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
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.
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.
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.)
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.
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.
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.
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.
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.
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.”
