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Blood on the Stone
Greed, Corruption and War in the Global Diamond Trade
By Ian Smillie
Wimbledon Publishing Company Copyright © 2010 Ian Smillie
All rights reserved.
OF JUDGEMENT AND CUNNING WORK: DIRTY DIAMONDS
And thou shalt make the breastplate of judgment with cunning work ... and the second row shall be an emerald, a sapphire and a diamond.
– Exodus 28:13, 18
Sir Percy Sillitoe, newly retired head of MI5, Britain's chief spymaster, was casting about for something to do in life when he was approached by Sir Ernest Oppenheimer, Chairman of the giant diamond cartel, De Beers. As Sillitoe tells it, Oppenheimer wanted him to investigate illegal African diamond smuggling, a perennial problem that was turning into a massive drain on the company and a threat to De Beers' domination of the industry. It was 1953, and Sillitoe would spend the next three years travelling across Africa investigating the problem and establishing a covert diamond police force known as the International Diamond Security Organization (IDSO). One of the IDSO's operatives in West Africa was Fred Kamil, a Lebanese whose parents had settled in Liberia. Working in the family retail business, Kamil inadvertently found himself involved with men engaged in a massive diamond smuggling operation into Liberia from Sierra Leone. In the course of events, his business was ruined and he vowed to seek revenge on 'the callousness of the cursed trade which had wrecked my business at Robertsport, and the careers of so many'. Kamil made his way to Sierra Leone where he says he was recruited by the IDSO.
The Madingo tribe is one of the most prominent and most dispersed ethno-linguistic groups in Africa, stretching from the River Niger in the west to the mouth of the Gambia River in the east, and north as far as the deserts of Mauretania. Their trading networks across West Africa are legend: once slaves; now agricultural products, cloth, gold and diamonds. The diamonds were Kamil's fixation. He soon infiltrated illicit Madingo diamond gangs and led armed raids on smuggling routes, catching dozens of what he called 'little and medium-sized fish'. He always missed the big ones, however, because of what he viewed as odd and unfathomable policies within the company and the IDSO. Gone from Sierra Leone by the end of the 1950s, he hints in his memoirs at dark deeds and massive corruption in the highest places of the diamond industry.
Enter Ian Fleming. Fleming had been a journalist for ten years before serving in British naval intelligence during the Second World War. Following the war he returned to journalism, but women, travel, expensive tastes and a Jamaican villa called Goldeneye demanded a more remunerative occupation. Over a seven week period in 1952, he dashed off a spy thriller, calling it Casino Royale. The book and a television production were successful, and in the next couple of years he wrote two more James Bond novels, Live and Let Die, and Moonraker. Fleming's interest in diamonds began in 1954 when he met Percy Sillitoe and heard about his new job with De Beers. Fleming's fourth novel, Diamonds are Forever, and arguably the worst of the 14 he eventually wrote, appeared in 1956, and it was obviously influenced by what Sillitoe had told him. It is the only Bond novel in which Fleming referred to an actual person:
'Things are getting too hot. At the mines. I don't like it at all. There's been a big intelligence man down from London. You've read about him. This man Sillitoe. They say he's been hired by the Diamond Corporation. There've been a lot of new regulations and all the punishments have been doubled ...'
The following year, Fleming wrote a series of articles for the Sunday Times dealing with Sillitoe's work, and later compiled the stories into a non-fiction book called The Diamond Smugglers. Sillitoe's legend grew, courtesy of an IDSO deputy named John Blaize, who provided most of the details that Fleming used in The Diamond Smugglers. Meeting secretly in Tangier, they discussed Sillitoe and the IDSO operation while strolling through the Kasbah, sipping mint tea in the gardens of the Minzah, and over Cuba Libres in suitably darkened bars and nightclubs.
In The Diamond Smugglers, Fleming explains that while De Beers may well have worried about the threat smuggling posed to its control over the diamond industry, the company's ultimate motive behind the hiring of Sillitoe and the creation of IDSO was bigger, and infinitely more important. Stopping the 'biggest smuggling operation in the world' - partly in Southern Africa, but mainly out of Sierra Leone via Liberia - was De Beers' 'patriotic duty'. Fleming explained it this way: the boom in gem diamonds was a hedge against inflation everywhere. 'As for industrial diamonds', he has Blaize explain, 'these are used for machine tools, and they're being stockpiled in the armaments race.' Fleming laced the book with Soviet intrigue, saying that 'industrial diamonds are one of the sinews of peace', lifting a phrase from Churchill. He included a world map in the book which showed 'light', 'medium' and 'heavy' diamond smuggling traffic. The heaviest traffic on the supply side was from Monrovia, and on the end-user side, the heaviest lines depicting smuggled diamonds were drawn from Antwerp, via Berlin and Zurich, to Moscow. Fleming asks Blaize about reports of huge new diamond finds in Russia, but Blaize replies that 'No one's ever seen anything to back that story up.' He then asks rhetorically, 'If the Russians have got all that supply on tap, why would they be paying above world prices in Liberia and Belgium, as we know they're doing?'
Sillitoe's police work was successful, but the real solution to the diamond smuggling from Sierra Leone was commercial. One company, the Sierra Leone Selection Trust (SLST), had a diamond monopoly throughout the country. This was reduced to 450 square miles in 1955, and for the first time ordinary Sierra Leoneans were allowed to mine legally. The colonial government invited De Beers to set up buying stations in areas surrendered by SLST, partly to create a legal and taxable outlet, partly to stop smuggling. De Beers sent a small battalion of young school leavers and retired army types to sit in tin sheds with piles of cash to buy diamonds that once went across the border to Liberia. This novel solution - paying Sierra Leoneans for diamonds that they dug out of land which SLST had treated as its own - worked. 'And so, in a brief blaze of glory,' as Blaize explained it to Fleming, 'IDSO wound up its activities and prepared to disband.'
'Once the Diamond Corporation had set itself up in Sierra Leone and was ousting the IDB [illicit diamond buying] by straight commercial methods, there was nothing more for us to do that couldn't be done by the mine security staffs and by the local police forces in Africa.'
Apart from a few loose ends and a skeleton organization with a watching brief, there was little more to be done. The Soviets had been foiled, the smugglers had been stopped, and all was well with the diamond world. Sir Percy went back to Britain where he helped establish a private security firm. Fred Kamil developed a neurotic grudge against De Beers and Harry Oppenheimer which culminated when he hijacked an aircraft in 1972, expecting to find Oppenheimer's former son-in-law on board. This was supposed to result in high-level negotiations between Kamil and Oppenheimer, but instead led to 21 unpleasant months in a Malawi prison. Ian Fleming became rich and famous, and John Blaize disappeared forever. Mainly because he never existed.
In fact most of the Percy Sillitoe story and Ian Fleming's intrigues were exaggerations or wildly incorrect. Sir Percy had never been 'approached by Ernest Oppenheimer'. When he retired from MI5, he opened a candy shop in Eastbourne. After two days of selling sweets to kiddies, he closed the shop, and following months of depression and failed attempts at writing his memoirs, he applied to a blind advertisement that had been placed in The Times by De Beers. Flying to Cape Town, he finally did meet with Oppenheimer, who told him that a vast, communist-directed diamond smuggling ring was at work throughout Africa. One of the field operators chosen for Sillitoe was J. H. du Plessis, a former member of the South African police, who in due course wrote his memoirs (everyone at this time, it seems, was writing memoirs, filled with both pseudonyms and pseudo facts). Du Plessis wrote that 'certain of my superiors had made it clear to me that without the incredibly huge flow of illicit industrial diamonds from Central Africa to behind the Iron Curtain, the development of the Russian H-bomb would have been delayed by many years. Diamonds, thousands upon thousands of industrial diamonds, helped to make the precision tools and instruments which made the Russian H-bomb ...' Not only that, diamonds, he wrote, were financing anti-west uprisings in Greece, Lebanon, Syria, Algeria, the Far East, and 'a dozen other places'.
Coming from a long career as a police officer and eight years as head of Britain's counter-espionage organization, the Cold Warrior in Sillitoe must have bristled at what he was hearing. In fact, however, it made little sense. Industrial diamonds are not rare or expensive, and with the exception of a brief moment during World War II, they never were. And industrial diamonds are not used to make H-bombs or any other kind of bomb. They are used in machine tools for cutting and grinding, and they would have been readily available to the Russians - if they needed to import them - from many commercial sources. In any case, by the time Sillitoe was on the job, and certainly by the time Ian Fleming wrote The Diamond Smugglers, the Russians were well into the mining of their own kimberlite pipes in Yakutia, a fact that could not possibly have been lost on De Beers, which - only months later - was negotiating with the Russians to buy their goods.
The huge smuggling racket out of Sierra Leone certainly existed, but the Sillitoe gambit was in actual fact about a foreign exchange problem. And it was about Sierra Leone's gem diamonds, which were never sent covertly over, under or anywhere near the Iron Curtain. Easily laundered in Antwerp, they went straight into the legitimate trade, and from there into the jewellery shops of London, Paris and New York. 'John Blaize', in reality a former MI5 employee named John Collard, probably fed Ian Fleming his stories more for the Cuba Libres than anything else. In fact in the three short years that IDSO existed, there were only half a dozen people charged with diamond smuggling, and no evidence was ever found - despite all of Ian Fleming's dark innuendo and outright nonsense - that any smuggled African diamonds were going to the Soviet Union.
So what was IDSO all about? Certainly it had to do with smuggling and the very real threat that widespread leakage posed to the De Beers cartel. De Beers wanted to choke off the Liberian channel. By setting up sting operations and sending thugs like Fred Kamil to crash about in the rainforest, they may well have gone some way towards this goal. By establishing their own buying agents in Sierra Leone, however, and by persuading the British colonial government to waive tight, post-war foreign exchange rules, they went much further. This gave them the hard currency they needed in order to compete in Sierra Leone with Liberia - where the currency was the US dollar. In order to get the currency restrictions lifted, they needed someone of Sillitoe's stature, and they needed a Cold War excuse. In the end, De Beers got its cake and ate it too.
But not for long, as more recent events will show. Before leaving the 1950s, however, there are two footnotes to the IDSO story. One is the incredible arrogance that runs through the tales these men tell. If they were in any way typical of the late colonial mind, it is no wonder that the British Empire fell apart so quickly in the following decade. There is no conception anywhere in their writing that Africans had any role to play in the diamond business, except as hewers of kimberlite and drawers of gravel. A photograph in The Diamond Smugglers shows three grown men handling a massive jackhammer; the caption reads 'Native boys at the face of the Williamson mine'. And Ian Fleming quotes 'John Blaize' on the subject of using X-rays to check miners: 'You see, you can't go on X-raying men, even if they're black, again and again. They get loaded with gamma rays.' Later he says that Blaize was scathing about Liberia, 'with good cause'. 'He despised many of the comic opera Negroes in official positions, but he thought even less of the white men who backed them and often incited them in their venality.' Fleming puts these words into the mouth of 'Blaize', but the arrogance, racism, thinly veiled anti-Semitism and stupidity that run through The Diamond Smugglers shed a whole new light on the creator of James Bond, gazing knowledgeably out from the dust jacket of his book in a jejune Cecil Beaton pose, cigarette and cigarette holder held just so for the camera.
Worse is the legacy of Fred Kamil, who would not be remembered at all had he not committed his exaggerations to paper. Born Fouad Bu Kamil in a small Druse village in Lebanon, he did indeed move to Liberia and he did become involved with IDSO, although many of his tales are fabricated, as one might expect of a man so unbalanced as to hijack an aircraft in order to meet Harry Oppenheimer. He too looks out from the dust jacket of his book, cigarette in hand; glowering; ready to take on the world. In his book he recalls a touching love affair with 'Ann', the wife of an American missionary in Liberia. Kamil writes of Ann's husband, 'John', 'a small man with reddish hair, standing with his bible in his left hand to leave his right hand free to point his finger towards Salvation'. Is 'Ann' the mother of a woman who was still searching for Fred Kamil almost half a century after his adventures in West Africa? Writing in 2002, there was little doubt in her chilling tale. A man she calls 'Amin' in a short memoir was a reformed alcoholic who had been befriended by her missionary parents in Monrovia in the early 1950s. Her father had baptized him when he renounced Islam, and they were close for several years. One night in 1956, when 'John' was away, 'Amin' attacked her mother, brutally and repeatedly, and returned on two subsequent nights to do it again. Eventually the missionaries confronted 'Amin', who by now was drinking heavily again and was involved with diamond smugglers. They forgave him because Jesus taught forgiveness, and eventually they moved on to other times and other countries. But they did not forget. Half a century later, John's daughter, who was three years old at the time, still remembered, as did her parents. 'There is no vengeance in any of our hearts,' she writes. 'If there is any emotion, it is sorrow that he chose the road he did ... I want him to know that he is forgiven.'
* * *
During the 1990s, perhaps 25 per cent of the world's trade in rough diamonds was infected by smuggling, tax evasion, money laundering, sanction-busting, war and state collapse. This represented almost $2 billion worth of illicit behaviour in a rough diamond trade that was worth about $7.8 billion in 2002. The extent of the problem started to become clear in the late 1990s, when two NGOs, Global Witness in Britain and Partnership Africa Canada, exposed the relationship between diamonds and the wars in Angola and Sierra Leone. Here the issue was conflict diamonds, a sub set of the larger problem, but infinitely worse in its effect. Conflict diamonds, or 'blood diamonds', are diamonds used by rebel movements to buy weapons and fuel war.
Excerpted from Blood on the Stone by Ian Smillie. Copyright © 2010 Ian Smillie. Excerpted by permission of Wimbledon Publishing Company.
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