Diamond Dealers Club president Jacob Banda is at the center of a political storm after receiving a bonus for his work organizing the 2004 World Diamond Congress in New York.
Banda was awarded $50,000 by the Club’s board of directors out of gratitude for his hard work on the Congress after it turned an unexpected profit of $272,000. According to a club letter, Banda plans to give the money to charity, namely five religious schools. News of the bonus was first reported in Idex Online.
DDC board members told JCK privately that the bonus was a sincere expression of thanks for Banda’s efforts in organizing the Congress. They note that the Club saved a good deal of money by not hiring a professional group to organize things (although many felt it could have used one).
But what’s inflaming the issue is the fact that this is not the first time Banda has received a controversial payment.
In 2004, Banda served as the broker for 10 local manufacturers who received goods from De Beers subsidiary Diamdel, meaning he received a 1% commission from his clients. He continues to represent local manufacturers as a Diamdel broker.
Banda did not respond to questions from JCK but in the past has noted that his goal was to bring more goods into the United States. “I did it for the club, not for me,” he told JCK after the first sale. He has said that the money goes for his expenses, such as airfare and carfare.
Yet some have seen a more conspiratorial motive in Banda’s acting as broker. The lawsuit from ex-sightholder W.B. David against De Beers charges: “To restrain the [DDC] from commencing litigation against [De Beers], Diamdel agreed to provide $250,000 worth of rough diamonds per sight to U.S. manufacturers, for which Banda received a 1% commission.”
While there is no evidence that anyone at the DDC seriously considered litigation against De Beers, the DDC board in 2003 reportedly voted to approach New York State Attorney General Eliot Spitzer to block De Beers’ entry into the United States. However, no action was taken.
In response to a query from JCK, De Beers spokeswoman Lynette Hori said: “We do supply some clients from the United States who are represented by Mr. Banda, but we supply those clients on the basis of our normal supply arrangements, and there is no additional weight attached to the fact that they may choose to be represented by him. Just as with all other applicants for our goods, the Diamdels seek to supply clients represented by Mr. Banda to the extent that we are able to do so.”