Meet the mysterious Jean-Raymond Boulle,
whose trail runs from Hope, Ark. to Kinshasa and
Luanda in Africa.
Friends in high places
By Richard C. Morais
JEAN-RAYMOND BOULLE says his 6-year-old son
calls him a "treasure hunter." What the child may
not know is that Pop does his hunting where more
prudent men hesitate to go. Where war and
politics intersect, Boulle is very much at home. A
Mauritius-born British citizen living in Monaco,
Boulle, at 47, is immensely charming and utterly
ruthless. Right now he's up to his armpits in the
bloody, messy politics of the Democratic Republic
of the Congo, formerly called Zaire, and before
that the Belgian Congo.
When Zaire's dictator, Mobutu Sese Seko, was
dying of cancer early last year, rebel leader
Laurent Kabila was driving Mobutu's ragtag army
back toward Kinshasa, the capital. As it became
clear that Mobutu's 32-year reign was ending,
Boulle suddenly dropped mining ventures he was
working on with the Mobutu regime and started
cozying up to Kabila. At the time, the U.S.
government was still supporting Mobutu, but was
wavering. U.S. State Department officials met
Kabila in late February in South Africa.
Hiring a Turkish pilot to fly a Challenger 601R into
rebel headquarters in Goma on Mar. 27, 1997,
Boulle and an associate, Joseph Martin, gave
Kabila a boost by buying diamonds produced in
Kabila-captured territory. Boulle, however, was
after bigger game. He and Martin came away in
April 1997 with concessions on two valuable
mining properties for Boulle's flagship company,
America Mineral Fields Inc.
Boulle put at Kabila's disposal AMF's Learjet, and
"advanced" $1 million worth of "mineral taxes"
and "fees" to the guerrilla leader. In return, AMF
got a contract to rehabilitate the badly run-down
Kipushi zinc and copper mines and to develop the
copper/cobalt Kolwezi Tailings Project, the latter
a massive mine's easily sifted waste, from which
an estimated $16 billion worth of minerals can be
extracted.
Laurent Kabila took Kinshasa and installed
himself as the new dictator, changing the name of
the country to the Democratic Republic of the
Congo. On May 17 George Moose, Assistant
Secretary of State for African Affairs at the State
Department, met Kabila in Kinshasa, and the U.S.
formally recognized the new DRC government.
Did Boulle have advance knowledge that the U.S.
was about to change sides, sealing the fate of the
old dictatorship? We don't know; Boulle denies he
had any help from the U.S. government. But we
do know that Jean Boulle has interesting Clinton
Administration connections.
A week before Kinshasa fell to Kabila—and he
gained U.S. recognition—AMF flew a group of
investors and analysts to meet the new Congo
rebel leader in the area he controlled. On that
Boulle-sponsored trip were high-powered
Washington guests: Congresswoman Cynthia
McKinney (D–Ga.) and, from the White House,
Robin Sanders, Director of African Affairs for the
National Security Council. Congresswoman
McKinney says she and Sanders were on a
"fact-finding" mission on behalf of the U.S.
government and simply hitched a ride on Boulle's
plane.
In the garden of a local house Kabila talked
grandly to his American visitors about the need to
bring democracy and economic opportunity to the
people of the Congo. "It was like meeting George
Washington," says Robert Brisotti, a Wall Street
investment banker flown in by AMF.
Well, not quite. Kabila's forces have been
condemned by the U.N. for their role in the Hutu
massacres, and as the new "president," Kabila has
shown no sign of bringing anything even remotely
resembling democracy to his suffering country.
The best that can be said for him so far is that he
and his associates are not pillaging the country
Mobutu-style.
Earlier this year Boulle's America Mineral Fields
moved its headquarters to Dallas, but for most of
its life the company was headquartered in, of all
places, Hope, Ark.
In the 1980s Boulle promoted a venture digging
for diamonds in Arkansas. Yes, Arkansas. Early
in the century there had been an active diamond
mine in now-sleepy Murfreesboro. It was long
ago abandoned and converted into the Crater of
Diamonds State Park, with tourists digging for the
odd diamond in the old mine's waste. Boulle found
backers to purchase diamond exploration leases
around the park. He needed drilling rights in the
park itself to see if mining was economically
feasible. At the time he told the New York Times:
"It [the mine] had the potential to rival any in
South Africa." It held, he claimed, $5 billion worth
of diamonds. In fact, in 1996 the diamond project
was shut down when it was determined that the
kimberlite in the state park was not worth mining.
When he was trying to line up the approvals he
needed to make his promotion plausible, he turned
to James Blair—the Springdale, Ark. attorney
who helped Hillary Clinton turn $1,000 into
$100,000 trading commodities. Blair got Boulle
and then-governor William Jefferson Clinton
together over lunch in the summer of 1984.
Apparently convinced that the mine had promise,
governor Clinton asked his friend Karen Lackey,
then commissioner for parks and tourism, to work
on a "blue ribbon task force" to study the issue
despite the outraged howls of environmentalists.
Bruce Lindsey, President Clinton's confidant and
White House aide, did the legal work on Boulle's
diamond project.
Boulle met Clinton again around 1987, this time at
the governor's office, to complain about delays in
approval. Clinton immediately signed a bill
authorizing exploratory drilling as soon as the
Clinton-picked task force recommended the
project. It was green-lighted, allowing the
Boulle-controlled company, along with a few
others, to drill in the Arkansas park. That was not
the last time Boulle saw Clinton. Boulle and his
wife were guests at Clinton's first White House
inauguration.
We have no evidence that Clinton is even aware
of Boulle's African activities, but it is quite
apparent that Boulle is surrounded by Democratic
political connections. Among them is the San
Francisco-based Robertson Stephens Investment
Management Co., whose funds have for years
invested in companies run by Boulle. The
Robertson Stephens Orphan Fund, for example,
was among AMF's biggest shareholders when it
was first listed on the Toronto Stock Exchange in
1996. Jean Boulle guided Paul Stephens, the San
Francisco firm's cofounder, on a trip through
Africa around 1994, treating him to barbecued
warthog and a lunch with Namibia's president.
The firm's other cofounder, Sanford Robertson,
has given hundreds of thousands of dollars to
Democratic Party causes and hosts fundraisers
for Clinton. Letters to then-commerce secretary
Ron Brown and President Clinton, also in 1994,
show how Robertson translated his DNC
fundraising into White House trade mission trips
that helped him clinch deals in China, such as a
joint project with the country's largest investment
banking firm, Shanghai International Securities.
"The trip was extremely worthwhile for our firm,"
Robertson boasted to Brown. "By basking in the
reflected glow of your trip we were able to
underwrite projects in China and Hong Kong [as
well as Japan]." Robertson gave another $100,000
to the Democratic Party on Jan. 23, 1996.
FORBES is certainly not the first to discover the
intimate connection between political contributions
and official favors. What makes Boulle's story
possibly sinister is that he is profiting essentially
from Africa's misery.
Jean Boulle became seriously rich when he
partnered with the controversial Robert Friedland
to look for diamonds in Voisey's Bay,
Newfoundland. In a detailed story last year (Minig
the suckers), FORBES reviewed Friedland's
questionable dealings and his penchant for using
hype to promote stocks.
Boulle was a partner in Friedland's most
successful deal: Their company, Diamond Fields
Resources, Inc., discovered one of the world's
richest nickel deposits. In 1995 they sold the
company to nickel producer Inco Ltd. for $3.1
billion. Boulle held $145 million in Inco stock at the
time, but has since sold much of it.
"My track record for creating wealth for
shareholders speaks for itself," says Boulle,
pointing out that Diamond Fields' public
shareholders shared in the good fortune. But
public shareholders of Exdiam Corp., the Boulle
outfit with the Arkansas diamond connection,
have a different tale to tell. The shareholders of
that company sued, alleging that Boulle and
Friedland siphoned off valuable leases and
geological information. Boulle and Friedland's
Diamond Fields Resources settled with Exdiam's
shareholders for $25 million.
Since then Boulle has gone his own way and
concentrated on America Mineral Fields, which
trades on the Toronto Stock Exchange, with a
market capitalization of $90 million. Boulle is not
an officer of AMF, but 42% of its shares are held
by Luxembourg-based corporations controlled by
him. Now he's trying to merge AMF into Nord
Resources, an NYSE-traded mining firm in which
he has a 28.5% stake.
After Kabila's government came
to power, it showed scant
gratitude for Boulle's early
support.
Laurent Kabila's Democratic Republic of the
Congo is not America Mineral Fields' only
troubled African treasure hunting ground. It has
been heavily involved in Angola, the former
Portuguese colony that for decades was a
battleground between a Soviet-backed Marxist
government and Unita, a rebel force backed by
the U.S. government. In 1993 the U.S. switched
sides in Angola—as it did later in the
Congo—recognizing the Marxist government.
Guess who made out in the switch? Jean Boulle.
Mercenaries and mining often go together in
Africa, and Boulle has ties to providers of what
are believed to be military mercenaries. Here's
the murky tale:
Paul Beaver, a consultant specializing in
mercenaries for the reputable 's defense
publications, says the Clinton Administration
forced the Angolan government to ditch
mercenaries it had been employing and replace
them with groups of Washington-approved
mercenaries. One such security company to
emerge was a Brussels-based outfit called IDAS
Belgium S.A. (International Defense & Security).
The Angolan government granted a Netherlands
Antilles IDAS subsidiary 50% of the diamond
rights in more than 36,000 square kilometers of
rebel-controlled bush. Think of it as an incentive
contract: Clear out the rebels, and a share of the
diamonds is yours.
Starting in May 1996, Boulle's AMF began buying
the IDAS affiliate with the diamond rights, paying
$2.3 million in cash and shares, plus a back-end
share of profits capped at $84 million if enough
diamonds are produced.
It takes patience to deal in Africa. Legal, financial
and security problems still bedevil AMF's Angolan
diamond properties. To help clear them, according
to Angola's leading diamond expert, Christine
Gordon, AMF is negotiating to join forces with
New Yorker Maurice Tempelsman of Lazare
Kaplan International Inc. Tempelsman, a longtime
close companion of the late Jacqueline Kennedy
Onassis, often deals at the top level with African
dignitaries. He is a big financial backer of the
Democratic Party, one of the privileged few who
have traveled on Air Force One. He accompanied
the President to Russia and Ukraine in 1995, and
joined Clinton on his travels through Africa last
March.
Murky indeed are the ways of African politics and
business. After Kabila's government took power
in the former Zaire, it showed scant gratitude for
Boulle's early support. The AMF deal was torn up
in December 1997 and Kabila was on the verge
of giving the contract to the giant international
conglomerate Anglo American Corp. of South
Africa Ltd.
"When Jean is cornered, he plays rough," says
former Boulle partner Don Hanvey. In this case
Boulle demonstrated his toughness by sending into
action Stephen Malouf, a longtime Boulle
associate and attorney who was officially
reprimanded in 1995 for beating up opposing
counsel in a Texas court. In January of this year
Malouf sued Anglo American and its affiliates in
Dallas on antitrust grounds, demanding damages
of $3 billion. Very smart. That's the last subject
the South African diamond cartel cares to have
dragged into U.S. courts.
Suddenly AngloAmerican and Boulle were
partners, and the suit was dropped. Tim Read,
Merrill Lynch International Ltd.'s managing
director of metals and mining investment banking,
brokered the peace treaty: Anglo American Corp.
is paying $16 million to become a 50/50 partner in
AMF's Kolwezi Tailings Project, with additional
financing ready when Kabila green-lights the
project with a presidential decree.
Boulle and AMF now stand to make a huge
amount of money as the Democratic Republic of
the Congo tries to restore the copper industry—all
but shut down in the civil war. Will AMF, a small
company, reap the reward because of its mining
expertise? Unlikely. Most of that will be supplied
by Anglo American. Jean Boulle's real
contributions to the deal are his political
connections and political savvy. One more
foreigner exploiting Africa's desperate struggle for
development and stability. |
