“Well, you can rest safely.”
“No one’s trying to stop diamond mining?”
“No. You’re not paranoid.”
“That’s less comforting.”
“I hate to hand you over to someone else, but this someone else is better positioned to help you. I assigned an Arkansas diamond antitrust case less than a week ago to our Econ Lit section. He gave it to one of our young up-and-comers.”
“Sounds like too much of a coincidence.”
“Right. His name is Pat Carlton. Not much of a savvy political player, but he’s smart and down to earth. I’ll tell him you’ll be calling.”
Wenzel took down the number. “Thanks, Gail.”
“It’s quite simple, really,” Carlton said to the Beverly Hills lawyer, a Daniel Wenzel. “Gail Rothenberg assigned a case that dealt with a diamond mine in Arkansas. I can’t divulge names or locations, of course. A mining company tried to buy a family mining operation, but the farmer wouldn’t sell. So they just paid him not to produce. The farmer was happy, the mining company was happy. It violated antitrust laws, but never went to trial because the defendant settled, on the condition of non-admission and no publicity, of course. The weird thing is they settled almost immediately for an astronomical amount. Plus, their corporate structure is a maze. I’m not quite certain how this affects you, if at all.”
“It may or may not. My client recently purchased a property in Arkansas. In Macon Grove. From an old Arkansas farmer by the name of Osage. Anyway, we did him a small favor, letting him live on the land for the rest of his life. In turn, Osage informed us of a diamond deposit under the land. We were very excited. After some preliminary geological and environmental work, my client decided to mine the deposits.
“Here is where it gets weird. We didn’t contact a single soul about this project, just recorded the deed. No mining permit application yet or even a declaration of intent to mine. Before all that, I received telephone calls from the National Trust for Historic Preservation, the Bureau of Land Management, and from some cockeyed environmental group. All within three days. Calls telling us not to mine. Not just asking us or telling us, but threatening us. And every one of those callers knew that we were going to mine.”
Wenzel also told him about the warning from Cohen, without revealing his name.
A shiver crawled up Carlton’s spine. He thought about the sinister results of his and Erika’s research. “Are you sure no one spilled the beans?”
“Quite certain. We have long relationships with our contractors, Mr. Carlton.”
“It’s Pat.”
“Thanks. Please call me Dan,” Wenzel said in return.
“Have you spoken with the seller since all of this started? Osage, was it?”
Wenzel sniffed. “He showed us a geology report that substantiated the diamond deposits. He thinks it’s some big government conspiracy, that the government murdered his father when he tried to publicize the report after the government buried it.”
“The geology report—is it credible?”
“Apparently. Done in the 1920s by the U.S. Geological Survey.”
“To be candid, although we’ve negotiated a settlement, I’m digging a bit further into our case. Something doesn’t sit well with me. More so now that you’ve told me about your client’s situation. Let me call you back in a few days when I’ve got more information.”
“Thanks. I’d appreciate that.”
“No. Thank you, Dan. I’ll be in touch.”
Carlton swiveled around to face his desk, returned the phone to its cradle.
Curiouser and curiouser.
But as they said at DOJ, to catch a criminal, know his business. Based on that adage, his next destination was clear.
14 JEWELER
Cartier
Connecticut Avenue, NW
Washington, D. C.
10:31 A.M.
“Pat Carlton, Department of Justice.” said Carlton, pleased by the woman’s firm handshake. He despised limp handshakes.
“Therese de la Pierre. Welcome to Cartier, monsieur Carlton,” she replied with a heavy French accent.
Any man would have found the fortyish de la Pierre attractive. She had olive skin, an angular face from which ardent dark eyes smiled with Gallic sensuality. Her black hair was held in a ponytail with a gold clasp. Carlton found her stunning, but a touch too hard and cold, especially compared to Erika’s warmth and spontaneity, her air of childlike mischievousness. He felt de la Pierre size him up.
“Thank you for seeing me on such short notice.”
“You are welcome, monsieur. I was informed you wished to discuss diamonds. Are you getting engaged?”
“No, I have a case that involves diamonds, and I’ve realized I don’t know the first thing about them. I thought perhaps someone from the venerable house of Cartier could give me a crash course.”
“Certainement, monsieur,” she replied, her feline eyes smiling at the notion that he was not getting married after scanning his ring finger. “We are happy to be of service to the Department of Justice. Please sit down. May I offer you some coffee?”
“That would be great. Thanks.”
Carlton scanned the photographs of 150 years of Cartier masterpieces that adorned the walls while de la Pierre requested coffee from her assistant.
“Cartier has been involved with diamonds since Louis Cartier founded the house in 1847, even before they were discovered underground in South Africa. For some reason, diamonds fascinate people. Since I don’t know what you know or don’t know, I will give you a general overview. Forgive me if my explanations are too elementary.
"First, what makes diamonds unique other than their hardness is that they are ranked according to a strict scale. No other gemstone is. Diamonds are judged by the four Cs— clarity, color, cut, and carat.”
De la Pierre leaned back in her swivel chair as her assistant arrived with two tiny cups of espresso in Cartier porcelain on a silver Cartier tray.
She looked up and smiled. “Merci, François.” She stirred sugar into her espresso. “Rabbi Nahman of Braslov once said, ’God never repeats Himself’. This is so with diamonds. Each diamond is unique, and because diamonds can be ranked, that uniqueness can be translated into specific monetary value, again unlike other gemstones.
"The clarity of a diamond refers to the type and quantity of flaws in the stone. Almost every diamond has a flaw of some sort." She gestured gracefully with her long fingers. "Bubbles. Black and brown spots. Small slivers called ’feathers.’ Clouds called ’carbon spots.’ Fluorescent concentrations. All of these are flaws, or ’inclusions.’ Most of these inclusions aren’t visible to the naked eye, even if you look very closely. Determinations must be made under ten-times magnification. That’s the industry standard.” She took a sip of coffee. “Are you with me so far?”
“As sure as God made little green apples.”
She laughed. “I love that expression. Clarity, in diamonds, not apples, is divided into seven categories. A flawless diamond is the best, a diamond that has absolutely no flaws. These are extremely rare. Extremely expensive. ’Internally flawless’ describes a diamond that is almost flawless, but has small surface imperfections. An extra number of facets, perhaps. Lines on its surface. These are also very rare stones. The next categories of clarity we call VVS1, VS1, and VS2. These are acronyms. Generally, they are very slight inclusions that can be seen only under magnification. The next level of clarity is SI. These are diamonds that have inclusions visible from the back of the diamond with the naked eye.” She turned her palm up to emphasize the point. “But that can only be seen under magnification from the front of the stone. It’s an awkward grouping, frankly. The last category we call I—imperfect. Imperfect diamonds have inclusions that are visible to the naked eye and can also affect the stone’s durability. Still with me?”
“Yes.” Carlton remembered his coffee, drained the small cup.
“Bien. Now, color. Normal diamonds are white. Fancie
s, as we call them, come in bright yellows, blues. Even pinks. But let’s concentrate on white diamonds, the most common. The color standard set by the GIA—the Gemological Institute of America—slides from D to Z, D being the best. It denotes what we call a colorless white stone. From L on down, the diamonds are more and more yellow. Less valuable. These distinctions are difficult to make, so color should always be judged against a set of master stones. Even though Cartier buys diamonds daily, we never buy diamonds without comparing them to a master set. Eyes become tired. Even working with a master set of stones, diamond sorters compare color for no more than an hour at a time. Background light is also very important. Diamonds must be compared in a particular light. Once a diamond is judged, its color is noted on the GIA certificate. Disreputable retail jewelers won’t give you a real certificate. They’ll try to—how do you say in English—swindle you? They’ll say their diamonds are certified by `GIA trained’ gemologists or by ‘GIA standards’ and so on. This is always a bad sign.
“Now for the cut. There are many types of cuts. Here, let me show you.” She took a memo pad from her desk and drew different shapes of diamond cuts with a sharp pencil, announcing each designation. Marquise. Emerald. Oval. Heart. Pear. Single. Baguette. “The most common cut, and the most valuable, is the brilliant cut. This is your standard diamond with 58 facets.” She drew the familiar round top, conical profile shape on a piece of paper. “But all of these,” she motioned to the shapes on the pad, “are not really cuts. Just shapes. The real cut of a diamond is as important as its clarity and color. A good cut will yield maximum brilliance. In optical terms, it will maximize the return of white light to the eye. This is the sparkle effect of a well-cut diamond. Too deep or too shallow and you miss the maximum brilliance of the stone. Does all this make sense?”
Carlton nodded. “You make it sound logical, but I have a feeling that law school may be easier than diamond school.”
She smiled. “And now for carat. Spelled with a ‘C’ for stones, with a ‘K’ for gold. One carat corresponds to a fifth of a gram. The word comes from India. Before the South African discoveries in the late nineteenth century, India was the largest producer of diamonds. In ancient times, Indians believed that diamonds grew in the ground. Like seeds. So the carob seed became the standard of measurement. Of course, seeds in Greece, England, and Rome were different, so there were discrepancies in carats. Les Anglais—the English—for example, used to measure a carat by the middle grain of an ear of corn.” The Frenchwoman chuckled at the foolish Brits. “Today, the system is precise. There are one hundred points to a carat, five carats to a gram. Each point corresponds to two one-thousandths of a gram. Extremely small. A difference of one point can make a large difference in price. An interesting convention is that although most people round numbers up, diamond dealers round points down. So 99.8 points does not round up to a carat, but down to ninety-nine points.”
“Very conservative and very complicated.”
“Diamond dealers are.”
“The devil is definitely in the details, isn’t he? What about value? How is that established?”
“I was wondering when you would ask.” She allowed a sly smile to draw across her pouted lips. “Generally, it’s the first question people ask. Value and price, of course, depend on the four Cs. But it also depends on the relative size of the diamond.”
“Clearly.”
“Not for the obvious reason you think. Not size, but relative size. With diamonds, one plus one equals three.”
“I might mention that I became a lawyer because I flunked math.”
She grinned. “Let me explain. A stone costs more than two stones of half its size. Larger stones are more rare than smaller stones. What is known as Jeffreys’ and Tavernier’s rule of squares links carat price and carat weight.” She leaned forward, jotted down a simple formula with flourish.
“To determine the price of a stone, you must multiply the square of the number of carats in the stone by the price of a one-carat stone of that particular cut, color, and clarity. For example. Let us say that a one-carat costs two dollars. A two-carat stone will cost the square of two-four - times two dollars - which is eight dollars. A three-carat stone would cost, let’s see...”
“Eighteen dollars.”
“Très bien. I think your math teacher was unfair.”
Carlton decided it was time to fish for information closer to the bone. “But are diamonds really so rare? There are diamond deposits even in Arkansas. I’ve never heard about diamonds in Arkansas.”
De la Pierre paused, obviously weighing her response. “Most people believe diamonds are valuable because they are rare. They are led to believe this. Made to believe it.” Her voice became a whisper, as if others at Cartier were listening in. “The high price of diamonds is not based on the free market; it is imposed by the diamond syndicate. Diamonds aren’t rare at all. They don’t line the fields like gravel, of course, but they certainly are not as rare as the industry wishes people to believe. The syndicate stockpiles vast quantities of diamonds every year to maintain the price of diamonds at an inflated rate.” She paused and lowered her gaze. “That is all I can say on the subject, you cannot quote me on it. I know you will not.” Her tone was final, but Carlton noticed a flash of nervousness cross her face.
“Of course not.” He rose. “Thank you for your time, ma’am. If you think of anything else important, you can reach me here.” Uneasy about Jarvik, he handed her his personal card rather than his DOJ business card.
“Il n’y a pas de quoi, monsieur. It is my pleasure. Au revoir. Call me if you need anything else.” She smiled broadly. “Anything at all.”
The woman who answered the telephone had an ebullient voice heavily accented with a Southern twang. “Senator Bigham’s office. Good morning.” She pronounced it Biggam
“Good morning,” Carlton said. “Could you please tell me the name of the LA who handles mining issues for the Senator?” Senator Bigham was the senior senator representing Arkansas. The legislative assistant - LA - handling mining issues for him might shed some light on things.
“Certainly, sir. That would be David Mazursky.”
“Could you patch me through to him? My name is Pat Carlton. I’m over at Justice.” The short statement informed the receptionist this was a government call, not a constituent call, which she would have directed to a legislative correspondent - LC - or a press call, which she would have directed to the press secretary, no matter what the caller requested.
“Certainly, sir. One moment please.”
“This is Dave Mazursky.” The voice was friendly but decidedly not Southern.
“Good morning. My name is Pat Carlton. I’m an attorney in Antitrust over at Main Justice.”
“Hi. What can I do for you?”
“I’d like to pick your brain about a bizarre mining case I’m involved in out of Murfreesboro.”
“I’ll be glad to help. If I can.”
Carlton recounted the basic facts about Raymond Mines, Murfreesboro Mining Corporation, and the uncanny settlement without mentioning names or places. He also left out any mention of Wenzel’s plans and unsettling telephone calls.
“Well it certainly seems unusual. But frankly, I’m amazed any diamond mining occurred at all. It’s part of state folklore that there are oceans of diamonds in Arkansas, especially under Murfreesboro, but I have yet to see any proof. The closest I’ve seen is the Crater of Diamonds State Park down there. Tourist attraction. It’s been open for years. People find diamonds there, but they’re few and far between, industrial grade at best as far as I know. So I also find it strange that someone would settle so quickly for a large sum.”
“Does the name Murfreesboro Mining Corporation ring any bells?” He realized he had just blurted out the defendant’s name, tried to convince himself it was okay because he didn’t actually say they were involved.
“Mufreesboro Mining Corporation. Murfreesboro Mining Corporation. No. I can’t say it does.”
“Thanks for your time, David.”
“You bet. If you need any more info, call me on my direct line.” He recited it. “I’m often on the floor or in Arkansas, so leave a voicemail.”
“Thanks a lot.”
“You bet.”
Carlton hung up. Another dead end. Of course, Mazursky could have been snowing him, but Carlton thought his lack of knowledge genuine. Still, something about the settlement and Wenzel’s information kept gnawing at him.
He knew there was a link between the Raymond Mines case and the problems Dan Wenzel’s client was having with his mining project, just didn’t know what it was.
Both cases involved diamonds, the same hamlet in Arkansas, and serious efforts to squash mining. For Carlton, a ridiculously large settlement. For MacLean, threatening calls from the federal government and obscure groups. There were simply too many coincidences.
Carlton was all too aware coincidences rarely occurred. Besides, the information about Waterboer troubled him far too much and provided too obvious an opportunity for investigation for him to walk away now.
He could, maybe should look away, drown himself in another case. Others would, particularly given Stalin’s orders. But Waterboer’s history of misdeeds was too strong for him to ignore, even if he didn’t know how or even if the monopoly was involved. It was the first time he’d disobeyed explicit orders at DOJ, but then Jarvik didn’t have to know, did he?
Further investigation began with a second call to Stein at the SEC. On a hunch, Carlton asked him to obtain the incorporation papers of the Mineral Rights Protection Group, the officious group that had threatened MacLean’s operation. As expected, Carlton did not find anything in the documents other than what Wenzel had already divulged: that the shady group had been formed as a corporation only several days earlier. But incorporations for tax-exempt, nonprofit corporations were not prepared by concerned citizens on a whim. They were prepared by lawyers. Likely an attorney would be listed as the corporation’s agent for service of process on the articles of incorporation that Stein faxed to Carlton’s office. Carlton scanned the document. There it was: Perry Trask, Esq.
Patrick Carlton 01 - The Diamond Conspiracy Page 9