February 12, 2001 12:00 PM

Forty-eight hours before the dawn of the new millennium, a crisis gripped the Rocky Mountain resort of Aspen. Some of America’s most celebrated citizens realized they had nowhere to go on New Year’s Eve. To the rescue came Denise Rich, the ebullient songwriter-social diva known for the wildly extravagant parties she throws at her Manhattan penthouse overlooking Central Park and her 10,000-sq.-ft. mansion on Aspen’s Red Mountain. “Denise said, ‘Nobody is doing anything fabulous,’ ” recalls Brad Boles, her personal party planner. ” ‘I should do something.’ ”

By Rich’s standards it was a muted affair. No ice skaters in gold body paint twirling around her New York patio, as there had been at her 1998 Grammy soiree. Nothing like the 17 umbrella-toting cupids in red hot pants who sang “It’s Raining Men” at a recent Valentine’s Day celebration. Under 350 helium balloons covering her vaulted ceiling, 300 of Denise’s fabulous friends—among them Michael Douglas and Catherine Zeta-Jones, Goldie Hawn and Kurt Russell, Ivana Trump and beau Count Roffredo Gaetani—savored goat cheese ravioli and marinated ahi tuna. At 10 p.m. Rich was snuggled on her couch with Zeta-Jones and Douglas (who at home later that night would propose to his date) when she suddenly called for silence. On her wide-screen TV Bill Clinton was addressing the nation. After his millennial message, Rich—but few others—broke out in applause.

Her admiration was more than a show of patriotic zeal. Since she burst on the social scene doe-eyed and décolleté in the early 1990s, Denise Rich, 57, has been a fund-raising dynamo for the Democratic party, contributing more than $1 million of her own, including, most recently, $70,000 to Hillary Rodham Clinton’s Senate campaign. She often entertains the erstwhile First Couple and gave them $7,375 in designer tables and chairs. “They hug and are very close,” actress Jane Seymour, another Rich pal, says of Denise, Bill and Hill.

But that special bond has landed the popular socialite and three-time Grammy-nominated songwriter in the center of a major Clinton embarrassment. On Jan. 20, hours before leaving office, the former President granted 140 pardons to a range of individuals accused or convicted of crimes. A number of the pardons were controversial, but none fueled such outrage as the one bestowed on billionaire commodities trader Marc Rich, 66, Denise’s ex-husband and perhaps the nation’s most notorious white-collar fugitive. Charged in 1983 with evading $48 million in taxes from his oil commodities firm and illegally trading with Iran during the hostage crisis, the Belgian-born Rich took up residence in Switzerland along with Denise and his partner Pincus Green, 66. There he expanded his vast oil and metals business and became known as an art collector and a philanthropist with a particular fondness for Israeli charities. Divorced from Denise in 1996 after 30 years, he shares a sprawling villa with his second wife, Gisela, and their children in the Alpine town of Meggen. Defying custom, Clinton pardoned Rich and Green without consulting Justice Department officials familiar with details of the case—a move that also neatly avoided preemptive questions about Denise’s Democratic ties. There is no apparent chance the action can be revoked, but it drew bipartisan fire on Capitol Hill, incensing critics, including the Senate minority leader, Democrat Tom Daschle, and House Republican Dan Burton, who says he may hold hearings on the matter.

“An absolute outrage,” fumes New York City Mayor Rudy Giuliani, who, when he was a U.S. attorney in the early ’80s, brought the indictment against Rich and who last year opposed Hillary Clinton in her Senate bid before leaving the race due to prostate cancer. “This is clearly the selling of justice,” adds former New York City Police Commissioner Howard Safir, who, as a U.S. marshal in the mid-’80s, tried to arrest Rich in Switzerland but was turned away by Swiss authorities. In petitioning for the pardon, Rich’s attorney, former Clinton White House counsel Jack Quinn, solicited the backing of many notables, including Israeli Prime Minister Ehud Barak, Spain’s King Juan Carlos—and Denise Rich. “I support [Marc’s] application with all my heart,” she wrote, lamenting that he was “cruelly denied” the chance to visit their daughter Gabrielle before she died of leukemia at 27 in 1996. Still, Denise initially professed shock at the pardon and denied any role in securing it. Only later did she recant and acknowledge she had written the letter.

Yet friends deny she could ever be underhanded. “She’s one of the least manipulative people I’ve ever met—very naive and girlish in her enthusiasm,” says Geraldo Rivera, who met Denise nine years ago when her then-boyfriend, Park Avenue fertility doctor Niels Lauersen, helped the TV host and his wife conceive their first child. (Lauersen, who split with Denise in 1999, was convicted last month of insurance fraud.) Despite her support of Rich, intimates say, the unattached Denise holds no lingering affection for her ex, who she once said “destroyed our family” by cheating on her. Says Seymour: “She’s very divorced from Marc.”

The Riches’ peculiar odyssey began with a blind date. Raised in Worcester, Mass., Denise was one of two daughters of Holocaust survivors Emil Eisenberg, 88, and his late wife, Gery, who founded a shoe company that made millions. It was Emil who set Denise up with Rich, then a young commodities broker. Born in Antwerp, he’d left Belgium with his family as a child, just ahead of Hitler’s blitz. A New York University dropout, Rich had risen from the mail room at the Philipp Brothers brokerage firm to become a top trader. “I just knew that I would have a fascinating life with this man,” Denise told New York magazine in 1999. They wed in October 1966, six months after their first date. Philipp Brothers moved Rich to Madrid, where he and Denise lived for 14 years, raising daughters Ilona, now 33, a sculptor; Gabrielle, who was an aspiring actress; and Daniella, 25, an actress.

It was during the ’70s and early ’80s, prosecutors alleged, that Rich made $100 million illegally, skirting price controls by buying oil at bargain prices, then reselling it at huge markups and funneling the profits to Swiss banks. Then living in Manhattan, Denise tried to talk Rich out of leaving the country. But in 1983 she and the girls joined him in Zug, Switzerland. “It was like, ‘It’s my husband, I’m his wife, this is life,’ ” she recalled.

For years Denise had dabbled in songwriting, and in 1985 she published “Frankie,” which Sister Sledge turned into a European hit. After Marc’s affair with a German woman, she returned with their daughters in 1991 to New York City, where she wrote Chaka Khan’s “Free Yourself,” Celine Dion’s “Love is on the Way” and songs for Aretha Franklin and Patti LaBelle, a close friend.

At the same time Denise established herself as a social lioness. In 1994 she bought her Fifth Avenue duplex and hired self-styled “imagist” Brad Boles to lend her parties just the right note of, well, fabulousness. For a 1997 book party honoring photographer Francesco Scavullo—whose home and studio are stark white—Boles decked out Denise’s place in shocking pink and orange. “He lives in the absence of color,” Boles says. “So I decided to do the opposite.” Martha Stewart, RuPaul and Bobby Kennedy Jr. schmoozed amid pink and orange feather bouquets, nude mannequins bathed in pink and orange light and a wait staff in pink and orange wigs. For Milton Berle’s 90th birthday in 1998, Boles celebrated what he calls the comedian’s “legendary sexual stamina” with Venus de Milos draped in pomegranates and grapes. “When you put your heart and soul into it,” Denise told PEOPLE last year, “it’s not just, ‘Aagh, another party.’ ” On the big day, she adds, “I pray something good will come out of it.”

The greatest good has sprung from her deepest sorrow. At 26 her daughter Gabrielle was diagnosed with leukemia. With Denise as donor, she underwent a bone-marrow transplant, but it failed, and on Sept. 9,1996, she died in her mother’s arms. Her last wish was that Denise start an organization to support cancer research. And so she formed the G&P Foundation (after Gabrielle and her husband, Philip Aouad) in 1996. The charity has raised millions, and its galas have drawn the likes of the Clintons, Mikhail Gorbachev, Sarah Ferguson, Stevie Wonder and Michael Jackson.

Today, with Marc Rich suddenly free to return to the U.S. from his secluded villa, his ex-wife is maintaining an uncharacteristically low profile. Recently she canceled plans to host an elaborate party for outgoing HUD Secretary and New York State gubernatorial candidate Andrew Cuomo. But she’s hardly a shut-in. On Jan. 26 she marked her 57th birthday at Manhattan’s much-hailed restaurant Le Bernardin. In a plunging black dress, she danced with music mogul Give Davis and 30 other friends. Of the crush of reporters camped outside armed with questions about the pardon, Denise was heard to wail, “Oh, it’s so annoying.” “Cut the bull——,” a guest shot back. “You know you love it.” Indeed it seems unlikely that a little scandal will cramp her style. After all, says pal Russell Simmons, founder of Def Jam Records, “she couldn’t pay for this kind of publicity.”

Richard Jerome

Elizabeth McNeil, Joseph V. Tirella and Aaron Smith in New York City, Vickie Bane in Aspen, Lisa Newman in Washington, D.C, Karen Nickel Anhalt in Meggen and Peter Mikelbank in Paris

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