Dear AprokoNation, starting today, I would be doing a seven-part expose on how global commodity traders and their Nigerian counterparts systematically hollowed out our dear nation.
So, let us peel back the scab and open a file containing the very 'DNA' of how Nigeria was systematically hollowed out. This narration begins with 'The Rich Boys'. When we speak of 'The Rich Boys,' we are not discussing a group of flashy socialites popping champagne in Lagos or Abuja. This is about the 'University of Marc Rich' - a secretive, hyper-aggressive network of global commodities traders who transformed the world's oil markets into a combat zone and treated Nigeria as their private playground for extraction and industrial-scale bribery. To understand the disappearance of our national wealth into Swiss vaults, you must understand that this is not just a story of local 'political greed', it is the moment international 'shadow finance' found its perfect, willing partner in the Nigerian elite.
Chapter One: The Architect and His Blueprint
The Man Who Invented Shadow Markets
To grasp the mechanics of this theft, you have to meet the man who wrote the playbook. Marc Rich, a Belgian-American billionaire born in Antwerp in 1934, essentially invented the modern 'spot market' for oil. Before him, oil was traded via long-term, predictable contracts between nations and 'Big Oil' companies. Rich realized that in times of geopolitical chaos, like the 1973 embargo or the Iranian Revolution, billions could be made by acting as a ruthless middleman for pariah states.
Rich's career began at Philipp Brothers, then the leading trader of industrial metals, where he joined in 1954. By the late 1960s, he was running their Madrid office, working in Cuba, Bolivia, the Netherlands, India, Spain, and Switzerland. His early prominence came from buying up mercury to sell to vehicle battery makers supplying the U.S. Army during the Korean War. In the early 1970s, Rich pioneered the 'spot' market for crude oil, drawing business away from the larger established oil companies that had relied on traditional long-term contracts for future purchases.
As Andrew Hill of the Financial Times put it, 'Rich's key insight was that oil, and other raw materials could be traded with less capital, and fewer assets, than the big oil producers thought, if backed by bank finance.' This leveraged business model became the template for modern traders, including Trafigura, Vitol, and Glencore.
Rich’s tutelage under Philipp Brothers afforded him the opportunity to develop relationships with various dictatorial regimes and embargoed nations. He would later tell biographer Daniel Ammann that he had made his 'most important and most profitable' business deals by violating international trade embargoes and doing business with the apartheid regime of South Africa. He also counted Fidel Castro's Cuba, Marxist Angola, the Nicaraguan Sandinistas, Muammar Gaddafi's Libya, Nicolae Ceaușescu's Romania, and Augusto Pinochet's Chile among the clients he served.
According to Ammann, Rich had 'no regrets whatsoever.... He used to say "I deliver a service. People want to sell oil to me and other people wanted to buy oil from me. I am a businessman, not a politician."'
In 1974, Rich and co-worker Pincus Green set up their own company in Switzerland, Marc Rich + Co. AG, which would later become Glencore. Nicknamed 'the King of Oil' by his business partners, Rich popularized the use of letters of credit in the oil trade and built vast wealth through deals others considered too dangerous or unethical.
The Nigerian Connection: Bribes and Bootlegging Rich admitted buying oil from Iran during the embargo, as well as supplying oil to apartheid South Africa and bribing officials in countries such as Nigeria. In his biography, he argued that all this was legal at the time. The bribing of foreign officials was legal in the United States until the passing of the Foreign Corrupt Practices Act of 1977. In Switzerland, it remained legal until 2000. As a non-U.S. company based in Switzerland, Marc Rich & Co was legally (if perhaps not morally) exempt from the embargoes on Iran and apartheid South Africa. Specifically regarding Nigeria, in 1978, Rich and Pincus Green were found to have diverted Nigerian oil to South Africa. Green paid a $1 million bribe to the Nigerian oil minister to regain his contract in the country. This early pattern, bribery of Nigerian oil ministers to secure crude allocations, followed by diversion to embargoed nations at premium prices would become the operational DNA of the 'Rich Boys' for decades.
According to U.S. Congressional reports, Rich routinely used Panamanian shell companies to launder funds and conceal profits. He also had ties to many mafia associates in the Soviet Union and, subsequently, the former Soviet Union, such as the Georgian-Israeli Grigori Loutchansky who owns the Austrian-based oil exporting company Nordex, and especially in the Russian Mafia, such as Marat Balagula, who was convicted of gasoline price fixing.
The Birth of Glencore and the 'Rich Boys' By the early 1990s, Rich's empire was at its zenith. However, at the end of 1993, Rich lost control of the company when a disastrous attempt to corner the world zinc market led to losses of $172 million. A number of the 'Rich Boys', his protégés and senior traders insisted he give up his majority stake. After a management buyout, Marc Rich + Co was renamed Glencore on September 1, 1994. The name is an abbreviation of 'Global Energy Commodity Resources.'
Rich had spawned the most powerful informal network of independent commodities traders on earth. He did it primarily by funding spin-offs and startups around the globe for decades, and by training scores of traders who set up their own shops. In 1993, a number of Marc Rich employees, led by Claude Dauphin, left to set up another trading company, Trafigura. Although Rich no longer maintained stakes in most of these outfits after his forced exit, he had helped create a network that, in sum, was far more formidable than his own company in the 1970s and 1980s.
Ivan Glasenberg was appointed chief executive of Glencore in 2002. In 2013, Glencore merged with Xstrata to become Glencore Xstrata, headquartered in Baar, Switzerland. Until the 2011 Glencore IPO and the Glencore/Xstrata merger of 2013, Glencore was run as a private partnership. By some estimates, it became the world's largest commodity trader, with a 2010 global market share of 60% in internationally traded commodities. Glencore's oil and gas headquarters are in London, England, with its primary listing on the London Stock Exchange.
We continue soon...