The two leaders had no reason to believe their confidential chat would ever become public. Yet the Clinton-Barak telephone call that evening, like all conversations between U.S. presidents and foreign heads of state, was monitored by a team of note takers sitting at computers in the White House Situation Room. Last week congressional investigators probing the Rich pardon received access to National Security Council-prepared transcripts of three Clinton-Barak conversations that dealt with the Rich pardon. NEWSWEEK also has reviewed the contents of the transcripts, which were edited by archivists to exclude matters of Mideast diplomacy. The transcripts offer no “smoking gun” showing that the former president was motivated by large donations to his presidential library or by generous campaign contributions. But the conversations do show that, in sharp contrast to the picture painted by some of his former aides, Clinton was keenly aware of details of the Rich case, and appeared determined to grant the highly questionable pardon even though, as he admitted to Barak, there was “almost no precedent in American history.”

On the merits, Rich’s case certainly seemed improbable from the start. Indicted in 1983 on charges of tax fraud and racketeering, the billionaire commodities broker had fled the country, renounced his U.S. citizenship and moved to a heavily guarded private enclave in Switzerland rather than face trial in the United States. In a congressional hearing in March, a trio of former top aides–White House counsel Beth Nolan, chief of staff John Podesta and Bruce Lindsey–all testified that they had strenuously argued against the Rich pardon and even thought they had persuaded their boss to reject it. But, they said, it was a last-minute appeal from Barak, Clinton’s partner in the Mideast peace talks, that appeared to turn the president around. “It certainly seemed he was not going to grant it, and that Mr. Barak’s phone call had been significant,” Nolan said.

The NSC transcripts tell a more complicated story. Barak first raised the issue with Clinton more than a month earlier, on Dec. 11, 2000. That same day Jack Quinn, Rich’s lawyer (and a former Clinton White House counsel), submitted a thick pardon application. It included a personal letter from Denise Rich, the financier’s ex-wife and a major Democratic Party contributor who had already donated $450,000 to Clinton’s presidential library. In the conversation that day, Barak described Rich as a “Jewish American businessman” who was “making a lot of philanthropic contributions to Israeli institutions and activities like education.” Barak acknowledged that Rich had “violated certain rules of the game in the United States.” But “I just wanted to let you know that here he is highly appreciated,” the Israeli said. Clinton was hardly caught off guard. “I know about that case because I know his ex-wife,” Clinton said, referring to Denise Rich. “She wants to help him, too. If your ex-wife wants to help you, that’s good.” Barak responded, somewhat inaccurately: “Oh, I know his new wife only, an Italian woman, very young.”

In the weeks that followed, records show, Rich’s advocates stepped up their campaign for a pardon, arranging for a flurry of personal appeals to Clinton–including one from Beth Dozoretz, another big Democratic fund-raiser who had also pledged to raise $1 million for his library. So by the time Barak raised the issue a second time, in the Jan. 8 phone call, Clinton appeared even more receptive to the Israeli leader’s pitch. “I believe it could be important (gap) not just financially, but he helped Mossad [the Israeli intelligence agency] on more than one case,” the transcript records Barak as saying. (An NSC source told NEWSWEEK that the agency’s transcripts typically use the word “gap” when note takers cannot make out a garbled word or sentence.) Last week House Government Reform chair Dan Burton sent Barak a letter asking him a series of questions about the transcripts, including what he meant by “help financially.” A Barak spokeswoman told NEWSWEEK that the former prime minister was referring only to charitable donations to Israeli causes, and not political contributions to Barak or his Labor Party. Clinton ended the discussion that day by assuring Barak, “It is a bizarre case and I am working on it.”

The third phone call, on Jan. 19, may be the most revealing. The transcripts show that the two leaders spoke by phone for 22 minutes, between 2:47 and 3:09 p.m., just minutes after Clinton had cut a surprise deal to escape criminal prosecution in the Monica Lewinsky affair by acknowledging he had given false testimony under oath. Contrary to the accounts of his former aides, the transcript shows it was Clinton, and not Barak, who raised the Rich matter that afternoon. “I’m trying to do something on clemency for Rich, but it is very difficult,” Clinton said. “Might it move forward?” Barak asked. The president ruminated about the problems he was facing. “I’m working on that, but I’m not sure,” he said. “There’s nothing illegal about it, but there’s no precedent. He was overseas when he was indicted and never came home.” Clinton concluded that the question “is not whether he should get it or not but whether he should get it without coming back here. That’s the dilemma I’m working through.”

Clinton solved it, at least in his own mind. By early the next morning Justice Department officials were stunned to discover that Rich–who until then had been on their list of “most wanted” international fugitives–got an unconditional pardon. The conversations with Barak clearly show Clinton–whose spokesman last week wouldn’t comment–suspected he would take some political heat for the decision. But it’s unlikely even he foresaw the unrelenting fury the “bizarre case” would create.

EAVESDROPPING ON A TOUGH CALLIN THEIR FINAL DAYS IN OFFICE, PRESIDENT CLINTON AND ISRAELI PRIME MINISTER EHUD BARAK DISCUSSED MARC RICH’S PARDON PROSPECTS.

Prime Minister Barak:… There is an American Jewish businessman living in Switzerland and making a lot of philanthropic contributions to Israeli institutions and activities like education, and he is a man called Mark [sic] Rich. He violated certain rules of the game in the United States and is living abroad. I just wanted to let you know that here he is highly appreciated… I would like to make my recommendation to consider his case.

President Clinton:… I know about that… because I know his ex-wife. She wants to help him, too. If your ex-wife wants to help you, that’s good.

Barak:… Okay. So, Mr. President, thank you very much. We will be in touch…

Barak: Let me tell you last but not least two names I want to mention. [Redacted] The second is Mark [sic], the Jewish American.

Clinton: I know quite a few things about that. I just got a long memo and am working on it. It’s best that we not say much about that.

Barak: Okay. I understand. I’m not mentioning it in any place.

Clinton: I understand.

Barak: I believe it could be important [gap] not just financially, but he helped Mossad on more than one case.

Clinton: It is a bizarre case, and I am working on it.

Clinton:[Redacted] I’m trying to do something on clemency for Rich, but it is very difficult.

Barak: Might it move forward?

Clinton:… Here’s the only problem… there’s almost no precedent in American history. There’s nothing illegal about it but there’s no precedent. He was overseas when he was indicted and never came home. The question is not whether he should get it… but whether he should get it without coming back… That’s the dilemma I’m working through…