Tuesday, May 30, 2006

Marc Rich, Xstrata and Falconbridge

Swiss-based mining company Xstrata is trying to buy Canadian mining company Falconbridge (see here, and earlier background here).  Xstrata is controlled by a company called Glencore, which was founded by a fellow named Marc Rich (Glencore used to be called Marc Rich & Co. AG).  Rich, of course, was the recipient of the last-second pardon granted by Bill Clinton, a pardon that Clinton now says he regrets.  Rich was pardoned despite the fact that he fled from American justice and never served any of his sentence.  We can now see the pardon as being an early pre-Bush example of the power of the Israel Lobby.  Rich has been accused of working for the Mossad.  Libby was Rich’s attorney for years (and made two million in fees from Rich), and testified at the House Committee hearings on the pardon.  The Interdisciplinary Center in Herzliya was founded with money from Marc Rich (Rich also funds Birthright Israel).  The LaRouche-ites claim that Laurent Murawiec received money from Rich (Murawiec’s July 10, 2002 power-point presentation – Iraq is the tactical pivot/Saudi Arabia the strategic pivot/Egypt the prize - is, unfortunately, starting to make sense).  Rich is a proto-Lobby-ist. 

Although Xstrata and Glencore both claim to no longer have any connections to Rich, they are all based in Rich’s town of Zug, and Glencore is still run by Rich’s people, many of whom are also on the board of Xstrata.  In addition to Rich’s own criminal baggage, Glencore has a ‘rich’ history of allegedly participating in various shenanigans, including attempted union busting in the United States (where Rich hid his involvement through using front companies), involvement with Arkadi Gaydamak in AngolaGate, and participation in breaking the sanctions against Iraq. Glencore’s unsavory reputation is starting to be a political issue in both Canada (see pdf here) and the United States.  It had also been an issue in Glencore’s failed 2005 bid for Australian WMC Resources.  Although the rival for Falconbridge is another Canadian company Inco (itself now subject to a takeover bid from Teck Cominco), Canada is notoriously slutty when it comes to foreign investment, and I doubt that the very unsavory reputation of Glencore will be a factor in whether Xstrata succeeds (on the other hand, Inco seems to fear that European regulators will delay approval of Inco’s bid in such a way as to favor Xstrata’s bid, a fact which may influence Canadian regulators, and the fact that the enormously politically-powerful Caisse – the Quebec pension-fund manager, described as “Canada's largest institutional investor, the primary holder of TSX-listed stocks and the holder of the country's largest real property portfolio” - owns a big chunk of Teck may mean that Teck somehow ends up winning in the end).  One has to wonder, however, whether the world will feel comfortable having its strategic resources in the hands of a crazed Zionist with an awful reputation.