Beny Steinmetz: Scion of diamond royalty, now at bay over bribery charges

10 June 2024 , 18:00
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Beny Steinmetz arrives for his first bribery trial in Geneva, in January 2021, with lawyers Marc Bonnant (left) and Camille Haab (right). Credit: Stefan Wermuth/Bloomberg via Getty Images
Beny Steinmetz arrives for his first bribery trial in Geneva, in January 2021, with lawyers Marc Bonnant (left) and Camille Haab (right). Credit: Stefan Wermuth/Bloomberg via Getty Images

Beny Steinmetz likes to do things his own way.

The Israeli businessman came of age amid gem-trading royalty, with a father who had built up the country’s biggest diamond business in the 1950s. But he wasn’t satisfied with a junior role at the family firm. So he set out to secure supplies from war-torn and troubled regions of Africa, beginning a journey that would make him a fortune — but also land him in a Swiss court on trial for bribery.

Starting with diamonds and expanding out to iron ore and even swathes of Romanian state land, Steinmetz developed a taste for acquiring natural resources cheaply — and a willingness to deal with dictators and corrupt rulers to make that happen.

Steinmetz, now 68, has been up-front about his approach. “We invest in difficult places,” he told Britain’s Financial Times in 2012. “You have to get your hands dirty.”

Despite criticism over the years, his associates have praised him as an effective businessman with a no-nonsense approach. Steinmetz has an ability to “put aside empathy and do what needs to be done,” Dag Cramer, one of his closest associates, told a Brazilian magazine in December 2020.

For years, this approach seemed to be effective. Steinmetz became a world-renowned diamond trader, with close business relationships with the likes of De Beers and Tiffany & Co., and built up a property empire spanning Europe and the U.S. But today, his high-flying career has become mired in scandal. Even before the Swiss trial began, a Romanian court found him guilty of forming an “organized criminal group.” Steinmetz says both rulings are trumped up.

The Steinmetz Scandals

This article is part of an investigative project by OCCRP into the mining magnate Beny Steinmetz, and the two scandals that have landed him jail sentences in Switzerland and Romania.

As Steinmetz awaits the decision on his appeal at Switzerland’s supreme court, OCCRP has dug into thousands of court records, corporate and real estate filings, and carried out dozens of interviews to build a picture of Steinmetz’s controversial career.

Steinmetz’s quest for African diamonds started in Angola in the 1980s, when the country was in the midst of a protracted civil war. He quickly became one of the largest buyers of Angola’s rough diamonds, and kept buying them even after rebels took over most of the country’s mines.

“They were eventful years,” Steinmetz later recalled in “The Steinmetz Diamond Story”, a coffee-table book recounting the official family history. “The government had legalized the possession and sale of rough diamonds, and a massive artisanal mining rush characterized the contemporary scene.” Photographs in the book show Steinmetz in conversation with Angolan dictator Jose Eduardo dos Santos, and posing with celebrities.

As the new millennium began, Steinmetz’s attention turned to Sierra Leone, itself just emerging from an 11-year civil war. He bought into the country’s largest diamond mine, known as Koidu, partnering up with a company reportedly tied to former mercenaries who had fought on the government side against notoriously brutal rebels.

With civil war still raging in neighboring Liberia, less than 100 kilometers away, the investment was fraught with jeopardy. But high risks and high stakes were Steinmetz’s business model.

The Koidu mine generated tensions with local residents, many of whom made their living by digging diamonds out of nearby fields by hand. Koidu’s CEO later admitted that whenever rock was blasted at the industrial operation, local residents had to be evacuated to a safe location. Houses were damaged, and residents demanded to be rehoused and began protesting. Relations with the expatriate staff running the mine deteriorated quickly.

At one demonstration police shot two people dead, and Sierra Leone’s government ordered a halt to Koidu’s operations.

Steinmetz — who would later describe his role at his companies as “ambassadorial” and “making high level connections” — quickly intervened.

In May 2008, he flew to Sierra Leone’s capital Freetown on his private Bombardier jet and met with President Ernest Bai Koroma. What was said was not disclosed. But the results were immediate: The government abandoned its demands and allowed Koidu to start up again, citing its “strategic importance” to the country’s economy.

Residents from the mining area have sued Koidu Holdings and its parent company Octea Ltd. in Sierra Leone, seeking redress for human rights violations and environmental damage. The case was initially dismissed in October 2022, but was being appealed as OCCRP went to press.

Steinmetz told OCCRP through his lawyers that the company respects “the best practices of the mining industry in Sierra Leone and Africa.”

But it was across the border, in Guinea, that he would land the deal that cemented his fortune — and sowed the seeds of the bribery charge he is fighting today.

“Deal of the Century”

Immediately after Steinmetz’s meeting with Koroma, he boarded his jet to Guinea’s capital, Conakry, flight records show. He had his eye on the verdant mountain range of Simandou, which contained one of the world’s biggest deposits of iron ore. Anglo-Australian mining giant Rio Tinto had been granted mining rights over the entire chain of mountains in 1997. Although the company had done no more than explore, Guinean authorities were reluctant to cancel its licenses.

Simandou mountain in Guinea rriddqikeiqtkinv

Credit: Copyright © 2023 Rio TintoSimandou mountain, in Guinea, West Africa, is one of the world’s largest reserves of iron ore, and has long been the focus of fierce commercial rivalry.

Steinmetz’s eponymous company, Beny Steinmetz Group Resources, known as BSGR, first set its sights on Simandou in 2005, and began working through middlemen to acquire the mining licenses for itself. Contracts obtained by OCCRP show BSGR and its intermediaries promised millions of dollars in “commission” payments to Mamadie Touré, one of the four wives of Guinea’s president at the time, in return for her help winning the blocks for BSGR.

Timeline of mining scandals

Credit: Edin Pašović/OCCRP

The May 2008 flight was Steinmetz’s fourth visit to Guinea that year. It’s not clear whom he met during the trip. But the same day Steinmetz arrived, Guinea’s prime minister — who had opposed canceling Rio Tinto’s licenses — was sacked. Two days later, the president’s office wrote to Rio Tinto, threatening to strip the company of its rights to mine and leave it only with less valuable exploration rights. It said that, by failing to develop the mine over the previous decade, Rio Tinto was effectively “freezing our mineral resources” and hindering the fight against poverty. In July, a presidential decree made good on the threat and stripped the mining rights from Rio Tinto.

Steinmetz traveled to Guinea again in September 2008. This time, he met with an ailing, 74-year-old President Lansana Conté in his home village, where they discussed the Simandou blocks, according to testimony in the Swiss case from Asher Avidan, BSGR’s country manager at the time.

The president then summoned his mines minister, Loucény Nabé, and demanded that a section of Rio Tinto’s exploration rights be entirely canceled “quickly,” according to testimony from Nabé at a World Bank arbitration tribunal.

“When I saw Mamadie Touré next to the president at the meeting, I understood that she was putting pressure on her husband in favor of BSGR,” he said. “He addressed himself to the prime minister and me regarding Rio Tinto, saying: ‘If they don’t accept, they’ll have to be thrown out.’” Touré gave her account of her role, in an affidavit, saying: “The President told Steinmetz that he was entrusting me to Steinmetz, meaning that I was there to help BSGR.” (“She is a liar, she is dangerous,” Steinmetz has said in cross-examination.)

Mamadie Touré with former BSGR president, Asher Avidan

Credit: Global Witness

Mamadie Touré (center), one of the four wives of former Guinea’s president Alpha Condé, with former BSGR president, Asher Avidan (left).

On December 4, 2008, Guinea’s cabinet took the final, formal steps to cancel half of Rio’s licenses. They were awarded to BSGR immediately and, thanks to Guinean government policy on rights allocation at the time, for free.

BSGR denied all allegations of corruption at the time, saying they “are baseless and merely constitute a crude smear campaign”, and that it obtained the licenses “through due legal and transparent processes.” Steinmetz has denied the allegations against him personally in court and tribunal hearings and criticized “false reporting and accusations.”

Conté died on December 22, 2008. The following day a military junta seized power, and installed army officer Moussa Dadis Camara as president. Steinmetz set about cultivating relations with the new authorities: He invited Camara to his daughter’s wedding in Israel the next year, and developed a close relationship with the mines minister, former banker Mahmoud Thiam.

Less than 18 months after winning the mining rights it had acquired for free, BSGR sold half of its interest in them to the Brazilian mining group Vale S.A. for $2.5 billion. Media coverage at the time described it as “the deal of the century.” BSGR said it has invested tens of millions in the property.

Prince Paul Philippe of Romania

Credit: Prince Paul of Romania, Flickr

Prince Paul Philippe of Romania.

Royal Romanian Lands

Although Steinmetz’s West African deals were larger, a dispute over a land deal he made in Romania has been the source of many of his recent legal woes, including arrests in Israel, Greece and, most recently, Cyprus.

Romania’s supreme court found in December 2020 that Steinmetz had conspired with a Romanian prince and others to illegally obtain over $100 million in real estate, according to court records and corporate documents obtained by OCCRP. The scheme was largely financed by Steinmetz, the court ruled.

The ruling has been questioned by judges in cases in Paris and Athens, and by an Interpol committee. In rulings against the extradition of Steinmetz and the prince, Paul Philippe of Romania, Interpol and the courts said there was a risk the supreme court judgment was politicized.

Paul Philippe — grandson of Romania’s King Carol II — had campaigned after the fall of the Communist government in 1989 to be recognized as the king’s heir and claim old royal lands, but a decade and a half later, his efforts were foundering. Around this time, he was introduced to Remus Truică, an adviser to Romania’s former prime minister, who offered to help Paul Philippe claim the old royal estates if he agreed to share profits from the sale of the land with a company called Reciplia SRL — which would also pay Paul Philippe an advance of four million euros ($5.1 million).

Paul Philippe thought these funds came from Truică, he told Romanian prosecutors. But Reciplia was actually 90 percent owned by Steinmetz, who had been quietly working hand-in-hand with Truică, according to findings by Romania’s supreme court.

“Our only motivation here is that we want to invest a lot of money in this business, having a low profile,” Steinmetz told Paul Philippe and his wife at a meeting at their home in Romania in December 2011, secretly recorded by one of the participants and admitted into evidence at the supreme court.

Truică regularly kept Steinmetz updated, according to separate wiretap transcripts from the Romanian Intelligence Service. They were however deemed inadmissible by the supreme court, after a change in the law limiting how such wiretaps could be used.

Steinmetz was also provided with progress reports by his business associate Tal Silberstein, the supreme court judgment says, citing witnesses.

According to the supreme court’s findings, Truică arranged to get a local forestry official replaced with a relative, who later received 50,000 euros’ ($74,000) worth of land from the deal. The court also found he had bribed the head of the agricultural institute with a trip to Monaco for him and his family.

The institute granted Paul Philippe two pieces of land, in March 2007 and September 2008. In both cases, he quickly transferred the land to Reciplia.

But the prince felt shortchanged when Reciplia failed to pay him additional amounts for his share of the property. In 2015, he complained to the police, who ended up putting him, Steinmetz, and Truică under investigation. Steinmetz, and Truică under investigation. In December 2020, they were convicted over their land dealings. Steinmetz and Silberstein, both convicted in absentia, received five years jail time for forming an “organized criminal group.” Truică was sentenced to seven years for "money laundering" and other crimes, and Paul Philippe — convicted for "buying influence" — received three years and four months.

A lawyer for Steinmetz told OCCRP the supreme court ruling was “highly politically motivated and the procedure was rife with irregularities.”

Steinmetz and Paul Philippe — who was officially recognized as heir to King Carol in Romania in 2012 — were put on the Romanian authorities’ wanted list. They have both successfully challenged extradition attempts and Interpol arrest warrants. Steinmetz has filed an appeal at the European Court of Human Rights, which the ECHR said it is considering although “no decision has yet been taken as to its admissibility.”

In November 2021, Steinmetz was arrested in Greece, on the basis of a European Arrest Warrant. He was allowed to leave the following spring, when the Athens Court of Appeal decided against extraditing him to Romania. The Athens court ruled that one of the three Romanian supreme court justices who convicted him had not sworn an oath of office, and that this risked a “violation of his fundamental right to a fair trial.”

Interpol also canceled an arrest warrant for Steinmetz in October 2021, when a committee found there were doubts over the legality of wiretap evidence against him.

Steinmetz was arrested again in Cyprus in August last year, before the Supreme Court there also rejected his extradition, saying he risked inhumane treatment.

Paul Philippe was arrested in Paris in June 2022 — also on the basis of a European Arrest Warrant — and detained for three months, but the Paris Court of Appeal ruled against Romania’s demand for extradition in November 2023. The court said that the panel of Romanian judges that convicted him may not have been “independent and impartial” and that political bias could prevent Prince Paul challenging his conviction. In May this year, Prince Paul was arrested again in Malta. A Maltese court decided against extraditing him to Romania, ruling that it posed a “real risk” to his human rights. Malta’s Office of the Attorney General has appealed the ruling.

Turning Point

In 2010, Guinean elections brought opposition stalwart Alpha Condé to power. As part of an anti-corruption drive, he launched a review of Guinea’s mining rights in March 2012. Investigators soon got wind of the contracts BSGR and its fixers had signed with Touré, the former dictator’s widow, who had since settled in Jacksonville, Florida, using the money she received from BSGR to buy an upscale home and other properties, according to court and property records.

To prevent investigators from getting their hands on original copies of the contracts, Steinmetz’s key fixer in Guinea, Frenchman Frédéric Cilins, traveled to meet Touré in Florida in April 2013.

What he didn’t know was that, by then, the U.S. had launched its own probe into the Simandou affair, and Touré had become a cooperating witness in a grand jury investigation. She was wired up and the FBI recorded everything she and Cilins said.

He promised her millions of dollars to hand over the contracts so that he could destroy them, and had her sign an affidavit denying any involvement with BSGR, according to a transcript of the recording.

Cilins told Touré that he was acting on Steinmetz’s instructions:

Cilins: There will be 3, 4, 5 [million dollars] more … And that’s the communication I was given directly by the number 1, I don’t even want to mention his name …Touré: The number 1? Michael?

Cilins: “No, no … Beny [whispering]. Everything I tell you is directly from Beny … Nobody else. Nobody else. I purposely went to see him, to see him and discuss all this thoroughly … He said “look, that’s fine, but I want you to go see. I want you to destroy these documents.”

Click here for an excerpt from the FBI’s video of Touré and Cilins. (For a full transcript, see p. 71 here.)

Cilins also offered to buy Touré tickets to Sierra Leone so she could avoid testifying in any official U.S. inquiry.

The conversation ended when federal agents swooped in and arrested Cilins. On trial in New York, he pled guilty to bribery and obstructing a federal investigation, and received a two-year sentence. Cilins has claimed in court that he was lying to Touré about Steinmetz’s involvement, to impress her.

Frédéric Cilins

Credit: Youtube screenshot by @GlobalWitnessFrédéric Cilins, former middleman for BSGR.

His arrest was a turning point for Steinmetz. Multiple countries launched investigations, including the U.K., Israel, and Switzerland, where Steinmetz lived at the time. In April 2014, Guinea withdrew the Simandou mining licenses, triggering a lawsuit from BSGR, which itself was then sued by its co-investor Vale for hiding the bribery.

In January 2021, Steinmetz was convicted and sentenced to five years’ jail time in Switzerland, later reduced to 18 months in prison and 18 months suspended on appeal in March 2023.

At the appeal hearing, the prosecutor, Yves Bertossa, lambasted Steinmetz as a “coward” for having used Cilins as “a pawn…to carry out the dirty work.” (Steinmetz told the court he was “upset by what the public prosecutor has said.”)

Steinmetz has said he had no knowledge of Cilins’ actions, and told OCCRP that he “never approved” the affidavit Touré signed in Florida.

But the Swiss prosecutor showed that, on April 5, 2013, one of Steinmetz’s lawyers sent him an almost identical draft affidavit in an email, seen by reporters. “You have sent me the below which have nothing to do with me,” Steinmetz replied. “I met her only once in my life… but we haven’t spoken etc., so I have no knowledge of her.”

Yet in April 2023 Geneva’s appeals court ruled that Steinmetz had taken part in a “cover-up” of corruption, by helping with “the drafting of the affidavit… the main aim of which was to exonerate “BSGR,” and de facto himself.” The court also said several copies of contracts signed with Touré were found when Swiss police raided his private jet.

Steinmetz has now appealed his reduced sentence, this time to Switzerland’s supreme court. No date for the hearing has been set.

Fighting Back

As pressure on Steinmetz has grown over the bribery scandal in Guinea, so has the ire he and his team have directed against billionaire philanthropist George Soros.

George Soros

Credit: APA-PictureDesk/Alamy Stock Photo

George Soros.

Soros “used his wide, high level network to engage the Guinean, Swiss, US and Israeli authorities into investigations” against Steinmetz, the mining magnate’s lawyer said in a letter to OCCRP. The lawyer also accused OCCRP — which receives some funding from Soros’s Open Society Foundations — of complicity in this.

Michael Vachon, a spokesman for Soros, said Steinmetz’s allegations were all untrue. They have been made in “arbitration and in a criminal case in Switzerland, and both cases were decided against him and his false claims rejected,” said Vachon.

Blaming it on Soros

As he has fought off allegations of bribery in Guinea, Steinmetz has blamed one man above all for his troubles: the billionaire and philanthropist George Soros.

“George Soros has used all his power, all his capacity — and he is very powerful and has a lot of capacity — to run after me everywhere,” Steinmetz testified to a World Bank tribunal in 2017. “He has an obsession with me…I mean, the guy is nuts.”

Soros was an early supporter of Guinean President Alpha Condé’s anti-corruption campaign, after the latter came to power in December 2010. At a March 2011 press conference with Condé, Guinea’s first democratically elected leader since independence, Soros said that Guinea had entered “a new era” and that its natural resources could now be used “to benefit the people.”

At the same press conference, Condé warned that there would be a review of the mining sector, and contracts based on bribery could be canceled. Soros provided initial funding — around $1 million, according to a source familiar with the matter — to the law firm DLA Piper, which began investigations into how Steinmetz acquired his mining rights. Soros also funded advisers on financial management and transparency for the Guinean government.

There is no evidence that Soros’s support for Condé lasted beyond the start of his first term. The Guinean mining review committee that recommended BSGR be stripped of its mining licenses in 2014 has said Soros had “no role, either formal or informal” in its work.

But starting in at least mid-2012, Steinmetz’s PR agents FTI Consulting were pushing conspiracy theories, in a press release and a separate briefing to journalists, which placed Soros in the middle of a purported plot to rig the Guinean election in favor of Condé and then grab Guinea’s mines. (FTI declined to comment.)

Internal company emails show the mining magnate’s growing anger with articles on corruption in his Guinea dealings.

Soros “has made it his new life mission to take the asset [the Simandou mining blocks] and smear Beny,” Steinmetz wrote to the consulting firm in November 2012.

At the time, Soros told the Financial Times: “I have no business interest in the mining industry of Guinea and have no intention of acquiring any.” He said that he had “no personal grudge against” Steinmetz.

Asked about Soros’s relationship with Condé, Soros spokesman Michael Vachon told OCCRP that “Mr Soros has long been a supporter of anti-corruption efforts around the world,” including in Guinea after Condé was first elected. But Steinmetz’s allegations of a plot by Soros are “false” and have been rejected by Swiss judges and in arbitration, he said.

FTI dropped Steinmetz as a client in November 2012 — which BSGR also blamed on Soros’s interference — and a London communications firm, Powerscourt, took over the account. The attacks on Soros continued, with Powerscourt issuing an April 2013 statement that said: “Organizations linked to and funded by Mr Soros have issued entirely baseless smears against BSGR in a bid to justify the bizarre cessation to mining investments in Guinea.”

While Steinmetz’s claims of a Soros plot gained much play in the media, they have not gone down well in the courts. In May 2015, a U.K. court dismissed attempts by BSGR to force the Serious Fraud Office to cease its investigations into Simandou. Lord Justice Davis ruled that a BSGR director’s claim that the investigation resulted from Soros’s conspiring showed “little first-hand knowledge of the underlying alleged facts.”

In August and September last year, Steinmetz was in Switzerland appealing a five-year sentence for bribery. On the margins, spokespeople for Steinmetz went further. They told an OCCRP reporter that Soros, when he was 14 and living under a false identity to escape being rounded up as a Jew, was in fact a Nazi “collaborator.” Soros helped identify Jewish properties for the Hungarian collaborationist authorities, they claimed, and said this resulted in Jews being sent to extermination camps.

(Two spokespeople repeated the claims to reporters several times in conversation. OCCRP chose to report the claims due to ethical concerns.)

Steinmetz has also advanced these claims through his lawyer, telling OCCRP that Soros had publicly acknowledged “that he assisted his Nazi protector.”

The accusation of Nazi collaboration against Soros has been made frequently by the American far right, and does not stand up to scrutiny. U.S. advocacy group the Anti-Defamation League has said the allegation is inaccurate and “repugnant”. A spokesman for Soros has said “such false allegations are insulting to the victims of the Holocaust, to all Jewish people, and to anyone who honors the truth.”

Israeli authorities, who had opened their own investigation into the Guinea bribery in 2016, reached a settlement with Steinmetz in December 2022. Steinmetz agreed to pay $5 million under the country’s anti-money laundering law, Israel’s Office of the State Attorney said in a statement. At the same time he agreed to pay a reported $86 million to settle a separate dispute with the Israeli tax agency. Steinmetz did not admit to any wrongdoing and no indictment was ever filed in Israel.

Steinmetz has now warded off the Israeli authorities and managed to keep out of the clutches of Romania, where he was convicted in absentia of forming an “organized criminal group.” But he may find it harder to escape his Swiss travails.

In keeping with his aggressive business strategy, Steinmetz — who now lives in Arsuf, near Tel Aviv — has remained publicly bullish about his chances, telling Geneva’s appeal court last year: “I’m innocent and I have nothing to reproach myself with.”

James Smith

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