R-0048

a reporter at large buried secrets

How an Israeli billionaire wrested control of one of ’s biggest prizes. BY patrick radden keefe

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TNY—2013_07_08&15—PAGE 50—133SC.—Live art r23707—Critical photograph to be watched throughout the entire press run—please pull kodak approval proof f0r press color guid- ance 4c ne of the world’s largest known de- As wealthy countries confront the posits of untapped iron ore is buried prospect of rapidly depleting natural re- insideO a great, forested mountain range in sources, they are turning, increasingly, the tiny West African of . to Africa, where oil and minerals worth In the country’s southeast highlands, far trillions of dollars remain trapped in the from any city or major roads, the Siman- ground. By one estimate, the continent dou Mountains stretch for seventy miles, holds thirty per cent of the world’s min- looming over the jungle floor like a giant eral reserves. Paul Collier, who runs the dinosaur spine. Some of the peaks have Center for the Study of African Econo- nicknames that were bestowed by geolo- mies, at Oxford, has suggested that “a gists and miners who have worked in the new scramble for Africa” is under way. area; one is Iron Maiden, another Metal- Bilateral trade between and Af- lica. Iron ore is the raw material that, once rica, which in 2000 stood at ten billion smelted, becomes steel, and the ore at Si- dollars, is projected to top two hundred mandou is unusually rich, meaning that billion dollars this year. The U.S. now it can be fed into blast furnaces with min- imports more oil from Africa than from imal processing. During the past de- the Persian Gulf. cade, as glittering mega-cities rose across The Western world has always China, the global price of iron soared, thought of Africa as a continent to take and investors began seeking new sources things from, whether it was diamonds, of ore. The red earth that dusts the lush rubber, or slaves. This outlook was in- vegetation around Simandou and mar- scribed into the very names of Guinea’s bles the mountain rock is worth a fortune. neighbor Côte d’Ivoire and of , Mining iron ore is complicated and which was known to its British masters requires a huge amount of capital. Si- as the Gold Coast. During the Victorian mandou lies four hundred miles from the period, the exploitation of resources was coast, in jungle so impassable that the especially brutal; King Leopold II, of first drill rigs had to be transported to the Belgium, was so rapacious in his pursuit mountaintops with helicopters. The site of rubber that ten million people in the has barely been developed—no ore has Congo Free State died as a result. The been excavated. Shipping it to China and new international stampede for African other markets will require not only the resources could become another grim construction of a mine but the building story, or it could present an unprece- of a railroad line sturdy enough to sup- dented opportunity for economic devel- port freight cars laden with ore. It will opment. Collier, who several years ago also be necessary to have access to a deep- wrote a best-seller about global poverty, water port, which Guinea lacks. “The Bottom Billion,” believes that, for Guinea is one of the poorest countries countries like Guinea, the extraction of on the planet. There is little industry and natural resources, rather than foreign aid, scarce electricity, and there are few navi- offers the greatest chance of economic gable roads. Public institutions hardly progress. Simandou alone could poten- function. More than half the population tially generate a hundred and forty billion can’t read. “The level of development is dollars in revenue over the next quarter equivalent to or ,” a century, more than doubling Guinea’s government adviser in , Guin- gross domestic product. “The money in- ea’s ramshackle seaside capital, told me volved will dwarf everything else,” Col- recently. “But in Guinea we haven’t had lier told me. Like the silver mine in Jo- a civil war.” This dire state of affairs was seph Conrad’s novel “Nostromo,” the not inevitable, for the country has a Simandou deposit holds the promise of bounty of natural resources. In addition supplying what Guinea needs most: “law, to the iron ore in the Simandou range, good faith, order, security.” Guinea has one of the world’s largest As with deepwater oil drilling or with reserves of bauxite—the ore that, twice missions to the moon, the export of iron refined, makes aluminum—and signi­ ore requires so much investment and ex- ficant quantities of diamonds, gold, ura- pertise that the business is limited to a nium, and, off the coast, oil. few major players. In 1997, the exclusive

Guinea, in West Africa, is one of the world’s poorest countries. The iron ore buried inside PHOTO ILLUSTRATION BY AJ FRACKATTACK; PORTRAIT BY TOMER APPELBAUM TOMER BY PORTRAIT AJ FRACKATTACK; BY ILLUSTRATION PHOTO the Simandou range may be worth a hundred and forty billion dollars.

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TNY—2013_07_08&15—PAGE 51—133SC.—Live art r23707—Critical photograph to be watched throughout the entire press run—please pull kodak approval proof f0r press color guid- ance 4c rights to explore and develop Simandou vies, a senior at Rio Tinto, told state.” A recent report by the Africa were given to the Anglo-Australian min- me that the company had invested hun- Progress Panel, which is chaired by Kofi ing giant Rio Tinto, which is one of the dreds of millions of dollars at the site, and Annan, suggests that well-connected world’s biggest iron-ore producers. In had been moving as expeditiously as pos- foreigners often purchase lucrative assets early 2008, Tom Albanese, the compa- sible on a project that would have re- in Africa at prices far below market value, ny’s chief executive, boasted to share- quired decades to complete. “This was by offering inducements to predatory holders that Simandou was, “without quite a shocking event for the company,” local élites. “Africa’s resource wealth has doubt, the top undeveloped tier-one he said. bypassed the vast majority of African iron-ore asset in the world.” But shortly In April, 2009, the Ministry of Mines people and built vast fortunes for a privi- afterward the government of Guinea de- in Conakry ratified the agreement with leged few,” it says. The report highlights clared that Rio Tinto was developing the Steinmetz. A year later, he made a deal the billions of dollars that Vale agreed to mine too slowly, citing progress bench- with the Brazilian mining company pay Steinmetz for Simandou, noting that marks that had been missed, and imply- “the people of Guinea, who appear to ing that the company was simply hoard- have lost out as a result of the undervalu- ing the Simandou deposit—keeping it ation of the concession, will not share in from competitors while focussing on that gain.” mines elsewhere. In 2010, several months after the Vale In July, 2008, Rio Tinto was stripped deal was announced, Guinea held its first of its license. Guinean officials then fully democratic elections since indepen- granted exploration permits for half of dence, ending half a century of authori- the deposit to a much smaller company: tarian rule. The new President, Alpha Beny Steinmetz Group Resources, or Vale—one of Rio Tinto’s chief compet- Condé, had run on a platform of good B.S.G.R. Beny Steinmetz is, by some es- itors. Vale agreed to pay two and a half governance and greater transparency in timates, the richest man in ; accord- billion dollars in exchange for a fifty-one- the mining sector. But as he took office ing to Bloomberg, his personal fortune per-cent stake in B.S.G.R.’s Simandou he faced the possibility that Guinea’s amounts to some nine billion dollars. operations. This was an extraordinary most prized mineral asset may have been Steinmetz, who made his name in the di- windfall: B.S.G.R. had paid nothing up traded out from under the country. He amond trade, hardly ever speaks to the front, as is customary with exploration li- could not simply void the contract. press, and the corporate structures of his censes, and at that point had invested “There is continuity of the state,” he told various enterprises are so convoluted that only a hundred and sixty million dollars. me recently. “I couldn’t put things back it is difficult to assess the extent of his In less than five years, B.S.G.R.’s invest- where they had been—unless I had holdings. The Simandou contract was a ment in Simandou had become a five- right on my side.” B.S.G.R. denied any surprising addition to Steinmetz’s port- billion-dollar asset. At that time, the an- wrongdoing: “These allegations are false, folio, because B.S.G.R. had no experi- nual budget of the government of Guinea and are a smear campaign against ence exporting iron ore. A mining exec- amounted to just $1.2 billion. Mo Ibra- B.S.G.R.,” a company spokesman told utive in Guinea told me, “Diamonds you him, the Sudanese telecom billionaire, me. If the Simandou license had been can carry away from the mine in your captured the reaction of many observers secured through bribery, then the deal pocket. With iron ore, you need infra- when he asked, at a forum in Dakar, “Are could potentially be undone. But Condé structure that can last decades.” the Guineans who did that deal idiots, or and his advisers would have to prove it. Rio Tinto angrily protested the deci- criminals, or both?” sion. “We are surprised that a company Steinmetz was proud of the transac- “ inherited a country but not a state,” that has never built an iron-ore-mining tion. “People don’t like success,” he told Condé told me when I first met him, operation would have been awarded an the Financial Times, in a rare interview, inI January. He had come to the Swiss area of our concession,” a spokesman in 2012. “It’s disturbing to people that Alps to attend the World Economic said at the time. Company officials com- the small David can disturb the big Forum, in Davos, and we met in a hotel plained to the U.S. Embassy in Conakry; Goliath.” He said that it was B.S.G.R.’s suite that was bathed in sunlight one of them suggested that Steinmetz strategy to pursue “opportunities in an reflecting off the snowbanks outside. had no intention of developing the mine aggressive way,” adding, “You have to get Condé is a tall man with a high forehead, himself, and planned instead to flip it— your hands dirty.” and he has small eyes that light up with “to obtain the concession and then sell it In Conakry, there were rumors that wry amusement when he listens. He for a big profit.” Rio Tinto viewed Stein- Steinmetz had acquired the concession wore a brown suit and a red tie. Lower- metz, who was rumored to have exten- through bribes. According to Trans- ing himself into a wingback chair, he sive contacts in Israeli intelligence, as a parency International, Guinea is one of listed slightly to the right while we talked, suspicious interloper. According to a dip- the most corrupt countries on earth. A in a posture of heavy-lies-the-crown fa- lomatic cable released by WikiLeaks, the Watch report suggested tigue. At times, his elbow appeared to general manager of Rio Tinto told the that, when Steinmetz acquired his parcel be propping up his whole body, like a U.S. Embassy that he did not feel com- of Simandou, Guinea was effectively a tent pole. fortable discussing the Simandou matter kleptocracy, with its leaders presiding When he was elected President, on an “unsecured” cell phone. Alan Da- over “an increasing criminalization of the Condé was seventy-two years old, and he

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TNY—2013_07_08&15—PAGE 52—133SC.—live art R23722E—PLease use virtual proof 4c had spent much of his life in exile. He left him with Paul Collier, the Oxford centrated in the executive, and, without Guinea as a boy, when it was still ruled economist. Collier, in turn, introduced a robust judiciary or a democratically by France, and eventually settled in Paris, Condé to Tony Blair, who offered him elected parliament, there is next to no where he became a leader of the pan-Af- assistance through an organization that oversight, which they desperately need. rican student movements of the nine- he runs, the Africa Governance Initiative. But Condé has made real progress in teen-sixties. He studied law, lectured at These Westerners saw in Condé an confronting the disastrous governance the University of Paris, and emerged as opportunity to save Guinea. Collier told and rights problems he inherited.” perhaps the most famous member of the me that what the country needed above It is no easy task to transform a coun- Guinean opposition. For this distinction, all was “integrity at the top.” Condé try that is corrupt from top to bottom. he was sentenced to death, in absentia, by could be ornery; he had a tendency to lec- During Condé’s first months in office, he the first despot to rule an independent ture his interlocutors as though they were performed a kind of triage. With the as- Guinea, and jailed for more than two students. And, after a life spent in per- sistance of Revenue Watch—an organi- years by the second, after he returned, in petual opposition, it was not clear how zation, backed by Soros, that encourages 1991, to run, unsuccessfully, for Presi- well he would govern. From the start, he transparency in extractive industries— dent. The 2010 election was bitter— had difficulties. He came into office with Condé established a committee to in- his challenger, , a commitment to complete Guinea’s spect existing mining contracts and de- had been a government minister when democratic transition by holding par- termine if any of them were problematic. Condé was thrown in jail. After Condé liamentary elections, but he delayed He didn’t know Steinmetz—“I didn’t was finally inaugurated as President, he them, ostensibly on procedural grounds, know any miners,” he said, with pride— pledged to be the Nelson Mandela of then delayed them again. Opposition but there were elements of the Simandou Guinea. riots broke out in Conakry, leading to deal that appeared to warrant an investi- First, he told me, he had to confront a series of violent confrontations be- gation. “I found it a bit strange that they the legacy of a decades-long “state of an- tween demonstrators and government had invested a hundred and sixty million archy.” The government in Conakry had security forces. dollars and were going to earn billions,” a Potemkin quality: a profusion of bu- For all the tumult, Condé’s foreign Condé said. “It’s a little . . .” He smiled reaucrats showed up for work at crum- friends and advisers maintain faith in and gave a Gallic shrug. bling administrative buildings, but there his ethics. “He is absolutely incorrupt- was little genuine institutional capacity. ible,” Kouchner told me. “He’s not lux- eny Steinmetz, who is fifty-six, does “The central bank, they were printing urious. He’s not travelling. He is having not seem to live anywhere in partic- counterfeit money,” Condé said. Yet he a cold potato at night!” Corinne Dufka, Bular. He shuttles, on his private jet, be- couldn’t fire every official; he’d have to a senior researcher at Human Rights tween (where his family lives, make do with a civil service that had Watch, has not lost hope that Condé in one of the most expensive houses in never known anything but graft. “Almost can succeed as a reformer. “There’s a lot Israel), Geneva (where he technically everybody who had any expertise was of work to be done for Guinea to over- resides, for tax purposes), London compromised,” one person who has ad- come its legacy of abusive rule,” she (where the main management office of vised Condé told me. “So he had to bal- said. “Power remains too heavily con- B.S.G.R. is situated), and far-flung ance between people who were compe- tent but compromised and people who were upstanding but inexperienced.” Condé was defensive about the fact that he had spent so much of his life abroad; when I raised the subject, he snapped, “I know Guinea better than those who have never left.” But his out- sider status meant that he was not impli- cated in the scandals of past adminis- trations. And, having spent much of his life in France, he was strikingly at ease in places like Davos. The U.S. Ambassa- dor in Conakry, Alex Laskaris, told me, “Condé has a much broader circle of contacts and advisers globally than any other African I’ve dealt with.” Bernard Kouchner, the former foreign minister of France, went to high school with Condé, and is a good friend. Kouchner introduced him to George Soros, the billionaire financier, who be- came an informal adviser, and connected “And that’s how Twitter almost crashed the Dow.”

TNY—2013_07_08&15—PAGE 53—133SC.—live cartoon—a 17535—PLease use virtual proof bw locations connected to his diamond and wards. Ambassador Laskaris, who has drivers with diamond-encrusted helmets mineral interests, from Macedonia to done tours in Liberia and Angola, lik- and steering wheels. At a 2004 race in Sierra Leone. He is technically not an ened the diamond trade in much of Af- Monaco, a large Steinmetz diamond was executive of the conglomerate that rica to the seedy cantina in “Star Wars.” affixed to the nose of a Jaguar race car. As bears his name, but merely the chief “It attracts all the rejects of the galaxy,” the vehicle tore around a hairpin curve, beneficiary of a foundation into which he said. “Low barriers to entry. It re- the driver lost control and the Jaguar the profits flow. This is a legal fig leaf. wards corruption. It also rewards a little slammed into a guardrail. The diamond, Ehud Olmert, the former Prime Minis- bit of brutality.” which was reportedly a hundred and ter of Israel and a friend of his, described Steinmetz plunged into Africa’s eight carats and worth two hundred thou- Steinmetz as “a one-man show.” Olmert treacherous political waters. In the nine- sand dollars, was never recovered. continued, “I don’t quite understand the teen-nineties, he was the largest pur- legal aspects—just know that he can chaser of diamonds from Angola; later, eneral Lansana Conté, the dictator work ceaselessly and will move from one he became the biggest private investor in who ruled Guinea before Alpha side of the globe to the other if he Sierra Leone. Today, Steinmetz is the CondéG became President, was famously identifies a promising deal.” Steinmetz largest buyer of rough diamonds from corrupt: he referred to his ministers, is very fit and exercises every day, no De Beers, and one of the major suppliers not without affection, as “thieves,” and matter where he is. With blue eyes, tou- of Tiffany & Company. And he has once remarked, “If we had to shoot every sled sandy hair, a preference for casual diversified his holdings into real estate, Guinean who had stolen from Guinea dress, and a deep tan, he looks more like minerals, oil and gas, and other fields, there would be no one left to kill.” By a movie agent than like a magnate. with interests in more than twenty coun- 2008, after more than two decades in “I grew up in a home where diamonds tries. A Web site that Steinmetz recently power, he had become ill, and had largely were the subject,” Steinmetz has said. set up describes him as a “visionary” who stopped appearing in public; when he His father, Rubin, was a Polish diamond used a “network of contacts on the Afri- did, he was propped up by bodyguards cutter who learned the business in Ant- can continent” to build “a multi-faced and orbited by adjutants who often made werp before settling in Palestine, in 1936. empire.” a show of stooping to whisper in his ear, A family photograph from 1977 captures Paul Collier, however, takes a dim even when it was obvious, to a close ob- Beny as a young man, sitting at a clut- view of businessmen like Steinmetz, server, that he was asleep. tered table with his two older brothers who have secured the rights to natural During this period, Steinmetz flew to and his father, who looks sternly at the resources that they may not actually have Conakry and met with Conté. At the camera while Beny inspects a precious the expertise to develop. “Their techni- General’s compound, they sat and talked stone. That year, Beny finished his mili- cal competence is a social-network map,” beneath a mango tree. Conté was aware tary service and struck out for Antwerp, Collier said. “ ‘Who has the power to of B.S.G.R. because it had acquired the with instructions to expand the compa- make the decision? Who can I reach?’ rights to explore two small parcels of land ny’s international business in polished They know how to get a contract—that abutting the Simandou range—places stones. According to a privately pub- is their skill.” (Cramer rejected this char- where others in the mining industry had lished history of the family business, acterization, insisting that Steinmetz not thought to look. In 2006, one of “The Steinmetz Diamond Story,” Beny makes sustainable investments wherever Steinmetz’s employees called him from branched into Africa, in search of new he operates. “B.S.G.R. is not a company the top of a mountain, using a satellite sources of rough stones. The plan wasn’t that has ever been in the business of ob- phone, and said, “Beny, you cannot be- to establish mines but, rather, to make taining rights and flipping them,” he lieve. I’m standing on so much iron here, deals with the people doing the digging. told me.) you have no idea.” After this success, Approximately half the diamonds in Despite his great wealth, Steinmetz General Conté began to entertain the the world originate in sub-Saharan Af- has maintained an exceptionally low idea of reapportioning the Simandou de- rica, and many ambitious Westerners profile. Last year, after “Hamakor,” a posit. It was not long after he met Stein- have followed the lead of Cecil Rhodes— news program on Israeli television, de- metz that he stripped Rio Tinto of its the founder of De Beers—and sought voted an episode to a battle that he was claim and gave B.S.G.R. a license to ex- fortunes on the continent. “Unfortu- having with tax authorities in Tel Aviv, plore half the Simandou range. Two nately, there aren’t any diamond mines in he threatened legal action and succeeded weeks after General Conté signed the Piccadilly,” Dag Cramer, who oversees in blocking the program from being deal, he died. Steinmetz’s business interests, told me. posted on the Internet. “He’s a very pri- Hours later, a military coup installed “That’s not where God put the assets.” vate guy,” Alon Pinkas, a friend of Stein- an erratic young Army captain, Moussa Instead, diamonds tend to be found metz’s who once served as Israel’s con- Dadis Camara. The junta was a night- in countries that are plagued by under- sul-general in New York, told me. “His marish period for Guinea. In Septem- development and corruption and, often, family is all he cares about—and his ber, 2009, during an opposition rally at by war. This is enough to scare off many business.” a stadium in Conakry, government sol- investors, but not all; some entrepre- Steinmetz’s diamond business, how- diers massacred more than a hundred neurs are drawn to the heady combina- ever, has occasionally engaged in some and fifty demonstrators. The U.S. evac- tion of political uncertainty, physical creative publicity. The company sponsors uated most of its staff from the Embassy, danger, and potentially astronomical re- Formula 1 events, sometimes furnishing and the International Criminal Court

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TNY—2013_07_08&15—PAGE 54—133SC­­ bw described the violence as a crime against Tinto had proposed it. As a concession, He also suggested that Guinea hire Scott humanity. But B.S.G.R. stayed put. On B.S.G.R. agreed to spend a billion dol- Horton, an attorney at the U.S. law firm one occasion, Steinmetz flew in with lars developing a passenger railway for D.L.A. Piper; Horton has conducted two of his sons to meet Captain Dadis. Guinea. dozens of corruption investigations They invited him to Israel to attend the In December, 2009, an aide shot around the world. wedding of Steinmetz’s daughter—a Captain Dadis in the head. He survived, “There was no way, going up against celebration with more than a thousand and fled the country; another interim a guy like Steinmetz, that the Condé guests. (Dadis sent his regrets.) government took over. Once again, government could compete effectively To Steinmetz, this cultivation of the Steinmetz weathered the chaos, and in without outside help,” Horton told me.

Alpha Condé, Guinea’s President, launched an inquiry into whether a parcel of Simandou had been obtained with bribes.

junta only proved his company’s un- April, 2010, he flew to Rio de Janeiro to Another difficulty was that so many gov- shakable commitment to Guinea. “We finalize the two-and-a-half-billion-dol- ernment officials had held prominent put money in the ground at a time when lar deal with Vale. Afterward, he stopped roles in prior regimes. “I can’t task my people thought we were crazy,” he told at a shipyard in Chile, to check on the gendarmerie to do the investigation,” the Financial Times. B.S.G.R. and the progress of a mega-yacht that he had Condé observed to his advisers. “They’ll junta eventually came to terms over how commissioned to be built there. come up with members of their own the company would export iron ore. It families.” did not have to build a deepwater port hen President Condé set out to In the spring of 2011, Horton began or a railroad capable of carrying iron ore clean up Guinea’s mining indus- to investigate the Simandou deal. For to Guinea’s coast. Instead, B.S.G.R. Wtry, he discovered a generous ally in assistance, he turned to a man named could pursue a cheaper option: export- George Soros. “I was aware of the mag- Steven Fox, who runs a risk-assessment ing the ore through Liberia, which al- nitude of the problem in Guinea,” Soros company, in New York, called Veracity ready had the necessary infrastructure. told me. “I was eager to help.” He en- Worldwide. When corporations want For years, the government of Guinea listed Revenue Watch to provide techni- to do business in countries that suffer MAGNUM had resisted such a scenario when Rio cal support in revising the mining code. from political instability and corruption,

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TNY—2013_07_08&15—PAGE 55—133SC. —Live art r23730—Critical photograph to be watched throughout the entire press run 4c Cilins was affable and surprisingly candid. While Fox took notes, Cilins explained that he first visited Guinea in 2005, after a B.S.G.R. executive in Johannesburg had informed him that the company wanted to “shoot for the moon”—a phrase that Cilins took to indicate Simandou. Cilins told Fox that he spent the next six months in Conakry, staying at the Novotel, a sea- side property that is popular with mining executives. He became friendly with the staff in the business center, and persuaded them to hand him copies of all incoming and outgoing faxes. In this manner, he learned details about the Conté regime’s frustration with Rio Tinto. Each time that Cilins flew from France to Guinea, he brought gifts— MP3 players, cell phones, perfumes— which he disbursed among his contacts. They came to think of him as “Father Christmas,” he told Fox. One minister “I’m gay and I’m a caterer, so it’s a real win-win.” informed him that the only person who mattered in the country was General Conté—and that the way to Conté was •• through his four wives. (Plural marriage is tolerated in Guinea, a predominantly Veracity can help them assess if such man, with thinning hair, who lived on the Muslim country.) an investment would be prudent—and Riviera, near Cannes, but spent a lot of After further inquiries, Cilins fo- viable without breaking the law. time in Africa. He had served as a scout cussed on the fourth and youngest wife, Fox is in his forties, with the bearing for B.S.G.R. in Guinea. When I asked Mamadie Touré—a stout, almond-eyed of a man who feels most comfortable in Fox how he had learned of Cilins, his re- woman who was still in her twenties. a suit. He speaks softly, enunciating each sponse was enigmatic: “We knew a circle “She was young, and she was considered syllable. At a recent meeting at his office, of people who knew a circle of people.” very beautiful,” Fox told me. “She’s not a in midtown Manhattan, he told me that Fox said of Cilins, “He’s an opera- rocket scientist, but she had a certain dy- until 2005 he had worked for the State tor—that’s the best way to describe him.” namism. Most important, she had the Department, and had spent time as a for- His role at B.S.G.R. was to accumulate ear of the President.” eign-service officer in Africa. According relationships and identify relevant power Cilins hired Touré’s brother to help to Eamon Javers’s “Broker, Trader, Law- structures. In that respect, Fox realized, promote the company’s interests in yer, Spy,” a 2011 book about the private- Cilins was not so different from him: Guinea, then secured an introduction to intelligence industry, Fox actually they both excelled at parachuting into her. Not long afterward, Cilins and sev- worked for the C.I.A. As we sat down to foreign countries and figuring out what eral associates from the company ob- talk, I noted a bookshelf that was heavy “makes them tick.” (Cilins declined to tained an audience with the President. on le Carré and Furst. comment for this article.) At this meeting, Cilins told Fox, they When Guinean government officials One day in the fall of 2011, Fox flew gave General Conté a watch that was began looking into the Simandou con- to Paris and met with Cilins. They had inlaid with Steinmetz diamonds. At tract, Fox told me, they had no evidence been introduced by a mutual acquain- another meeting, they presented the of malfeasance. “They only heard the ru- tance; as Cilins understood it, Fox was Minister of Mines with a model of a For­ mors on the street,” he said. Fox had met working on behalf of a client who wanted mula 1 race car that was similarly encrusted Steinmetz once, in London, and had to know how B.S.G.R. had secured the with Steinmetz bling. Soon afterward, found him quiet and unassuming, but his Simandou deal. Fox told me that, unlike Touré’s brother was named the head of understanding was that Steinmetz en- some corporate-espionage outfits (and public relations for B.S.G.R.-Guinea. listed employees to pave the way for spies), Veracity does not “pretext”—em- Fox shrugged when asked why Cilins him—“pointy-end-of-the-spear for- ploy ruses to approach a potential source. had confided in him. “There’s an element ward-reconnaissance people.” Fox de- Even so, he did not acknowledge that of arrogance,” he said. “Or of complete cided that his first essential task was to his client was the new government of naïveté. Of believing they did what they identify Steinmetz’s man in Guinea. Guinea. did and there was no big deal.” Cilins He soon pinpointed a candidate: Fré- Fox and Cilins met in a conference seemed proud of his work in Conakry. déric Cilins, a tanned, gregarious French- room, then went to a restaurant for lunch. He told Fox that, in his view, the history

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TNY—2013_07_08&15—PAGE 56—133SC.—PLease use virtual proof—live cartoon—A 17634 bw of Guinea would henceforth be thought Jacksonville isn’t Malibu. But, when staff of trained inspectors, so he relied on of as dividing into two periods—“before Fox and his team investigated, they dis- D.L.A. Piper, the law firm, and Steven and after B.S.G.R.” covered that Touré had purchased a Mc- Fox, the investigator. “It was outsourced,” To Cilins, giving gifts may have Mansion on a canal there, along with a Touré told me. seemed simply like the cost of doing busi- series of smaller properties in the vicinity. Last October, he sent an incendiary ness in places like Guinea. Many coun- letter to representatives of the joint ven- tries aggressively prosecute domestic cor- hen you disembark from a plane ture between Vale and B.S.G.R., identi- ruption but are much more permissive in Conakry, the corruption hits fying “possible irregularities” in the Si- when it comes to bribes paid abroad. Wyou almost as quickly as the heat. At the mandou concession. It called Frédéric Until fairly recently, French firms that airport, a uniformed officer will stop you, Cilins “a secret proxy” for Steinmetz, gave bribes in order to secure business in raising no specific objections but making raised suspicions about Cilins’s alliance foreign countries could declare them as it clear, with his body, that your exit from with Mamadie Touré, and itemized gifts deductible business expenses. the situation will be transactional. Out such as the diamond watch and the be- In recent years, however, interna- on the rubble-strewn streets, which are jewelled model race car. The letter ac- tional norms have begun changing. The perfumed by the garbage that clogs the cused B.S.G.R. of planning all along U.S. Justice Department has dramati- city’s open sewers, the military presence to flip the rights to Simandou, in order cally increased its enforcement of the is less conspicuous than in the past—se- “to extract immediate and substantial Foreign Corrupt Practices Act; the U.K. curity-sector reform has been a priority profits.” has passed its own stringent Bribery Act; for Condé—but at night insouciant Nava Touré’s accusations also impli- and the Organization for Economic young soldiers position themselves at in- cated a man he knew: Mahmoud Thiam, Coöperation and Development has insti- tersections, holding submachine guns; who had served as the Minister of Mines tuted a convention against bribery, and they lean into passing cars and come under the junta that ruled Guinea after several dozen countries—including Is- away with cash. In 1961, Frantz Fanon General Conté’s death. Touré had been rael—have signed it. Major companies, wrote of post-colonial West Africa, one of Thiam’s advisers at the time. like Siemens and K.B.R., have settled “Concessions are snatched up by foreign- Thiam came to the job, in early 2009, corruption investigations by paying hun- ers; scandals are numerous, ministers with stellar credentials. After obtaining dreds of millions of dollars in fines. (Rio grow rich, their wives doll themselves up, an economics degree from Cornell, he Tinto, too, has contended with corrup- the members of parliament feather their had worked as a banker at Merrill Lynch tion; in 2010, four representatives of the nests and there is not a soul down to the and U.B.S. Thiam was handsome, very company were convicted of accepting simple policeman or the customs officer polished, and a champion of Beny bribes in China.) Many multinational who does not join in the great procession Steinmetz. In 2010, in an interview on corporations have responded to the in- of corruption.” This description no lon- “Closing Bell with Maria Bartiromo,” on creased vigilance about graft by establish- ger applies to the region as a whole— CNBC, Thiam praised the “very aggres- ing robust internal-compliance depart- Ghana, for example, is a prospering sive junior company, B.S.G.R., that ments that monitor employee behavior. democracy—but in Guinea little has came and developed that permit to the B.S.G.R. says that it conducts itself eth- changed. point where it made it attractive to a big ically wherever it operates, and a com- One afternoon, I went to a white- player like Vale.” Simandou, Thiam said, pany representative pointed out to me washed building in Conakry’s adminis- would “catapult the country into the that neither Steinmetz nor his organiza- trative quarter to meet Nava Touré, a No. 3 iron-ore exporter in the world.” He tion has ever been implicated in bribery. former professor of engineering whom had attended the lavish wedding of But B.S.G.R. does not have a compli- Condé had entrusted with running the Steinmetz’s daughter in Israel, as a repre- ance department, and it does not have technical committee on mines. Touré sentative of the junta. a single employee whose chief respon- (no relation to Mamadie Touré, the According to Nava Touré’s letter, sibility is to monitor company behav- General’s fourth wife) has a round face, a Thiam not only took payoffs from ior abroad. melodious voice, and a decorous, almost B.S.G.R.; he effectively worked as the Shortly after General Conté died, ethereal, manner. During the months company’s paymaster, meeting a cor­ Mamadie Touré fled Guinea. Fox and that I spent reporting this story, Nava porate jet at Conakry airport, unloading his colleagues discovered that she was Touré was one of the few officials in the suitcases full of cash, and then distrib- living in Jacksonville, Florida. The government about whom I never heard uting bribes to the junta’s leaders. Ste- World Bank estimates that forty per even a rumor of corruption. He had been ven Fox, the American investigator, cent of the private wealth in Africa is charged with establishing a new mining had discovered that while Thiam was held outside the continent. In a recent code that would create a more equitable minister he took to driving around civil-forfeiture proceeding against the balance between the interests of the min- Conakry in a Lamborghini. Before he son of the dictator of Equatorial Guinea, ing companies and the people of Guinea. left office, in 2011, he bought an apart- the Justice Department documented In addition, he had been asked to review ment on the Upper East Side of Man- some of his possessions: a twelve-acre all existing mining contracts and recom- hattan, for $1.5 million, and an estate in estate in Malibu, a Gulfstream jet, seven mend whether any of them should be re- Dutchess County, for $3.75 million. Rolls-Royces, eight Ferraris, and a white negotiated or rescinded. But when he He paid for both properties with cash. glove once worn by Michael Jackson. turned his focus on Simandou he had no Thiam currently lives in the U.S.,

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TNY—2013_07_08&15—PAGE 57—133SC. bw running an investment-advisory firm. ditioner powered down. He didn’t seem ments made to public officials “would be This spring, I visited him at his elegant to notice. “I don’t think that it is tolera- easily identified by bank transfers, pay- office, on Madison Avenue. He denied ble or acceptable from the investors,” he ment orders, copies of checks, etc.” Again any wrongdoing. The Manhattan apart- continued. “But I’m more shocked by the and again, B.S.G.R. returned to “the ment, he explained, was paid for with attitude and the behavior of the national absence of the smallest amount of sup- money that he had made in banking. decision-makers.” porting proof.” And he had bought the country estate on When B.S.G.R. received Touré’s let- But how do you prove corruption? By behalf of a Mozambican friend who was ter, it responded aggressively, dismissing its nature, corruption is covert; payoffs looking to invest in the U.S. (Thiam re- the investigation as an effort by President are designed to be difficult to detect. The fused to name the friend.) The Lambor­ Condé to expropriate its asset. The com- international financial system has evolved ghini was not a sports car but a four- pany insisted that it had never given a to accommodate a wide array of illicit ac- wheel-drive vehicle. “You can’t serve as watch to General Conté; though the tivities, and shell companies and banking mining minister without being accused story about the miniature Formula 1 car havens make it easy to camouflage trans- of corruption,” he told me. He regards was true, the model had a value of only a fers, payment orders, and copies of the review of the B.S.G.R. contract as lit- thousand dollars, and B.S.G.R. routinely checks. Paul Collier argues that there are tle more than a witch hunt, but added gave such “gifts to companies around the often three parties to a corrupt deal: the that he still maintains the highest respect world.” Frédéric Cilins had worked for briber, the bribed, and the lawyers and for Nava Touré. the company, but “B.S.G.R. never told financial facilitators who enable the se- During our meeting in the white- Mr. Cilins that it ‘asked for the moon.’ ” cret transaction. The result, he says, is “a washed building, I asked Touré how it Cilins may have distributed gifts among web of corporate opacity” that is spun made him feel to learn of such allegations his contacts in Conakry, but the com- largely by wealthy professionals in about former colleagues. He paused. pany denied any knowledge of them. financial capitals like London and New “The feeling of shame,” he said at last. Oddly, B.S.G.R.’s written response in- York. A recent study found that the eas- “Because, finally, what they have got per- sisted, more than once, that Mamadie iest country in which to establish an un- sonally—let’s say ten million U.S. dollars, Touré had not actually been the wife of traceable shell company is not a tropical twelve million U.S. dollars—what does General Conté. banking haven but the United States. that amount to? Compared with the lives B.S.G.R. faulted the Condé adminis- of the whole country?” The lights in the tration for failing to name the sources of n the spring of 2012, one of President room suddenly shut off, and the air-con- the allegations, and noted that any pay- Condé’s ministers took a trip to Paris. IAt the Hilton Arc de Triomphe, he was approached by a Gabonese businessman. According to an affidavit by the minister, the Gabonese man said that he had been in contact with Mamadie Touré, and that she had provided him with docu- ments that would be interesting to Pres- ident Condé. “Madame Touré was angry with Mr. Beny Steinmetz,” the Gabo- nese man said. She believed that “she had been taken advantage of.” The minister was astonished by the documents. They appeared to be a series of legal contracts, complete with signa- tures and official seals, between officers of B.S.G.R. and Mamadie Touré. The documents contained the signature of Asher Avidan, the head of the company’s Guinea operations. Avidan was a former member of Israel’s internal security ser- vice, Shin Bet. The contracts had been signed in Conakry in February, 2008— five months before General Conté took the Simandou concession away from Rio Tinto, and ten months before the north- ern half of that concession was given to Beny Steinmetz. The agreements stipu- lated that Touré would be granted a five- per-cent stake in the northern “blocks” “Your products are encroaching on my products.” of Simandou, in addition to “two (2)

TNY—2013_07_08&15—PAGE 58—133SC.—live cartoon—a 17539—PLease use virtual proof bw million” dollars, which would be paid sination attempt, in which soldiers bom- pany also granted the government up to through a shell company. In exchange, barded his residence in Conakry with a thirty-five-per-cent stake in the mine. she committed “to do all that is neces- machine-gun fire and rockets. He In this respect, the Condé administration sary” to help B.S.G.R. “obtain from the pressed on with his efforts to reform was trying to bring mining into line with authorities the signature for the obtain- Guinea, but his situation grew more the more equitable deals made by the oil- ing of said blocks.” precarious. His Treasury chief, whom and-gas industry. (Dag Cramer, the ex- An American lawyer involved in the Condé had charged with investigating ecutive who oversees Steinmetz’s busi- case told me, “I’ve been involved in cor- embezzlement by government officials, ness interests, told me, “There’s a reason porate corruption work for thirty years, was driving home from work one night Arab families own half of London today. and I’ve never seen anything like this. A when her car was cut off by another ve- The bulk of the profits from oil are being contract for bribery that’s actually signed hicle; she was shot and killed. Bernard extracted by the host countries. This by a senior executive? Corporate seals?” Kouchner said of Condé, “He is really hasn’t happened yet in mining.”) The The Gabonese man intimated that the isolated.” After the attack on his resi- Rio Tinto deal was also transparent: the documents were potentially worth mil- dence, Condé moved into the Presiden- contract was published, in its entirety, on lions of dollars. He was not going to part tial palace, a cavernous fortress, con- the Internet. “This is something that no with such a valuable commodity for free. structed by Chinese contractors, which other Guinean government would have He was associated with an investment one diplomat referred to as “the Dim done, at any point in the country’s his- company, Palladino, which had loaned Sum Palace.” Condé is married, but at tory,” Patrick Heller, who works at Rev- the Condé government twenty-five mil- night he often ate alone, occasionally enue Watch, told me. “It’s a huge sign of lion dollars to set up a mining project. watching a soccer game to distract him progress.” Moreover, the funds went not Now, in return for the documents, the from his worries. He did not discuss the into numbered bank accounts but di- Gabonese man wanted his own stake in matter with me, but several people who rectly into the Guinean treasury. Simandou. (Palladino acknowledges that have spoken with Condé about it told Nevertheless, several B.S.G.R. em- the Paris meeting took place, but denies me that he believes that Steinmetz is ployees suggested to me that the seven that the Gabonese businessman made eavesdropping on his communications. hundred million dollars amounted to a any such demands.) (B.S.G.R. denies this.) colossal bribe. They further speculated President Condé refused to make a Condé was also contending with an that Condé had “stolen” the election in quid-pro-quo deal for the documents, unstable capital. The violence that 2010, by collaborating with wealthy but at least the Guinean government erupted after he delayed parliamentary South African backers to rig the results. knew of their existence. If they were gen- elections did not abate. Rival factions In conversations with me, friends of uine, they could be that rare thing: proof fought one another in the street, and pro- Steinmetz’s likened Condé to Robert of corruption. testers threw rocks at police. In several Mugabe and to Mahmoud Ahmadine- When I asked Steven Fox, the inves- instances, Condé’s security forces fired jad. (Both the Carter Center and the Eu- tigator, why any company would sign on protesters. More than two dozen peo- ropean Union, which monitored the such a contract, he suggested that Touré ple died. To some, it looked as if Condé election, found that, despite some proce- may have insisted upon it. “There’s a might replicate the sad pattern of many dural irregularities, Condé’s victory was whole Francophone-African culture of post-colonial African leaders who have “credible” and “fair.”) these very legalistic documents that for- started as reformers and then drifted into In September, 2011, Condé invited malize certain arrangements,” he ex- tyranny. In September, 2011, Amnesty Steinmetz to Conakry, to clear the air. plained. And Touré would have been International declared that “President Steinmetz arrived at the palace, and they concerned about securing her position. Alpha Condé is resorting to exactly the sat in Condé’s office, speaking in French. “Her sole value was that she was the same brutal methods as his predecessors.” (Steinmetz is fluent.) “Why are you wife of the President,” he said. When Ehud Olmert told me that Steinmetz against us?” Steinmetz asked. “What the contract was signed, the General’s “is the last guy you want as an enemy.” have we done wrong?” health was in rapid decline, and “she B.S.G.R.—sensing, perhaps, that Condé “I have no personal problem with knew that the minute he closed his eyes was politically vulnerable—went on the you,” Condé replied. “But I have to de- she would have absolutely nothing.” At attack, labelling his government a “dis- fend the interests of Guinea.” first glance, it seemed odd that she had credited regime” that was trying to “ille- Steinmetz was not placated. Cramer entrusted copies of the documents to gally seize” the Simandou deposit. The told me that the company had to counter the Gabonese man. But several people company also pointed out that Rio Tinto the allegations as forcefully as possible, who have spoken to Touré suggested to had reacquired the rights to the southern because, for Steinmetz, “the perception me that she had grown to fear Stein- half of Simandou, eventually paying the of him being an honest person” was cru- metz. The contracts—which, if ex- Condé government seven hundred mil- cial. “In the diamond business, a hand- posed, could potentially imperil his po- lion dollars to secure the deal. shake is more important than a contract,” sition in Guinea—amounted to a form But was this corruption at work? Rio Cramer explained. of insurance policy. Tinto’s payment was, in part, a reflection B.S.G.R. expanded its campaign By this time, President Condé had of a new mining code, which levied against Condé, and turned to a company come to fear for his safety as well. In higher taxes on international companies called F.T.I., which is based in Palm 2011, he had narrowly survived an assas- exporting Guinean resources. The com- Beach but has operations throughout

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TNY—2013_07_08&15—PAGE 59—133SC. bw the world. F.T.I. practices an aggressive convinced that Malloch-Brown had ter- to many dinners at Davos over the years. form of public relations, seeking not minated the F.T.I. contract at the behest If he did meet Steinmetz, he had no only to suppress negative media cover- of an old friend of his: Soros. Cramer memory of it. age about a client but also to plant unfa- showed me an internal document, titled vorable stories about the client’s adver- “The Spider,” which depicted Soros and ne day in April, Frédéric Cilins— saries. An F.T.I. spokesman blasted the Condé at the center of a web of influence, the Frenchman who allegedly or- Guinean government’s review process, and which identified Soros as “a hater of chestratedO the bribes in Guinea—flew to calling it a “crude smear campaign.” The Israel.” The firm sent Soros an angry let- Jacksonville for an urgent rendezvous. firm encouraged journalists to run neg- ter, saying, “We can no longer remain si- Mamadie Touré met him at the airport. ative stories about Condé; the President lent letting you ceaselessly maul our com- They sat in a bar-and-grill in the depar- soon began to receive bad press about pany and maliciously attempt wrecking tures area, and she ordered a chicken- the delay in setting parliamentary elec- the investment.” salad sandwich. Cilins was not as com- tions and about several ostensibly dubi- Earlier this year, lawyers for Stein- posed as he usually is; he suffers from ous transactions made by people close to metz sent a letter to Malloch-Brown, de- high blood pressure, and as they spoke, him, including his son, Alpha Mo- manding that he acknowledge his “per- in hushed tones, he was extremely anx- hamed Condé. It is not hard to imagine sonal vendetta” against Steinmetz, sign a ious. He had come to Florida on a mis- that at least some of Condé’s associates formal apology that they had scripted, sion. He told Mamadie Touré that she have made side deals. “I practice the and “clear” B.S.G.R. of any wrongdoing must destroy the documents—and that watch theory of politics,” a Western dip- in Africa. When Malloch-Brown re- he was willing to pay her to do it. lomat in Conakry told me. “When a fused, B.S.G.R. sued him, along with She informed him that it might al- minister is wearing a watch that costs F.T.I. The lawsuit claimed that Soros ready be too late: she had recently been more than my car, I start to worry.” Dur- nurtured a “personal obsession” with approached by the F.B.I. “They’re going ing my interviews with officials in Con- Steinmetz; it also alleged that Soros had to give me a subpoena,” she said. A grand akry, I spotted more than one conspicu- perpetuated a shocking rumor—that jury had been convened, and the author- ously expensive watch; in the Guinean Steinmetz tried to have President Condé ities would expect her to testify and turn , the watches hung loose on the killed, by backing the mortar attack on over “all the documents.” wrist, like bracelets. his residence in 2011. (B.S.G.R. main- “Everything must be destroyed!” Ci­ Inside F.T.I., the decision to work on tains that this rumor is entirely un- lins said. It was “very, very urgent.” behalf of Steinmetz caused discord. In founded; the lawsuit was recently set- Cilins did not realize that he had 2012, the company hired a new execu- tled out of court, with no admission fallen into a trap. Touré was wearing a tive to oversee some of its accounts in of wrongdoing by Malloch-Brown wire. She had indeed been approached Africa, and when he discovered that or F.T.I.) by the authorities and, aware of her own the firm represented Steinmetz and When I asked Soros about Steinmetz, legal predicament, had agreed to coöper- Dan Gertler—another Israeli diamond he insisted that he holds no grudge ate with the F.B.I. As she subsequently mogul, who has been involved in contro- against him. A major philanthropist, explained in an interview with Guinean versial deals in the Democratic Republic Soros has long been committed to pro- authorities, Cilins and his colleagues had of Congo—the executive protested, then moting transparency and curtailing cor- “one single concern,” which was “to get resigned. Mark Malloch-Brown, the for- ruption, and he funds numerous organi- these documents back at any price.” mer Deputy Secretary-General of the As federal agents observed from United Nations, is now F.T.I.’s chairman around the restaurant and the wire re- for the Middle East and Europe. He corded every word, she asked Cilins what grew concerned that the company’s rep- she should do if she was summoned be- utation might be damaged by its associ- fore the grand jury. “Of course, you have ation with Steinmetz, and earlier this to lie!” he said, according to a court filing year he terminated the relationship. The that quotes the exchange. Cilins then leadership at B.S.G.R. was incensed. suggested that she should deny that she As the company’s troubles accumu- had ever been married to General Conté. lated, Steinmetz and his colleagues began zations in these fields. It is true that some Touré and Cilins had spoken on the to direct their feelings of grievance at of these groups have converged, lately, on phone before meeting in Jacksonville, George Soros, who had financed Con- the activities of Steinmetz. This may and at one point she had asked him if the dé’s initial investigation and provided mean that Soros is obsessed with Stein- plan to buy her silence had been autho- seed money to D.L.A. Piper. Soros also metz; or it may mean that Steinmetz is rized by an individual who is identified in bankrolled Revenue Watch, the organi- corrupt. court documents only as “CC-1,” for “co- zation that had been assisting Nava Soros told me that he had never met conspirator.” Two sources close to the in- Touré in revising Guinea’s mining code, Steinmetz. When I asked Cramer about vestigation told me that CC-1 is Beny and supported Global Witness, an anti- this, he said, “That’s a lie.” In 2005, the Steinmetz. corruption watchdog group that had two men had attended a dinner at Davos, “Of course,” Cilins had replied. That been looking into Steinmetz’s activities and spoke to each other. Presented with call, too, was recorded by the F.B.I. in Guinea. B.S.G.R. executives became this account, Soros said that he has gone At the airport, Cilins said that he had

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TNY—2013_07_08&15—PAGE 60—133SC.—live art R23722F—PLease use virtual proof 4c there would say nothing for the record. “The question for Vale is: What were Spring, 2012 you thinking?” a diplomat in Conakry told me. “Did you really think you would I rub my eyes. The world is still green— be able to start a fifty-year project export- a lime dust coating the porch tiles, rocking chairs, patio, yard, ing iron ore in the remotest part of Guinea on the basis of a clearly dubious delicate as a mourning veil. deal?” Having paid only half a billion dollars to B.S.G.R. so far, Vale has re- A green fnch dances between the bird feeders. fused, for the moment, to make any fur- I can’t breathe, my eyes water. My friend can’t breathe, either. ther payments on the two billion dollars it still owes. She’s lost her son to an I.E.D. No details yet. Routine patrol around a dusty village far away. n mid-June, I flew to Nice, on the French Riviera, and proceeded in a Tea waits on the table between us, and two blueberry scones. taxiI to Cap d’Antibes, a resort town Impossible, of course, to talk about loneliness favored by billionaires. I had spent sev- eral months trying to meet with Stein- or changing our lives. Rain today, then a cooling. metz, without success. I had visited the In a week or so, dogwoods fowering along the back fence. B.S.G.R. offices in London, and been told when I arrived that Steinmetz would After that, maple sap staining the hoods of our cars. meet me in Paris. By the time I reached Paris, he had left on his private plane for —David Bottoms Israel. I volunteered to fly to Israel, but was told that he wouldn’t necessarily meet with me when I got there. After seen CC-1—Steinmetz—the previous he was arrested. This put B.S.G.R. in an weeks of negotiation, I finally managed week. “I went specially to see him,” he ex- awkward position. The transcript of the to speak to him by telephone, and after a plained. He lowered his voice to a whis- airport conversation looked very much brief conversation—in which he an- per and said he had assured Steinmetz like confirmation of bribery. Mamadie nounced, flatly, “I don’t give inter- that Touré would “never betray” him, and Touré’s documents were now in the pos- views”—he agreed to see me. would “never give away any documents session of the Department of Justice. The We met at a hotel that was perched whatsoever.” government of Guinea had also obtained above the Mediterranean. Steinmetz was Steinmetz’s response, according to a videotape, shot during the opening of staying on one of his yachts—an Italian Cilins, was “That’s good. . . . But I want B.S.G.R.’s office in Conakry, in 2006, model. A sleek white multistory vessel, it you to destroy these documents.” that seemed to further illustrate Touré’s floated regally in the distance. As I en- Touré told Cilins that the documents close relationship with the company. It tered the lobby, I brushed past a slim, were in a vault, and assured him that she shows Cilins sitting next to Asher Avi- deeply tanned man wearing a blue linen would destroy them. But he wasn’t dan, who is addressing a crowd of Guin- shirt that was unbuttoned halfway to his satisfied, explaining that he had been in- eans. Touré then makes an entrance, re- navel. It was Steinmetz. structed to watch the papers burn. splendent in a white headdress and “Thank you for making the trip,” he If she agreed to this plan, Cilins told flowing robes, and flanked by members said when I introduced myself. He seized her, she would be paid a million dollars. of the Presidential guard—implicitly my hand with the formidable grip of He had brought along an attestation—a conferring, by virtue of her presence, the someone who puts a lot of stock in a legal document, in French—for her to approval of her dying husband. handshake. We left the hotel and made sign. (Cilins’s comfort with formal legal When news of the arrest in Jackson- our way up a steep hill, toward a suite of agreements appears to have extended ville broke, Vale released a statement offices. Steinmetz moved almost at a trot; even into the realm of the coverup.) “I saying that it was “deeply concerned I had to scramble to keep up. have never signed a single contract with about these allegations,” and commit- “I’m totally open—totally transpar- B.S.G.R.,” the attestation read. “I have ted to working with the relevant au- ent,” Steinmetz told me when we sat never received any money from B.S.G.R.” thorities. By this time, it seems safe to down. “I never lie, as a principle.” He re- The arrangement included a possible assume, the Brazilian company may sents the idea that he is secretive, and be- bonus, Cilins said. If she signed the attes- have developed some buyer’s remorse lieves that he simply protects his right to tation, destroyed the documents, and lied over its iron-ore project in Guinea. When privacy. “I don’t consider myself a public to the grand jury, and if B.S.G.R. suc- I visited the Conakry office of V.B.G.— person,” he said. ceeded in holding on to its asset at Siman- the joint venture of Vale and the Beny We talked for nearly three hours, until dou—“if they’re still part of the project”— Steinmetz Group—it was operating Steinmetz grew hoarse. He said that he she would receive five million dollars. with a skeleton staff, and the project felt blindsided by the controversy over Before Cilins could leave Jacksonville, was clearly on hold, though the executives Simandou. People who think that it is

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TNY—2013_07_08&15—PAGE 61—133SC. bw He pulled out color photocopies of the documents, and pointed at sequential no- tations that had supposedly been made on each contract by the notary public in Con- akry. These notations, he said, ran in de- scending rather than ascending order— proof that they were inauthentic. I told him that I could imagine a scenario in which the documents were forgeries, and conceded that Touré was not exactly an unimpeachable witness. But the transcript of the Jacksonville conservation did not look good for Steinmetz, and I told him that there was another factor that inclined me to consider the documents real: if they were fake, why would Frédéric Cilins fly across the Atlantic and offer Touré five million dollars to destroy them? I posed “I feel tremendous pressure to frolic.” the question to Steinmetz multiple times, in multiple ways, but he replied only that he would not “speculate” about Cilins •• while his case was before the courts. I pressed the matter. “Cilins told Ma- inherently outlandish to make billions of Dadis, the junta leader who presided over madie Touré, ‘I’ve spoken to Beny. He dollars on an investment of a hundred the stadium massacre, was “an honest told me to do this.’ Did you?” and sixty million simply don’t understand guy” who simply “wanted the best for “I didn’t ask him to destroy these fake that the natural-resources business is a his country.” documents or any other documents,” game of chance. “It’s roulette,” Steinmetz President Condé was the real villain Steinmetz said. said; if you work hard, and take risks, you in this story, Steinmetz said. His loath- Was Cilins lying about Steinmetz’s sometimes “get lucky.” As a small com- ing for Condé was so palpable that, directive, then? Or was he somehow pany that was comfortable with risk, whenever he mentioned him, the ten- mistaken? B.S.G.R. made investments that the dons in his neck stood out. Steinmetz, growing impatient, reiter- major mining companies wouldn’t. His Steinmetz claimed that the accusa- ated that he did not want to speculate company lost money in Tanzania. It lost tions against him were the product of a about Cilins. He did want to talk, how- money in Zambia. But in Guinea it won. concerted smear campaign, initiated by ever, about Condé’s responsibility for the Steinmetz argued that the deal with Condé and financed by George Soros. deaths of protesters in Guinea. “The guy Vale was not an effort by B.S.G.R. to sell “According to the Jewish religion, if you has blood on his hands,” Steinmetz said. off its asset but, rather, a partnership of say somebody is guilty of something “Captain Dadis had blood on his the sort that is often necessary with am- without proof, this is a very bad thing to hands, too,” I observed. “And you invited bitious, resource-intensive mining proj- do,” Steinmetz said. And the documents him to your daughter’s wedding.” ects. “How did we flip?” he asked. “Why that were discussed in Jacksonville did Steinmetz stared at me for a second, is bringing a partner in a flip?” not prove anything, he said—they were then said, “I’m not going to argue or go In our telephone call, Steinmetz had forgeries. into depth about the politics of Guinea.” described the saga of Simandou as “a After failing to meet Steinmetz in Even as we were meeting in France, very African story,” and when we met I Paris, I had met Asher Avidan, the head the leaders of the Group of Eight had as- asked him how his company has dealt of B.S.G.R.’s Guinea operations, for a sembled in Northern Ireland. A major with the pervasiveness of corruption in drink. When I presented him with a goal was to assess the rules governing Africa. “Very strict instructions and guide- photograph of a signature that appeared how executives from wealthy nations lines to people on the ground,” he said, on one of the contracts, he had acknowl- conduct themselves when they venture insisting that, even in jurisdictions that edged that it was identical to his own but into the developing world. Before the are notorious for graft, the company dismissed it as “a simple Photoshop.” In summit, Prime Minister David Cam- does not pay bribes. “We manage our Cap d’Antibes, Steinmetz elaborated on eron, of the U.K., published an op-ed in business like the most transparent pub- this theme, claiming that Mamadie Tou- the Wall Street Journal: “We must lift the lic company,” he said. ré’s documents were fake, and that long veil of secrecy that too often lets corrupt To hear Steinmetz tell it, the former before the F.B.I. investigation began she corporations and officials in some coun- leaders of Guinea were undeserving of had tried to blackmail B.S.G.R., using tries run rings around the law. The G-8 the widespread censure they had re- the fraudulent contracts as leverage. “We must move toward a global common ceived. General Conté was “more hon- never paid her,” Steinmetz insisted. “We standard for resource-extracting compa- est” than President Condé. Captain never promised her anything.” nies to report all payments to govern-

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TNY—2013_07_08&15—PAGE 62—133SC­—liveART—a 17497.—PLease use virtual proof bw ments, and in turn for governments to as a genuinely democratic leader. Alexis B.S.G.R. officials might be so commit- report those revenues.” Arieff, a Guinea expert at the Congressio- ted to the notion that Touré had not In developing this ambitious agenda, nal Research Service, told me, “He came been married to the old General. If she Cameron had been closely advised by in with a real sense of having fought for was not related to him, then she was Paul Collier. “This is Africa’s big oppor- the Presidency, and deserving a free hand merely another local influence peddler— tunity,” Collier told me. “But it’s a non- in how he runs the country—‘This is a lobbyist. And it might be argued that, renewable opportunity.” If companies are mine, I went to prison for this, I suffered as a legal matter, paying a lobbyist is allowed to acquire natural resources for this.’ ” A European Union report re- different from paying a bribe. If B.S.G.R. without full transparency, the result will cently blamed “Condé’s governing style” was ever forced to admit that it had paid be plunder—or, as Collier puts it, “a trag- for the escalating tension in the country. Mamadie Touré, here, in embryo, was edy of awesome proportions.” At Cam- Condé, for his part, felt that Steinmetz a defense. eron’s invitation, President Condé trav- had played a role in the unrest; at Cha- Although the U.S. Justice Depart- elled to London before the meeting. “If tham House, he intimated that B.S.G.R. ment will not comment on the case, Ci­ we are to fight against exploitation and is funding the opposition movement. lins is likely not the ultimate target of its bring about transparency, we are going to (Steinmetz told me that this was false.) investigation. When the grand jury in need the help of the G-8,” Condé said, When I asked Condé if he felt vindi- Manhattan began issuing subpoenas, in a speech at Chatham House, the for- cated when the U.S. Justice Department earlier this year, it requested information eign-policy think tank. “Mining compa- began investigating the Simandou deal, not just on “the Simandou concession” nies are mostly in the West.” he refused to take the bait. It is ultimately but on Steinmetz himself. The F.B.I. re- Steinmetz was appalled by the lioniza- up to him to decide—on the basis of cently dispatched two teams of investiga- tion of Guinea’s leader. The current gov- counsel from the mining ministry— tors to Conakry. According to the Wall ernment, he said, is a “sophisticated” ver- whether or not to strip B.S.G.R. and Street Journal, the Serious Fraud Office, sion of a corrupt regime, because “they are Vale of the Simandou license, and he did in London, has also opened an investiga- pretending to be honest.” He repeated a not want to say anything that might prej- tion into B.S.G.R.’s activities. Because claim that some of his colleagues had udice this process. Instead, he smiled and both Israel and France have been reluc- made—that Condé had stolen the 2010 said, “The actions of the United States tant to extradite their citizens in the past, election by promising to strip B.S.G.R. of can help me advance in the struggle Steinmetz might never see trial in the its Simandou license and transfer the against corruption in Guinea.” U.S., even in the event that he was in- rights to his backers. “He sold our assets Cilins’s bail was set at fifteen million dicted. Still, Scott Horton told me, to South African interests who provided dollars, because of the danger that he “Steinmetz’s future travel options may him with financial support to manipulate might flee the U.S. In May, he pleaded be limited.” the election,” he said. Even before Condé not guilty to obstruction-of-justice When we spoke in Cap d’Antibes, entered office, he had decided “that he charges, and it’s possible that he will de- Steinmetz did not seem worried. “We was going to take Simandou from us.” In cide to coöperate with authorities; in his have zero to hide,” he said. Steinmetz’s telling, Condé is like the title court filings, he has not denied offering Steven Fox, the investigator, told me character in “Nostromo”—the “perfectly Mamadie Touré money to destroy the that Steinmetz and his colleagues were incorruptible” man who, through his own documents, or doing so at the behest of “very improvisational,” adding, “They vanity and the spell of the mine, finally Steinmetz. B.S.G.R. continues to main- can think creatively and move fast in an succumbs to corruption. uncertain situation. That’s what ac- “We are the victims,” Steinmetz said. counted for their success, in a lot of “We have done only good things for ways. But it will probably also account Guinea, and what we’re getting is spit in for their downfall.” the face.” With that, he wished me well. For the moment, the iron ore re- Dusk was falling, and I descended the mains locked inside the Simandou hill while Steinmetz headed back to his Mountains, and the site is still cut off yacht for dinner. from the rest of Guinea. “Everyone wants Simandou,” Condé told me as we hortly after Frédéric Cilins was ar- tain that it never paid any money to sat in the palace. “It became the obses- rested in Florida, I went to Conakry Touré or signed any contracts with her. sion, literally, of everybody.” andS visited President Condé at the Dim But Asher Avidan said something inter- He continued to talk, in his professo- Sum Palace. He wore a white suit esting in our conversation at the Paris rial way, but a note of bewilderment crept with short sleeves—a common style in bar. He repeated B.S.G.R.’s claim that into his voice. “Looking at the iron ore, Guinea—and looked tired. The violent Touré had not been married to General the grade is world-class. The quality is opposition rallies showed no sign of stop- Conté when he signed over the rights to world-class. Yet, in so many years, we ping, and it was not entirely clear that Simandou. “She was not his wife,” Avi- haven’t been able to benefit from any of Condé would hold on to power long dan said. “Not even sleeping with him.” these tremendous resources.” President enough to fulfill his reform agenda. Hav- Then he added, “She is a lobbyist. Like a Condé paused. Then he murmured ing failed to hold parliamentary elections, thousand others.” something, almost to himself: “How can he was also at risk of losing his credibility It suddenly occurred to me why we be so rich and yet so poor?” 

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