Africa: Terry Crawford-Browne Returns With the Sequel to Eye On the Money10 mai 2012
The following extract from Terry Crawford Browne's new book, Eye on the Diamonds examines "how diamonds link the colonial and apartheid histories of South Africa with the close histories of Israel and Palestine".
Diamond diggers are amongst the poorest people in Africa - even though they produce great wealth for others. This is a human security issue; it is about development at its most basic; and it is about justice.
Smuggling continues, and diggers face appalling working conditions.
Residents of mining areas complain of environmental degradation, water pollution, and the influx of migrant labour, with high rates of prostitution and HIV/Aids. Family and societal violence follow.
Most diamond diggers lead hard, insecure, dangerous and unhealthy lives.
With average earnings of less than a dollar a day they fall squarely into the broad category of 'absolute poverty'. Until these problems are fixed, diamonds will continue to be a source of insecurity; conversely, change could produce significantly better lives for diggers and their communities.
The UN Security Council in 2001 accused Kagame and Museveni of being 'the godfathers of illegal exploitation of natural resources and continuation of the conflict'. Yet no action was taken against them thanks to highly placed connections in the British and American governments. Former British Prime Minister Tony Blair proudly describes himself as one of Kagame's advisers, and 'friend'. Huge amounts of British financial aid have been poured into Rwanda which, most curiously, has also been accepted as a member country of the Commonwealth.
Blair's reputation has been shredded on many issues, to the extent that he is now widely nicknamed 'Bliar', and described as a war criminal who should be in jail. Within the first six years of his tenure he involved Britain in five africa's first world war wars, including the disastrous and illegal war against Iraq. His promotion of the British war industry included a cover-up of massive bribes paid to members of the Saudi royal family plus his involvement as 'number one salesman' for BAE in the South African arms deal scandal.
There were also a myriad of allegations at the UN and around the world about John Bredenkamp, a British intelligence agent and bagman for BAE.
He had been a tobacco and arms sanctions-buster during the Rhodesian UDI days, but both he and multimillionaire Zimbabwean businessman Billy Rautenbach became untouchable in Zimbabwe once they became Mugabe's major financial patrons. The US Treasury in November 2008 finally froze Bredenkamp's assets in America, describing him as:
A well-known Mugabe insider involved in various business activities, including tobacco trading, gray-market arms trading and trafficking, equity investments, oil distribution, tourism, sports management and diamond extraction. Through a sophisticated web of companies, Bredenkamp has financially propped up the regime and provided other support to a number of high ranking officials. He also has financed and provided logistical support to a number of Zimbabwean parastatal entities.
Only in May 2010 did South Africa's Supreme Court of Appeal finally uphold Standard Bank's decision to blacklist Bredenkamp, and to close his accounts.36 Barry Sergeant, author of Brett Kebble: The Inside Story, has investigated who bankrolled Mugabe, and writes:
Why have the names of those bankrolling Zimbabwe's deranged president, Robert Mugabe, been kept so well under wraps? For one thing, the deals behind the bankrolling are not simple, and for another, the robber barons are pretty smart and can also be pretty darn dangerous. Depending on how you count, there are four or five individuals bankrolling Mugabe and they are all palefaces. This may be surprising given Mugabe's year 2000 'land reform' package where he booted an estimated four thousand palefaces off Zimbabwe's commercial farms.
Mugabe relies on patronage from his chosen palefaces, and the robber barons have become increasingly bold. Rautenbach did not come by his eye on the diamonds DRC assets by accident. He was described by a UN panel as a major player in the elite network of twisted politicians, military commanders and shady businessmen that organised the transfer of billions of dollars of state assets to private companies with no compensation or direct revenue benefit accruing to the state treasuries of either the DRC or Zimbabwe.
Gertler and other Israeli diamond interests not only had ousted De Beers in the Congo, but the long-running and sensational Angolagate scandal in France revealed extraordinary tales of French, Israeli and Russian involvements to take control of Angolan diamonds. The son of former French President François Mitterand, a former government minister plus several senior French government officials were implicated.
Russian-born Arcadi Gaydamak is one of numerous gangsters who flocked to Israel from the Soviet Union during the 1970s, albeit he soon re-emigrated to France to make his fortune. His colleague in the Angolagate affair was an Algerian pied-noir, Pierre Falcone, whom Angolan President Eduardo dos Santos had appointed as economic adviser.
Both Gaydamak and Falcone were issued with Angolan diplomatic passports, and claimed diplomatic immunity when the legal noose began to tighten.
The Angolagate arms deal was estimated to have been worth US$791 million. Gaydamak and his cronies in the French government between 1993 and 1998 sold huge quantities of Soviet armaments to the Angolan government for use against Unita. The French wanted access to Angolan oil irrespective of the devastation and human miseries resulting from yet more weapons in a country already awash with arms. Gaydamak managed to escape back to Russia to avoid a six-year jail sentence for gunrunning.
Extraordinarily, the Paris Court of Appeals in April 2011 overturned the judgment. It ruled that irrespective of the UN arms embargo, it was not illegal to import weapons into Angola, and therefore dismissed the charge of arms trafficking. Israeli newspapers in July 2011 reported that Gaydamak is back in business in Angola.
Having looted Angola's oil and diamond wealth and squirrelled it away in Brazil and elsewhere, President Dos Santos is said to be both the richest man in Angola and the second richest man in Brazil. His daughter Isabel maintains africa's first world war a close relationship with Lev Leviev, who is now fast replacing De Beers and the Oppenheimer family in the battle to control the diamond industry. Over the past thirty years De Beers has found it increasingly difficult to control the huge new sources of diamonds being found all over the world. Diamonds have been discovered in over twenty countries - notably not Israel - but most especially in Russia, Canada and Australia. The new Marange field in Zimbabwe is allegedly the largest. The whole mystique and value of diamonds would immediately collapse but for the unique monopoly that De Beers created and ruthlessly defended during the days of colonial and apartheid South Africa.
Back in 1975 the Israeli diamond industry accounted for almost forty per cent of Israel's non-agricultural exports. It employed more than twenty thousand workers. Even then, the Israelis were increasingly rebellious about operating under rules determined in Johannesburg and London. They challenged De Beers by amassing a stockpile that was funded by Israeli banks. The cartel retaliated and by ruthless dumping and pricing policies between 1978 and 1980 almost destroyed both the Israeli banking and diamond industries. About three hundred and fifty diamond firms went bankrupt.
De Beers won that round, but many Israelis who were severely burned neither forgot nor forgave. Amongst them was Leviev, who migrated to Israel in 1971 at the age of fifteen from Tashkent in what is now Uzbekistan. He had apprenticed himself as a diamond cutter, and he was both street-smart and industrious. Having been born in the Soviet Union, he also spoke Russian. The New York Times reported in 2007:
Leviev saw an opportunity in 1989. De Beers had encountered anti-trust problems in the US. In South Africa, the apartheid government was losing political power. At the same time, the Soviet Union, whose leaders had long had a mutually profitable partnership with De Beers, was nearing collapse. One of Leviev's first moves in Russia was to set up a high-tech cuttingand polishing plant. It provided jobs and, more important, showed the Russians how they could gain control of their own industry. In turn, the Russian government helped him gain a foothold in Africa. Leviev bought into the Catoca diamond mine in Angola, and soon eye on the diamonds established warm ties with the Angolan president, José Eduardo Dos Santos. Dos Santos was fighting a civil war against Unita rebels, who were financed by the sale of smuggled 'blood diamonds.' Leviev had a suggestion:
Why not create a company to centralize control of all diamonds?
The company that grew out of that idea was the Angola Selling Corporation, or Ascorp, jointly owned by the Angolan government, Omega Diamonds and Leviev.
Unita surrendered in 2002, after the death of its leader, Jonas Savimbi.
By then, the Angolan government had pushed De Beers out of the country, and Ascorp had generated great sums for the Dos Santos government and, it is rumoured, the Dos Santos family.
Other reports were not so flattering. Leviev's dealings in Russia and Angola produced a vast fortune, variously estimated in 2007 as being from US$4.1 billion to U $8 billion. Angolan human rights activists, in particular Raphael Marques, documented atrocities by Leviev's companies,41 and the European Union in 2008 also warned him against selling 'blood rubies' that finance the Burmese military dictatorship.
In addition, Belgian police learned in 2009 that Leviev's partner in Ascorp, Omega Diamonds, was involved in a multibillion euro laundering scheme. Yes, multibillions, not multimillions! Omega Diamonds, established only in 1994, had suddenly become the second largest diamond cutting and polishing firm in Antwerp. Investigations revealed that Omega had been buying diamonds in Angola and the Congo at dumping prices dictated by Dos Santos's daughter Isabel, and traded through Dubai, Tel Aviv and Geneva.
Leviev's success in Russia and Angola was such that in 1997 for US$400 million he purchased a seventy-five per cent shareholding in Africa-Israel Investment Company, Israel's leading property development and financial institution. The company, perchance, was established back in 1934 by South African Zionist Jews to purchase land in Palestine. The Jewish community in South Africa was then the most affluent anywhere in the world in terms of per capita income, and was hugely supportive of the Zionist initiative. Africa-Israel offered Leviev a unique opportunity to launder theproceeds of 'blood diamonds' through property development in the illegal africa's first world war construction of settlements in the West Bank. Africa-Israel became a multi-faceted organisation operating in numerous countries in addition to Israel and including Russia, Britain and the US.
For the following ten years it was trumpeted as hugely successful, and rapidly expanded into the US and Russia. The reality was that its sub- sidiaries, including Danya Cebus, were leading building contractors in illegal construction of settlements in the West Bank, including Zufim near Jayyous, Har Homa near Bethlehem and Ma'ale Adumin between Jerusalem and Jericho.
Leviev epitomises the unscrupulous behaviour and corruption of war profiteering, and the collapse that often follows. The financial opportunities offered by Israel's occupation of the Palestinian territories provided unique opportunities to launder such ill-gotten gains.
Leviev was conspicuous in funding philanthropic causes. He relished acclaim as the world's leading diamond polisher and the man who cracked the De Beers diamond cartel. Leviev Diamonds is Israel's largest diamond company, and its stores now grace the prime shopping districts of Dubai, New York, London and Moscow.
His troubles began in 2008 when the people of Jayyous appealed to Unicef to stop accepting donations from Leviev or his companies.Norwegian pension funds then divested from Africa-Israel, and Americans regularly demonstrated outside the Leviev Diamond store on Madison Avenue.
Even the British government backtracked from its intention to rent office accommodation from Africa-Israel to house its embassy in Tel Aviv. When Africa-Israel crashed during the 2008/2009 financial crisis, it was deemed too big to fail because Israeli pension funds were now so entangled in its web. The diamond industry buckled, with Israeli exports to the crucial US market collapsing by forty per cent to US$5.6 billion.
Africa-Israel had also made massive investments in both the Russian and American property markets just before the property bubble burst. The company's share price on the Tel Aviv Stock Market fell by more than ninety per cent, and the company was US$5.5 billion in debt. All Israeli banks were deeply involved,47 and a restructuring agreement eye on the diamonds was approved by the Tel Aviv District Court in December 2009.48 The Israeli banking and financial system looked extremely vulnerable to collapse, as reflected in a sober analysis published by Haaretz entitled 'Judge's creativity on Africa-Israel may cost us dearly'.
One year later, however, the company had already repaid most of that debt. It also announced in November 2010 that for business rather than political reasons it was withdrawing from housing construction in the settlements. De Beers also, albeit not so quickly, recovered from the 2008/2009 crash. It reported a ninety-seven per cent drop in profits during the first six months of 2009 to only US$3 million, and a loss for that year of US$220 million. For 2010 the company reported a fifty three per cent increase in sales to US$5.08 billion, and a return to profitability of US$546 million.
After a fourteen-year investigation, in April 2008 the company finally agreed to pay a fine of US$295 million to American diamond traders and consumers. Court papers declared: 'De Beers violated anti-trust and unfair competition and consumer protection laws by monopolising diamond supplies, conspiring to fix, raise and control diamond prices and in disseminating false and misleading advertising.'
De Beers denied the allegations, and claimed it had done nothing wrong.
Its press statement declared that it chose to settle the suit to preserve its reputation, and did not want 'the burden and distraction of litigation'.
In November 2007 De Beers sold the Premier (Cullinan) Mine for R1 billion in cash to a black economic empowerment consortium comprising Petra Diamonds and Saudi Arabia investors. This was followed in January 2011 by the sale of Finsch's mine for R1.4 billion, also to Petra. As it did in Namibia during the 1970s and 1980s, De Beers has 'cherry- picked' its diamond properties in South Africa, and is now yielding to even more ruthless gangsters in the war business. The Oppenheimer family has shrewdly seen the end of an era. In its heyday De Beers controlled up to ninety-five per cent of the diamond market. That dominance has already been reduced to only forty per cent.
The announcement was made in November 2011 that the Oppenheimers had sold their forty per cent stake in De Beers for US$5.1 million.
- The book is published by Penguin Books South Africa