Israeli diamond magnate appeals corruption conviction in Switzerland

Lawyers for Israeli diamond magnate Beny Steinmetz urged a Swiss appeals court on August 29 to throw out testimony from a former first lady of Guinea that contributed to his conviction for corruption over the secret payment of millions by his firm to win iron-ore contracts in the west African country.

Geneva lawyer Daniel Kinzer said the terms and circumstance of a deal between Mamadie Toure, one of the wives of late Guinean President Lansana Conte, and the FBI in the United States were unclear, and defence lawyers never had a chance to question her — depriving Steinmetz of the chance for a fair trial and the right to cross-examine her, he said.

The prosecutor’s office has argued that from 2005 onward, Steinmetz crafted a pact of corruption with Conte, who ruled the West African country from 1984 until his death in 2008, and with Toure, his fourth wife, involving the payment of nearly $10 million, The Times of Israel reports.

The case has exposed the shady and complex world of deal-making and cutthroat competition in the lucrative mining business.

Appearing before a Geneva appeals court on Monday, Kinzer said Swiss state prosecutors had “deliberately” excluded defence teams from any pretrial questioning of Toure in the United States, where she lives. She has reached an agreement with US authorities in the case.

Toure did not appear for the original trial in January last year. At its conclusion, Steinmetz was sentenced to five years in prison and ordered to pay a 50-million-Swiss franc ($51.5 million) fine. Two other defendants received lesser penalties.

“It’s easier to falsely accuse a defendant when you don’t have to look at them,” Kinzer said. “The defence team was never able to cross-examine Madame Toure.”

He said a “face-to-face confrontation” was required under both Swiss law and from rulings by the European Court of Human Rights.

The appeal is expected to run through Sept. 7.

Steinmetz will be without high-profile Geneva lawyer Marc Bonnant, who is no longer representing the billionaire. The attorney had previously argued that Steinmetz had not given “a single dollar” to any official of the Guinea regime under Conte.

Backers of the Israeli tycoon insist that the lower court didn’t get a full understanding of the facts of the case, and believe that the court wanted to set an example that Switzerland — which has had a reputation over the years for secretive financial dealings — can hold financial kingpins to account when necessary.

After the verdict, Swiss transparency group Public Eye hailed a “landmark ruling” that showed the court could see through a “slick” legal defence.

Steinmetz, 66, has denied the charges and remains free pending the appeal. If the conviction is upheld, his lawyers can appeal to the Swiss federal court.

The Geneva prosecutor’s office alleged that Steinmetz, a former resident of Geneva, and the two other defendants engaged in corruption of foreign officials and falsification of documents to hide the payment of bribes from authorities and banks. Some of the funds allegedly transited through Switzerland — and the case has been investigated in Europe, Africa and the United States.

The plot, dating to the mid-2000s, involved Steinmetz’s BSGR Group squeezing out a rival for mining rights for vast iron ore deposits in Guinea’s southeastern Simandou region.

In its court filing, the prosecutor’s office said BSGR won exploration and exploitation licenses in Guinea between 2006 and 2010 in Guinea’s southeastern Simandou region, while its competitor — Anglo-Australian mining group Rio Tinto — was stripped of its mining rights on two sites in the region.

Steinmetz’s defence team says a mountain range in the area holds some of the world’s largest untapped deposits of iron ore, and the standoff has stifled any hopes to reap them — and offer a potential windfall for an impoverished country. They say BSGR was the first company to study the feasibility of mining iron ore in the area.