTON (R-IN), CHAIRMAN: Thank you very much. The gentleman's time has expired. Mr...

AUERBACH: Don't think so at all.

UNIDENTIFIED MALE: Mr. Lewis has not yet asked questions.

BOB FRANKEN, CNN CORRESPONDENT: What we were witnessing before was a discussion about whether or not Marc Rich, in fact, should have been indicted. Jack Quinn, his attorney, says all along that he was pursued in ways that other companies were not.

And so you heard one of the prosecutors back in the '80s, in fact heard them say that other companies that were charged with violations that related to this, in fact, were more forthcoming -- they, in fact, were not exactly the same. The issue, they said, with Marc Rich is number one, that he, in fact, tried to hide evidence; and number two, he fled the country and became a fugitive, which he remained until he was pardoned by President Clinton. So, that is what that was all about.


REP. RON LEWIS (R), KENTUCKY: ... in the position of probably where he wouldn't want to be making a decision like that on his last day in office and to be remembered for that decision?

Do you feel like you maybe should have told him more now, that he could have maybe made a better decision?

QUINN: I do not think I failed in my responsibility to anyone, including to the former president.

The thing I believe was most important, in this regard, was that I forthrightly and on more than one occasion urged the lawyers in the White House working for the former president to contact the Department of Justice. I think that discharged my responsibility because I think if there was to have been a presentation in as much depth as anyone wanted that that was the place it should come from.

LEWIS: Did the former president ask a lot of questions? Or did he ask for more information from you? Do you think he was trusting you, totally, for the information that he needed? Because, evidently, he didn't pursue this any further with the Justice Department.

QUINN: I do not believe that he relied entirely on my representation of the case and our arguments against it. It is my impression that there was a robust debate about this in the White House counsel's office.

I'm not privy to...

LEWIS: Did they have more information to provide the president than what the Justice Department would have?

QUINN: I don't know, sir. But I do believe that the application was discussed with some thoroughness. I am not privy to those conversations, and so I don't know the precise nature of them. But I am as confident as I can be that the president did hear from people who disagreed with my application.

And, again, I believe I discharged my responsibility to him when I urged the White House counsel to contact the Department of Justice and when, at the same time, I made efforts to alert the Department of Justice that this matter was being considered and, again, in the hope that I would get some constructive involvement, positive involvement on their part.

But with both the White House lawyers and the Department of Justice, I was pushing them to be engaged in this process.

LEWIS: Do you think the president -- and I'm asking you to make a judgment here -- have you talked to the president since that pardon? And how does he -- does he feel like he has made a mistake now, that it was a wrong decision, that he shouldn't of done it because of the information that is out there now?

QUINN: That is not my impression. I have spoken to him just once, several days later. And the impression I got in that conversation was that he believed he did the right thing and he was confident he did it for the right reasons. He thought I should be more aggressive about getting the particulars of the arguments we made out to the news media.

BURTON: Would the gentleman yield real briefly?

LEWIS: Yes, sure.

BURTON: When you refer to you asking them to check with the Justice Department -- now, the Justice Department did not have your documents, did they?

QUINN: They did not have them from me. That's correct.

BURTON: But did they have them from anybody? You don't know.


BURTON: But you didn't give them to them?

QUINN: That's correct.

BURTON: All you did was talked to Eric Holder?

QUINN: That's correct.


The gentleman?

LEWIS: Thank you, Mr. Chairman.

I just want to change gears a little bit.

BURTON: Well, we'll let you ask one more question since I interrupted you, and then we'll move on.


In an e-mail exhibit, exhibit 73, you wrote to Mr. Rich's other attorneys that you had a great concern that, "We're withholding our very good and compelling petition from the press only to protect the tax professors who don't want to be that far out in front."

How were you protecting the tax professors?

QUINN: Well, what I understood from other lawyers involved was that the tax professors didn't want to be besieged with media requests and so on. And as a result, there seemed to be some reluctance not on the part of the professors, but on the part of at least one other lawyer, to distribute the Ginsberg-Wolfman tax memo. This was frustrating because that analysis was critical to the argument that we made in the pardon petition. And so in this e-mail I think you see reflected my frustration that we need to make sure people understand the analysis that Ginsberg and Wolfman went through and why it was so helpful to our case.

LEWIS: Did Mr. Ginsberg express any concern that making the tax opinion public might harm his wife's reputation?

QUINN: No, sir, not at all. Not at all. And it's my understanding that both of those professors absolutely stand by that opinion.

LEWIS: Thank you.

BURTON: Gentleman's time has expired.

Mr. Kanjorski?

REP. PAUL E. KANJORSKI (D), PENNSYLVANIA: Thank you, Mr. Chairman.

To the prosecutors, as I gather, this process and the fugitive nature of Mr. Rich occurred in about 1984. Is that correct?

WEINBERG: As I understand it, he was indicted in September of '83, and by that time he just chose not to come back to the United States.

KANJORSKI: Now, he was in Switzerland?

WEINBERG: Apparently he was in Switzerland. He was living in New York prior to the indictment and he had offices in Switzerland and stayed in Switzerland after the indictment.

KANJORSKI: Is it correct that any American citizen who is indicted or may be indicted shortly should just get on a plane and go to Switzerland and it will guarantee that they will not be able to be brought back to the United States for prosecution?

WEINBERG: Well, I don't think that that is correct.

KANJORSKI: Well, then, were there particular circumstances in this case why Switzerland failed to extradite?

WEINBERG: Well, first of all, we were told he was one of the largest taxpayers in Switzerland. Secondly, obviously...

KANJORSKI: So money allows judicial process in Switzerland?

WEINBERG: Well, I believe that that a lot to do with what happened back in 1983 and 1984, yes.

KANJORSKI: Were there attempts after 1983 and 1984 by -- that was the Reagan administration, there were four years remaining, the Bush administration for four years -- did the Justice Department or the Southern District do anything over that eight-year period to proceed?


KANJORSKI: What were the results of that?

WEINBERG: As I understand, they tried to extradite him from Israel, both of them, and the Israelis turned down the extradition request. And there were persistent attempts to apprehend him in various countries apparently, as indicated by the marshals.

KANJORSKI: And were these taken through judicial processes in these various countries?

AUERBACH: The judicial process in Switzerland and Israel resulted in the Swiss declining to extradite And while they did indicate that Mr. Rich and his company were the largest taxpayer in the canton in which they're located and one of the largest in the country, they also took the position that these were violations, that these were crimes which were not the subject of extradition.

KANJORSKI: OK. So there was a judicial vetting in a developed nation of the world that determined that they weren't going to send this fugitive or former American citizen or what have you back to the United States for prosecution.

WEINBERG: Yes. If the process had been in England, Germany, a number of other countries, they would have been extradited, but in Switzerland and apparently Israel they were not.

AUERBACH: Because of the treaty that we have with those countries, which defined crimes for which our citizens can be extradited.

KANJORSKI: So if you are a commodities operator and you fail to pay taxes in the United States and make an extraordinary amount of money you can go to Switzerland and be quite safe?

AUERBACH: You might conclude that from the facts of this case.

KANJORSKI: Don't you think it's possible also that you might conclude, if you were looking over this petition, that there has been some sort of a vetting as to whether or not, as Mr. Quinn points out, the RICO statute was properly applied in a case like this and the charges that were brought against Mr. Rich and Mr. Green were not necessarily charges that that nation interpreting was fair administration of justice?

WEINBERG: No, I really don't. I think the main issue in Switzerland was taxes and tax offenses, and at the time the extradition treaty did not provide for extradition on tax-related matters.


KANJORSKI: That nation has been known to change its rules and laws when pressured to do so, hasn't it? AUERBACH: It has. And it has certainly become amenable to providing assistance to the United States in areas like money laundering.

KANJORSKI: We went through a process in this country about three or four years ago with the Holocaust victims, particularly with Switzerland, and hammered them into coming up with a considerable amount of money. It's either $3 or $4 billion of funds. Did anyone, the State Department or anyone else, particularly the Southern District of New York attorney's office, -- did they think in terms of, "Maybe we ought to include in this package, that if we can make them open up the secret bank accounts, that we can make them account for 50-year-old money in accounts, that we can also get back a live fugitive."

AUERBACH: Well, I think that they had become amenable to returning fugitives. And as I said before, I believe that if this case were brought today, it would include money laundering charges and we might well have been able to get people like Rich and Green back on the basis of those charges. Unfortunately, that was not the law at the time.

KANJORSKI: Well, when did it become the law? And when did we have that window of opportunity?

AUERBACH: Well, I'm saying that if this crime was committed today ...

KANJORSKI: Oh, if this crime were committed today...

AUERBACH: If this crime was committed today. One certainly can't go back and rewrite the laws as they applied then.

WEINBERG: Back in 1980, we didn't have a money laundering statute that would have covered these offenses. We do now. And it's likely that we wouldn't have this same set of circumstances today, because of these other available statutes that could have been used.

BURTON: The gentleman's time has expired. Who do we have next?

NATALIE ALLEN, CNN ANCHOR: We will take a break in our coverage of these hearings; we'll continue in just a moment.


ALLEN: We continue now with our coverage of the hearings on Capitol Hill about the controversial pardon of Marc Rich. CNN's Bob Franken is covering the story for us on Capitol Hill, and Bob, maybe this is a good time -- people are just starting to join us on this story, to tell us who is getting the question here from members of this committee?

FRANKEN: I think it's fair to use the word hammering that Jack Quinn is getting; he is the former White House counsel for President Bill Clinton, who went directly to the president, and detractors say that he bypassed the normal Justice Department procedures. There have been arguments all day -- debates all day over whether he acted appropriately, whether he fairly represented the case of Marc Rich, the billionaire oil commodities trader fugitive, when he, in fact, sought the pardon from President Clinton.

There are questions about whether there was some sort of quid pro quo, a word that been used -- in other words, money that changed handed or some sort of consideration like that. Quinn has been also arguing with former prosecutors of Marc Rich. Quinn makes the claim that he believes that Rich's indictment 17 years ago was really the case of overzealous prosecution.

The prosecutors at that time have been appearing before the committee and they are saying that, indeed, that was not the case, that Rich was accused of the largest tax evasion in U.S. history: $48 million, it was accused with dealing with somebody, a country that was against the law to deal with at that time, meaning Iran.

He then fled the United States, became a fugitive, became a billionaire living safely and lavishly in Switzerland. And the very fact that he was a fugitive, who renounced his citizenship, he said, made him somebody who should not have been eligible for a pardon. Even the Democrats are saying that President Clinton made a mistake in issuing that pardon, but they're are the ones that point out he has the absolutely right to do so.

One other person whose name I need to mention, Natalie, and that is Denise Rich -- she is a Grammy-winning songwriter, by the way -- she's also, more importantly, the ex-wife of Marc Rich; who went over with him but then came back the United States. She is also a major contributor to the Democratic party to the tune of one million dollars, plus. She has had fund-raisers for President Clinton, she's among those that donated furniture -- of course, that sort of overlaps to the whole gifts controversy -- donated furniture to the Clintons, about $8,000, and she wrote a letter requesting a pardon for her ex- husband Marc Rich, which has raised questions in many peoples mind whether there was some sort of, to use the words of Dan Burton, the committee chairman, "influence peddling."

She, in fact, was sent a list of questions by the committee. He lawyer wrote back, saying that on the advice of the lawyer, she would not answer the questions because of Fifth Amendment considers, that being, the protection against self-incrimination. The committee chairman is saying now he is going to the Justice Department to seek immunity for Denise Rich, so she would be required to answer the question. That is the situation.

Quinn has been on the stand all day -- the stand, actually, at the witness table along with those two former prosecutors. We still have not heard yet from Deputy Attorney General Eric Holder, who is expected later in the day who will talk about whether, in fact, Quinn did keep the Justice Department informed, which would be the more normal procedure when trying to get a pardon.

So, they are going back and forth right now between members of the committee -- some of the junior members of the committee now, questioning Quinn. So, Quinn maybe has another hour left of what can be charitably, easily called a grilling.

ALLEN: OK, Bob, we thank you. And he's taking questions now from a Republican from Pennsylvania, Republican Todd Platts.

REP. TODD PLATTS (R), PENNSYLVANIA: ...pardon avenue was always available, even after standing trial. So you would at least acknowledge that is another course that could have been pursued, is to stand trial and then, if necessary, pursue a pardon at that time?

QUINN: That's true.

PLATTS: Well, again, Mr. Chairman, thanks for your discretion on the time for me.

And to all three of our testifiers, as I said, we may agree on some points with prosecutors and with Mr. Quinn and respectively disagree, but I very much all three of you appearing before the committee.

Thank you.

BURTON: Ms. Davis?

REP. JO ANN DAVIS (R), VIRGINIA: With your permission, I'd like to yield my time to Mr. Latourette.

BURTON: Mr. Latourette?

LATOURETTE: I thank the gentlelady very much.

Mr. Quinn, one of the things that amazes me and it probably amazed you about Washington when you were White House counsel is how fast stuff moves in this town. And one of the fast things that's happened while we've been here today is someone's published a publication reporting on your testimony, today. And the headline is: "Quinn says Rich deserved pardon because of flawed Giuliani prosecution."

Now, I went to the bathroom for about five minutes during this hearing. Did you ever say that today?

QUINN: Frankly, I was thinking when we were having lunch, I don't think the mayor's name has come up in this hearing.

LATOURETTE: I don't either. And, you know, I think that I've seen that reported in the press. And to me at least, since he left the campaign trail and decided not to run against Mrs. Clinton, he seems like a benign character who shows up in Giants and Yankees turtlenecks and roots for New York sports teams.


But, specifically, I want to just read to you what the reporter had to say here. And it said that you argued, today, that, "Mayor Rudolph Giuliani, who was the U.S. attorney in 1983," and you guys are mentioned, "former assistant U.S. attorneys, Martin Auerbach and Morris Weinberg, Jr., misused the RICO act to indict Rich," and that's why he deserved the pardon.

Did you say that today?

QUINN: Well, I have certainly pointed to the use of RICO as dramatically ratcheting up this case and contributing to the impasse. And you were kind enough to point out earlier, in connection with my being on both panels, that it is a long day. And so I will confess there may be some things that have slipped by me, too. But I don't think that that reference to the mayor has been part of this hearing.

LATOURETTE: I didn't think so, either.

But I do want to turn to your January 5 letter to the president of the United States, where you do write -- and I think that that's exhibit number 89, if you want to follow along on our program -- where you talked about the outrageously prejudicial and unfair treatment of him by the, then-new U.S. attorney in New York, Mr. Giuliani. Is that your conclusion, that Mr. Rich suffered outrageously prejudicial and unfair treatment at the hands of Rudolph Giuliani?

QUINN: Yes, sir.


Fellows, how about you? Mr. Weinberg, Mr. Auerbach, how do you feel about it?


QUINN: And anyway, I'm familiar with the letter.

LATOURETTE: You wrote a letter to the president on January 5. And do you remember using the words "outrageously, prejudicial and unfair treatment by Mr. Giuliani"?

QUINN: If you're reading it, I'm confident that that's what I said.

LATOURETTE: OK. Mr. Weinberg?

WEINBERG: I think the that the treatment must have been me -- by me and not Rudy because Rudy had very little to do with the case until at the end of the case when he participated in negotiating the guilty pleas. Actually, the investigation was done under John Martin (ph). John Martin (ph) is now a federal judge in the Southern District of New York.

I just want to say that I do not believe that it is fair to characterize anything that we did -- and I was a 31-year-old prosecutor then -- during the investigation as unfair. The reason that Mr. Rich and Mr. Green really found themselves in the position that they found themselves in is because of the extraordinary things that they did during the investigation to obstruct it, the contempt fines, the steamer trunks, trying to sell the American corporation secretly, that the court found was fraudulent, their fugitivity -- I mean, this extraordinary effort to avoid turning over documents. I mean, the Swiss government, quote, "seized," some documents in Switzerland so that they couldn't be turned over. And then, they were the safe haven for Mr. Rich and Mr. Green so they couldn't be extradited.

The reason that this case, you know, attracted the attention that it did was not because of Sandy Weinberg. It wasn't because of Martin Auerbach.

WEINBERG: It certainly wasn't because of Rudy Guiliani who wasn't even around at the time when all this publicity was going on. It was because of the extraordinary things, extraordinary, I would say, misdeeds that took place during the investigation.

LATOURETTE: But, let me ask you this. Are you fellows familiar with a gentleman by the name of Robert Litt?

Did Robert Litt have something to do with this that the ...

WEINBERG: I will explain to you what Robert Litt had to do with this. Robert Litt was in the appellate section. Bob is a very close personal friend of mine and actually is a partner at Mr. Quinn's old law firm and was in the Justice Department before this.

Mr. Litt worked on the appellate. There were six appeals in this case. This person, Mr. Rich, who had these wonderful lawyers involved, brought six appeals during the investigation. We were in the Second Circuit six times. That's how aggressively they litigated it. And Mr. Litt and Mr. Lynch, who one of the letters was to in the early 90's is now a federal judge. They were both in the appellate section and served honorably and they worked on these extraordinary appellate issues that we had during the investigation.

LATOURETTE: And Mr. Lynch, if I understand who you're talking about, a fellow named Gerard Lynch?


LATOURETTE: He's been nominated and he's now on the federal bench? An appointment of President Clinton's, is he not?

WEINBERG: As far as I'm concerned, he's the best lawyer I've ever worked with in my entire life.

LATOURETTE: And if I remember Robert Litt, aside from being a partner of Mr. Quinn's at one time at Porter and Arnold, he was also nominated to head the criminal division at the Justice Department during the time that Mr. Quinn served as counsel to the president. Does that sound about right?

WEINBERG: That's correct.

LATOURETTE: Thank you. I have nothing further.

QUINN: May I add a point in response?

LATOURETTE: Sure, go ahead. QUINN: In terms of the basis for my making the statement that I did in the letter. I'm going to read to you three short clips from the Wall Street Journal.

The first reads, "It's worth taking a second look at Mr. Giuliani's first big RICO case. This was the much celebrated 1984 case against Mark Rich, the wealthy oil trader. A close reading of the allegations shows that these also effectively reduced the tax charges. The core of the case is that Mr. Rich wrongly attributed domestic income to a foreign subsidiary. Again, this sounds like a standard civil tax issue, not RICO."

Second clip, again from the Wall Street Journal. "The Department of Justice should launch a complete review of all U.S. attorney RICO cases. From Mr. Giuliani's first RICO expanding case against Mark Rich in 1984, through the current allegations against Chicago pit traders and Michael Milken."

Third Wall Street Journal: "The major prior RICO abuse was when Rudolph Giuliani, the former U.S. attorney in Manhattan, in 1984 RICOed oil trader Mark Rich on essentially -- essentially on tax grounds." It goes on.

FRANKEN: RICO, of course, is the part of the law which allows prosecution for racketeering, influence, corruption. And Rudy Giuliani was somebody who, as a U.S. attorney, indulged in that back then. And it became part of the basis for the prosecution of Marc Rich -- Marc Rich.

The argument that is going on here -- and it's been going on all day -- is Jack Quinn and his attorneys' claim that he made to the president that Rich was inappropriately prosecuted: that he done nothing that called for prosecution. And you have heard him make that claim over and over again. He is arguing now the argument that the use of RICO was inappropriate.

The attorneys who, in fact, were the main investigators for Rudy Giuliani -- the U.S. attorney in New York at the time -- Morris Weinberg and Martin Auerbach -- they are saying that, in fact, Marc Rich was a real bad guy, to the tune of millions upon millions of millions of dollars, that, he, in fact, was more than appropriately indicted, and, in addition, he fled the United States and gave up his U.S. citizenship and, therefore, was absolutely somebody who should not be pardoned.

That is the debate that has been going on all day. Right now, we are hearing from Morris Weinberg as he, in fact, argues about the use of RICO to pursue Marc Rich.

WEINBERG: ... this was President Reagan's administration, the Justice Department in 1983, specifically approved filing RICO charges and approved filing the tax charges.

LATOURETTE: Thank you. Thank you, Mr. Chairman.

BURTON: The gentleman's time has expired. Mr. Waxman, did you want to take some of your time?

REP. HENRY WAXMAN (D), CALIFORNIA: Thank you. I'll just take this time. We have had a taste of this case. I can't say that we have dug into it in detail. The three of you know it in great detail. And, it sounds to me whenever you have somebody's very complicated transactions, whether it was tax evasion or tax avoidance becomes a real serious question.

The RICO issues have been quite controversial. They say it might be money laundering charge today, but that wasn't then. I don't know that this committee can make a final judgment on the merits. The president, however, was the one that had to make some judgment. And he had to make a decision whether to exercise that unique power that a president has which is to show clemency or to grant a pardon. We can disagree with his conclusion, and we can also question whether he had enough information to reach the conclusion.

So, I know the chairman said this is worth doing to give some signal to all presidents that when they make this decision it might be examined by a committee of Congress.

But, let's don't kid ourselves. I don't know that we're going to have any careful examination of this president, President Bush's decisions as carefully scrutinized as we have had from this committee of President Clinton. For example, if we're looking for things to examine, does anyone think that if the decision in Florida hadn't been reversed and that Mr. Gore was determined to be the president, that this committee wouldn't be issuing subpoenas all over the place to examine what went on in Florida?

But, we're not looking at that at all. Even though we know that thousands of people were disenfranchised in Florida and didn't get their votes counted, maybe legitimately, maybe not. But that's not the topic that this committee majority has decided to hold hearings on. This committee majority has decided to hold hearings on an action by President Clinton which many of us disagree with, but which he had the constitutional authority to take.

In the few minutes I have left, Mr. Quinn and Mr. Auerbach, Mr. Weinberg, starting with you, Mr. Quinn, is there anything you want to say that you haven't had the chance to say? We have fired questions and we get this thing in a very piecemeal fashion. Any points that you think we ought to know about that you don't feel you've had a chance to make or want to elaborate on?

QUINN: Well, to be honest with you, I think that you've heard from the prosecutors why they brought the charges they did against Mr. Rich and others. You've heard from me why we thought the indictment was flawed. You have in front of you the indictment, you have the legal arguments laid out in the petition. I don't feel I've left anything out, frankly. So, no, I don't think I need to embellish further the arguments we made.

ALLEN: ... that our coverage will continue in just a moment.


CHEN: We're going to take you back now to Capitol Hill. The House Government Reform Committee is meeting, talking to Jack Quinn, former White House counsel, and some other lawyers as well about the pardon of financier Marc Rich by President Clinton in his final hours of office.

CNN's Bob Franken is following the proceedings now on Capitol Hill, and he joins us -- Bob, bring us up to date on what is going on here this afternoon.

BOB FRANKEN, CNN CORRESPONDENT: Well, it's more back and forth about how appropriate it was that there was a prosecution of Marc Rich to begin with. Right now, Henry Waxman, who is the ranking Democrat on the committee is having exchanges with both Jack Quinn and with the two prosecutors from back then, Mark Auerbach -- Martin Auerbach, excuse me -- and Morris Weinberg.

There was just a fairly testy exchange about whether, in fact, Rich should have been prosecuted. And the prosecutors said that his crimes were massive. He was money laundering. He was hiding millions upon millions of dollars, evaded $48 million in taxes, fled the country -- the same arguments that have been made.

Now, Waxman, one of the points that he makes repeatedly, is that the committee has made a career, inappropriately, out of going after President Clinton -- president, and now former president. And he has repeatedly charged that there are so many other things where the emphasis could be placed. Now, what we're seeing now is the committee beginning to sort of wrap up the hammering, the grilling that has gone on for hours, particularly of Quinn.

Quinn as the former White House counsel, went directly to President Clinton with his plea for the pardon of Marc Rich. And one of the charges is that he should have, in fact, gone through the normal Justice Department procedures. Let's listen now to the Republican chairman of the committee, Dan Burton.

BURTON: ... why didn't they stand trial? Were they afraid they'd be convicted? And I think the case needs to be made that if they thought they had a meritorious defense, and they had the best lawyers in the country and they thought they could win the case, why did they renounce their citizenship, try to sneak documents out of the country, flee the country, and have been gone 17 years? Why didn't they stand trial? Did they think that our judicial system is so corrupt that they would have been convicted and put in jail on charges that were not meritorious? I mean, why didn't they stand trial? They had the best lawyers in the country.

QUINN: Yes. Look, Mr. Chairman, what I think is the honest answer to that is that they were not willing to expose themselves to 300 years in jail over what they thought was a tax and energy dispute.

BURTON: So they thought they might be convicted? So they thought they might be convicted?

QUINN: Of course, they must have.

BURTON: OK. Why did they think they might be convicted?

QUINN: I think they thought that they were going to be exposed to 300 years in jail for something they didn't do.

BURTON: Well, but the point is, if you're innocent, we have a very fair system of justice in this country where the laws apply equally to everybody. According to the prosecuting attorneys or the people who were bringing this case, they had separate sets of books. They had a pot -- they called it -- a pot, where they stuck their devious monies so that the IRS and the government of this country could not find them.

And when all this was uncovered, they tried to smuggle the documents out of the country.

FRANKEN: At issue is here is why it was that Marc -- Mark Rich -- and also, when he says, "they," his partner, Pincus Green, who was also pardoned by the president, why they never gave up their fugitive status and came back to the United States if they believed that there was a flawed indictment.

As you just heard Jack Quinn answered Dan Burton, the chairman's question, by saying they were afraid that for bad reasons they could face 300 years in jail. But anyway, when you hear the word, "they," the other one besides Mark Rich is Pincus Green.

QUINN: ... Mr. Burton -- Mr. Chairman, let me respond to as much of that as I can, very briefly.

I wasn't involved with them 17 years ago. I hope I can tell you honestly I would never, ever encourage a client to flee the jurisdiction. I know I can tell you with complete sincerity, I would never condone or encourage the renunciation of one's American citizenship.

With regard to this alleged pot of money, this goes to the monies that were part of the Department of Energy analysis of these transactions. And again, another agency of the federal government concluded that Rich and not Arco had correctly accounted for these transactions.

I was dealing with the four corners of the indictment in front of me. I couldn't rewrite their history, sir.

BURTON: Well, I won't make any more points about this. I think we've covered it all pretty thoroughly. But if Mr. Weinberg or Mr. Auerbach want to conclude, we'll then conclude this panel.

AUERBACH: I would just try to respond to what Congressman Waxman said and what other people on the committee have said today, which is that there seems to be a fairly widespread view that at a minimum the president made a mistake when he granted this pardon. And I would say that at this point one of the things this committee could do is look to the future and look to Mr. Rich and Mr. Green's future. And I hope that in your government oversight role you will ensure that the appropriate government agencies do everything within their power to not compound this mistake.

BURTON: Mr. Weinberg, anything else?

WEINBERG: I just appreciate the opportunity of having appeared here today. And I agree with much of what Representative Waxman has said. I'm also a Florida citizen, so I'm not sure my vote counted or not.

But I appreciate, Chairman Burton, you looking at this, because I think that from my perspective as the prosecutor, but as a defense lawyer as well since then, that the system of justice has really been done a disservice in this case; that to reward two individuals who in my opinion thumbed their nose at the system from day one, who committed, I believe, one of the biggest tax frauds in the history of the United States, who did everything they could to obstruct our investigation, whether it was not turning over documents or trying to smuggle documents out of the country or trying to spirit assets away from the courts so that they couldn't enforce the fines, who then chose to do what basically no other citizens in this country can do, and that is find a safe haven, and from a distance for 17 years, you know, try to put their defense on through a series of lawyers like Mr. Quinn, who without anybody on the other side say that this case had no merit; for people to be allowed to do that, renunciate their citizenship, whether there's some technical defense or not, which I do not believe that there is, to trade with enemies of the United States while they were American citizens for sure, because that's what was charged in this case, and whatever they've done since; to reward people like that with the ultimate act of mercy is an outrage.

And I as the prosecutor, I as a defense lawyer, I as a Democrat, a lifelong Democrat, I can't find another word for it. I'm outraged by it. And I agree with Representative Waxman, if there's no criminality, and I'm not sure that this committee can make that determination today, if there's no criminality, there's nothing that you can do about it, because it's an absolute power.

But it is an outrage and it should be -- and I'm proud to be here today to say that it's an outrage. And I do not believe that Mr. Clinton was given the full and complete story, because I happen to believe that he is way too intelligent and smart to believe that it was appropriate to pardon two people that did not fit one criteria for pardons.

BURTON: Thank you very much, Mr. Weinberg and Mr. Auerbach.

Mr. Quinn, we'll ask you to stay for the next panel.

And we'll ask Mr. Holder. Is Mr. Holder here?

QUINN: Mr. Chairman, would it be reasonable to ask if can take five minutes between panels?

BURTON: Sure. We want to make sure you can do whatever needs to be done... FRANKEN: Mr. Holder is Eric Holder who is the deputy attorney general under the Clinton administration. Jack Quinn has made the claim repeatedly that he kept Eric Holder, the deputy attorney general, completely informed about what he was doing, as his effort to make sure that the Justice Department was informed about the pardon process.

Holder is known to be -- Holder is known to be saying that he doesn't think that, as a matter of fact, he was properly informed -- Joie.

CHEN: All right, Bob. And we do expect to hear from Eric Holder later here on CNN. We will take a break here.



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