Free The Secret Club That Runs the World: Inside the Fraternity of Commodity Traders by Kate Kelly

became an American citizen as an adolescent. After dropping out of college, he had made his name as a mercury trader at Phibro, the historic commodity trading firm, founded in 1901, that now operated a hub in New York. But Rich’s real success came in the crude-oil markets during the late 1960s, when he was running Phibro’s Madrid branch, from which he oversaw parts of Africa, Latin America, and the Middle East.
    Oil trading at the time was dominated by the so-called SevenSisters: Gulf Oil and forerunners to Exxon, Mobil, Chevron, Texaco, BP, and Royal Dutch Shell. Physical barrels were often secured months or even years ahead of time and at fixed prices, making short-term gaps hard to fill. During the Six-Day War in 1967, Egypt effectively blocked Israel from importing crude, creating the first real oil embargo. In its wake, Rich was the first to embrace a novel idea: to circumvent the Seven Sisters by offering to buy oil directly from producer nations. It was the birth of what would become known as the on-the-spot, or “spot,” market for oil, in which crude was secured and delivered far quicker than it had in the past, and would revolutionize the way business was done.
    Shortly after the construction of a secret Iranian-Israeli pipeline in 1969, Rich began exporting oil from the Middle East all over the world. The experiment helped turn Phibro into a crucial international supplier.
    Rich incorporated his own company in Zug, Switzerland—a larger lakeside city just south of neighboring Baar—after a pay dispute with Phibro. Building on the spot, or shorter-term, oil market Rich had launched at his old firm, and taking on numerous other commodities in addition, Marc Rich & Co. flourished under its name partner’s aggressive, innovative style of thinking, giving him godlike status in the industry. Over time, he amassed a personal fortune estimated to beat least $1 billion, and was nicknamed “the king of oil” (which became the title of a biography published in 2010).
    He also set a new, and arguably lower, industry standard by dealing extensively with rogue nations. No despot was too corrupt to do business with. Rich shipped large quantities of oil toSouth Africa during apartheid, brokered sugar-for-oil deals and later traded sugar with Cuba notwithstanding U.S. sanctions, andpurchased oil from Iran during the American hostage crisis that stretched over 444 days from 1979 to 1981.
    Rich, who eventually moved from Madrid to London and, later, to his wife Denise’s native New York, comforted himself with the idea that his transactions were legal under Swiss law, and that the law was the only objective standard for business. U.S. authorities, however, were far less accepting of the way he operated. In 1983, federal prosecutors indicted him on numerous charges, including racketeering, tax evasion, and trading with the enemy during the hostage crisis. Rather than facing the charges, which he considered bogus, Rich obtained Spanish citizenship and fled his Fifth Avenue apartment for the comforting slopes of Switzerland, where, by comparison, almost anything was permissible.
    Amazingly, Rich’s fugitive status had little real effect on his company, which he continued operating as usual from Zug, whose charming, tree-lined shores and tasteful church spires belied the corruption of one of its richest residents. But in 1992, a large bet that one of his traders had made on zinc went uncharacteristically awry. The resultant $172 million loss damaged both the company and Rich’s standing in it.
    Marc Rich & Co. stabilized, but Rich himself did not. Under duress,Rich sold his 51 percent stake in the company to his partners the following year. Willy Strothotte, a German metals trader Rich had mentored and then fired amid a power struggle, returned to take on the chief executive role, and the company was renamed Glencore.
    Rich retreated to a quieter life, eventually focusing more on real estate than commodities. His status as