----- Forwarded Message ----- From: George Soros <[email protected]> To: [email protected] Sent: Wednesday, 3 July 2013, 16:43 Subject: Corruption Exposed Dear Friends and Colleagues: George Soros and the Open Society Foundations have long been advocates of greater transparency in the extractive industries. This article in the current issue of the New Yorker demonstrates why transparency is so crucial to the future of resource rich countries in the developing world. All best, Michael Vachon ~~~~ http://www.newyorker.com/reporting/2013/07/08/130708fa_fact_keefe ~~~~ Press Release from the New Yorker How an Israeli Billionaire Wrested Control of One of Africa’s Biggest Prizes In the July 8 & 15, 2013, issue of The New Yorker, in “Buried Secrets” (p. 50), Patrick Radden Keefe investigates allegations that one of Israel’s richest citizens may have bribed African officials in order to obtain a prospecting license in Guinea and the riches that could result from it. “As wealthy countries confront the prospect of rapidly depleting natural resources, they are turning, increasingly, to Africa, where oil and minerals worth trillions of dollars remain trapped in the ground,” Keefe writes. Guinea is one of the poorest countries on the planet, but it possesses a bounty of natural resources—including vast iron-ore deposits buried inside a great, forested mountain range called Simandou— which are “worth a fortune.” For a while, it seemed that Anglo-Australian mining giant Rio Tinto was poised to profit, but in July, 2008, the company was abruptly stripped of its license by the Guinean government. Beny Steinmetz Group Resources, or B.S.G.R., was given the exclusive license to prospect half of the area, and they soon brought on Rio Tinto’s competitor, the mining company Vale. Steinmetz is the largest buyer of rough diamonds from De Beers, and has diversified his holdings into real estate, minerals, oil and gas, and other fields. Steinmetz is, according to some sources, the richest man in his native Israel, but despite his great wealth, he has “maintained an exceptionally low profile,” Keefe writes. “The Simandou contract was a surprising addition to Steinmetz’s portfolio, because B.S.G.R. had no experience exporting iron ore,” Keefe writes, and in Conakry, Guinea’s capital, “there were rumors that Steinmetz had acquired the concession through bribes.” Then, in 2010, several months after the Vale deal was announced, Guinea held its first fully democratic elections since independence. “The new President, Alpha Condé, had run on a platform of good governance and greater transparency in the mining sector. But as he took office he faced the possibility that Guinea’s most prized mineral asset may have been traded out from under the country. He could not simply void the contract.” Condé tells Keefe, “There is continuity of the state. I couldn’t put things back where they had been—unless I had right on my side.” Last October, Nava Touré, a former professor of engineering whom Condé had entrusted with running the technical committee on mines, “sent an incendiary letter to representatives of the joint venture between Vale and B.S.G.R., identifying ‘possible irregularities’ in the Simandou concession,” Keefe writes. The letter “accused B.S.G.R. of planning all along to flip the rights to Simandou, in order ‘to extract immediate and substantial profits.’ ” Condé’s government opened an inquiry into the license with the help of Scott Horton, an attorney at the U.S. law firm D.L.A. Piper, who has conducted dozens of corruption investigations around the world, and Steven Fox, who runs a risk-assessment company, in New York, called Veracity Worldwide. “But how do you prove corruption?” Keefe asks. “By its nature, corruption is covert; payoffs are designed to be difficult to detect.” Fox, however, soon located Frédéric Cilins, a tanned, gregarious Frenchman who had served as a scout for B.S.G.R. in Guinea, who told Fox tales of elaborate gifts made to Guinean officials and connections made through the then-dictator General Lansana Conté’s fourth wife. Documents purportedly signed by officials at B.S.G.R. promising Conté’s wife a stake in Simandou and two million dollars to be paid through a shell company were obtained by the Department of Justice, and Cilins was recorded, on a wiretap, offering to pay further bribes. Cilins was soon arrested and Steinmetz found himself in the middle of one of the largest corruption cases to ever come out of Africa. But the mysterious mogul maintains his innocence and the innocence of B.S.G.R. “I’m totally open—totally transparent,” Steinmetz tells Keefe in a rare interview. “I never lie, as a principle.” Steinmetz tells Keefe that the natural-resources business in Africa is “roulette”; if you work hard, and take risks, you sometimes “get lucky.” When Keefe asks Steinmetz how his company has dealt with the pervasiveness of corruption in Africa, Steinmetz tells Keefe that B.S.G.R. uses “very strict instructions and guidelines to people on the ground,” insisting that, even in jurisdictions that are notorious for graft, the company does not pay bribes. “We manage our business like the most transparent public company,” he tells Keefe. Steinmetz maintains that the documents obtained by the F.B.I. were forgeries, and he has waged a public-relations battle against the Guinean government and the nonprofit groups the government has enlisted to help investigate his company, several of which are connected to financier George Soros. The firm has sent angry letters to Soros, and elsewhere Steinmetz has claimed that Soros is “obsessed” with him. Meanwhile, civil unrest in Guinea threatens to unseat Alpha Condé before he has had the chance to implement his agenda. Guinea’s “iron ore remains locked inside the Simandou Mountains, and the site is still cut off from the rest of Guinea,” Keefe writes. Touré tells Keefe that he harbors a “feeling of shame” about the Guineans who may have accepted bribes. “Because, finally, what they have got personally—let’s say ten million U.S. dollars, twelve million U.S. dollars—what does that amount to? Compared with the lives of the whole country?” The “new international stampede for African resources could become another grim story, or it could present an unprecedented opportunity for economic development,” Keefe writes. “Everyone wants Simandou,” Condé tells Keefe. “Yet, in so many years, we haven’t been able to benefit from any of these tremendous resources. How can we be so rich and yet so poor?” ***Please do not hit "reply" to this email. This message was generated automatically and responses are not monitored. © 2009 GeorgeSoros.com | All rights reserved | Unsubscribe