After an 18-month investigation, a special committee of the Guinean government on Wednesday said it found that Israeli billionaire Beny Steinmetz’s mining company had won multi-billion-dollar mineral rights through bribery and corruption and that existing contracts should be revoked.
The ad hoc committee also released a collection of supporting documents, including bank records and apparent transcriptions of covert F.B.I. recordings, which it said showed that corrupt acts had taken place.
The committee determined that “a number of items of proof exist, which are clear and corroborative, and establish with a sufficient certitude the existence of acts of corruption connected to the issuance of the licenses and the mining convention.”
BSG Resources, the Steinmetz mining company which won the rights to coveted iron ore deposits from a former government in 2008, quickly promised to disprove the committee’s allegations, which it said were based on “fabricated claims, compromised witnesses and illegitimate processes” as part of an alleged attempt by Guinean President Alpha Condé to appropriate B.S.G.R.’s assets.
“Despite overwhelming evidence of government corruption, embezzlement and harassment — not to mention lack of transparency, democracy and human rights abuses — President Condé has manipulated the process through unconditional technical and financial support from activists like George Soros and the NGOs that function as his personal advocacy groups,” the company said in a statement.
Representatives for Soros have denied that he has any personal interests in Guinea. Soros’s charitable Open Society Foundations helped found the Revenue Watch Institute, a New York-based nonprofit organization supporting transparency in the exploitation of natural resources. Revenue Watch helped establish the investigating committee and revise Guinea’s mining code.
The allegations of corruption have spurred independent money laundering and bribery investigations in the United States and Switzerland, which have compounded the pressures on Steinmetz’s business empire as the battle with the Guinean authorities deepens.
B.S.G.R. has denied wrongdoing since the start of the Guinean investigation in 2012.
Some of the documents released Wednesday appeared similar to those under subpoena by a federal grand jury in Manhattan, where a former Steinmetz associate, Frédéric Cilins, pleaded guilty last month to a charge of attempting to pay a cooperating witness to withhold evidence.
In a statement to the committee purportedly given by Mamadie Touré, the cooperating witness and fourth wife of the late dictator Lansana Conté, who awarded licenses to B.S.G.R. shortly before his death in 2008, Touré appears to describe direct contact with Steinmetz and her efforts to lobby her husband on his behalf.
Though short on precision and dates, the account portrays Touré, now a Florida resident, as central to the negotiations and alleged bribery, in which she says she signed contracts for the receipt of millions of dollars and a lucrative share in the company’s local business with company representatives including Asher Avidan, the president of B.S.G.R.
The statement claims Touré introduced Steinmetz to her husband and that Avidan personally asked Conté to strip two licensed areas from the Anglo-Australian giant Rio Tinto and then award them to B.S.G.R.
After the Guinea government had stripped the licenses from Rio Tinto but before they were finally awarded to B.S.G.R., the statement says, Avidan called Touré to a meeting.
“During this meeting, Avidan pointed to a bed on which American money was spread out,” the French-language statement said. “Avidan told me there was 1,000,000 American dollars and that it was for me. Avidan then placed the money in a bag and gave it to me.”
Illtud Harri, a spokesman for Rio Tinto, declined to comment.
Touré’s statement also claimed Avidan and Steinmetz showered her with gifts, including two Toyota Land Cruisers, a diamond-encrusted miniature car, a diamond-studded chain of white gold and a necklace.
Banking records released by the committee also appeared to show that Cilins, the former BSGR agent, used the banks Wachovia and Wells Fargo to move money from Israel to the United States to pay Touré. (Wells Fargo and Wachovia merged in 2008.)
In June and August of 2010, nearly $150,000 was transferred from Bank Leumi in Israel via Wells Fargo New York to a Wachovia account held in Cilins’s name at an address in Antibes on the French Riviera.
The documents also include corresponding checks for $100,000 and $50,000 made out to Mamadie Touré and submitted for payment through Wachovia in Orlando, Florida.
The committee also released what appeared to be transcripts of undercover F.B.I. recordings of meetings and intercepted telephone calls between Cilins and Touré in Florida.
The transcripts portray Cilins as on a personal mission from Steinmetz to find and destroy any evidence held by Touré, and to insure that she not give evidence to U.S. authorities.
According to one transcript of an April 11, 2013 meeting in restaurant at the Jacksonville airport — where Cilins was arrested three days later — a waitress and flight status announcements interrupted as people identified as Cilins and Touré negotiated in French over payments for Touré’s agreement not to cooperate with U.S. authorities.
Cilins: If the group isn’t shut out and its project is confirmed, the five that you’re meant to get, it’s sure that you will get it. There’s no problem. […]
There will be the five and there will be the 800. That will make six with what you have in addition. […]
Depending on how it ends up, if it’s in a good way for him, if they don’t cut too much off right and left, I have no idea, there will be even more. How much I don’t know. There will be three, four, five more, I have no idea. But there will be even more. And that is directly the communication that was given to me directly by the number one — I don’t even want to give his name — saying that’s the way it is, okay? And that is sure and certain.
Touré: The number one? Michael?
Cilins: No, no. Beny [whispering].
Cilins: Everything I say is directly from Beny. The other day when I told you, I am — I’m waiting over there for a meeting, I went on a trip, I traveled to see him directly, to speak face to face, and to have — everything I tell you, it’s from him that I have it. No one else, okay?
Touré: I didn’t know.
Cilins: No one else. No one else. I went just to see him, to see him and to talk about all that very, very well. I always told him, I always told him, even last week I told him, I told Beny, always repeated, that she was, that she will never betray you, she will never betray you, she will never betray you, she will never give the documents to any one. He told me, “Look,” he said to me, “Look, that’s good, but I want you to go see. I want you to destroy these documents.” He said, you see, “Do what you want but I want you to tell me, ‘I saw Mamadie and the documents. It’s over. There are no more documents.’” And on that, I’m telling you, I repeat, so that it should be very clear in your mind, the five that is planned, you will get it at any rate. You will get it if they aren’t kicked out, if they’re still in the project. What you’re going to get no mater what happens, the one million, that’s to say 200 plus 800, you’ll get that.
The statements attributed to Cilins closely resemble those attributed to him in court documents submitted by the U.S. Justice Department in his prosecution, where Steinmetz is instead referred to as CC-1, a pseudonym for a co-conspirator.
Steinmetz has adamantly denied wrongdoing and has not been charged with a crime.
In her valedictory remarks last month, the outgoing head of the Justice Department’s criminal division, Mythili Raman, cited the Cilins prosecution as a warning that the U.S. authorities were willing to use covert means to ferret out international corruption.
“Prosecutions like that of Cilins means that those who are committing acts of foreign bribery right now should be acutely aware that the middleman they are engaging could be an undercover agent, that the telephone calls they are making may be being recorded pursuant to a court order, and that the public official they are bribing may be cooperating with U.S. law enforcement,” Raman told a gathering of legal compliance professionals in Washington.
Two months before Cilins’s arrest, however, Touré had already been summoned by the Manhattan grand jury to give evidence about “Beny Steinmetz, BSG Resources Ltd. and related entities,” according to a copy of a grand jury summons seen by 100Reporters.
U.S. prosecutors have also privately notified Steinmetz that he may fall within the scope of the activities under investigation, according to a person with knowledge of the matter.
The Guinean committee, known as the Technical Committee for the Review of Licenses and Mining Agreements, stressed Wednesday that its recommendations did not constitute a decision by the government.
In President’s Hands
The committee said it would present its recommendations to a “Strategic Committee,” which would then submit a formal opinion to President Condé and the Mining Minister Kerfalla Yansané. Nava Touré, the committee’s president who is not related to Mamadie Touré, could not be reached for comment.
According to a person with knowledge of the matter, the Strategic Committee reviewed and endorsed the report last week, sending it on to President Condé for a final decision.
The Brazilian mining company Vale SA, which in 2010 bought a 51 percent stake in a joint venture with B.S.G.R. for $2.5 billion, told investors last month that the company risked losing all investments made so far if the Guinean government were to revoke licenses held by the joint venture, known as VBG.
“As far as we are aware, the technical committee has not alleged any wrongdoing by Vale,” the company said in an annual report.
In southeast Guinea, VBG currently holds a mining concession covering 395 square miles (of 1,204 square km), which is the so-called Zogota deposit, and exploration licenses in two blocks covering 142 square miles (or 369 square km) in the Simandou mountain range — considered among the last major untapped iron ore reserves in the world and valued at tens of billions of dollars.
For Steinmetz, the battle with Guinean authorities carries particularly high stakes. The news organizations Forbes and Bloomberg differ as the size of Steinmetz’s personal wealth. Forbes estimates Steinmetz’s wealth at $4 billion, while the Bloomberg Billionaires Index ranks the diamond magnate as Israel’s richest person with $6.8 billion.
However the Guinea project accounts for 35 percent of this, according to Bloomberg.
B.S.G.R. has long said that any attempt by the Guinean government to appropriate B.S.G.R.’s assets would be met with renewed legal action.
“The next step is international arbitration where the evidence can be aired in a proper forum and B.S.G.R. can establish the truth,” the company said in Wednesday’s statement.