De Beers Settles Price-Fixing Suit
By Rob Bates Senior Editor -- JCK Online, 5/1/2002 2:00:00 AM
De Beers recently paid $20 million to settle a 1995 civil suit over industrial diamond price fixing, the London Times reported.
The settlement does not affect the Justice Department's 1996 criminal indictment of De Beers on similar charges. Co-defendant General Electric was cleared of all counts, but since De Beers never answered the indictment, it still stands.
In a teleconference with analysts, De Beers managing director Gary Ralfe reiterated that De Beers was hoping to settle its legal problems in the United States. "We would very much like to be able to settle the criminal indictment because it is not desirable for a company of our standing, prestige, and integrity to have an indictment hanging over it in the United States," he said. "But that is a matter that we have not yet addressed."
In related news, two congressmen recently called upon the government to get its "act together" in its dealing with De Beers. Rep. Tony Hall (D-Ohio) and Rep. Frank Wolf (R-Va.), the two congressmen most active on the conflict diamond issue, told a Senate committee there were contradictions in the government's policy toward the company.
"[The U.S. Justice Department is] pursuing court action [against De Beers, which] seems to be in diametric opposition to diplomatic work on conflict diamonds, because De Beers plays an enormous role in the diamond trade," the two congressmen said in a submitted statement.
Hall and Wolf said De Beers might deserve the government's "appreciation" if it helps with the issue.
"If instead it exerts its power to prolong jawboning about the issue—either to burnish its public image, to exact concessions from the Justice Department, or to increase its market share—that would rightly earn it more opprobrium," said the statement. "In the interim, as work to implement necessary controls is done, we would hope that Congress will help the agencies that deal with De Beers manage the inherent contradiction in their missions."
De Beers wasn't sure what to make of the remarks. "My interpretation is that De Beers is central to solving this problem and needs to play a leadership role, which we have done and intend to keep doing," says spokesman Andy Bone. He stressed that De Beers never linked the conflict diamond issue with its legal woes. "We have gone out of our way to say these are two completely and utterly different issues," he said.
Hall spokeswoman Deborah DeYoung said that the congressmen were calling for more consistency, noting that two De Beers executives attended a conflict diamond conference at Harvard University in Cambridge, Mass., last year, even though executives typically do not set foot in the United States because of the outstanding indictment.
"De Beers is a glaring problem for our government," she said. "They can't have the Justice Department pursuing them for antitrust and the State Department rolling out the red carpet to go to a Harvard conference."
