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A Rush to Judgment
Future, Once Assured, Is Marred by the Case of Marc Rich

Peter Slevin
Washington Post Staff Writer
Thursday, March 1, 2001

Eric Holder wishes he had focused for three minutes when he heard the name Marc Rich connected with the word pardon. He might have understood that the Justice Department needed to take a stand. He might have discussed it with his staff and opposed clemency for the fugitive businessman.

He might have left office with his reputation intact.

Six weeks later, the pardon of Rich by then-President Clinton is the subject of two congressional inquiries, a federal criminal investigation and too many front-page headlines to count. Holder finds himself marooned in the maelstrom, under attack for giving advice he never fully considered.

When Holder reached home after a bruising Senate Judiciary Committee appearance last month, he says he wanted to "crawl into bed and pull the covers up over my head."

"I'm done. Public life's over for me," Holder says. "I had a moment in time. That moment has passed."

This was not supposed to happen to Eric H. Holder Jr., who occupied one of Washington's most enviable glide paths. He had been a public corruption prosecutor, a D.C. Superior Court judge and the U.S. attorney in the District. In 1997, he ascended to second-in-command at the Justice Department, where virtually every major federal law enforcement matter in the land crossed his desk.

When he was appointed deputy attorney general to Janet Reno, his friends expected he would rise to the top job before Clinton left office. At a minimum, they believed, Holder needed only avoid mishap to become attorney general in the next Democratic administration -- and the first African American to occupy the post.

At a critical moment on the last full day of Clinton's term, however, Holder said he was "neutral, leaning towards favorable" on the Rich case. Clinton cited the opinion among eight factors that persuaded him to grant a pardon, although he publicly regretted that Holder was not given more time to review the case.

Even supporters agree that Holder should have raised serious questions about pardoning Rich, a fabulously wealthy commodities dealer who spent 17 years dodging federal tax and oil trading charges. Holder himself painfully concurs: "If I had focused on this in a way that I could have, should have, the recommendation I would have given him would have been, 'Don't do this, Mr. President.' "

The Rich episode has brought down upon Holder the kind of doubts that can haunt a person's career. He was asked at a congressional hearing whether his desire to become attorney general caused him to go easy on Rich, who was represented by well-connected former White House counsel and Al Gore adviser Jack Quinn. At the same hearing, Rep. Paul Kanjorski (D-Pa.) told Holder he greatly respected him, but labeled his positions on Rich "almost incredible."

In political Washington, "neutral, leaning towards favorable" could become his epitaph. Sen. Dianne Feinstein (D-Calif.) commented ruefully at the Senate Judiciary Committee hearing that Holder may be an unintended casualty of the intense lobbying that accompanies the pardon process.

"A lot of well-meaning people get involved and they put on a lot of pressure," Feinstein said. "And a lot of other well-meaning people get involved in that -- I think Mr. Holder is one of them, for example -- and something like this can really ruin their entire career."

The Ascending Star Holder feels stung. The day he testified to the Judiciary Committee, his usual confident ease was absent. The overhead lights were dim and the TV spots shone brightly on a lanky 50-year-old looking lonely behind a microphone. As senators bore in, he looked weary and pained. His eyelids blinked rapidly as he registered the toughest questions.

The tempest comes after 25 sometimes exhausting years as a judge and federal prosecutor, just as Holder was preparing to ease into a life of good money, good deeds and quiet time with his wife, Sharon Malone, and their three children, Maya, 7, Brooke, 5, and Eric, 3.

Malone and Holder met in 1989 at a fundraiser for Concerned Black Men. He describes Malone, a respected obstetrician and gynecologist, as a partner who "sacrificed a great deal" while he rode his ambitions and his opportunities. "In too many ways, she has at times been a single parent."

It was 1976, two years after Watergate and the resignation of Richard Nixon, when Holder arrived in Washington. He was born, raised and educated through law school in New York City, where his father had immigrated from Barbados. His mother was a homemaker who became secretary to the Episcopal parish priest, and his father was a real estate agent.

Holder never imagined that he would stay, but weekly visits back to New York became monthly ones, and now he heads north only once or twice a year. He spent 12 years in the Justice Department's Public Integrity Section, prosecuting a Philadelphia judge who took a bribe, an organized crime figure who paid one, and a Florida insurance commissioner who accepted money from the industry he oversaw.

Holder wore the robes of a Superior Court judge for five years, but when Clinton entered office and the U.S. attorney's job opened up, he applied. "I liked being a judge, but I ultimately began to feel like I was a referee in a game where I still wanted to be a player."

Then came the call in 1997 to become Reno's deputy, overseeing a $22 billion budget and 125,000 employees. He would come to call it the "most physically demanding job that I ever had."

"I had a certain hesitation about it, because it seemed more managerial than I would have liked. And I was also moving from a number one position to a number two position," Holder recalls. But it was also a big step on the stairway to the stars. Few expected Reno to last to the end of Clinton's term.

Reno stayed, but Holder was still positioned on the inside rail. He did his best to dodge trouble and minimize the number of people who considered him an enemy. He was preparing to leave office on a high. And then along came the Rich case to put Holder in the witness chair.

"I've seen it happen at different times to other people and thought, 'That's unfair.' But whatever my feelings were about other people in other situations, it's an entirely different situation when you're in the middle of it," Holder says. "Especially when I tried to reconstruct my part and I didn't think I was in the middle of it."

The End-Around The last full day of the Clinton presidency was Jan. 19. Across Washington, the political appointees who owed their jobs to the Democratic administration were packing their last boxes and saying their goodbyes. At Justice, amid the handshakes and hugs, Holder was preparing to become acting attorney general until the Senate voted on the nomination of John Ashcroft.

That was the day Clinton, racing the clock, considered clemency for Rich and 175 others. It was the day, too, when White House counsel Beth Nolan called Holder and heard him say he had no objection to a pardon, although he knew Rich was a fugitive. Nolan is scheduled to talk publicly about the pardons today for the first time, at a Capitol Hill hearing.

"The full dimension of who this guy was and what he was charged with didn't come in evidence even after those initial news stories," Holder says, referring to articles printed after Clinton's Jan. 20 pardon. "It was not something that ever commanded a lot of my attention while I was there."

Elsewhere in the law enforcement community, particularly at the New York office that pursued him, Rich was a big name. A grand jury indicted him on 65 counts in 1983, alleging that he had hidden nearly $100 million from tax authorities and had traded with Iran while U.S. citizens were held hostage there.

Rich hired a battalion of big-time lawyers and obtained Spanish and Israeli citizenship to help avoid extradition. His proxies, both Republican and Democratic, said the charges were a product of overzealous prosecution. Along the way, however, his companies pleaded guilty to 78 felony counts and paid nearly $200 million in fines while Rich stayed abroad and free.

A pardon would allow Rich to return to the United States, and he wanted one badly. He hired Jack Quinn, a power player in the Clinton administration, a man who could get a face-to-face meeting with the president. As Quinn spun into gear, he skipped the established Justice Department pardon procedure and avoided contact with the Manhattan prosecutors who he knew would scream bloody murder.

Quinn went directly to Clinton with his thick petition, minimizing the chance that Justice would open a file. That meant no automatic background checks, no telephone calls to the FBI, no conversations with prosecutors. Such a review was routine in clemency petitions routed through Justice, but would not have been taken in this case unless Clinton ordered an analysis or Holder expressed concern when Quinn alerted him.

Neither did. When the White House called on Jan. 19, Holder was not prepared.

"It was almost unimaginable to Eric that an unvetted pardon could be under consideration at that late date and time," a colleague says. "It was a very savvy strategy by Quinn to circumvent all the safeguards of the system."

Transparent Disclosure? Quinn says he did nothing improper as he guided Rich's case through the system. He declined to be interviewed for this article. But with the help of a hired public relations man, he argues that he kept Justice sufficiently informed -- through Holder.

The disagreement over what Quinn told Holder -- and Holder's response -- is central. The interests of the two former Clinton administration colleagues have diverged.

"I want to emphasize at the outset that the process I followed was one of transparency at both the Department of Justice and the White House," Quinn told the House Government Reform and Oversight Committee.

"On more than one occasion I urged the White House counsel to seek the views of the Justice Department," Quinn said. "In point of fact, I believed the consultation by the White House with Mr. Holder would help me make my case because, for over a year, since October 1999, I have had a series of communications orally and in writing with him about Mr. Rich's case."

Quinn says it was Holder's responsibility to seek more information if he needed it, according to spokesman Peter Mirijanian.

Martin Auerbach, who worked the Rich case as a New York prosecutor, takes another view. He believes Holder "dropped the ball" but suggests that Quinn was selective about the information he gave the White House and in his discussions with the deputy attorney general.

"Give me a break," says Auerbach, now a defense attorney. "There are efforts to keep this under the radar that are explicitly discussed. There's just no interest in transparency. I think what Jack Quinn is saying, when he uses the word 'transparent,' is he wanted it to be invisible."

Steps Toward Clemency Holder and Quinn have testified to three conversations about Marc Rich.

The first occurred in late 1999, when Quinn asked Holder to help arrange a meeting with the Manhattan prosecutors, who had refused to negotiate while Rich was a fugitive. Holder backed the move, saying he supported the principle that lawyers should talk. Early last year, Quinn sent Holder a two-page analysis of the case as seen by the Rich lawyers.

Another talk took place on Nov. 21, at the end of a large meeting at Justice on another topic. Quinn said he told Holder he was sending Rich's petition to the White House. Holder says he does not recall the brief discussion. Thinking back, he reasons that he expected Quinn also to send the petition to the Justice pardon attorney. If the case became important, Holder figured, paperwork would cross his desk in due course.

An e-mail revealed Tuesday identifies another conversation that neither man recalled when testifying. The Nov. 18 message from Quinn to fellow Rich attorney Kathleen Behan is titled "eric." Quinn wrote: "spoke to him last evening. he says go straight to wh. also says timing is good. we shd get in soon." Holder adamantly denies giving Quinn any such advice.

The next development was Jan. 10, when Quinn dispatched a letter to Holder about the Rich application. The cover sheet said, "Your saying positive things, I'm told, would make this happen." But the envelope was misaddressed and did not reach Holder. It turned up on Jan. 18 in the pardon office, where attorney Roger C. Adams assumed it concerned a future case and set it aside.

A Life-Changing Phone Call The third Quinn-Holder conversation, and the most important, happened the night before Clinton left office.

At about 6:30 p.m. on Jan. 19, Quinn reached Holder at Justice to say that White House counsel Nolan would be phoning to ask his opinion. Nolan soon called, and Holder said he noted the "significant piece of new information" that Israeli Prime Minister Ehud Barak strongly supported the pardon.

Holder uttered his now well-known phrase, "neutral, leaning towards favorable."

By describing himself as "neutral," Holder says, he meant that he knew too little about Rich to make a recommendation on the legal merits. The reference to "leaning towards favorable" meant deferring to the White House if foreign policy interests warranted.

Holder hung up and went to his next meeting, a strategy session about reports that President Bush's inaugural motorcade would be attacked with stink bombs and Molotov cocktails on its way to the White House. The last thing Holder wanted was a calamity in his first hours as acting attorney general.

"That's one of the things where you look back and say, 'What if?' If after those couple of phone calls at 6:30 I had simply said . . . 'Hey, what's the status of the Rich case?' I assumed it was being worked by someone in the department."

In fact, Rich's case was not being considered by anyone in the agency. Holder told the Judiciary Committee that the White House must have been aware that he and the Justice Department were not fully informed.

"I don't know if it's inadvertence, design, whatever," Holder testified. "But somebody had to know that any recommendation or comment from Holder is not based on the kinds of materials that he normally has access to."

Throughout the night, Holder spoke with assistant Deborah Smolover, who stayed in contact with the White House and kept him posted on a range of clemency cases. She also was in touch with the Manhattan prosecutors, who were monitoring a series of pardons but knew nothing of the Rich petition.

Longtime Associates In a political town where careers intersect and alliances are formed, Holder and Quinn have known each other for years and dealt with each other in the upper reaches of the Clinton administration. Even after he left government for private practice, Quinn was able to reach Holder on the telephone. And in December, Holder sent the re{acute}sume{acute}s of two job-seeking colleagues to Quinn.

Holder also discussed his ambition to become attorney general with Quinn, who was a longtime adviser to Gore. As he recalls, Holder told Quinn that he hoped he could count on his support if Gore were elected. They testified that the conversation probably took place before the election, and certainly before Quinn delivered his two-inch-thick pardon request on Dec. 11.

Rep. Dan Burton (R-Ind.), chairman of the House committee, asked Holder whether the two men had arranged a quid pro quo. Holder testily said they had not. His integrity, he asserted, should not be in question.

"The notion that career advancement was somehow related to this, that somehow Quinn would have been able to help me," Holder says, "it didn't enter into my decision-making at all."

'Somewhat Responsible' "Integrity" is a word used repeatedly by Holder's admirers.

"A guy of the utmost integrity," says Joseph DiGenova, a former U.S. attorney who now represents Quinn. A onetime colleague recalls Holder routinely telling his prosecutors, "Do the right thing."

"If you're inclined to look at this with a sinister, cynical eye, you could read the worst into it," says former solicitor general Seth Waxman. "But I believe Eric's version of this without hesitation, because I have such a high opinion of his integrity."

Almost every day new characters join the pardon circus that is spinning outward to include party fundraisers, presidential relatives, a New York socialite and a purveyor of bogus herbal remedies. But the chances are good that Holder has not answered his last question on the matter.

New York lawyer Auerbach, the former Rich prosecutor, speaks of two reactions often heard when Holder's name is mentioned. The first is sadness that Holder is entangled in a mess largely of Clinton's making. The other is frustration that he did not explore the Rich case and speak out.

"I feel very bad for him. I think he was terribly compromised by this. I think he, too, was seeing part of the picture and being encouraged that he didn't need to look any harder at it," says Auerbach. But he adds, "How you could say you were neutral about a man who was a longstanding fugitive is puzzling to me."

Former Democratic Party chief Robert Strauss believes Holder "has unquestionably taken scars from this, some deserved, but he will recover. This, too, will pass."

Holder is taking a few months off as he considers job offers and spends time with his family. It is probably too soon to know what effect the Rich case might have on his prospects in public life. Washington scandal stories have a tendency to grow and scatter, disappear and resurrect themselves like the images in a kaleidoscope.

"My emotions change from day to day. There are times when I'm very angry about the situation. There are other times when I hear about things, read about things, that are hurtful," Holder says. "But these are choices I have made. It is not all everybody else's fault. I am somewhat responsible.

"This is Washington, a city that I love. This is one of the uglier parts of the city," he says. "It doesn't make me want to leave the city or be any less committed to the causes I feel are important."

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