Arms, diamonds, and mercenaries

On May 2, 2012 by stratagem

Source: IOL

De Beers, Chevron, Rio Tinto and Texaco were among the international corporations to hire Executive Outcomes (EO), which became the first of the world’s privatised armies in the post-Cold War era. The Angolan and Sierra Leonean governments followed.

EO’s connections to the British government through Sandline International and Aegis Defence remain contentious.

The links include highly placed individuals among the British elite such as Tony Buckingham, Tony Spicer, Simon Mann and Mark Thatcher. Mann and Thatcher, both living in Cape Town, most notoriously were the drivers of the attempted coup in Equatorial Guinea in March 2004. Their plan was to topple the long-time dictator, President Teodoro Obiang Nguema, and take control of the country’s massive oilfields.

Mann’s erstwhile assistant turned state witness and revealed in 2007 at the “Wonga trial” in Pretoria that the United States, British, Spanish, South African and Zimbabwean governments had all been part of the conspiracy to overthrow Nguema. South African government spokesmen angrily rejected on British television Mann’s claims that he had official encouragement.

The plot came ludicrously unglued when Zimbabwe’s generals and arms industry executives blew the whistle. The weapons for the adventure were being bought in Zimbabwe, where Mann himself confessed to a Harare court that he had planned to dupe Zimbabwe Defence Industries through a side plot to seize diamond mines in the Congo. The story given to his mercenary force was that they were being employed by Sandline as guards for those mines.

After operating in Namibia and Angola, Buckingham and Spicer turned their attention to Sierra Leonean diamond concessions as payment for mercenary services.

Diamonds had been discovered in Sierra Leone in 1930, and five years later British colonial authorities granted De Beers exclusive mining and prospecting rights over the entire country for 99 years.

By the mid-1950s there were an estimated 75 000 illicit miners in the Kono area alone.

De Beers employed the recently retired head of the British MI5, Sir Percy Sillitoe, to counter smuggling.

Given the tighter security, Lebanese traders began smuggling diamonds to Monrovia in neighbouring Liberia. By 1970 Sierra Leone was mining over two million carats of high-quality stones when the newly independent government nationalised the industry. De Beers took revenge. “Legal” diamond exports dropped to under 600 000 carats by 1980, to under 50 000 carats by 1984 and to only 8 500 carats by 1998.

There are about 250 000 people of Lebanese origin in West Africa, who have lived there for generations.

They dominate commerce, and as the Lebanese civil war of the 1980s gathered momentum, the diamond trade funded the parties in the conflict. That, in turn, prompted Israeli intervention.

In the 1980s, Israel and South Africa were collaborating to develop nuclear weapons and were using Sierra Leonean diamonds to circumvent the UN arms embargo.

The Israeli-based Liat Construction and Finance Company was controlled by a Russian-born Israeli, Shabtai Kalmanovich, who, in partnership with Marc Rich, also brought in American money launderers, drug traffickers and arms dealers.

Having become a prominent millionaire and philanthropist – on top of being the “ambassador” to Israel from the apartheid bantustan of Bophuthatswana – Kalmanovich was eventually arrested in London in 1987.

He was exposed as a Soviet KGB agent and jailed for six years. On release, he returned to Russia but was gunned down in Moscow in 2009 in a gangster killing.

Rich was the infamous oil sanctions-buster during the apartheid era and fugitive from US authorities, based in Zug, Switzerland. He became one of the largest shareholders in De Beers. Despite his notoriety, Rich was controversially pardoned by President Bill Clinton in 2001 after a financial donation of $500 000 to the Democratic Party.

Until 1994, like most people, I had been bedazzled by the mystique and glamour around diamonds promoted by De Beers and its marketing strategists.

Then-Archbishop Desmond Tutu appointed me to represent the Anglican Church at the Cameron Commission of Inquiry into Armscor. The inquiry, just months after the UN lifted the arms embargo, was prompted by international revelations that a shipment from South Africa of AK47s and other weapons had been seized in Yemen.

When I met him, Armscor’s general manager Andre Buys initially insisted that the shipment was destined for the Lebanese army that, unusually, had standardised its equipment on AK47s.

The Lebanese Consul in South Africa angrily and publicly denied that his office had authorised the shipment.

Armscor then insisted that it had the full support of the Israeli government, with which SAwas co-operating in the war against international terrorism.

Even more extraordinarily, Buys declared that South Africa, as a Christian country, had a Christian obligation to help in the defence of other Christian countries such as Lebanon.

The fact that most Lebanese were Muslims, and not Christians, had evidently not dawned on Armscor.

So how, I asked, could weapons sold to Christian militias in Lebanon end up in a Muslim country such as Yemen?

Buys’s explanation was that Armscor could not be blamed for the criminal actions of third parties.

Given the new political dispensation in SA, Armscor was trying to get rid of its remaining stocks of 35 000 Chinese-supplied AK47s.

The weapons had originally been imported as part of the apartheid government’s destabilisation programme in Angola.

Armscor was prepared to sell to any crooks or terrorists.

The shipment was impounded in Yemen en route to Croatia, which was then engaged in a secessionist war from Yugoslavia and was itself the subject of a UN arms embargo.

The revelations became a major embarrassment for South Africa’s new democratic government.

Our Anglican stance at the Cameron Commission was to call for a total prohibition of arms exports, and for the armaments industry to be converted to peaceful purposes.

Purchases of diamonds by De Beers to finance Unita’s war effort facilitated the apartheid government’s destabilisation policies in Angola.

We also urged the commission to take measures to block SA’s further involvement in the weapons-for-diamonds trade which we then estimated at about $500 million a year.

Unita had developed a diamond smuggling organisation, and between 1993 and 1997 these operations earned about $3.7 billion.

De Beers sanctimoniously pleaded that its purchases were solely intended to prevent Unita from dumping diamonds on the market, and not to finance a war.

The proceeds paid for weapons supplied from South Africa, Bulgaria and other countries by the Russian arms trafficker Viktor Bout.

Government ministers insisted that they could not be blamed when corrupt policemen and customs officials “closed their eyes” at South Africa’s porous airports.

Armscor’s top-secret document on arms export authorisations termed “Log 17” confirmed that Armscor was prepared to sell weapons to almost anyone, including the world’s most unsavoury dictators. Armscor even tried to have the document suppressed at the Cameron Commission on the bizarre rationale that disclosure of its incompetence threatened South Africa’s foreign policy relationships.

The Cameron Commission established that Armscor’s corporate culture was corrupt and incompetent, but the two commissioners, Edwin Cameron and Laurie Nathan, rejected our submission that Armscor and Denel should be disbanded, and that their assets could be converted to peaceful purposes.

Although they expressed sympathy with our stance, Cameron and Nathan, unfortunately but naively, accepted assurances from the new government that South Africa would in future pursue a responsible arms trade policy.

That failure subsequently cost South African taxpayers tens of billions of rand in further subsidies poured into Armscor and Denel on fallacious assumptions that the armaments industry is economically lucrative and an important creator of employment. Armscor and Denel have proceeded from one corruption scandal to the next, not least being the arms deal.

The wars in Angola and Sierra Leone shattered the glamorous image that De Beers had so carefully cultivated over decades. Perceptions are all-important in the diamond trade. Carefully constructed marketing myths were fast unravelling. De Beers stopped buying Angolan diamonds in October 1999, and in May 2000 made an unctuous, written submission to the US congressional committee on Africa that:

De Beers knows all too well the deleterious effects that conflict and political instability often have on potential large-scale investors. Having spent hundreds of millions of dollars on advertising its product, De Beers is deeply concerned about anything that could damage the image of diamonds as a symbol of love, beauty and rarity.

This is an extract from Eye on the Diamonds by Terry Crawford-Browne published by Penguin.

FYI:

The Global Mercenary Network

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