Diamonds are forever - and greed - Worldview

USA Today (Society for the Advancement of Education), March, 2004 by Janine Roberts

MANY SEE EXPENSIVE diamonds as the perfect gift for their significant others. Yet, couldn't some other gem have the same impact? There is an extraordinary logic to the diamond trade: Diamonds are presumed of value because they are pricey. Consumers are told they are pricey because they are rare and expensive to cut. Are they really? After all, flawless diamonds can be produced in a laboratory. A "mined" diamond and a "lab" version are tough to tell apart. Little wonder, since both are crystallized carbon. Of course, concern over the price of gems pales in comparison to the horrible sight of children whose arms have been amputated by the thugs who tam diamond mines in West Africa, or the knowledge that Al Qaeda trades in diamonds purchased from these same mines.

Responding to the outcry of its citizens, Congress passed the Clean Diamond Trade Act in 2003 to guarantee that gems purchased in the U.S. be free from all human rights abuse. Is this legislation working? Are the diamonds in our stores guaranteed to be clean? I set out to answer these and other questions using the Freedom of Information Act. I searched the records of the Justice and State Departments for information on this lucrative trade and on De Beers, the company that controls 65% of the world's diamond supply. In 1942, the Justice Department began an investigation of De Beers that is still ongoing. I went through thousands of pages of intercepted cables, spy reports, Nazi documents, and eye-opening mail. These brutal diamond wars have been going on fur decades. Moreover, terrorists have long used the precious stones to fund their egregious activities.

Documents reveal highly secretive price-fixing operations that run rings around the Justice Department, Congress, and the White House. The strategy is quite simple, actually: American diamond merchants pick up their supply from De Beers in London where U.S. laws banning exploitative price fixing do not apply. De Beers moves diamonds along clandestine routes used by drug barons and arms merchants. I traced these trails, I found De Beers has its own area in Switzerland's Zurich Airport where, as a customs official explained to me, it can fly in a diamond from Africa, and, within a day, legally arrange for it to be given papers identifying it as Canadian. The United Nations claims that this tactic makes it near impossible to trace terrorist-linked diamonds. De Beers, incidentally, is controlled by a family company registered in Liberia.

International trading statistics show that diamonds sent from Switzerland to the United Kingdom surprisingly multiply by three times en route. In 1982, for example, UK customs recorded 10 times more stones arriving from Switzerland than Switzerland said it had sent. Some years, by similar means, thousands of gems vanish into thin air. As for the diamond-producing countries of South Africa, Namibia, and Botswana, their gems may seem to disappear from international circulation overnight.

After reviewing documents and traveling around the world to investigate the many leads they supplied, I wrote a proposal fix a television special called "The Diamond Empire." It appeared in 1994 as a feature-length "Frontline Special" on PBS and as a three-part BBC series. Filming was not an easy project to complete. Everywhere I went. De Beers had phoned merchants telling them not to speak with me. Gradually, though, I untangled The diamond cartel's web, shooting footage in India, Europe, and the U.S. Then a gang broke into my home and assaulted me, shattering several of my facial I bled heavily from the wounds head. The next day, there was a surprise attempt to take over the documentary I withstood this, but medical complications soon set in. I spent two months in the hospital. For two of those weeks, I was in critical condition. I could not edit the film myself. PBS cut it to my script, but the BBC censored its version under heavy pressure from De Beers. When I came out of the hospital, I was determined to complete my investigation and publish the findings uncensored.

Diamonds once were genuinely rare--about 140 years ago--after the diamond mines practically ran dry in India. Then diamonds were discovered by the thousands literally sparkling in the moonlight in southern Africa. Merchants who had invested huge sums of money in the few remaining diamond mines in India panicked. They feared their investments would plummet in value. So, they funded South African politician Cecil Rhodes to set up De Beers. He had all the cash needed to buy up the diamond deposits of South Africa. In return, he agreed to sell the entire output to the "Diamond Syndicate" comprised of these same merchants. Thus, they kept the price high. In the 1930s, the Oppenheimer family gained control over De Beers and the Diamond Syndicate.

I first became interested in diamonds in 1979. I was working on civil rights issues with Aborigines in the far northwest of Australia when a major diamond deposit was found nearby in a sacred valley called Barramundi Dreaming, where for centuries women had gone to pray and meditate. Some of these women took me to see the site before it was destroyed by the diamond rush. There was a beautiful, sparkling stream surrounded by fat-trunked boab trees. When I looked into the water, there were hundreds of diamonds, lying like glossy pebbles in its bed. Later, I learned from local geologists that there were up to 27 carats of diamonds in every ton of rock underlying the stream's headwaters. Today, this locale is an enormous pit, full of excavators and tracks. It is producing up to eight tons of diamonds a year at a cost of less than $10 a carat.