From: Gary S. Gevisser
Sent: Friday, March 10, 2006 7:27 PM PT
To: Devin Standard
Cc: rest; Ivan Oshry Esq.; Conrad Wolff; United States Justice Department; FBI; Edward Jay Epstein - Author of The Diamond Invention
Subject: DONT WAIT TO DIE AND FORGET TO LEAVE ME THE BULK IF NOT YOUR ENTIRE ESTATE BEFORE READING MY QUICK RISK ASSESSMENT OF CHAPTERS 12 AND 17 OF THE DIAMOND INVENTION

Devin,

While I wait on everyone to settle down for the Jewish Sabbath and that includes the folks in Hawaii bearing in mind time and again the Chinese only sleep when having sex, I am going to do something I was raised never to do and that included never spoon feeding even a rat.

But these are unique times and I am going to do exactly that and if in fact you feel I am going “overboard” just forgive me the way T4 does when he asks me not to publish something and I go right ahead and do just that.

Bear in mind, however, there will be approximately 3,000 individuals-groups eventually copied by the end of the Sabbath including Dr. John K. Pollard who I know for a fact has read THE DIAMOND INVENTION at least once BUT even this scholarly scientist-businessman extraordinaire I believe can gain SIGNIFICANTLY from my “spoon feeding” given how I am quite certain that if Dr. JKP fully understood what I am going to be “cutting and pasting” directly out of increasingly edgy Edward Jay Epstein’s highly fascinating THE DIAMOND INVENTION he not only would have signed up for our $1,99 ONE TIME ONLY SPECIAL (or whatever my wife dictates) but let me know that he has changed his will rather than have me waiting anxiously, which of course assumes I am still around, for his will to be read to find out it is me rather than Marie who will inherit the bulk if not all of his estate, certainly even without me shoving the “cut and paste” job down his throat, not giving but a moment’s thought him being so foolhardy to leave his family members anything but a kick in the tochas especially his teamster-cheerleader sister Ms. Kelley who is blind copied and I will assume she will share this with her buddy whose name I forget but whose father was the previous head of the teamsters before he got greedy, and before they buried him in cement I understand they made certain he got his last meal.

Chewing one’s tongue is not quite as tough as what happened to some of my Israeli brothers who ended up with their cocks stuffed in their mouths when their front lines were overrun at the start of the 1973 Yom Kippur War that could have been so easily averted if United States Justice Department Officials went very public the instant they became aware of President elect John F. Kennedy meeting with Harry Oppenheimer on United States soil, I couldn’t fricken care less if it was in a fricken mud hut,,, get my drift which includes not only the Justice Department knowing exactly when and where JFK was selling out the United States but the entire Secret Service +++++++!

Now cutting and pasting very quickly first from Chapter 12 THE CORPORATE UNDERGROUND making very carefully thought through comments in red.

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When the war ended, Oppenheimer returned to the family business. He was managing director of De Beers, and second in command to his father. Even though he remained intimately involved with the strategic planning of the diamond cartel, he focused a great deal of his energies on South African politics. "If you are involved in a large bushiness [NOTE SPELLING ERROR] enterprise, you've simply got to concern yourself with politics: it is not realistic not to do so," he has explained. In the postwar period, South Africa was deeply divided by two political forces. On the one hand, there was the United party, headed by General Jan Smuts, and backed by the English-speaking and relatively liberal segments of the other white population. It was committed to a policy of gradual accommodation with the non-white majority of the population and to keeping South Africa in the British Commonwealth. On the other hand, there was the Nationalist party, backed mainly by the Afrikaner-speaking settlers of Dutch origin, which insisted that South Africa maintain a policy of strict separation of the races, or apartheid. Since many of the leaders of the Nationalist party had been interned by the British in a De Beers-owned diamond mining camp for the duration of the war because of their suspected pro-German sympathies, they were eager to cut the ties with Great Britain and, if necessary, withdraw South Africa from the British Commonwealth. As the 1948 general election approached, white South Africans were confronted with a critical choice [BULLSH*T]: They could vote for General Smuts's United party, and move toward gradual racial integration within the British Commonwealth, or they could vote for the Nationalist party, and proceed down the road of racial apartheid and international isolation.

For Harry Oppenheimer, there was one conceivable course of action: to finance and support General Smuts. Smuts, who had been a poet, soldier, statesman and hero in South Africa since the Boer War, had been a close family friend of the Oppenheimers for forty years [NO SURPRISE HERE OTHER THAN NO MENTION OF SMUTS NOT SIMPLY BEING AFFORDED A PENSION BUT TO REMAIN IN GOOD HEALTH UNTIL HE GOT SICK AND I ASSUME DIED]. He had even flown to England to attend Harry Oppenheimer's gala twenty-first birthday party at the Spreadeagle Inn. Aside from personal considerations, Oppenheimer realized that his family business operated throughout the British Empire the sights were in London, small diamonds were cut in Israel (then a British mandate), and diamonds were mined in British colonies in West Africa-and that if Smuts was defeated in the election, relations with England would be strained, if not completely severed. Diamonds were truly an international business, and Oppenheimer did not want to see De Beers isolated from its distribution network in London. Moreover, Oppenheimer personally opposed apartheid as both impractical and immoral.

Not only did the Oppenheimer interest provide financing for most of the United party in 1948, but Harry Oppenheimer himself stood for Parliament in the district of Kimberley where he had the support of the diamond workers from the De Beers Mines. When the votes were counted, however, the United party found itself decisively defeated. [ARE YOU VOMITING…EJE WANTS US TO BELIEVE THAT WE ARE ALL DUMB ENOUGH TO BELIEVE THIS UTTER BULLSH*T OF THEM ACTUALLY BOTHERING TO COUNT WHAT VOTES?] General Smuts, after serving as prime minister for sixteen years, lost his own seat in Parliament. The Nationalist party, led by H. F. Verwoerd, won a resounding majority of the seats, and immediately moved to form a government that would begin implementing its policy of apartheid.

One of the handful of United party candidates to win a seat in 1948 was Harry Oppenheimer. He had, however, no opportunity [THIS IS BIG TIME TEAR TIME, GO AHEAD AND GIVE EVERYONE READING THIS OVER YOUR SHOULDER A FULL BOX OF TISSUE PAPER, NO FORGET THAT, JUST ROLL OUT THE TOILET PAPER] to influence the government. As he sat in Parliament, he saw apartheid laws enacted over his protest, and the nonwhite population stripped of every right they had gained. He also saw South Africa gradually slipping from the British orbit. Since the United party had collapsed, Oppenheimer provided most of the funds for a new party called the Progressive party-but it was never able to elect more than a few members to Parliament. The Oppenheimer interests also bought an important share of the English language press in South Africa, which shrilly attacked the government's racial policies. It was, however, to no avail. The Nationalists kept winning elections-and Harry Oppenheimer retired from Parliament, although he continued, almost single-handedly, to finance the Progressive party. [I WANT YOU TO NOW EMAIL IVAN OSHRY A FORMER LOCAL BIG DEAL IN THE PROGRESSIVE PARTY AND JUST ASK FOR HIS CREDIT CARD NUMBER AND I WILL TELL ONCE YOU GET IT WHAT I THINK IS FAIR TO CHARGE HIM FOR HIS CRIMES OF IGNORANCE UNLESS HE WANTS ME TO BEGIN MAKING THE CASE THAT HE WAS COMPLICIT. PLEASE ALSO NOTE THAT MY “ASSETS” ARE ON HEIGHTENED ALERT AROUND THE WORLD – YOU MAY HAVE A SENSE OF WHAT I WILL BE SPELLING OUT IN MY NEXT HEAVILY BROADCASTED MISSIVE!]

When his father died in 1957, Oppenheimer withdrew entirely from South African politics and concentrated his energies on planning out a new future for the diamond cartel. He recognized that the geopolitical forces in Africa were rapidly changing, and that the problems he would confront in his efforts to preserve the diamond invention would be very different from the ones that his father had faced in colonial Africa. When Sir Ernest had brilliantly forged the elements in the diamond cartel, South Africa and most other diamond producing areas in the world were part of the British Empire, and he could count on the administrative powers of the British Colonial Office to help him protect one of the leading British exports-diamonds. The only diamond producers outside the British sphere of influence were the Belgian Congo and Portuguese Angola, both of which were colonies of countries allied with Great Britain. Sir Ernest did not have to concern himself with Marxist revolutions, nationalistic movements and hostile regimes. [WELCOME TO AMERICAN, THE LAND OF THE FREE, HOME OF THE BRAVE BOUGHT AND PAID FOR UNITED STATES CONGRESS ARMED TO THE TEETH…---…]

Whereas Sir Ernest had only to worry about economic changes, Harry Oppenheimer realized even as early as 1958, he has written, that he would have to prepare himself for violent political changes. A decade of apartheid under the Nationalist government had served to alienate South Africa [GIVE ME YOUR HOME ADDRESS AND I WILL SEND YOU A YEARS SUPPLY OF TOILET PAPER TO MAKE UP FOR WHAT YOU CONSUME READING JUST THIS PARAGRAPH] from the rest of the Commonwealth. By 1961, South Africa was formally expelled from the Commonwealth and became a republic. As British colonies, such as Sierra Leone, Ghana and Tanzania, achieved their independence, they severed diplomatic relations with South Africa. Belgium also relinquished control of the Congo (which became Zaire), with its vast reserves of diamonds. As these newly independent nations grew increasingly hostile to South Africa, De Beers, which was, after all, a South African corporation, could not openly control their diamond fields. Then in 196 3, the Soviet Union called for a world boycott of trade with South Africa, and almost every nation in Africa Joined it (in theory, if not in fact). The United States even cut off military aid to South Africa. By the mid-1960s, South Africa became a pariah nation. [TO MENTION LITTLE OF THE NUCLEAR AIRCRAFT CARRIER ENTERPRISE ROUNDING THE CAPE OF GOOD HOPE IN MID 1964 WITHOUT FIRING A SINGLE SHOT IN THE DIRECTION OF THE ILLEGITIMATE SOUTH AFRICAN APARTHEID REGIME UNDER THE COMMAND AND CONTROL OF THE DAAC, THE MOST REPRESSIVE COMMUNIST REGIME IN THE HISTORY OF MANKIND.]

To keep control over the world supply of diamonds, Harry Oppenheimer had to make covert arrangements with both the Russians and the African nations that produced diamonds. As early as 1964, Oppenheimer informed investors in his company that the "political situation in Africa has created new problems for our group.... There are obvious political objections to the purchase of production from African states." He further reported, "This unfortunate state of affairs has necessitated a considerable reorganization of the group's activities . . . [diamond] buying operations in the newly independent African states are now, in every case, undertaken by companies registered and managed outside the Republic of South Africa, and which are not subsidiaries of De Beers."

In fact, however, these companies were created and controlled by Oppenheimer for the purpose of serving as intermediaries in the diamond arrangements. In other words, a complicated system of corporate fronts had been set up to obscure the movement of diamonds to De Beers from African states pledged to the destruction of South Africa.

The Oppenheimer strategy was not aimed at deceiving the African governments themselves, for they were fully aware that De Beers was the ultimate operator of their mines and marketer of their diamonds. It was intended merely to provide a necessary cloak of "deniability" for African politicians. [HOW INFANTILE TO THINK YOU CAN GET AWAY WITH A HOLLYWOOD IDEA OF A PLOT WITHIN A PLOT AND STILL NOT PRODUCE A BLOCKBUSTER MOVIE] If any journalists or dissidents charged them with trading with the enemy, they could deny the charges and be at least technically truthful. [BLAH BLAH ]The corporations with which they dealt were registered in Luxembourg, Liechtenstein, Switzerland, or England, and had innocuous names, such as the Diamond Development Corporation, or Mining and Technical Services, Ltd. They could remain conveniently blind to the fact that these intermediaries were creatures of De Beers, or that they immediately transferred their diamonds to De Beers' Diamond Trading Company in London. The distinction was, however, a crucial one for many African governments because, at the very time they were earning a large portion of their hard currency from the Oppenheimer empire, they were demanding through the United Nations that other nations boycott South African business.

The ever-expanding number of diamonds coming out of the Soviet Union proved to be an even more vexing [DON’T YOU JUST LOVE THIS WORD] problem for Harry Oppenheimer. His father had had only to concern himself with restricting and allocating the production of the diamond mines in Africa; he had to find ways to prevent the Soviets from flooding the world market with their diamonds. According to the geological reports he received, Soviet mines in Siberia had a potential for producing more diamonds than did all the mines in South Africa. He realized that if the Soviets ever attempted to market their diamonds in competition with De Beers, the price might collapse. He therefore moved to bring the Soviet Union into the cartel arrangement, since, as he eloquently put it, "a single channel ... is in the interest of all diamond producers whatever the political difference between them may be." In return for not competing with De Beers, he offered to buy up the entire Soviet production, year after year, of uncut gem diamonds at prices higher than the Soviets could otherwise obtain on the free market.

The Soviets immediately saw the benefits of this monopolistic arrangement. Since, however, Soviet foreign policy was designed to isolate and undermine South Africa, the Soviets preferred to remain silent partners with De Beers in the diamond business. The Soviet Union had insisted from the outset that Oppenheimer publicly deny the existence of any deal, and, in 1963, in the annual report of De Beers, "On account of Russian support for the boycotting of trade with South Africa, our contract to buy Russian diamonds has not been renewed." What he did not put in the annual report was that the Russian diamonds were arriving through a corporate front in ever-increasing numbers. Indeed, Oppenheimer had arranged to buy out the entire Russian production of uncut diamonds, an arrangement that persists to this day. [WHY DOESN’T EJE TELL US WHAT WE DON’T ALREADY KNOW OTHER THAN THIS BOOK WAS WRITTEN FOR VERY LIMITED CIRCULATION ONLY SEEING THE LIGHT OF DAY IN AND AROUND I BELIEVE IT WAS MARCH 1982 WHEN EJE, GIVEN HIS WALL STREET JOURNAL CONNECTIONS, SHOULD HAVE BEEN EASILY ABLE TO CALL “OUR MAN ROGER” AS IN ROGER W. ROBINSON JUST ENTERING THE WHITE HOUSE AS A SENIOR MEMBER OF THE NSC AND SIMPLY REMINDED ROGER WHO MAY NOW HAVE THE EXCUSE THAT HE WAS STONED OUT OF HIS MIND OF HOW EASY IT WOULD HAVE BEEN TO NOT ONLY END THE COLD WAR WITH THE USSR BEFORE IT BEGAN BY CUTTING OFF THE SOVIET’S ACCESS TO HARD-DIAMOND CURRENCY BUT IN THE SAME BREATH TERMINATING THE DAAC CARTEL, ORGANIZING ALL THOSE GOVERNMENTS AROUND THE WORLD NOT ON THE PAYROLL OF THE DAAC TO TERMINATE, I.E. CHOP OFF THE BALLS, THE HEAD, THE TORSO OF THIS REPRESSIVE REGIME’S EXCLUSIVE WORLDWIDE RIGHT TO ENGINEER-MANUFACTURE-DISTRIBUTE THEIR OWN UNLIMITED SUPPLY OF UNTRACEABLE, LIGHTWEIGHT AND NEVER INVENTORIED DIAMOND CURRENCY.

Oppenheimer needed a tight-knit staff that could discreetly direct all the operations of the mines, the diamond buyers, and the distribution network from South Africa. He located his headquarters, as had his father, in the Anglo-American Building at 44 Main Street in Johannesburg. In theory, Anglo-American and De Beers are two separate entities; in fact, the Oppenheimers, who own a controlling interest in both companies, treat them as a single empire, Anglo-De Beers. The Anglo-American Company provides De Beers with "technical services" such as mine managers, engineers, architects, bookkeepers, lawyers, and public relations advisers. These technicians nominally remain on the payroll of Anglo-American and are only on "loan" to De Beers. In fact, they operate the mines, supervise the logistics, make the financial arrangements and hire personnel for De Beers. They report directly through a global telex system to a suite of offices on the fourth floor Of 44 Main Street, called simply "Diamond Services."

Diamond Services is in reality Oppenheimer's staff for running the diamond cartel. It is composed of only about a dozen men. The strategic objective of the staff is to preserve the delicate equilibrium between the world supply and world demand for diamonds. To achieve this balance, the staff uses its detailed knowledge of all diamond prospecting possibilities to determine when new diamond mines will be brought into production-or closed-and the level of production. It also formulates plans for dealing with possible competitors, either by making arrangements with them or buying them out directly. And it closely monitors all aspects of the far-flung diamond business.

In England, Oppenheimer controls the distribution of gem diamonds through the Diamond Trading Company, which is headed by his cousin, Sir Philip Oppenheimer and operated by Monty Charles. Also, in England, Oppenheimer controls the Charter Company which, in turn, owns substantial interests in some of the supposedly independent mining companies with which the Diamond Trading Company has an arrangement to buy diamonds. For example, Charter owned 25 percent of the Selection Trust Company, which held diamond concessions in Ghana and other West African countries-and sold these diamonds to the Diamond Trading Company.

In Luxembourg, Oppenheimer has a subsidiary called Boart International that holds, in turn, controlling interest in some of the largest manufacturers of diamond drilling equipment in the world. Through this Luxembourg corporation, he was able to dominate the entire industrial diamond business. Moreover, through a subsidiary in Ireland called the Shannon B Corporation, he was able to control the distribution worldwide of diamond abrasive powders for industry.

With the enormous profits from the diamond cartel, Oppenheimer built a $15 billion mining conglomerate that operated on five continents. His father had invested heavily in gold mines in the Orange Free State, even though the price of gold was then fixed at $35 an ounce, and gold mining was unprofitable. As the price of gold rose, Oppenheimer expanded the gold mining until, in 1980s, his companies produced nearly one-third of all the gold produced in the world. As the gold mines in South Africa also yielded uranium oxide as a by-product, Oppenheimer also became one of the world's largest producers of uranium. Oppenheimer gradually expanded into platinum, copper, tin, manganese, oil, lead, zinc and other strategic minerals. By 1980s, his congeries of companies accounted for more than half of the value of South Africa's mineral and industrial exports. They also had international connections. For example, through Anglo-American Corporation he had become the second largest foreign investor in the United States in 1980s. [WHY DO YOU THINK IT IS THAT I-WE HAVENT ALREADY DIED THE RICHEST PERSON EVER IN THE GRAVE JUST FROM EVERYONE ON THE PLANET PAYING THEIR ANNUAL SUBSCRIPTION OF $1.99 IN ADVANCE AND I ASSUME DR. JOHN K. POLLARD’S ESTATE HAS EARMARKED EVEN IF MDG IS TO GET THE LION’S SHARE AT LEAST $100 FOR ME AND YOU AND THEN DO THE MATH ON THE REST OF THE WORLD’S POPULATION WHO HAS MORE THAN A POT TO PEE IN AND WHO IS NOT BOUGHT AND PAID FOR BY THE DAAC?]

Oppenheimer was personally able to control this vast corporate complex, though he had only a small percent of the equity in it, through an ingeniously constructed pyramid of ownership. At the top of the pyramid was a private firm called E. Oppenheimer and Son. The chief shareholder in it were Harry Oppenheimer and his children, Nicholas and Mary Slack. The principal asset of E. Oppenheimer and Son was ten percent of the shares of the Anglo-American Corporation. This block of stock was sufficient to give Oppenheimer undisputed control of it, since another 41 percent of the stock was held in the treasury of De Beers which was controlled by Oppenheimer.

At the next level of this complex structure, Anglo-American held a 52 percent interest in an investment trust called Anamint. Anamint, in turn, held 26 percent of the shares of De Beers-- a cross-holding that allowed Oppenheimer to appoint the board of directors of both companies.

The pyramid then dramatically widens with De Beers and Anglo-American owning pieces which when combined are tantamount to a controlling interest in seven of the largest conglomerates in South Africa. These investments, which included Anglo-American Gold Investment Company, Anglo-American Coal Corporation, and Johannesburg Consolidated Investment, encompassed most of the mining and industrial economy of South Africa: the companies, which themselves are holding companies, owned more than half of all the gold mines, the major insurance companies, the largest privately owned steel company in Africa, and virtually the entire petrochemical industry in South Africa. A government investigation of the holdings of the Oppenheimer empire found that it exercised direct control over 900 major companies in South Africa.

Finally, at the base of the pyramid, Anglo-American controlled two international companies-Mineral and Resources Corporation in Bermuda and Charter Consolidated in Great Britain which together dominate mining companies on all five continents.

Because public investors owned stock in most of these corporations but did not exercise control, the pyramid structure permitted Oppenheimer to expand the reach of his empire without diminishing his personal hold over it. Because of this enormous leverage over these interlocking companies, he can act with swiftness and, if necessary, stealth, in acquiring new properties.

The financial holdings of the Anglo-De beers corporate pyramid provide the means for protecting the diamond invention in adverse times. When new diamond strikes are made, it can orchestrate their purchase using its corporate intermediaries. When there is a temporary decline in retail sales of diamonds, it can use its financial reserves to buy back diamonds in the pipeline to prevent any decline in price. When influence is needed in diamond producing nations, it can use corporations in controls in those countries to provide incentives to their leaders not to infringe on the diamond invention. Like pawns on a chess board, the swirl of corporations in the complex are used to safe guard the all-important queen in the game: the diamond cartel.

CHAPTER 17 – THE RUSSIANS ARE COMING

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By 1976, De Beers was choking [SIDEBAR TO T4 – USE YOUR ONE HAND TO HOLD YOUR MOTHERS ONE HAND TIGHT AND KEEP REMINDING HER THAT YOU LOVE HER AS YOU SQUEEZE IT REAL HARD SO THAT HER OTHER HAND CLASPS YOUR HAND AS YOU USE YOUR OTHER HAND TO KEEP HER HEAD FROM SMACKING ITSELF UP AGAINST THE WALL BUT SHE MUST ALSO GIVE THOUGHT TO STEVE BIKO FOLLOWED IMMEDIATELY BY HER DOING THE RIGHT THING AND THE SMART THING WHICH IS ALSO THE RIGHT THING WHICH IF SHE DOESN’T KNOW SHE CAN EMAIL ME OR YOU WHO WILL LET HER KNOW PRECISELY] on the ceaseless flow of greenish diamonds that arrived each month in London on the Aeroflot let from Moscow. De Beers had little choice but to accept the consignments. Otherwise, the Russians would almost certainly dump these diamonds, which now amounted to some 2 million carats a year of gems, on the world market, and cause a ruinous collapse in prices. There was, however, a limit on the number of small diamonds that De Beers could absorb. The De Beers board of directors was becoming increasingly concerned with the seemingly magical capacity of the Siberian mines. They wanted to know how many more millions of carats of diamonds would be produced; and also why previous De Beers estimates of waning production in Siberia had proved so wrong.

Before renewing its commitment to buy diamonds, De Beers asked the Russian authorities to allow a group of executives to visit the Siberian mines and make their own appraisal. The Russians agreed to the De Beers visit on the condition that Russian geologists be allowed to observe De Beers' mines in southern Africa.

Sir Philip Oppenheimer, who had conducted most of the negotiations with the Russians in London, arrived in Moscow in the summer of 1976. He was accompanied by Barry Hawthorne, who was then De Beers' chief geologist in Kimberley, as well as a De Beers mining engineer, cost accountant and sales executive. Every night for nearly a week the Oppenheimer party was taken to the best restaurants in Moscow by various officials for caviar-laden meals. They also met during the day leading geologists, mineralogists, engineers and mine managers. Despite these thorough briefings, Sir Philip insisted on personally inspecting the mines, some four thousand miles away in Siberia.

After some procrastination, the Soviet Diamond Administration finally organized air transportation to Yakutia for Oppenheimer and his associates. Fog delayed the flight for nearly a day, however, and by the time they had completed the arduous Journey to Mirny, they had to begin preparing for the return journey to Moscow, which had been very tightly scheduled. "We had about a twenty-minute tour of the mine," Hawthorne recalled, "and seeing any other mine in Siberia was out of the question." Even in that brief period of time, the Oppenheimer party was able to get some picture of the Siberian mining operation.

The mine itself, which looked like any open-pit mine in South Africa, was far less deep than they had calculated. This meant that less ore had actually been taken from this mine since 1960 than De Beers had assumed, further deepening the mystery of how the Russians produced vast quantities of gem diamonds.

The Oppenheimer party was next taken for a whirlwind tour of the treatment plant itself. They were "astounded," [HAVE EVERYONE TAKE THEIR TURNS GOING TO THE BATHROOM TO BALL THEIR EYES OUT SAVING BOTH TREES AND THE SPREADING OF AIRBORNE PARTICLES…] as Hawthorne put it, to find that the Russians did not use water to separate the ore from the diamonds. In all the other diamond mines in the world, centrifugal baths are used to remove the non- diamondiferous material. An engineer explained that because it is too cold during the Siberian winters to prevent water from freezing, the ore at Mirny was first crushed by machines to a standard size and was fed through a battery of X-ray sorting machines. As a kimberlite geologist experienced with pipe mines in South Africa, Hawthorne found this explanation difficult to understand. In the De Beers diamond mines, more than 99 percent of the non-diamondiferous ore was washed away by the centrifugal baths, and thus only a minute fraction of the ore had to be processed through the X-ray machines. If they separated all the ore from the mine by X-ray machines, the separations would require over a thousand Sortex machines and millions of volts of electricity.

Hawthorne subsequently told me that he had not seen any of the Sortex machines or any evidence of power lines at the mine site. Moreover, judging from such standard mining parameters as the surface area of the open pit, the depth of the excavation, the height of the waste dumps, and the capacity of the earth-moving equipment and other machinery, he found it difficult to account for the vast quantity of diamonds that the Soviet Union had sold to De Beers. In 1978 alone, it delivered Some 2.5 million carats of gem diamonds-almost one-quarter of the world's supply.

The enigma [I THOUGHT ONE ONLY USES A WORD LIKE THIS WHEN TALKING ABOUT MAN?] of the Russian diamonds became all the more perplexing [DON’T YOU JUST LOVE THIS WORD?] when De Beers received fragmented reports about Russian advances in high-pressure physics. Even though the specifics of the Russians' progress remained clouded in secrecy, it had become readily apparent to everyone in the diamond industry by the mid-1960s that Russian scientists had developed the technology for mass-producing synthetic diamonds for industrial purposes. Russian factories, located mainly in Kiev in the Ukraine, began to churn out a wide variety of diamond grit and other abrasives, which were offered for sale to European dealers; at international conferences, Russian technicians claimed that they had developed synthetic diamonds ten times larger than had been produced in the West.

In 1966, Henry Meyer, an English mineralogist attended a conference on crystallography in Moscow with Dr. Kathleen Lonsdale, one of England's foremost crystallographers, and a member of the Soviet Academy of Science. During the meeting, a Russian scientist told of the enormous progress the Russians had made in the field of high-pressure physics-including the construction of a hydraulic press some ten stories high-and offered to show the English scientists some crystals that had been produced in the laboratory [O, SO THIS IS HOW THE DRUG NAME CRYSTAL AMPHETIMINE CAME ABOUT?]. That afternoon, both Dr. Lonsdale and Dr. Meyer accompanied him to a research facility on the outskirts of Moscow where he produced a tray of some half dozen small, white gem diamonds, all perfectly shaped and weighing approximately a quarter of a carat apiece.

Dr. Meyer, who specialized in analyzing the mineral inclusions in diamonds, closely examined the stones. They were not like any gem diamonds he had ever seen. The Russian scientist then explained that all these gems had been synthesized from carbon in a hydraulic press. He boasted that manufacturing gems was no longer a scientific problem in the Soviet Union but an economic one. Both English visitors were astounded at this casual disclosure. No laboratory in the West had come even close to synthesizing a gem diamond. (The General Electric breakthrough occurred later.)

In Johannesburg, De Beers' scientists soon heard of the Russian breakthrough, but they assumed that Meyer and Lonsdale had merely witnessed a laboratory experiment in crystal-growing, rather than any sort of new invention of technology.

The following year, however, there was further confirmation. Professor Bakul, the director of the Soviet Synthetic Research Institute in Kiev, recruited Joseph Bonroy, one of the finest craftsmen in Antwerp, to cut and polish some highly unusual Russian diamonds. Bonroy, who specialized in sawing distorted and difficult-shaped stones, found these diamonds particularly difficult to penetrate. He saw that they were gem crystals of excellent purity and nearly ideal octahedron shape, but as he studied them, he found that they all tended to have very unorthodox sawing directions.

To assist Bonroy, Professor Bakul explained that all the diamonds, which weighed about one-half carat and were slightly tinted, had been synthetically manufactured In Kiev, He asked the Belgian cutter to keep secret the fact that the Russians had manufactured gem diamonds, since, as Bonroy later put it, "the hypersensitive diamond market would be rocked by news such as this."

Bonroy found the solution to cutting the synthetic gems. When he completed the work, and polished and buffed the synthetic diamonds, they looked exactly like gem diamonds. Bonroy kept the secret of the Russian diamonds for four years. Then, in April 1971, [HELLO, HELLO, HELLO????? …---…WHY NOT THROW IN HERE THAT THE AMERICAN CHARLES ENGELHARD, THE CO-INVENTOR-CONSPIRATOR OF THE DIAMOND INVENTION WAS BURIED IN MARCH 1971 BECAUSE I LOOKED AHEAD IN THE NEXT CHAPTER WHERE EJE TALKS ABOUT CE HAVING “NO MALE HEIRS” BUT NO MENTION OF PRECISELY WHEN CE DIED OR WHAT HE DIED OF JUST 5 ODD FRICKEN MONTHS BEFORE THE UNITED STATES I.E. THE WORLD WENT OFF THE GOLD STANDARD…---…] he was asked to speak at a symposium in Kiev on the problems of cutting synthetic diamonds. Bonroy, concerned about the future of the diamond industry, asked Bakul whether the Soviet Union intended to mass-produce these synthetic gems.

The professor pondered the question for a moment and replied that the Russians still found it economically unfeasible to synthesize gem-quality diamonds. It was, however, not clear from his answer what the conditions were under which the Russians would use this technology to manufacture diamonds.

Even though the mysteries surrounding Russian diamonds were never fully resolved, De Beers succeeded in absorbing the constantly expanding production. Although at one point in the mid-1970s, it had to reduce its own production of diamonds from Namibia to accommodate Moscow's, De Beers gradually developed new markets for diamond jewelry in both Asia and America.

The De Beers arrangement with the Soviet Union was only for uncut diamonds. The Russians had always reserved a small percentage of its production from Siberia for its own Jewelry manufacturing. In the late 1960s, these Russian-cut jewels began to appear in ever-increasing number in the grading halls of Antwerp. Cut and polished in Russian factories in Moscow, Kiev and Sverdlovsk, the diamonds were called "silver bears," and had some extraordinary features. To begin with, most silver bears were almost exactly the same size in girth, and weighed approximately two-tenths of a carat each. Moreover, each of them had the same octahedron shape, and they were nearly identically faceted and polished. It was almost as if, as one Belgian trader observed, the silver bears had all been cut from the same pattern.

Initially, diamond experts in the West were baffled by the inordinate regularity of the silver bears. How could miniature diamonds that could fit on the tip of a pencil point be so identically matched in size, shape and cut?

Louis Asscher, one of the renowned master cutters of Europe, attempted to resolve the question by microscopically examining a sample of silver bears. He had a lifelong experience with diamonds; his father, the third generation of the House of Asscher in Amsterdam, had re-cut the crown jewels for the British royal family in 1907, and he himself had invented and popularized the Asscher cut (the "brilliant cut" of a triangular diamond). When he studied the silver bears, he found that they all contained a similar striation mark on certain facets. He concluded that this tell-tale mark came from a machine, and he suggested that the Russians had invented an automated diamond-cutting machine that accounted for the silver bears.

A number of master cutters in Antwerp took issue with Asscher. They found that the Russian cut on the silver bear was "too good, too regular, too perfect," as one of them put it, to be anything but the work of skilled human hands. The Antwerp experts theorized that the Russians had imposed draconian standards on their diamond cutters, and diamonds that failed to meet these criteria were simply ground to dust and used for industrial purposes. They recognized that in order to achieve such uniform diamonds, the Russians would have to sacrifice a considerable portion of the average "yield"-the weight of the finished gem-but they assumed this was a cost that the Russians were willing to pay in return for standardization.

As the Russians vastly stepped up their export of silver bears to Europe, the concern over Russian cutting techniques was replaced with a much more urgent one about their marketing objectives. The Russian diamond-trading organization opened up offices in rapid succession in 1969 in Antwerp, Zurich and Frankfurt. Italy began offering large discounts to American manufacturers, who needed a uniform product for their inexpensive assembly-line jewelry. In addition, reports reaching western Europe asserted that the Russians were training thousands of new diamond cutters at a center in Kostrana, some 180 miles north of Moscow.

The Russian trading organization itself conspicuously avoided releasing any meaningful data on the volume of its exports of polished diamonds to Europe. By 1970, however, diamond dealers in Antwerp reckoned that the Russians were putting at least a half million silver bears on the market each year. Manufacturers in Tel Aviv, as well as Antwerp, became increasingly apprehensive about these Russian diamonds. What they had first considered a novelty now seemed a threat to the very existence of their respective cutting centers.

The Soviet Union already was selling polished diamonds. For example, one New York dealer, Fred Knobloch, told me that he had been invited to Moscow on several occasions to buy cut diamonds by Russ Almaz, the Russian diamond-trading company. In Moscow, he described being escorted to a glass skyscraper at 29 Kalinin Prospect, where he was ushered into an austerely furnished room full of diamond buyers from Asian and European countries. A Russian official then emptied a canister of some 1,500 small polished diamonds, all under a carat in size. The official explained that the rules were the same as those insisted upon in London by De Beers, there was to be no bargaining, and cash had to be paid in advance of delivery. When Knobloch agreed to buy the lot of diamonds on the Russian terms, the Russian official said-ill perfect Yiddish-"Mazel und Brucha," literally: "Good luck and blessings," the same phrase that is used to conclude a deal on 47th Street in New York, Tel Aviv or Antwerp. A few feet away, at another table, he heard another Russian official saying "Mazel und Brucha" to a Japanese buyer. He realized then that the Russians were as capable as De Beers in conducting an international diamond business-right down to giving the traditional Jewish blessings.

In its public statements, De Beers desperately attempted to calm these fears in the trade. In its 1971 issue of the International Diamond Annual, it went to considerable lengths to explain: There has been no indication that the Russian authorities have the slightest intention of "dumping" their polished goods on Western markets. On the contrary, the Russian authorities appear to accept that the industry they have been at great pains to develop and establish would founder if the market for diamonds in the Western world were undermined or were not held in strong hands.

In their private deliberations, however, De Beers' executives were far less certain as to whose "strong hands" the Russians wanted controlling the diamond trade. They certainly did not want to afford the Russians the opportunity of establishing direct relations with the American, Belgian, and Japanese wholesalers. If the Russians succeeded in bypassing the diamond distribution chain that De Beers had ingeniously devised over a half century, they obviously would be one step closer to taking over the diamond cartel from Dc Beers. The silver bear offensive raised a more immediate problem: the excess of silver bears had to be drained from the market and brought under control. De Beers therefore strongly encouraged a number of its own dealers to buy silver bears directly from the Russians and then, when market conditions were tight, redistribute them through their own marketing channels. The chief operative in this endeavor was Joseph Goldfinger, De Beers' man in Tel Aviv.

Goldfinger had been born in Lithuania, and studied to be a rabbi at the Yeshiva before emigrating to Palestine in the mid-1930s. When the diamond industry began in Natanya during the Second World War, he trained as a cutter, and then began dealing in both uncut and cut diamonds. In 1949, he was invited by De Beers to attend their sight in London, and quickly proved himself to be both resourceful and dependable. Because the Israeli industry was expanding at a breakneck pace, De Beers needed a distributor in Israel who could shrewdly apportion its supply of melee diamonds among the hundreds of small manufacturers scattered around Tel Aviv. Goldfinger, who had demonstrated that he had both the requisite energy and judgment, was given a "dealer's sight" in 1962, which meant that he received diamonds not only for manufacturing himself, but also for redistributing to other Israeli dealers. By 1973, he was receiving up to $20 million worth of diamonds in his box at the London sights, and he had become De Beers' third largest client.

With this enormous sight from De Beers, Goldfinger became known as "Mr. Diamond" in Israel. He became heavily involved in every phase of the Israeli diamond industry and built up a network of wholesalers of polished diamonds that extended from Tel Aviv to Hong Kong and Tokyo. When the silver bear crisis arose, Goldfinger was logically the man that De Beers turned to: Not only did he have the vast experience in marketing small polished diamonds but he had a very strong interest in preventing the Russians from making inroads into this market.

The original plan, in 1973, was for Goldfinger to go to Moscow and to buy from Russ Almaz the selections of silver bears most in demand by American and Japanese manufacturers. Together with the uncut diamonds that De Beers was itself buying from the Russians, these purchases of polished diamonds would help reduce the Russian exports to Europe to manageable proportions.

The Soviet Union, however, in deference to Arab demands for a boycott against Israel, preferred not to deal directly with Goldfinger. Instead, it was arranged that I. Hennig, the broker next to De Beers on Charterhouse Street, would buy the diamonds in Moscow for Goldfinger's account, and turn them over to Goldfinger in London. In early 1974, representatives of I. Hennig traveled to Moscow and were lavishly entertained by Dolnitsov, the head of AmRuz. The London brokers purchased substantial quantities of the silver bears for Goldfinger's account, effectively withdrawing them from the market. On a subsequent trip to Moscow, the brokers were surprised to find that Dolnitsov had been replaced by a more dour official. No explanation for the change was offered. The arrangement remained intact, though, and the brokers were able to arrange delivery of some $2 million worth of silver bears a month. These preemptive buys succeeded in stabilizing the polished diamond market.

Even as De Beers extends its alliance with the Russians, it remains extremely vulnerable to any Russian policy change. For example, in 1980, the Russian trading company slashed its price without warning on its silver bears in Antwerp by 15 percent. To prevent prices from failing, De Beers compensated by distributing fewer such diamonds to its own customers. Like the Goldfinger preemptive buyout, this was, however, only a temporary expedient. If Russia continues to expand its own production of both uncut diamonds and silver bears, De Beers will be unable to stockpile or sell the increment-- or maintain the diamond invention.

TIME TO FLY…---…