Diamonds and Terror: The Missing Link

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Post-9/11 suspicions of a link between diamonds and terror were all but dismissed by a U.S. congressional panel, but does that mean a link does not exist? Terrorist organizations need untraceable cash to buy weapons, and diamonds are an easy target. Despite efforts of the Kimberley Process Certification Scheme (KPCS), diamonds are still being smuggled out of African producing countries into the world’s major diamond centers.

Peter Gross, global head of ABN AMRO bank’s International Diamond and Jewelry Group, puts it most eloquently: “Terrorists don’t need much money to perpetrate heinous crimes against humanity. It has been found that a significant portion of terrorists’ funding is derived from contributors to charities or other causes. Some of these contributors may know the intended purpose of their donations, others may not know.”

No Persuasive Evidence

The 9/11 Commission Report, released July 22, 2004, states that there is “no persuasive evidence that al-Qaeda funded itself by trading in African conflict diamonds.” The report continues: “To date, the U.S. government has not been able to determine the origin of the money used for the 9/11 attacks. Ultimately, the question is of little practical significance. Al-Qaeda had many avenues of funding. If a particular funding source had dried up, al-Qaeda could have easily tapped a different source or diverted funds from another project to fund an operation that cost $400,000 to $500,000 over nearly two years.”


While a connection between criminal syndicates and illicit diamonds was suspected for several years before 9/11, exact details eluded investigators and intelligence organizations.

In November 2001, former Washington Post reporter Douglas Farah raised serious allegations concerning individuals buying rough diamonds in order to conceal the funding of terrorist organizations. He also stated that rebels from Sierra Leone’s Revolutionary United Front (RUF) sold diamonds to al-Qaeda. Farah’s article added a new dimension to the conflict diamonds campaign and raised alarm in Europe and the U.S. Following is a string of events that some view as proof of a link between diamonds and terrorism:

• December 2002. The Wall Street Journal reported that the diaries of a former top lieutenant for Osama bin Laden indicated that he had traded in precious stones. The paper quoted a military intelligence summary, interviews with senior investigators, European, Latin America and U.S. investigations and two unnamed sources.

• April 16, 2003. Nongovernmental organization (NGO) Global Witness released an investigative report detailing how al-Qaeda had used diamonds for profit and to launder funds. Notebooks and business cards taken by the Federal Bureau of Investigation (FBI) from Osama bin Laden’s personal secretary, Wadih El Hage, showed a deep involvement in the diamond trade. Similarly, court transcripts of trials in the U.S. and Germany in 2000 and 2001 showed that al-Qaeda members in East Africa were involved with diamonds.

• September 11, 2003. The Belgian public prosecutor’s office raided Antwerp’s diamond district as part of a probe into money laundering and forgery by a Lebanese diamond family. A Lebanese food export company was also searched after tip-offs that the company was paid in diamonds and that it finances the militant Islamic Arab European League (AEL).

• November 2003. Abdel Qadir Mamou, a Senegalese cleric, admitted that he met Osama bin Laden three times in Sudan from 1993 to 1996 to receive money to fund his diamond-buying operations from West Africa into Belgium. Similarly, convicted al-Qaeda terrorist Nizar Trabelsi stated in court that he funded his operations by selling diamonds.

• March 2004. Financial Crimes Enforcement Network (FinCEN) Director William Fox stated: “Although evidence to prove the connections between diamonds and terrorists is still being developed, we are receiving enough information from government agencies, private concerns and the industry to warrant a closer examination of the problem.”

• March 30, 2004. Yehuda Abraham, a New York diamond dealer, pleaded guilty to charges that he unwittingly handled a $30,000 payment for smugglers who intended to shoot down U.S. planes with a shoulder-fired antiaircraft missile.

• June 28, 2004. UN war-crimes prosecutors in Sierra Leone claimed to have evidence that Aafia Siddiqui, possibly al-Qaeda’s only female leader, visited Liberia in June 2001 to assist the group’s alleged diamond-trading operation. The FBI linked Siddiqui to weapons purchases in Massachusetts.

• June 30, 2004. U.S. diplomats said Hezbollah militants were threatening Lebanese diamond dealers in West Africa in order to siphon profits from them. Lebanese will not speak out due to fear as well as the risk of the exposure of any illegal practices.

• July 25, 2004. Pakistani security forces captured Ahmed Khalfan Ghailani, a top al-Qaeda operative, alleged to have gone on a $20 million diamond-buying spree in Liberia and Sierra Leone.

• August 9, 2004. Witnesses placed six top al-Qaeda fugitives in Africa buying up diamonds in the period leading up to 9/11, according to a confidential report by Sierra Leone’s war-crime prosecutors. Lead prosecutor David Crane claimed to have “direct evidence” that former Liberian President Charles Taylor was the middleman between al-Qaeda and West Africa’s diamond trade before 9/11.

Alhaji M.S. Deen, Sierra Leone mineral resources minister, said RUF rebels who were mining diamonds in the country during its war would have been the only link to al-Qaeda, not the government. He rejected the notion that Lebanese dealers in the country are linked to terrorism.


The commission gave no details of its sourcing for its conclusion. However, neither did Farah, according to Christian Dietrich and Peter Danssaert, International Peace Information Service researchers. Subsequent reactions to the commission’s “no persuasive evidence” statement have been varied.

Those in the diamond industry were keen to accept the commission’s findings in order to exonerate their product. Those not involved in the industry were more open to the possibility that a link between diamonds and terrorism exists:

• Farah said in a recent media interview that he does not expect the commission to revisit evidence provided by organizations that supported his initial report, “There is a cultural resistance in the intelligence community to using any information that does not originate with them and unfortunately in this case, they had no information.”

• U.S. five-star Air Force General Charles Wald, deputy commander of the United States European Command (USEUCOM), publicly stated that diamonds are a source of income for al-Qaeda, whether through Lebanese or Hezbollah.

• U.S. Congresswoman Sue Kelly questioned the commission members about the basis of their conclusion, noting that several sources reached conclusions different from those of the Central Intelligence Agency (CIA) and from what the FBI cited in the 9/11 report.

• Global Witness said that the commission’s conclusion “is wrong and will damage international efforts to ensure that rough diamonds are not used to fund terrorism.” The NGO feared that unscrupulous elements of the diamond trade would use the report to undermine genuine efforts being made by groups like FinCEN and diamond financing banks like ABN AMRO to ensure that the diamond industry takes money laundering and terrorist financing more seriously.

• Dr. Gaetano Cavalieri, The World Jewellery Confederation (CIBJO) president, stated: “Such a declaration by a body that has spent months studying such issues is very welcome indeed. These charges besmirched the reputation of the products we sell. The commission’s report has, I believe, vindicated the diamond in this respect.”

• According to Cecelia Gardner, Jewelers Vigilance Committee (JVC) executive director and general counsel, the commission’s report is “entirely consistent with what we’ve heard from the FBI and the National Security Council for the past two and a half years.”

• Gross said that there is a discrepancy between the “noise level” and the “evidence level” as to what extent diamonds are being used in money laundering or in terrorist financing. However, he warned that whether the industry likes it or not, “We have to accept that what counts is the governmental and public perception. They believe that diamonds are used. Reality (i.e. the facts) is of less importance.”

• De Beers stated: “Whilst there has been no proven link… De Beers is acutely aware of the potential threat to the diamond industry….Any diamond used to fund terror is one diamond too many.”

What Now?

U.S. Representative Frank Wolf, senior house Republican from Virginia investigating connections between diamonds and terrorism, recommends that the commission should now talk to the FBI and “other individuals with the information and get that information.”

Gross advocates that diamond industry players and banks adopt a “zero-tolerance” approach to mitigate the risks of unwittingly becoming vehicles for criminal activities. He proposes that the industry players become “semipolicemen” who can identify when legitimate money may have been used for laundering or terrorist financing purposes.

Farah says that eradicating the terrorist financial structure is extremely difficult because the phenomenon of al-Qaeda and radical Islam has become a “theology and ideology of widespread appeal among people who feel they have no way of improving their lives and who feel they have nothing to lose by going into the Jihad against the West and against their religious enemies as defined by extremist Muslims.” Farah proposes the way to combat terrorism is to offer its followers a better and alternative life.

The diamond industry must face this new challenge in the same way it faced conflict diamonds. Whether or not there is a link, the possibility exists and the idea has been planted in consumers’ minds.

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