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On the smuggling of rough diamonds to the USSR

12 april 2021

The opinion that the USSR was actively involved in the smuggling of industrial diamonds after World War II is quite widespread in the literature of the subject. For example, “Industrial diamonds were spirited from Zaire and Sierra-Leone to Beirut, thence by diplomatic pouch to Moscow”1. Or there were reports that old traders in Beirut - where many illicit dealers in Africa shipped rough diamonds to - recalled that there were often industrial diamonds in the diplomatic pouches sent to Moscow by the Soviet embassy in Beirut.2 Such information is in almost all canonical works on the diamond market history, not to mention dozens of the op-ed pieces and journalistic articles. It should be noted that the original publications on the rough diamond smuggling by the Soviets dated back to 1951-1957, and later on, they were used by market researchers and journalists as a reference base without adding any significant details.

For a long time, the thesis about the rough diamond smuggling by the Soviets looked quite appropriate. Indeed, in the post-war USSR, the military industrial complex developed rapidly, and the industrial diamonds were an integral part of a number of critical technologies in the most promising areas, from the jet propulsion manufacture to the nuclear weapons and power industry. The CoCom (Coordinating Committee for Multilateral Export Controls) set up by the Western countries at the end of 1949 included industrial diamonds in the list of strategic goods and supplying them to the Soviet Bloc was prohibited. Against this background, the rough diamond smuggling by the Soviets looked logical and the reliability of the information sources was never questioned.

However, a number of documents we discovered in the central Russian archives on the purchase of a huge amount of industrial diamonds from England in 1951-1953 (the volume of these supplies exceeded the pre-war ones by an order of magnitude) radically changed the picture. These supplies allowed the USSR to build up the strategic reserve of industrial diamonds sufficient for the uninterrupted functioning of the Soviet industry for a period of 6 to 15 years (in different categories of diamonds)3. Thus, any smuggling from Africa lost all meaning. There was no need to organize an expensive, unreliable and dangerous channel and expose the agents and diplomats to a risk when diamonds were ‘flowing like water’ from London, and even at massively discounted prices.

Today, we can say that there is no slightest trace of smuggling operations in the Russian archives regarding the industrial diamonds from Africa. There was no smuggling as there was no need for it. However, someone created this myth, which was in all kinds of publications on the rough diamonds for more than half a century ... Who did it? And what was the purpose?

On January 26, 1951, the CIA issued secret intelligence report No.5447 entitled “Vulnerability of the Soviet Bloc to Existing and Tightened Western Economic Controls”. The report contained an “Industrial diamonds” chapter where one could find the cautious mentioning of the possible rough diamond smuggling from Africa by the Soviets, but no details were given. This first fake news about the rough diamond smuggling by the Soviets exactly coincided with the beginning of the negotiations on record deliveries of the rough diamonds from England to the USSR, but it remained a mystery who “suggested” such a valuable idea to the CIA - the source was not disclosed in the report. Further events are well known - the Americans ignored the record deliveries of the rough diamonds from England to the USSR, and another CIA intelligence memorandum stated that De Beers did not supply rough diamonds to the Soviet Bloc. In the memorandum titled “Word production and distribution of industrial diamonds”, the CIA analysts argued that the industrial diamond reserves in the USSR made by 1952 could be sufficient for a period of six months to a year, i.e., a mistake was 10-15 times for different categories of rough diamonds. It was a complete and obvious failure for the American intelligence.

In the USSR, all the information on the rough diamond transactions of 1951-1953 was classified as “top secret” and the British press did not report anything about these supplies. England was one of the initiators of setting up the CoCom and was its member, and the Korean War - a direct armed clash between the USSR and the Western countries - was in full swing. What would happen if the information about trading a strategic commodity with the enemy could become public? It was not hard to imagine the American ally’s reaction. Since 1951, numerous publications had appeared in the British and South African press about the rough diamond smuggling by the Soviets through the diplomatic mission in Beirut. However, it was not very convincing, not a single smuggler was caught, and opening the diplomatic parcels - in which the rough diamonds were supposedly transported - was more trouble than it was worth. It seemed that the Americans had already begun to suspect something; in 1953, rustic Walter Bedell Smith left the chair of the Director of Central Intelligence (DCI) and Head of the CIA and was replaced by Allen Dulles, a very serious man. And the supply of rough diamonds from London to Moscow continued, the volumes decreased, but still exceeded the pre-war purchases by two times. To reliably camouflage these transactions, an authoritative source on the “rough diamond smuggling by the Soviets” was needed, and not a pen-pusher, but a respected person and it would be better to involve an outside one, not from the Albion. By the way, where was the CoCom headquarters located? Oh, yes, in Paris.

On May 26, 1955, Allen Dulles, Director of Central Intelligence (DCI) and Head of the CIA, received a letter signed by General Arthur Trudeau, Assistant Chief of Staff (G-2) for Intelligence, US Army. It read:

“Dear Mr. Dulles:

Some days ago I had opportunity to discuss with General Cabell in your absence the probable routing of industrial diamonds being smuggled from South Africa into the Soviet Bloc.

Last Friday night I had dinner with M. Carlier of the Belgian Embassy who had been interested in having me visit the Belgian Congo. During the course of the evening the question of the smuggling of industrial diamonds from the Belgian Congo into Russia was discussed in a casual vein. Those present besides M. Carlier included Mr. George West of the State Department, Count Douglas of the Swedish Embassy, Mr. Jean Pierre Paulus, Secretary to the King, and M. Daufresne de la Chevalerie, the new Commercial Counselor to the Belgian Embassy. Most of the discussion was limited to the Belgian personnel only.

Mr. Paulus discounted any possibility of diamonds being smuggled from the Belgian Congo to Russia unless they were reshipped through Rotterdam or from a northern European port. M. Daufresne, Who is an extremely knowledgeable and personable individual, thought otherwise. He believes that a definite chain for smuggling diamonds from the Congo does exist through Uganda or the southern Sudan to Ethiopia and thence through unknown channels to the Soviet Bloc.

In view of this independent opinion which coincides with that obtained in South Africa that Addis Ababa is a focal point for the illegal shipment of industrial diamonds to the USSR and in view of the extreme importance of this particular item to the continued expansion of the Soviet industrial base, it is believed worthy of considerable effort to determine the correctness or falsity of these opinions.

The Russian Mission to Ethiopia, although ostensibly for medical purposes, has always been suspect, and these additional opinions would seem to indicate that the entire matter deserves the closest scrutiny. It is interesting to note in this connection that Ethiopia is the one country in Africa to whom we are giving substantial military and other aid.

I would be interested in assisting in any way possible, if desired, and particularly to be advised of any information in this regard that can be obtained.

With highest regards, I am

Sincerely,

Arthur G. Trudeau
Major General, GS
A. C. of S., G-2”

It was 1955, and the American intelligence generals (Cabell was Dulles’ deputy) were seriously discussing the rough diamond smuggling by the Soviets from Africa! Which, as we noted, was completely meaningless due to the creation of a huge strategic reserve of the rough diamonds in the USSR due to the direct deliveries from England. But let’s not be hard on the generals, they seemed to have a reliable source. He was Monsieur Marie-Emile Daufresne de La Chevalerie. General Trudeau called him Belgian, but he was not. He was not Belgian, but French, a representative of a well-known aristocratic family. Indeed, he was a highly qualified expert on Africa as he served in Africa during the war under the command of General Leclerc, and after the war, he hold the diplomatic posts. He was in Libya, Chad, Gabon, Congo, CAR and in many other places. He was a member of the Charles de Gaulle’s immediate circle, and his cousin was a de Gaulle’s personal private secretary. And they were ardent anti-Americanists as befitted the true Gaullists.

And this “exceptionally knowledgeable and dignified person” who informed about the Soviet smuggling route from Congo to Ethiopia (?) was not at all alone in his efforts. In addition to the information that de La Chevalerie leaked to the Americans, a certain J. H. du Plessis, a “well-known expert on diamond smuggling”, gave an interview to the Johannesburg Sunday Express, in which he told about the powerful Soviet underground organization that smuggled as much as 400,000 carats of technical diamonds from South Africa and Belgian Congo. In addition, the Soviets, he added, “refuse to supply themselves” with rough diamonds through De Beers and preferred to operate through their illegal African agents. But the Johannesburg Sunday Express newspaper was so-so, rather weak, the audience was small. And the serious Agence France-Presse (AFP, Paris) spread the du Plessis’ statement throughout the entire world savoring the details. However, it was 1957, the Mir and Udachnaya pipes had already been discovered and the Yakutalmaz company had been established. What kind of smuggling by the Soviets? Why the hell was it needed? But was it right to receive the de La Chevalerie’s and du Plessis’ information with incredulity? They were not some Boers, they were the cream of the French aristocracy, it was common practice to take their words for granted. A couple of years later, du Plessis wrote a book about the terrible Soviet smugglers “Diamonds are Dangerous” published in London. And when the concerted efforts of the Marseillaise fans were added to The Mining Journal (London) and The London Times that tirelessly wrote about the rough diamond smuggling by the Soviets, the American partner should have no doubts that CoCom - French manned - was working perfectly well, De Beers had no trade with the Soviet bloc, they had a little left to do - to catch the damned smugglers in Africa.

However, three months after receiving a letter about the rough diamond smuggling by the Soviets, Dulles sent a memorandum to the Pentagon for some reason, in which he wrote that Trudeau was incapable of analytical and intelligence work and was easily “taken in” by the enemy’s false information. As a result of the conflict with Dulles, on August 8, 1955, General Trudeau was forced to leave the post of the Assistant Chief of Staff for Intelligence (G-2), US Army. But maybe this is quite another story to tell?

Sergey Goryainov, Rough&Polished  

 

1Naylor R.T. Economic Warfare: Sanction, Embargo Busting and Their Human Cost. Boston, Mass. Northeastern Univ. Press, 1999. P.37. 
2Green T. The modern world of diamonds. M.: Progress, 1993.S. 125. 
3GARF. F. 5446.O. 86a. D. 1113.L. 2-3. 
General Arthur Trudeau's letter to Allen Dulles (source - CIA official website https://www.cia.gov/)


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