Sabotage

The following is an excerpt from Glitter & Greed: The Secret World of the Diamond Cartel. The author, a journalist and human rights activist, has written about De Beers Consolidated Mines for roughly 20 years and produced several documentary films. The excerpts are reprinted with the permission of the publisher, The Disinformation Co., based in New York, N.Y.

At the beginning of the 21st century, all the books on the diamond trade pointed out the curious fact that the U.S., which is world’s largest diamond consumer, does not have a diamond mine of its own. Yet Hillary Clinton wore a fine 4-carat diamond from Arkansas at her husband’s Presidential Ball — with a very odd story behind it.

When I started my trawl through U.S. Justice Department records, looking for legal actions relating to De Beers, I was surprised to find reports by eminent geologists saying that a diamond deposit in Arkansas was so rich that it would have created a major diamond mine — if it had been in South Africa. Why then was it not developed?

Secret Justice Department reports suggested that sabotage stopped the development of the Murfreesboro, Pike Cty. field (only a few hours from Little Rock) into a major diamond mine. Geological reports indicate that it was a commercial deposit able to supply America with millions of diamonds. The reports allege that Ernest Oppenheimer had worked to stop Murfreesboro from being mined. The lawyers thought the evidence warranted further investigation and the consideration of legal action, but this did not happen. The lack of a diamond mine in the U.S. had given the Oppenheimers a lucrative captive market for their African diamonds.

Diamonds were first found in Arkansas in 1906, when a local farmer, John Huddestone, found gems while cleaning out his pigs’ swill. These were sent to Tiffany’s in New York, where they were verified to be diamonds — and Tiffany’s would have been most cautious. In 1872, its founder, Charles Tiffany, was taken in by a diamond hoax involving the “seeding” of a Colorado “find” with a sprinkling of diamonds.

Tiffany was sufficiently impressed to send its chief mineralogist and vice-president, George Kunz, to Arkansas. He reported that it was a real diamond deposit and a definite mine prospect, saying that the major problem in developing it would be the reluctance of Americans to submit to the humiliating body cavity searches and purges imposed on black miners in South Africa.

Thousands more diamonds were then found. The Justice Department reported the discovery of more than 100,000 diamonds in the top 40 feet of the field next to this pig sty, and that 50,000 of these were sold to a diamond firm on Fifth Avenue. Many were cut as expensive gems.

The geologists reported that this was a volcanic deposit similar to those mined to great depths for diamonds in South Africa. In more than 80 years, no one had professionally drilled or otherwise examined the deposit below its top 40 feet. The 100,000 diamonds found were, in mining terms, taken from mere surface scratchings. This indicates a fortune at greater depths — at least that is what the Justice Department documents reported. They said it was most likely that this was only a surface concentration. South African diamond mines reportedly averaged only a quarter of a carat of diamonds in every tonne of rock and yet were extremely profitable and mined to great depths. In comparison, this Arkansas pig-run should have been an Eldorado.

But I found this diamond deposit had been turned into a public park where amateur diggers could hire a bucket, spade and rubber boots, and dig their own diamonds for $3.50 a day — as long as they did not dig a hole deeper than four feet or use any motorized equipment! The hopeful prospectors even had to fill in their holes every evening! Yet despite these restrictions, one in 200 of the many visitors found a diamond, an extraordinarily high ratio. This made me extremely curious to know why, in a country that consumed more diamonds than any other on earth, was this major diamond deposit not being mined commercially?

Before going to Murfreesboro, I had spoken with a top expert in New York’s diamond district. He worked in a small diamond-cutting workshop just off Fifth Avenue, overlooking the jewelry stores of 47th Street. Its walls were neatly hung with cutting and grinding tools, with every ledge black with dust torn from gems by grinding wheels. He was a master cutter whose nickname on the street was “The Professor,” because of his knowledge of the cutting trade. He was, at the time, repairing diamonds for Tiffany’s. He told me he had cut many Arkansas diamonds and found they made excellent gems.

I went next to the office of the U.S. Geological Survey in Washington to discover if they knew of a diamond deposit on a former pig farm in Murfreesboro. They did. They told me they held reports from several geologists, all of whom maintained it was a diamond deposit similar to those that supported major mines in South Africa. Increasingly perplexed, I asked why it was not then being mined? The senior spokesman for the Geological Survey replied that the Survey did not know exactly but that it had seen reports alleging that sabotage had wrecked early efforts to establish a diamond mine. He referred me to a report by Thomas H. Daly of the U.S. Justice Department’s Antitrust division.

Murfreesboro may not have a major diamond mine, but it still makes a living from its diamond deposit.

When I arrived, I could not mistake it. A large sign by the road proclaimed “Welcome to Murfreesboro, the Diamond Town.” The shops and the restaurants proclaimed the diamond connection. The local paper is The Murfreesboro Diamond. I booked a room at a hotel called The Crater of Diamonds. It seemed the discovery of the diamond deposit was the greatest thing that ever happened to Murfreesboro.

I had arranged to interview Margaret Millar, whose late father, Howard A. Millar, set up a diamond mine here many years ago. She met me by the plowed field in the park known as The Crater of Diamonds, where her father once mined diamonds commercially. Tourists were now crawling over the field with plastic containers as if they were looking for strawberries. She pointed out the two buildings from her father’s mine that still stood — one in the centre of the field; the other, a house in the woods by the open field. This had been the home of Margaret and her father. Sitting outside this house, Margaret Millar told me what had happened to the mine her father started.

Howard Millar came here about 1914 to investigate farmer Huddestone’s discovery. Preliminary investigations established that the diamonds came from the surface of an ancient volcanic crater with a surface area of 73 acres, second in size only to the world’s then-foremost diamond-bearing pipe, the Premier mine in South Africa. Local investors took mining rights to 60% of the surface of the crater, and Millar secured rights to the remaining 40%. The area he held was larger than the size of many South African diamond mines, so he thought his fortune was made. He did not have easy access to capital but planned to fund the deeper mine works by first exploiting the diamonds in the softer upper layers of the deposit.

According to Margaret, “during the four to five years they had the mine in operation, it was a commercially successful venture.”

But on Jan. 13, 1919, disaster struck. “My father’s diamond plant consisted of two buildings set far apart. They were torched or burnt simultaneously. It was an arsonist type of fire. They did not catch fire from each other. It was very strange [that] the night watchman . . . was not there that particular night. Nothing was saved, and there was not enough insurance or capital to start it up again since the Depression was just starting in America.” Some years later, a pilot told them he was paid to take aerial photographs of their mine “at the same time the plants were burnt.” The pilot suspected that the people who paid for the photographs were responsible for the arson. Her parents blamed the Diamond Syndicate, but they had no proof.

Her father thus was unable to find funds to drill deeper than about 70 ft. Below that depth, the rock was too hard for his equipment to penetrate. In diamond deposits in similar volcanic pipes, this softer rock is called “yellow ground,” whereas the harder rock is termed “blue ground,” and both contain diamonds. Millar was sure that diamonds would be present in the blue ground to a considerable depth, as at Premier. All the geological reports made the same prediction.

The suspicions of the investors reached Washington, triggering a Justice Department investigation. An engineer employed at the mine, George H. Vitt, told U.S. Justice Department investigators in 1942 that the employee ordered to destroy the mine’s papers had suspected sabotage, and so did not destroy them. Instead, he hid them under a building. He took Vitt to where they were concealed and recovered them. Vitt also checked the “waste” rejected by Zimmerman’s separation plant and found it rich in diamonds, thus strengthening suspicions that the plant had been rigged.

The recovered documents convinced the Justice department that the Arkansas mine had been sabotaged. Thomas Daly’s report for the Justice Department made it clear that the evidence indicated a secret sabotage deal with Oppenheimer. He noted as highly suspicious the secrecy surrounding the mine’s closure, and the fact that, at a time when it was closed, it was successfully selling its output to major Fifth Avenue diamond merchants.