Glitter & Greed: The Secret World of the Diamond Cartel

by Janine Farrell-Robert

Overview

Rare, romantic, and forever: The diamond industry depends on these myths to reap billions of dollars of profit. This sensational investigation explodes such fallacies and reveals how multimillion-dollar advertising campaigns create the impression of rarity and romance. It reveals a very secret and unromantic world, one that is dominated and controlled by a handful of mighty corporations.

With Leonardo DiCaprio’s movie The Blood Diamond making more people than ever aware of the seamy side of the diamond trade, Janine Roberts’ explosive exposé, taking us through seven decades of intrigue and manipulation, is the right book at the right time.

Product Details

ISBN-13:	9781609258801
Publisher:	Red Wheel/Weiser
Publication date:	04/01/2007
Sold by:	Barnes & Noble
Format:	eBook
Pages:	384
File size:	7 MB

Read an Excerpt

GLITTER & GREED

The Secret World of the Diamond Cartel

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By Janine Roberts

Red Wheel/Weiser, LLC

Copyright © 2007 Janine Roberts
All rights reserved.
ISBN: 978-1-60925-880-1

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CHAPTER 1

The Diamond Hunt

My investigations started quite innocently. I had been invited to explain the techniques of diamond mining to Aboriginal elders in a small settlement called Oombulgurri in northwest Australia. They told me of their alarm at the many prospectors in helicopters and four-wheel drives invading their lands. The elders and I sat in fine red dust in the shade of a fat-trunked boab tree. It was sultry, pre-monsoonal. As we talked, apart from the distant shouts of playing children, the only other sounds were the occasional buzz of flies or a parrot's staccato screech.

I did not need to introduce these elders to diamonds. Whites first found diamonds in this region some decades ago when they examined the sacred stones carried in a pouch by a murdered Aborigine. What Aborigines now wanted from me, a sociologist with strong friendships within their community, was factual information on the consequences of a major diamond find by a major diamond company.

Six months or so earlier the Oombulgurri community had bravely denied an entry permit to Stockdale, De Beers' diamond exploration company, because they feared it might trespass in sacred areas. They had heard that mining companies had even plundered burial caves.

Their refusal had so angered the state government that it had removed from all Aboriginal communities in Western Australia the right to issue permits to visitors. Thus, the Oombulgurri community could not give an official permit when it invited me to visit them.

I had come to see them nonetheless, for they had invited me and I could see no good reason to refuse. The local legal service advised that taking away their right to invite guests was a denial of civil rights. There was seemingly little risk. The local police had never arrested anyone for accepting an Aboriginal invitation.

But perhaps I was being somewhat naïve. My conversation with the elders was soon interrupted by a schoolteacher with a radio message from Melbourne, over 3,500 miles away. The Federal Authorities had ordered the police to fly in by helicopter to arrest me! I was open-mouthed with astonishment. This seemed so over the top, so extraordinary that I could scarcely believe it. It was then that I realized that I had fallen by chance into the midst of a quiet war between diamond prospectors, the government and the tribes.

I did not wait for the police to arrive, but hired the community's boat to travel back to the slaughterhouse town of Wyndham. I hoped this would protect my hosts from being harassed by the police. The mission boat was small - apparently larger crocodiles frolicked just up stream from us. But we made it away, through the tangled mangrove roots, across the shark infested estuary, over sediments now believed by some to be rich in diamonds, safely to Wyndham. The quayside was quiet when we arrived, the dust-blown streets deserted before the oncoming monsoonal storm. We made our way back to the home of the local district nurse where we were staying. After dinner the police came around to arrest us.

I found out later that the police had been unwilling to arrest us but had been ordered into action. I wondered why, then discovered that CRA Limited was concealing a massive diamond find nearby. It had secured over one hundred square miles, surrounding its find behind high fences, security guards and closed circuit television. I was then smuggled inside it by an Aboriginal group that had been given permission to hunt their tribal lands included within the lease. My face was dirty, my hair concealed beneath a scarf. The security guards ignored me, probably thinking me a half-caste. They did not see the camera on which I sat as we drove into the heart of a secret diamond find within the red and mauve slopes of an extinct volcano. It contained, according to secret geological reports later leaked to me, more diamonds than South Africa officially had.

In Melbourne a small Australian company later showed me a highly confidential three-dimensional model revealing the drill results from this diamond deposit. It told me that it contained over 20 times the diamond concentration per tonne than there were in De Beers' South African mines. I also learned that over half of its diamonds were of gem quality. My articles about this discovery ran full page in major newspapers and were nationally syndicated.

By now, small Australian mining firms were cheering me on - but not because of my work for Aborigines. They did not want to see Australian resources going into foreign hands. Their executives and geologists fed me information.

My articles may have educated, even entertained, but politically they failed. De Beers mounted Ernest Oppenheimer's "spring offensive." He has since boasted of this. Australian mining investors were feted. It did not take long for him to secure control over the marketing of these Australian diamonds.

I then discovered that the US Justice Department had pursued De Beers' diamond cartel for half a century, accusing it of greatly exploiting the American consumer. I obtained Justice Department files under the US Freedom of Information Act. Thousands of pages came to Australia. I now had FBI and American spy reports, intercepted letters and a hundred leads.

This investigation eventually took me around the world. I made a feature-length film called The Diamond Empire shown on American and British television and took it to South Africa, where I found the diamond mineworkers hungry for information about their employer, De Beers. They secretly showed our film inside its mines. I was invited to speak to up to 700 miners at a time, for up to three hours a session, and I found shameful and dangerous conditions still existed inside these mines, despite apartheid having ended. Yet, they were producing the most lucrative of stones worth many times more than gold; stones that today are sold as "clean."

Everywhere I found blood on the diamond crystal. Its shame was not just on the margins of the diamond empire but in its very heart.

The crown of shame

The figures appeared shadowy; children darting from the darkness to vanish from the flickering light of my headlights as I hesitatingly drove over unmade roads through the dust storm enveloping the seemingly endless shantytown. The dust had a peculiar gritty feel. It crusted my lips, irritating them. I was in Kimberley, the town that gave birth to De Beers and the modern diamond trade. The dust on my lips was kimberlite, the ore from which diamonds are extracted.

It swirled unhindered through razor wire from acres of gray waste tips, from mines dug into Kimberley's heart, clouding the air as it had for a century. But I hoped there would be a change, elation in the step of the black Africans the dust enshrouded. It was then 1994. South Africa was free. For the first time they were living in a democracy. When I asked for the diamond mineworkers on my arrival in Kimberley, I was misdirected to a two-storied iron roofed and iron laced building. It was the De Beers headquarters. The amused security guard pointed out the way to the nearby union office. Here diamond miners were awaiting me. Much had now changed. A former diamond mineworker was now the Premier in Kimberley.

I was taken to speak with miners in a De Beers hostel by a diamond mine in barbed wire encased wastelands. Afterwards they took me to the home of a mineworker in a Township where I was to stay, across the road from a diamond mine's waste treatment plant. On the way my host showed me the squatter camps where thousands lived in tiny shanties of corrugated iron. I thus met the people who had won De Beers its fortune.

Nothing I had read prepared me for this sea of squatter camps that stretched to the horizon. The city of diamonds on which the De Beers fortune was founded, the mines that gave Cecil Rhodes the funds needed to expand the British Empire throughout East Africa, was still surrounded by dire poverty.

Near the diamond waste reprocessing plant I came across a vast graveyard evidently reserved for blacks only. Many graves were marked only by heaps of rough rocks. Many were freshly dug. Sometimes the rock heaps were covered by the signs of grief of the extremely poor: a cracked jug, an old teapot, broken cups. From the graves' size, many were of children. Some had black tombstones. Others had the name of the dead scratched on pieces of metal. Many were nameless. The wall around the graveyard was cheaply erected out of rough rocks without municipal help. Not far away, on the city side of the blacks' township, was the large white graveyard, with neat graves spaced out in wide lawns. The fence around it was high and robust. Apartheid affected even the dead.

I had come to see how De Beers was doing in post-apartheid Africa. When I arrived in Johannesburg from London, the National Union of Mineworkers by a fortunate coincidence was about to hold a conference for shop stewards from De Beers' diamond mines. They planned to show my film, The Diamond Empire. They were surprised and delighted when I turned up just at the right moment and offered to talk about what we had learned while making this film. After my address I was enthusiastically invited to all the diamond mines.

Kimberley - De Beers' heartland

Three days later I hired a car and set out to Kimberley, some five hours drive from Johannesburg. Every town I passed had a sister town of hovels. A constant stream of black servants walked along dirt paths from one to the other, some in cleanly pressed uniforms, some in gardening or garage overalls.

I found the townships around Kimberley to be separated by overgrown heaps of blue rock, the remains of diamond mines. Excavators and bulldozers moved through the haze busily reprocessing the waste to check for any diamonds missed earlier. De Beers had sold this waste to licensed contractors at so much a truckload. They had to sell any diamonds found back to De Beers - the only permitted buyer. I stopped by a gate to talk to some black women. They were waiting to make sure their men did not waste their pay. One De Beers' truck driver told me his take home pay for a 50 hour week Was R96 - about $28. A senior government official told how they had asked De Beers to contract unemployed black workers to search these waste tips. The answer was no, it would encourage "illicit diamond buying" (IDB) and that blacks would gather like "vultures" (De Beers' word) to search for diamonds. Instead De Beers had sold these waste tips to Canadian diamond enthusiasts.

In South Africa the law prohibiting IDB stipulated that any rough uncut diamond found on public land must be sold to the government who then resold it to De Beers. Africans gasped with amazement when I told them how I had seen diamonds openly traded on the street in Mumbai (formerly known as Bombay) and New York. For them to do so would mean jail. Despite this, I learned there was a highly secretive local black diamond market in Kimberley run by men who hated De Beers for its mean wages and treatment of workers.

Over the next days the miners drove me along coundess miles of potholed and rock-strewn dirt roads lined with shacks, showing me inside the more substantial homes and not showing me the poorer ones for fear of shaming their owners. Despite their poverty, these residents were house-proud. The owners of the poorest homes took time every day to remove the dust from steps and windowsills.

The bare earth surrounding the hovels was raked daily and attempts were made at gardens. In the evening, their windows were lit by weak electric lights or by flickering flames, as many could not afford electricity. Power bills could easily amount to $90 a month, the entire income of a worker on the diamond dumps.

In the Kimberley Mines Division of De Beers there were between 1,200 and 1,400 workers of which 1,100 were black. Most lived in the townships and squatter camps. A senior government official in Kimberley told me they had approached De Beers for financial help to rebuild these homes in the name of the Reconstruction and Development Program (RDP) of the new ANC government of National Reconciliation. De Beers replied they had given their annual 120,000 Rand ($30,000) from their Chairman's Fund and could give no more. I also visited the suburbs constructed for white miners and managers. These had names such as "De Beers" and "Ernestville" and streets named after Ernest Oppenheimer. The homes were spacious and green with lawns; the only inadequacy were in the "maid's quarters." These were not large enough to house the numbers of servants employed. Thus early every morning I saw crowds of black women servants walking in over dusty paths from the townships and taxi stands.

The major tourist attraction in Kimberley was the "Big Hole," a vast crater of terraced sides descending to cliffs above an extremely deep lake - a diamond mine abandoned not because it had run out of diamonds but because it was endangering the stability of the town center. The dusty tips it creates are scattered throughout the town. The miners took me to another big hole on the outskirts of the city, disused and dangerously ill-protected, and showed me how the debris of diamond mining surrounded Kimberley. The museum at the Big Hole told of the exploits of the white prospectors, of the first miners, of Cecil Rhodes and the siege of Kimberley when guns, ammunition and an armored train were manufactured in De Beers' workshops as Boers and English fought for the diamond mines. But I saw no mention of the thousands of black miners whose labor built the mines or of the important role played by Kimberley's diamond bosses in developing apartheid.

The role of De Beers in the creation of apartheid

Up until the discovery of diamonds in South Africa in the 1870s, most Southern African nations or "tribes" were economically independent of the white settlers. They supplied the first miners with meat from their cattle herds and with farming products. These black nations at first controlled the alluvial diamond fields by the Orange River, traded in diamonds and restricted the white prospectors' use of mining equipment. When the large diamond deposits of Kimberley were found on the dry plateau to the east of the river, the Africans worked these deposits for white prospectors to acquire such goods as guns. When they had the funds required they would quit and return to their farms.

As the diamond diggings got deeper, the small mine companies became more and more dependent on black labor to remove the ore, break it up and to remake the roads that were always collapsing into the diggings. The wages paid to the black miners made up three quarters of the costs of the white owners. In July 1876 the owners tried to slash wages in half. The result was devastating. 4,000 black miners stopped work and went home. They did not return until wages were restored to their former level. As the Africans traditionally lived by barter, they did not require cash to survive. This gave the mine bosses little control over them.

Then taxes were imposed on the Africans in order to make them dependent on a cash income that could only be obtained by working for whites. This forced the Africans to leave their farms for the mines. Soon touts were auctioning black workers in the Market Square in Kimberley as if they were slaves. The touts took a fee equal to four months' miner's wages. The employers did not like this system for it increased their costs.

The mine owners were also concerned about the numbers of employees who supplemented their wages by retaining diamonds. Many workers, both white and black, saw little wrong in keeping a proportion of their finds. Some owners estimated that 30 to 40 percent of the stones found were going into this illegal distribution system. In 1883 a new law was passed allowing the mine owners to search all employees daily, white and black. Black employees (but not whites) had to wear mealie flour sacks at work so they had no pockets in which they could hide diamonds. In April 1884 white workers who refused to be searched were sacked by the Kimberley mines. Black workers then came out on strike in sympathy. The strike was put down by force, killing sue white miners. Shortly after this the daily searching of white employees was dropped.

(Continues...)

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Excerpted from GLITTER & GREED by Janine Roberts. Copyright © 2007 Janine Roberts. Excerpted by permission of Red Wheel/Weiser, LLC.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents

Contents

Preface,

Foreword The Real Blood Diamonds,

Introduction Blood Diamonds and Terrorists: An Overview,

Chapter 1 The Diamond Hunt,

Chapter 2 In Bondage - The Child and Adult Cutters of India,

Chapter 3 Diamonds and Tribal Rights,

Chapter 4 How Diamonds Were Made Rare,

Chapter 5 How the Only US Diamond Mine Was Sabotaged,

Chapter 6 Rationing the United States,

Chapter 7 Diamonds for Hitler,

Chapter 8 Selling the Diamond Myth,

Chapter 9 The Forging of Diamonds,

Chapter 10 Selling Conflict Diamonds to the White House,

Chapter 11 The Most Powerful of Diamond Merchants,

Chapter 12 The Secret Movement Of Diamonds,

Chapter 13 Conflict Diamonds and the Diamond Wars,

Chapter 14 The Secrets of The World's Most Prolific Diamond Mine; and Lessons from Fraud in Sierra Leone,

Chapter 15 The Diamonds of the Frozen North,

Chapter 16 The Diamond Heartland of De Beers,

Chapter 17 Defending the Crown,

Chapter 18 The Future of the Diamond Trade,

Epilogue Dangers of the Hunt: The Making of The Diamond Empire and of this book,

Glossary,

Bibliography,

Appendix The Clean Diamond Trade Act,

Index,

About the Author,