Industry Outraged by 60 Minutes/De Beers Profile

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The CBS News 60 Minutes profile on De Beers that aired February 18 was no surprise to the diamond industry. The piece was filmed back during the June 2000 DTC sight in London. For eight months, sightholders and other manufacturers waited for the piece to air, told that the segment might appear later that year. Kevin Tedesco, a spokesman for 60 Minutes, explained that the De Beers piece wasn’t delayed as some in the industry believe, but was aired when they had the right “mix” of pieces.

“We were all concerned that it was going to air before the holiday, and hurt the season,” said sightholder Marvin Samuels of Premier Gem. “We didn’t know what direction it would go.”

The “direction” the profile did go, industry leaders observed, resulted in a biased profile of De Beers linked to market manipulation and conflict diamonds. In the span of 14-minutes, reporter Bob Simon referred to De Beers as a “cartel” eight times. Images of diamond commercials were interspersed with explicit images of Sierra Leone amputee camp victims. One visual of a girl whose arms had been cut off by Sierra Leone rebels was accompanied by the Simon voiceover, “Diamonds are not this girl’s best friend.”

Sightholder William Goldberg, principal of William Goldberg Diamond Corp., was interviewed by Simon, and selected segments of the conversation appeared in the televised segment. The interview included Goldberg saying on the way to the DTC sight that he expected “exciting items,” but when pressed by Simon, he said that most of the time the rough he received was mixed, with much of it not what he really wanted.

A moment later, a voiceover of Simon is heard saying: “Bill Goldberg has done nothing illegal, but he has, in effect, laundered the diamonds of De Beers.”

Goldberg told RDR that while he had no problem with his own appearance on the program, the overall edited piece “was the most irresponsible, inaccurate and vicious kind of program one can imagine. I feel violated.”

Saul Goldberg, who was shown on the program with his father back at their New York office, offered his reflections on the 60 Minutes experience: “Bob Simon backstabbed the industry,” he said. “He came in friendly, talking about the glamour of diamonds and the intrigue of the industry.” What resulted on the TV screen before millions of viewers, he said, was a story that “tried to make the industry look bad. It was totally unfair. The overall message was one-sided.” He noted, however, that the impact of the program would pass shortly, but that his father would never do it again.

Louis Glick of Louis Glick & Co. was at the sight when 60 Minutes was filming. He spoke with members of the program, but, said Glick, “What I said didn’t fit their agenda. I spoke motherhood and apple pie.” As far as Goldberg’s comments that appeared in the final cut, Glick said, “They isolated a few statements and tried to bury the Syndicate. They accomplished their agenda. It was very unfair.” He believes that the message communicated in the segment about De Beers will temporarily hurt sales because “people are turned off” to the diamond trade.

Roger Van Eeghen, with the DTC public affairs office in the United Kingdom, thought that the 60 Minutes piece was “a backstabbing job. It concerns us hugely. It is much more hostile than we had been led to believe.” Van Eegen said that De Beers offered the producers of the TV show information on Debswana “but they said no thank you.”

Warwick Jones, an analyst with Dresdner Kleinwort Wasserstein in New York, who has followed De Beers for years, said that he was “hard pressed to believe De Beers is guilty of what they were accused of” in the 60 Minutes program. What the program failed to say, he noted, was “that De Beers is running down stockpiles, how expensive it is to mine diamonds, or the hundreds of millions they’ve spent on promoting the industry.”

Jeff Fischer of Fischer Diamonds believes that the 60 Minutes piece alone can’t do any damage to the industry, but combined with other recent publicity, it is slowly being felt. “The industry is under attack,” said Fischer, “and unfairly so. Everyone has their own distinct agenda.” To counter misperceptions about the industry, he noted, “Everybody has to work in a concerted effort and with a clear voice.”

Charmian Gooch of Global Witness, who appeared in the piece, said that De Beers “did its best to deny every point we made” regarding the conflict diamond trade and the Sierra Leone atrocities. Fischer, who is president of the Diamond Manufacturers & Importers Association of America, viewed the Global Witness stance as “superficial.” He encouraged “even-handed, well-researched analysis” of the conflict diamond issue.

Also appearing on the TV segment was Professor James Twitchell of the University of Florida and author of the book, “Twenty Ads That Shook the World.” On the show, Twitchell said that “De Beers took an object of almost no value and made it into a product of universally understood value.” In an interview with RDR, Twitchell said that De Beers’ “A Diamond is Forever” advertising campaign “is a perfect message. A young guy may feel he’s being used when spending three months’ salary on an engagement ring, but it’s something he feels he must do – it has become an elaborate exchange ritual.”

60 Minutes/De Beers Sound Bites

— Bob Simon: “Diamonds may or may not be a girl’s best friend. But one thing diamonds are definitely not is rare, and that happens to be one of the best kept secrets of the century…The fact that it happens to be worth a lot more is entirely due to one company. It’s called De Beers, the most enduring cartel in history. And the way it controls the price of diamonds makes OPEC look like free marketeers.”

“Zaire’s corrupt dictator Mobutu Sese Seko saw the light and agreed to market his country’s diamonds through De Beers. He was personally rewarded for all his wisdom with payments of a million dollars a month.”

“The cartel is facing a threat the likes of which it has never faced before…For the first time diamonds are beginning to be associated not with love, but with war, and De Beers is terrified that its carefully crafted illusion is about to be destroyed.”

“Last year [De Beers] started putting a promise in every box of diamonds they sell, a guarantee that the company is no longer buying stones from rebel-held areas. But the De Beers’ guarantee makes no mention of the diamonds in their vast stockpile, which was built up while De Beers was buying up all those diamonds from Africa’s war zones. And one of those diamonds might just be that diamond in the window.”

— Professor Debora Spar, Harvard Business School: “[De Beers] is illegal in their largest market, and I cannot think of any other commodity for which that’s true. With the exception of drugs.”

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