This is part 2 of a 4-part series.
It is easy to imagine uber-rich businessmen climbing the red carpeted steps that lead up to Beny Steinmetz’s hotel suite. Located on the shores of Lake Geneva at the foot of the Swiss city’s old town, Hotel Métropole seems untouched by time. Some find its decor outdated. Others are paying for an identity that has changed little since the hotel opened in 1854. At the top of the stairs, a butler welcomes the sparse stream of masked guests staying at the hotel today, 21 January.
Not so long ago, bankers and investors booked rooms here because of its relative privacy. People would cross paths and recognise each other, but pretend otherwise. More than anything else, people would scrutinise one another, watching the procession of the powerful. But in the Covid-19 pandemic era, the lobby remains depressingly empty and the restaurant deserted at lunchtime in the capital of bank secrecy. A cheery waiter tries to keep up the illusion of normalcy, serving coffee and freshly squeezed orange juice deserving of a five-star hotel. I am waiting for Steinmetz to arrive and liven things up, as he agreed to meet with me over a meal. In Europe in 2021, a lunch date is a big deal.
A caged lion
The Franco-Israeli businessman’s first-floor hotel suite is not ostentatious. A row of windows offers a view of the lake and the room is furnished with a corner sofa and a coffee table. Steinmetz sits down on the couch, propping his feet up on the table. Casually dressed in a partly unbuttoned shirt, the tanned mining tycoon is in good shape for a 64-year-old. He asks me how my train journey from Paris was. He is more of a private jet kind of guy, himself.
Steinmetz has been living in Geneva for two weeks, simply as a matter of convenience: Hotel Métropole is located just a few hundred metres from the courthouse where his trial opened 10 days prior to our interview. In courtroom no. 3, the diamond dealer pushed back against charges that he masterminded a “corruption pact” to obtain mining licences in Guinea between 2006 and 2010.
After asserting that the court testimonies against him were false, he reiterated that he was merely an “adviser” to Beny Steinmetz Group Resources (BSGR) and thereby had no decision-making authority.
Above him, like a shield extending from Guernsey all the way to the Cayman Islands, is an intricate web of companies to which his name is attached, but which he maintains he does not run. According to sources involved in the Panama Papers leak, there are 131 such companies and a foundation, Balda, headquartered in Liechtenstein, of which he is only a beneficiary.
Seated in the first row of an empty courtroom, the former billionaire (his net worth fell below the $1bn threshold in 2020, according to Forbes) never deviated from his story. At the top of the pyramid, there “may be God”, but not him. Flanked by three Swiss lawyers, including his lead counsel, the silver-haired Marc Bonnant, Steinmetz listened attentively and took in the proceedings eight hours each day.
On 15 January, the first blow fell: the prosecutor, Yves Bertossa, requested a five-year prison sentence for the businessman. On the 18th, the case was adjourned. With the verdict scheduled to be delivered the day after our interview, Steinmetz did not yet know that he would be convicted.
He reminds me of a caged lion. Despite his qualms about journalists, he agreed to tell me his side of the story.
Could Steinmetz have lived a less secretive existence? When he moved to Belgium in 1977, the young man, born in Netanya (a city 30 kilometres north of Tel Aviv) in 1956, had just completed three years of service in the Israeli army. He trained in artillery, but did not see any action. During his leave, he split his time between the family home and the diamond-cutting factory owned by his father, Rubin, where his older brothers, Daniel and Eldad, worked.
Once his military service was over, Steinmetz wanted a change of scenery. Raised in the diamond business, he decided on Antwerp, the diamond capital of the world. “My father trusted me and let me dive right in,” he says.
Conversations in Yiddish and shop backrooms
Rubin himself got his start in Belgium, where he lived from 1928 to 1936. A fervent Zionist, he left his deeply religious family in Poland at the age of 16 to move to Germany and, subsequently, Antwerp.
In 1977, Rubin set out to bolster Israel’s diamond industry, which he had helped develop after relocating to Nahariya, a city in the Jewish state’s northernmost tip. The company he had founded in 1948 needed someone who was at the heart of the action in Antwerp. His third son fit the bill. “Usually, children of diamond dealers spend five or 10 years training in cutting factories,” says Steinmetz. “But that’s not what I did. I learned on my own by trial and error.”
Beny would walk along Pelikaanstraat, the main stretch of Antwerp’s diamond district, where Yiddish and secrecy reign. In this part of town, business is conducted in backrooms under the auspices of South Africa’s De Beers, the corporation that has dominated the industry since the 19th century. “There weren’t many diamond suppliers. It was either Africa, De Beers or, to a lesser extent, the USSR,” Steinmetz tells us.
Through his family connections, he already had business ties to the Oppenheimer family-led diamond behemoth. As the years went by, he became an ace at prospecting and trading. That is to say, the African continent welcomed him with open arms and, by the mid-1980s, he was making trips to South Africa every month.
In 1988, he purchased his first factory and invested in Protea Diamonds Company (subsequently known as Ascot Diamonds). And so began Steinmetz’s business odyssey, with a company named after a South Africa flower. Just shy of his 30th birthday, our diamond dealer was also doing his share of shape-shifting, working as a trader, prospector, company ambassador, etc. As apartheid came to a close, he was navigating the thin line between business and politics.
Thanks to a friend with close ties to the African National Congress (ANC), Steinmetz had the opportunity to meet Nelson Mandela shortly after his release from prison. “He’s perhaps the most impressive person I’ve ever met,” he says. “He didn’t care about business details. He was interested in his country’s future.” Both men would cross paths on a few other occasions.
Steinmetz’s dealings in South Africa gave him a front row seat to the upheaval taking place in Southern Africa. In 1990, he was invited to Namibia’s independence celebrations, and in 2001 he would go on to found Namcot Diamonds in the country, leveraging his connections with the president, Sam Nujoma. But his biggest accomplishment was entering the Angolan market, a true gem.
Angola, the free-for-all market
In 1977, the Angolan government signed an operating agreement with De Beers whereby the country’s diamond production would be reserved for the Central Selling Organization, an entity controlled by De Beers. This monopoly ended in 1986. “In 1990, the president of Angola, José Eduardo dos Santos, wanted De Beers out because he felt they weren’t investing enough money in its operations there. And De Beers thought the situation was too complicated because UNITA [the National Union for the Total Independence of Angola] was carrying out attacks in the country,” says Steinmetz.
READ MORE Angola: on the trail of stolen billions
“It was a risky place to be. One morning, in Luanda, I went on a run. It must’ve been around 6am and I came across a soldier. I don’t know if he was drunk or something, but he started shooting in my direction. I never ran so fast in my life!”
With the help of his ties to Dos Santos, Steinmetz filled the gap left by De Beers by setting up a joint venture with the Angolan state-owned company Endiama. “Dos Santos wasn’t exactly a friend, but I sort of helped put him in touch with the Americans, as he understood by that point that communism was dead,” he recounts.
By the end of the 1980s, Steinmetz had become the country’s largest diamond exporter, and Angola had turned into a free-for-all market. “We were seeing new players come on the scene and they were trying to play their cards right, sometimes with the government and sometimes with UNITA,” an Angolan national involved in the trade back then tells us.
Among these players, Canada’s DiamondWorks (DW) and its subsidiary, Branch Energy, joined forces with the South African mercenary firm Executive Outcomes (EO), owned by Eeben Barlow and Simon Mann. Mann, a British ex-special forces officer turned mercenary, would subsequently become headline news in Africa for his alleged involvement in a failed coup attempt in Equatorial Guinea.
“Long-standing diamond companies in Angola didn’t want to operate certain mines because of the war going on. The country’s military generals asked us to invest in order to encourage the newer firms to come back,” says Mann. The task was simple: gain ground on the Jonas Savimbi-led UNITA rebels and help out another company in the process. “Angola was becoming a highly coveted market. We saw the whole EO galaxy come on the scene and, a little later on, the Israeli businessman Lev Leviev, with Isabel dos Santos’s backing,” says our source in Angola.
Steinmetz asserts that he only worked with the government and the political party Movimento Popular de Libertação de Angola (MPLA). But his relations with the Dos Santos family eventually grew weaker, and others managed to take his place.
In politics, things can swing one way or the other, there’s no predicting it.
In 2000, the government decided to break off ties with several buyers, including Steinmetz and one of his close associates, Maurice Tempelsman, the head of Lazare Kaplan International and a prominent US Democratic Party donor. “Officially speaking, the decision was made on financial grounds. President Dos Santos thought that the state wasn’t getting a large enough share of the diamond revenue pie. He felt Angola was getting ripped off,” says a former MPLA party member.
The government decided to create a new company with exclusive export rights to the country’s diamonds: the Angola Selling Corporation (Ascorp), 51% owned by Endiama and 24% owned by Leviev’s business partners. The remaining 25% stake was sold to a Swiss company linked to Isabel dos Santos, according to bank documents.
Leviev drew on his close ties with Moscow and the Dos Santos family to become Angola’s diamond king, though he would eventually be accused of backing violence against civilians. Steinmetz was sidelined. “I stopped travelling to Angola when the contract with Endiama expired. In politics, things can swing one way or the other, there’s no predicting it,” he says.
By 2000, Steinmetz already had a foothold in Botswana, the second-largest global producer after Australia, with a diamond output of 24m carats, or six times Angola’s. He was also eyeing a smaller prize: Sierra Leone, which had no diamond mining operations owing to the war that had been ravaging the country since 1991. “Big companies didn’t want to go there, so smaller operators seized the opportunity to worm their way in,” an expert tells us. Such operators included Branch Energy, whose partner EO supplied it in 1997 with helicopters and some 2,000 men to ensure the security of the company’s mines.
Beny is good at taking risks. In Sierra Leone, he knew how to use his connections with the governments of presidents like Valentine Strasser, Julius Maada Bio and Ahmad Tejan Kabbah. -used to work at DW and subsequently Energem
“Like in Angola with UNITA, EO pushed back the rebel army known as RUF [Revolutionary United Front, led by Foday Sankoh] and diamond companies, especially Branch Energy and DW, took advantage of the situation,” says one of our sources. But since DW did not have the kind of resources it needed to develop mines the size of Koidu’s, which was wrenched back from rebel control, the company set out to find investors.
“We approached Beny,” says a former DW executive. “We knew him from his Angola days and that he was someone who kept his promises.” In 2003, Energem (formerly DW) set up a joint venture with BSGR under the name Koidu Holdings. Four years later, BSGR purchased all of its partners’ shares, thereby bringing Koidu under its full ownership.
“Beny is good at taking risks. In Sierra Leone, he knew how to use his connections with the governments of presidents like Valentine Strasser, Julius Maada Bio and Ahmad Tejan Kabbah,” says our source who worked for DW and subsequently Energem, at the time led by Tony Teixeira, the brother-in-law of the Congolese politician Jean-Pierre Bemba.
“We were successful because we were more adventurous,” says Steinmetz. “We put a lot of money into the mine in Koidu and we did right by the people there. It was important that we do that because the mine was practically located in the city limits.” One of his London-based business partners describes him as “a man who wants to give back to host countries”.
But not everybody shares this opinion. In 2007 and again in 2012, protests erupted in Koidu against Octea, a BSGR subsidiary. Four people died as a result of the 2007 unrest, including 30-year-old Aiah Momoh. The demonstrator’s family wrote the following inscription on his tombstone: “He died during a peaceful demonstration against Koidu Holdings SA Limited for corporate abuse of community rights.”
For a time threatened with the loss of its mining licence, Octea managed to avoid prosecution by the state in 2016. Since then, residents have brought the case before the ECOWAS Court of Justice, alleging that the government failed to protect them.
Sophie Marceau and the ‘millennium star’
The Steinmetz Diamond Story, a book that the businessman wrote and privately published for his family in 2003 (it was reprinted in 2011), never mentions Sierra Leone. Angola, Botswana and South Africa take up most of its pages, while also recounting how the French actress Sophie Marceau wore the “millennium star”, a 203.4-carat diamond cut in 2000. A few pages on, Steinmetz relates a promotional stunt involving his precious gems and Formula 1.
In 2004, the Steinmetz Diamond Group (since renamed Diacore) joined up with the Jaguar Formula 1 team at the Monaco Grand Prix. A pink 59-carat diamond was set into the nose of Mark Webber’s and Christian Klien’s race cars. But the stunt was upended by the hazards of the sport: Klien crashed his car into a safety barrier and the jewel that had adorned the race car was never found.
By that time, Steinmetz was already starting to dabble in other lines of business. “When I turned 40, I wanted to try my hand at something else. If I didn’t, I knew I’d end up doing the same thing my entire life.” In 1997, he packed up his things in Belgium to move to Israel with his French wife Agnès (née Bouaziz) and their four children.
I love a good challenge. At bottom, I’m maybe a little on the crazy side. Does it show that much?
In the early 2000s, he bought the South African mining and metallurgy company Bateman, but also branched out into real estate, particularly in the UK. In the Democratic Republic of Congo (DRC), he partnered with another son of an Israeli diamond dealer, Dan Gertler, to lead the takeover of Nikanor, a company later sold to Glencore in a transaction – found to be fraudulent – that spurred the United States to impose financial sanctions on Gertler.
In reality, BSGR and Steinmetz had few business interests in the DRC because they felt corruption was too endemic there, and Gertler was the one who managed their dealings in the country. Once Glencore took over the reins, they pulled out of the DRC.
“I love a good challenge. At bottom, I’m maybe a little on the crazy side. Does it show that much?” jokes Steinmetz.
Would only a crazy person go into business in Guinea under Lansana Conté’s regime? In 2005, the Guinean president was ill and his grip on power tenuous. But the old Susu man knew he was sitting on a mountain of gold, or, rather, iron. Though Conté had signed an agreement with the Brazilian mining giant Rio Tinto eight years earlier, no iron ore had ever actually been mined.
“Conté was angry,” a source tells us. “Despite the fact that Guinea was overflowing with mineral resources, Rio Tinto wasn’t developing anything.” That is where BSGR came in and, with the help of several middlemen, namely Michael Noy, Frédéric Cilins and Avraham Lev Ran – all familiar with West Africa through the import-export trade – the company secured two mining concessions in the Simandou region, near Zogota.
Soon enough, Steinmetz’s right-hand men, whose official role in this story was merely that of “advisers”, realised the mining potential in the area. Marc Struik, a South African national and the head of BSGR’s mining division, estimated that potential to be upwards of 3bn tonnes. The rub was that Rio Tinto held the licences to the most promising blocks – 1, 2, 3 and 4. But no matter, a golden opportunity had presented itself and courting Conté was the key.
Given the president’s reclusive tendencies, few guests were invited to see him, but Cilins was a resourceful person. Aided by Mamadie Touré, the head of state’s fourth wife, and her brother-in-law, Ibrahima Sory Touré, BSGR pried its way into the halls of power.
At the beginning of 2008, Steinmetz made his first trip to Guinea to meet with the president. They sat together under a tree a short distance from the presidential palace, “which had been damaged by bombs”. He recounts: “That was the only time I saw him. He smoked one cigarette after the other. He was sick and his legs were really swollen. I remember there being tons of flies and that I didn’t say much. He talked most of the time. He was very dissatisfied with the big companies that he said weren’t doing anything.”
According to another source, “Cilins and BSGR completely leaned into Guineans’ disappointment with Rio Tinto. They made themselves out to be saviours who were really going to develop the country, and it worked.”
In July 2008, Conté made one of the last major decisions of his presidency, cancelling Rio Tinto’s licences for blocks 1 and 2, which he would award to BSGR in December. A few days later, the head of state drew his last breath. In 2010, BSGR sold a 51% stake in its Guinean assets to Brazil’s Vale for $2.5bn, or 15 times its initial investment – a windfall if there ever was one.
Did bribery help this success story come to pass? Did BSGR pay Ms Touré to get access to her husband? She acknowledged receiving a sum of around $10m. Did Steinmetz and his company cash in on a corruption pact? He denies the allegation.
“Ms Touré [who has been in the United States ever since reaching an agreement with a US court] lied. If she had come to the trial in Geneva, everyone would have realised that she lied. Our success was our downfall. What BSGR wanted to do in Guinea was too ambitious.”
Spaghetti with tomato sauce
Through 2010, Steinmetz was in contact with Conté’s successors, first Moussa Dadis Camara and then Sékouba Konaté. He explained to Dadis Camara that the iron ore should be mined in Liberia instead of Guinea and suggested building a rail connection between Conakry and Kankan – and that BSGR was up to the task.
BSGR asked my advice and I said that we shouldn’t pay the money. That’s when the problems began.
“The price tag was around $1bn,” he says. “Meetings with Dadis Camara were always at three or four in the morning. I think he wanted what was good for his country. Was he a good president? He probably didn’t have the kind of knowledge and experience that Konaté […] had. Our project would have been lucrative for Guinea. Ten years later, the country hasn’t exported an ounce of iron ore and not one kilometre of railway has been built. If our project with Vale had gone ahead, we would have already exported 80m tonnes of iron ore and tripled Guinea’s GDP. But George Soros stopped everything.”
In early 2011, two months after Alpha Condé’s election, the new president sparked a dispute. In Condé’s view, and based on information he received from the networks of a close ally, the US billionaire George Soros, BSGR had paid bribes to obtain its licences. According to one of the company’s lawyers, Condé “demanded an immediate extortion payment of $1.25bn [to the Guinean state] in order to let the project continue. And when BSGR refused to do so, Soros intervened”.
“BSGR asked my advice and I said that we shouldn’t pay the money. That’s when the problems began,” says Steinmetz, who met with Condé twice though they never reached an agreement.
“Then Soros had the idea to set up a technical committee, purportedly to examine all the licences. But they did just one audit – a fake audit – on BSGR,” he says, before adding: “This whole story about bribery in Guinea is a conspiracy.”
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In Steinmetz’s Geneva hotel suite, as our lunch arrives after an hour and a half wait, he brandishes the documents that have been haunting him since 2014. That was the year the Guinean government cancelled BSGR’s rights to the Simandou blocks and, in the wake of the decision, Vale filed a claim against BSGR with a London court regarding the company’s bribes and cover-ups.
Steinmetz holds an A3-sized colour document detailing the “Soros galaxy”, made up of an array of NGOs, law firms and foundations. Caught up in his legal saga, he currently devotes a great deal of his time to his crusade against the US billionaire. “Mediation isn’t an option,” he says.
That said, he is delighted to have “made amends” with Condé, with the help of Côte d’Ivoire’s former prime minister, Hamed Bakayoko, and Nicolas Sarkozy, whom Steinmetz became friends with in 2013 when the ex-French president received an honorary degree from Netanya Academic College, a university located in his home town.
In 2019, BSGR, which had filed a notice of dispute over being stripped of its Simandou rights, ultimately agreed to relinquish its claims on blocks 1 and 2 after the Guinea government said it would withdraw outstanding actions related to the dispute. The agreement has not, however, received the final approval of BSGR’s board of directors.
“I think Condé realises now that he shouldn’t have listened to Soros and that the Guinean people are the ones who lost out the most from this ordeal,” says Steinmetz. “I had to make amends. Even if BSGR had ended up winning on paper, what would that have changed? We wouldn’t have been able to operate there without the government’s approval.”
The ex-diamond dealer finishes his spaghetti with tomato sauce (his favourite dish, which he likes with grilled fish). We leave the suite to indulge in a drink at the hotel’s depressingly deserted bar. After that, Steinmetz gets back to business, juggling calls on two phones. Perhaps he is getting information on Côte d’Ivoire, as Compagnie minière du Bafing has entrusted him with looking into nickel mining opportunities there.
Since 2016, he has met with President Alassane Ouattara on several occasions, thanks in part to the first lady and her Israeli contacts, but also to Amadou Gon Coulibaly, the late Ivorian prime minister who died in July 2020; Jean-Claude Brou, who was Côte d’Ivoire’s minister of industry and mines until his appointment as president of the ECOWAS Commission; and, of course, Bakayoko.
Is Steinmetz planning on putting more money into Abidjan? At any rate, he has no shortage of ambitions and has even discussed them with Bakayoko and Sarkozy (while aboard private jets, naturally).
Côte d’Ivoire will have to wait. On 22 January, the day after our interview, Steinmetz was sentenced to five years in prison and ordered to pay a 50m Swiss franc (€46.2m) fine. He says that his defence could not withstand the pressure of “a biased investigation” and “Soros’s influence”.
After filing an appeal, he went back to Israel, where he is staying in his home by the Mediterranean Sea. Steinmetz is conscious of the fact that his battle against the nonagenarian billionaire is just beginning, but as an accomplished athlete – he has run in the Médoc Marathon in France and the New York City Marathon – endurance is his strength.
With a host of high-level communications advisers and lawyers by his side, this formidable businessman is lacking neither in charm nor resources. But will his team be able to shake off his new image as a crafty, corrupt entrepreneur?
Accustomed to the murky underworld in which he has struck his best business deals, Steinmetz now finds himself in a situation where he has no choice but to be transparent, even just partially so. At the helm of a sprawling business empire and subjected to the media spotlight in spite of himself, the tycoon has, going forward, just as much reason to disclose his secrets as to withhold them, given that his life’s work is on the line. A tall order and, for once, one that cannot be measured in carats.
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