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Buried Secrets [1]

['Condé Nast', 'Patrick Radden Keefe']

Date: 2013-07-08  

In 2010, several months after the Vale deal was announced, Guinea held its first fully democratic elections since independence, ending half a century of authoritarian rule. The new President, Alpha Condé, had run on a platform of good governance and greater transparency in the mining sector. But as he took office he faced the possibility that Guinea’s most prized mineral asset may have been traded out from under the country. He could not simply void the contract. “There is continuity of the state,” he told me recently. “I couldn’t put things back where they had been—unless I had right on my side.” B.S.G.R. denied any wrongdoing: “These allegations are false, and are a smear campaign against B.S.G.R.,” a company spokesman told me. If the Simandou license had been secured through bribery, then the deal could potentially be undone. But Condé and his advisers would have to prove it.

“I inherited a country but not a state,” Condé told me when I first met him, in January. He had come to the Swiss Alps to attend the World Economic Forum, in Davos, and we met in a hotel suite that was bathed in sunlight reflecting off the snowbanks outside. Condé is a tall man with a high forehead, and he has small eyes that light up with wry amusement when he listens. He wore a brown suit and a red tie. Lowering himself into a wingback chair, he listed slightly to the right while we talked, in a posture of heavy-lies-the-crown fatigue. At times, his elbow appeared to be propping up his whole body, like a tent pole.

When he was elected President, Condé was seventy-two years old, and he had spent much of his life in exile. He left Guinea as a boy, when it was still ruled by France, and eventually settled in Paris, where he became a leader of the pan-African student movements of the nineteen-sixties. He studied law, lectured at the University of Paris, and emerged as perhaps the most famous member of the Guinean opposition. For this distinction, he was sentenced to death, in absentia, by the first despot to rule an independent Guinea, and jailed for more than two years by the second, after he returned, in 1991, to run, unsuccessfully, for President. The 2010 election was bitter—his challenger, Cellou Dalein Diallo, had been a government minister when Condé was thrown in jail. After Condé was finally inaugurated as President, he pledged to be the Nelson Mandela of Guinea.

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First, he told me, he had to confront the legacy of a decades-long “state of anarchy.” The government in Conakry had a Potemkin quality: a profusion of bureaucrats showed up for work at crumbling administrative buildings, but there was little genuine institutional capacity. “The central bank, they were printing counterfeit money,” Condé said. Yet he couldn’t fire every official; he’d have to make do with a civil service that had never known anything but graft. “Almost everybody who had any expertise was compromised,” one person who has advised Condé told me. “So he had to balance between people who were competent but compromised and people who were upstanding but inexperienced.”

Condé was defensive about the fact that he had spent so much of his life abroad; when I raised the subject, he snapped, “I know Guinea better than those who have never left.” But his outsider status meant that he was not implicated in the scandals of past administrations. And, having spent much of his life in France, he was strikingly at ease in places like Davos. The U.S. Ambassador in Conakry, Alex Laskaris, told me, “Condé has a much broader circle of contacts and advisers globally than any other African head of state I’ve dealt with.” Bernard Kouchner, the former foreign minister of France, went to high school with Condé, and is a good friend. Kouchner introduced him to George Soros, the billionaire financier, who became an informal adviser, and connected him with Paul Collier, the Oxford economist. Collier, in turn, introduced Condé to Tony Blair, who offered him assistance through an organization that he runs, the Africa Governance Initiative.

These Westerners saw in Condé an opportunity to save Guinea. Collier told me that what the country needed above all was “integrity at the top.” Condé could be ornery; he had a tendency to lecture his interlocutors as though they were students. And, after a life spent in perpetual opposition, it was not clear how well he would govern. From the start, he had difficulties. He came into office with a commitment to complete Guinea’s democratic transition by holding parliamentary elections, but he delayed them, ostensibly on procedural grounds, then delayed them again. Opposition riots broke out in Conakry, leading to a series of violent confrontations between demonstrators and government security forces.

For all the tumult, Condé’s foreign friends and advisers maintain faith in his ethics. “He is absolutely incorruptible,” Kouchner told me. “He’s not luxurious. He’s not travelling. He is having a cold potato at night!” Corinne Dufka, a senior researcher at Human Rights Watch, has not lost hope that Condé can succeed as a reformer. “There’s a lot of work to be done for Guinea to overcome its legacy of abusive rule,” she said. “Power remains too heavily concentrated in the executive, and, without a robust judiciary or a democratically elected parliament, there is next to no oversight, which they desperately need. But Condé has made real progress in confronting the disastrous governance and rights problems he inherited.”

It is no easy task to transform a country that is corrupt from top to bottom. During Condé’s first months in office, he performed a kind of triage. With the assistance of Revenue Watch—an organization, backed by Soros, that encourages transparency in extractive industries—Condé established a committee to inspect existing mining contracts and determine if any of them were problematic. He didn’t know Steinmetz—“I didn’t know any miners,” he said, with pride—but there were elements of the Simandou deal that appeared to warrant an investigation. “I found it a bit strange that they had invested a hundred and sixty million dollars and were going to earn billions,” Condé said. “It’s a little . . .” He smiled and gave a Gallic shrug.

Beny Steinmetz, who is fifty-six, does not seem to live anywhere in particular. He shuttles, on his private jet, between Tel Aviv (where his family lives, in one of the most expensive houses in Israel), Geneva (where he technically resides, for tax purposes), London (where the main management office of B.S.G.R. is situated), and far-flung locations connected to his diamond and mineral interests, from Macedonia to Sierra Leone. He is technically not an executive of the conglomerate that bears his name, but merely the chief beneficiary of a foundation into which the profits flow. This is a legal fig leaf. Ehud Olmert, the former Prime Minister of Israel and a friend of his, described Steinmetz as “a one-man show.” Olmert continued, “I don’t quite understand the legal aspects—just know that he can work ceaselessly and will move from one side of the globe to the other if he identifies a promising deal.” Steinmetz is very fit and exercises every day, no matter where he is. With blue eyes, tousled sandy hair, a preference for casual dress, and a deep tan, he looks more like a movie agent than like a magnate.

“I grew up in a home where diamonds were the subject,” Steinmetz has said. His father, Rubin, was a Polish diamond cutter who learned the business in Antwerp before settling in Palestine, in 1936. A family photograph from 1977 captures Beny as a young man, sitting at a cluttered table with his two older brothers and his father, who looks sternly at the camera while Beny inspects a precious stone. That year, Beny finished his military service and struck out for Antwerp, with instructions to expand the company’s international business in polished stones. According to a privately published history of the family business, “The Steinmetz Diamond Story,” Beny branched into Africa, in search of new sources of rough stones. The plan wasn’t to establish mines but, rather, to make deals with the people doing the digging.

Approximately half the diamonds in the world originate in sub-Saharan Africa, and many ambitious Westerners have followed the lead of Cecil Rhodes—the founder of De Beers—and sought fortunes on the continent. “Unfortunately, there aren’t any diamond mines in Piccadilly,” Dag Cramer, who oversees Steinmetz’s business interests, told me. “That’s not where God put the assets.”

Instead, diamonds tend to be found in countries that are plagued by underdevelopment and corruption and, often, by war. This is enough to scare off many investors, but not all; some entrepreneurs are drawn to the heady combination of political uncertainty, physical danger, and potentially astronomical rewards. Ambassador Laskaris, who has done tours in Liberia and Angola, likened the diamond trade in much of Africa to the seedy cantina in “Star Wars.” “It attracts all the rejects of the galaxy,” he said. “Low barriers to entry. It rewards corruption. It also rewards a little bit of brutality.”

Steinmetz plunged into Africa’s treacherous political waters. In the nineteen-nineties, he was the largest purchaser of diamonds from Angola; later, he became the biggest private investor in Sierra Leone. Today, Steinmetz is the largest buyer of rough diamonds from De Beers, and one of the major suppliers of Tiffany & Company. And he has diversified his holdings into real estate, minerals, oil and gas, and other fields, with interests in more than twenty countries. A Web site that Steinmetz recently set up describes him as a “visionary” who used a “network of contacts on the African continent” to build “a multi-faced empire.”

Paul Collier, however, takes a dim view of businessmen like Steinmetz, who have secured the rights to natural resources that they may not actually have the expertise to develop. “Their technical competence is a social-network map,” Collier said. “ ‘Who has the power to make the decision? Who can I reach?’ They know how to get a contract—that is their skill.” (Cramer rejected this characterization, insisting that Steinmetz makes sustainable investments wherever he operates. “B.S.G.R. is not a company that has ever been in the business of obtaining rights and flipping them,” he told me.)

Despite his great wealth, Steinmetz has maintained an exceptionally low profile. Last year, after “Hamakor,” a news program on Israeli television, devoted an episode to a battle that he was having with tax authorities in Tel Aviv, he threatened legal action and succeeded in blocking the program from being posted on the Internet. “He’s a very private guy,” Alon Pinkas, a friend of Steinmetz’s who once served as Israel’s consul-general in New York, told me. “His family is all he cares about—and his business.”

Steinmetz’s diamond business, however, has occasionally engaged in some creative publicity. The company sponsors Formula 1 events, sometimes furnishing drivers with diamond-encrusted helmets and steering wheels. At a 2004 race in Monaco, a large Steinmetz diamond was affixed to the nose of a Jaguar race car. As the vehicle tore around a hairpin curve, the driver lost control and the Jaguar slammed into a guardrail. The diamond, which was reportedly a hundred and eight carats and worth two hundred thousand dollars, was never recovered.

General Lansana Conté, the dictator who ruled Guinea before Alpha Condé became President, was famously corrupt: he referred to his ministers, not without affection, as “thieves,” and once remarked, “If we had to shoot every Guinean who had stolen from Guinea there would be no one left to kill.” By 2008, after more than two decades in power, he had become ill, and had largely stopped appearing in public; when he did, he was propped up by bodyguards and orbited by adjutants who often made a show of stooping to whisper in his ear, even when it was obvious, to a close observer, that he was asleep.

During this period, Steinmetz flew to Conakry and met with Conté. At the General’s compound, they sat and talked beneath a mango tree. Conté was aware of B.S.G.R. because it had acquired the rights to explore two small parcels of land abutting the Simandou range—places where others in the mining industry had not thought to look. In 2006, one of Steinmetz’s employees called him from the top of a mountain, using a satellite phone, and said, “Beny, you cannot believe. I’m standing on so much iron here, you have no idea.” After this success, General Conté began to entertain the idea of reapportioning the Simandou deposit. It was not long after he met Steinmetz that he stripped Rio Tinto of its claim and gave B.S.G.R. a license to explore half the Simandou range. Two weeks after General Conté signed the deal, he died.

Hours later, a military coup installed an erratic young Army captain, Moussa Dadis Camara. The junta was a nightmarish period for Guinea. In September, 2009, during an opposition rally at a stadium in Conakry, government soldiers massacred more than a hundred and fifty demonstrators. The U.S. evacuated most of its staff from the Embassy, and the International Criminal Court described the violence as a crime against humanity. But B.S.G.R. stayed put. On one occasion, Steinmetz flew in with two of his sons to meet Captain Dadis. They invited him to Israel to attend the wedding of Steinmetz’s daughter—a celebration with more than a thousand guests. (Dadis sent his regrets.)

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[1] Url: https://www.newyorker.com/magazine/2013/07/08/buried-secrets

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