Industry Introduces Tanzanite Tracking

By Morgan Beard, Editor-in-Chief and Hamza Kondo, Tanzania Correspondent

A cross-section of Masai tanzanite brokers seen here at work in Mererani in February 2002. According to AREMA deputy chairman Hamis Lioba, most of them have no broker's or business licenses. Photo © Hamza Kondo, SENA NEWS.

TUCSON, ARIZONA - Leaders of the world gem industry met with officials from both the United States and Tanzanian governments in a closed session February 8, seeking a resolution to the alleged links between tanzanite and the al Qaeda terrorist network. The following day, they held a press conference announcing what would be called the "Tucson Tanzanite Protocol."

The highlight of the protocol is a system for tracking tanzanite from the mines to the final consumer to ensure that it has not passed through undesirable hands. Edgar Maokola-Majogo, head of the Tanzanian Ministry of Energy and Minerals, told participants at the meeting that he was mobilizing law enforcement officers to clear unauthorized people, including illegal miners, from the mining area in Mererani (also known as Merelani), Tanzania. All miners and dealers, including employees of mine owners, will be required to have identification cards, and only licensed individuals will be allowed to buy, sell, or export tanzanite.

From the point of first export, tanzanite will operate under a certification system similar to the Kimberley Process, which is being used to combat the trade in "conflict" diamonds. Gems will receive certification of their legal origin when exported from Tanzania, certification which could potentially follow the gem through to the retail level, although at press time, the nature of the paperwork had yet to be determined.

While taking these steps to restore consumer confidence, industry leaders were careful to stress that they did not believe there was a connection between tanzanite and terrorism. At the press conference, they got some unexpected support from within the U.S. government.

In a State Department intelligence briefing, "I was told bluntly that there is no evidence of al Qaeda or any other terrorist groups using tanzanite sales to fund terrorism," said Michael O'Keefe, of the State Department's Office of East African Affairs, Madagascar and Tanzania. In remarks after the press conference, he added, "The only incident where tanzanite was used by al Qaeda at all was this case [of the terrorist embassy bombing in Nairobi, Kenya, in 1998]. . . . That's the only incident where tanzanite shows up."

How was tanzanite connected to the bombing? And what led a respected newspaper like The Wall Street Journal to publish a front-page article linking tanzanite to the present-day al Qaeda movement? There's plenty of evidence, although where it leads depends on who's telling the story.

The Case of Wadih el Hage
The first evidence of a connection between tanzanite and the al Qaeda terrorist network came to light during the trial of four men accused of conspiring to bomb the U.S. embassies in Kenya and Tanzania in August 1998.

Of the four, only one, Wadih el Hage, was involved in trading gemstones in any capacity. El Hage is a former personal secretary to Osama bin Laden who was convicted of perjury and conspiracy to kill U.S. nationals in May 2001.

Although the transcripts make it clear that el Hage was in the business of selling gemstones, including tanzanite, it was not his only interest. Among other things, he and his associates sold leather, sugar, seeds, and ostrich eyes.

The transcripts also make it clear that el Hage was not an experienced gem trader. L'Houssaine Kherchtou, a former al Qaeda member who became one of the United States' star witnesses at the trial, met el Hage in Nairobi in 1996. At that time, he testified, el Hage was investigating a number of different businesses in an attempt to make money, including registering a non-government organization (NGO) called Help Africa People. The following is an excerpt from Kherchtou's testimony:

"Q. Now, while you were - you knew that Mr. el Hage while applying to register the NGO was also trying to work in the gemstone industry?

"A. Yes.

"Q. And in fact there were, he had many books about gems in his home, is that right?

"A. Yes.

"Q. And you had read a number of those books to try to learn about the gemstone industry as well, right?

"A. Yes.

"Q. And Mr. el Hage was contacting people that he knew elsewhere trying to see if they were able to sell gemstones and that they could make a profit together; is that right?

"A. Yes."

Around that time, el Hage formed a partnership with a man named Mohamed Ali Muraweh Saleh Odeh, who sold gemstones in Hong Kong. El Hage, Odeh, and an associate in Indonesia sold a variety of gems, including tanzanite, chrysoprase, tourmaline, ruby, sapphire, and lapis lazuli.

El Hage, who was married to a U.S. citizen, also traveled to the United States to conduct gem deals, or try to. According to his notebooks, introduced as evidence at the trial, his initial attempts at selling stones were unsuccessful. However, he apparently sold enough to keep the business alive; he told federal investigators that he moved to the United States in 1997 in part to engage in the gemstone trade.

It's clear from the evidence presented at the trial that el Hage was a minor, inexperienced player in the gem industry. Even if he did manage to make a profit, there was no evidence presented in court to suggest that he used any of the money to support al Qaeda. His own testimony was that he entered the gemstone business because he needed extra income to support his family.

The mines at Mererani are not new to negative publicity: They have been plagued with floods, poor working conditions, and conflict. Photo courtesy Gemtech International.

At the Mines
The first major article pointing to a connection between tanzanite and al Qaeda was published in November 2001 by The Wall Street Journal. In the article, authors Robert Block and Daniel Pearl described a radical Muslim element in Mererani, which was selling gemstones to support al Qaeda.

"In Mererani, a new mosque called Taqwa has brought an openly radical Muslim presence to the tanzanite district," reads the article. "Taqwa's imam, Sheik Omari, has issued edicts that Muslims [sic] miners should sell their stones only to fellow Muslims." The article goes on to quote several people confirming that Muslims are encouraged to sell their tanzanite only to other Muslims to support anti-American extremists.

A trip to Mererani today reveals no sign of such a connection. At the mosque referenced in the article, Masjid Ansaar Taqwa, prayers are led by four imams of equal power named Omari Rashid, Said Omari, Abdallahim Hamisi, and Jaffari Abdulrashidi, while Mudir Sheikh Omar Suleman, as head of the organization, also has the power to lead prayers at the mosque, according to deputy Imam Halifa Makame.

Mudir Sheikh Omar Suleman, mostly likely the "Sheik Omari" referenced in the article, was not in town at the time of Colored Stone's visit. However, the deputy provided a copy of a statement by Suleman denying having met or spoken with Robert Block or Daniel Pearl, although he did later meet with reporters from ABC News and CNN, among others.

Makame accused Block and Pearl of jumping to conclusions, assuming that the mosque was linked to al Qaeda when it wasn't. "To Robert Block and Daniel Pearl there is no harm for tanzanite money to construct a church, but a problem comes when the same money is used to build mosques, because according to them it will support al Qaeda activity," he said.

Other religious leaders said that there were no problems between the Christians and the Muslims of the area, and that Muslims trade freely with whoever has the money.

BELOW: A mine entrance in Mererani, Tanzania. Photo courtesy Schorr Marketing.

"Our people have no religious enmity here," said Pastor Sebastian Shija of the Pentecostal church in Mererani township. "People work together, drink together, buy stones together. There is no problem of religion, but if you want stones what matters is the size of your offer only."

There is no trace of Mussa Abdallah, described in the article as a Kenyan businessman with six years' experience in the tanzanite business. He was quoted as saying that Muslim fundamentalists had established a "mafia" to control the tanzanite trade. Even members of the Kenyan kijiwe (broker's center) when interviewed denied any knowledge of him.

Aman Mustafa, named in the article as a tanzanite broker and teacher of Masjid Taqwa, was met by Colored Stone in Mererani, but he also denied having spoken to Robert Block. He remembers meeting a Kenyan person, whose name he has forgotten, who asked him many questions concerning tanzanite. But when the man asked him about al Qaeda's involvement in the tanzanite trade, he also denied knowledge of it, he said. He added that the article also got a number of his personal facts wrong.

"I'm not a Kenyan, as quoted by The Wall Street Journal, my citizenship is Tanzanian. I'm also not a Masjid Taqwa teacher as claimed; instead I'm praying at [another mosque,] Masjid Nnur. Academically, I studied in Egypt," and not in Sudan as cited in the article, he stated.

In a phone interview, Arusha zone mineral officer Alex Magyane also said that he was misquoted in the article.

"Yes, I met with Robert Block, but I didn't tell him that I know of the terrorist group al Qaeda doing tanzanite business in Tanzania," Magyane said. "In fact, we didn't discuss such issues at all."

In the February 9 press conference, the U.S. State Department's O'Keefe said that the Wall Street Journal article was simply wrong. "It is very difficult to try to make a determination on what is happening in an overseas environment. The Wall Street Journal article, the show on ABC, and the other things in the press - many facts they had were correct. The conclusions they drew from those facts were wrong."

Later, in remarks to the press, O'Keefe added, "I think they looked at the trade [and they] saw it was chaotic, not totally controlled, with a certain percentage lost to smuggling, and they tied that to al Qaeda. . . . [But] our resources are a hell of a lot bigger; we have an intelligence community."

The Wall Street Journal is not backing down, however. "We absolutely stand by our reports that Islamic extremists have penetrated the tanzanite trade," said spokesperson Steven Goldstein of Dow Jones & Co. Inc., the newspaper's parent company. "Our reporter witnessed first-hand the extremists talking openly about their desire to use the proceeds from tanzanite to build their brand of Islam."

Assuming that that's true - and that the denials are part of a cover-up intended to protect the tanzanite trade - the evidence for a direct link to al Qaeda remains circumstantial. As described in the article, the tanzanite was being bought by men who were extreme in their Muslim views and then sent to buyers in Dubai, a center of the hawala money-exchange system that al Qaeda uses to cover its finances. But even in the Wall Street Journal article, which formed the basis for the storm of media coverage that followed, the only direct evidence that links tanzanite to al Qaeda is the notebooks and records of Wadih el Hage.

Retail Reaction
It was uncertainty rather than the weight of evidence that condemned the tanzanite trade. The major retailers who suspended the sale of tanzanite - QVC, Tiffany & Co., and Zale Corp. - all said that they did so, not because they felt a link to Osama bin Laden had been proven, but simply because they couldn't be sure.

"We actually chose to suspend our tanzanite sales for moral and ethical reasons while we further investigate the allegations made by The Wall Street Journal," said Bonnie Clark, vice president of public relations for QVC. "We are working with government agencies to obtain more definitive proof through documents and records."

A group of female tanzanite traders , often called sub-brokers, at the Keriakoo Kikjawe (trading center) in Mererani. Photo © Hamza Kondo, SENA NEWS.

In an attempt to decide for themselves, Zale Corp. directed General Counsel Susan Lanigan to investigate the allegations. She talked to virtually all of the company's approximately 50 tanzanite vendors. "Most don't believe there is a link," she said. "The problem is that most of the tanzanite that comes out of Tanzania is smuggled. We just don't know [where it came from]. Most of our vendors are in New York, buying from Thailand, Hong Kong, and India. They're as far away from it as we are."

Other retailers, faced with the same murkiness, decided to continue selling tanzanite. "We have no conclusive evidence [of a link]," said Sterling Jewelers Chief Financial Officer Richard Miller. "Until such time as that becomes clear to us, we see no need to cut off our suppliers and the people at the mines."

But if retailers were divided in their reaction to the news, one thing united them: the need for a guarantee. Even before the announcement of the Tucson Tanzanite Protocol, retailers across the board were calling for a tracking system similar to the one under development to deal with the issue of conflict diamonds. It was widely expected that the system announced in Tucson would satisfy that requirement, and even the retailers who had halted their sales of tanzanite would put it back in their stock.

That can't happen soon enough for the miners at Mererani, who blame September 11 and then the fallout from the al Qaeda story for a huge drop in both prices and buying at the mines.

"We will die if no solution is found to end this planted rumor against us," said local broker and farmer Harry Mushi. "For example, before September 11 last year, a top-color tanzanite of one gram sold at 500,000 Tanzanian shillings (US$543), but now it can only fetch about 200,000 shillings ($217)."

U.S. gem dealers exhibiting at the Tucson shows said that their business picked up after the press conference on February 9, and they felt that both buying and prices would recover in the coming months.

"There's a demand for tanzanite, and it's going to cause a shortage in the market," said dealer Michael Avram of Gemtech International. "People all over the country, when they hear the news [that tanzanite was] never affiliated with al Qaeda, they're going to go to the store and ask for tanzanite. When they see the beauty of the stone, it will sell itself."

As far as the trade is concerned, the issue has been settled, although once the new procedures are implemented they will need to be monitored. Erasing the negative public perception of tanzanite may take more time, however. In late February a group of lawyers acting on behalf of September 11 victims filed a wrongful death suit against, among others, the Tanzania Mineral Dealers Association and a New York-based tanzanite wholesaler. The suit, which seeks at least $1 billion in compensatory damages, was based on the evidence presented in The Wall Street Journal's November article.

To read Colored Stone's original article on this topic, see Wall Street Journal Links Tanzanite to Bin Laden.