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Last update - 00:00 24/06/2007
I coulda been a diplomat
By Yossi Melman

When Willie Nagel is asked about the value of his assets, he replies with an old adage he heard from his father: "If someone asks you if you're rich, don't say yes or no. If you say yes, you may need a loan from him one day and then you won't get it. If you say no, it can bring on the evil eye." Nagel, 82, is a renowned international diamond broker who is also known in the Ramat Gan exchange. His personal assets are estimated at tens of millions of dollars. In addition to his diamond business, he holds an 8 percent stake in Channel 2 television franchisee Keshet and has business interests in both Israel and in London, where he spends most of his time. However, in deference to his father's wishes, he absolutely refuses to specify where his assets are and how much they are worth.

Despite the breadth of his business dealings, Nagel is not a familiar face in the local business community. Recently he has agreed to be interviewed. It is in order to emphasize his role in formulating the Kimberley Process Certification Scheme (KPCS), launched in 2003 to combat the proliferation of blood, or conflict, diamonds, which have been used to finance wars in Africa.

Nagel was born in Chernowitz, Romania in 1925. His father, Abraham David, was a Vizhnitz Hasid who leased land in the Bukovina region on which he established vodka distilleries.
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"My father bought me a forest for my bar mitzvah that I have spent my whole life trying to find," Nagel relates. His father expanded the business into other areas, particularly food-related. He exported canned tuna to Palestine and was appointed deputy chair of the Palestine-Romania chamber of commerce.

"After the Second World War broke out, my father saw the convoys of fleeing refugees. He understood that the worst was yet to come," Nagel recalls. "He immediately told the family, 'We're going to Palestine. His connections and his chamber of commerce work enabled him to arrange for immigration permits from the British Mandate authorities. The same night, September 17, 1939, we traveled by train to Constanza, from which we sailed to Haifa. Father took care in advance to have money in Palestine, so we had a relatively soft landing," Nagel relates.

The family lived in a hotel on the Tel Aviv waterfront for a year before moving into its own apartment. His father continued doing what he knew best, business, buying fruit groves and other land. He and a Belgian diamond broker he met in Palestine, another refugee from the Nazis, established a diamond polishing workshop in Pardes Katz, near Tel Aviv. Nagel's father never forgot the Hasidim left behind in Romania and used his money and his connections to bring about 300 of them to Palestine during the war. He died in 1973.

In his teens Nagel moved from one high school to another, from Tel Aviv's Gymnasia Herzliya to Haifa's Reali School in Haifa and then to Terra Sancta in Jerusalem. He studied law at a Mandate school and in 1946, he was sent - without much enthusiasm on his part - to study law in Edinburgh. He made it only as far as London, where he completed his studies and became a lawyer.

Nagel says he was supposed to be accepted into the Foreign Ministry on an apprenticeship for young graduates, hoping to serve at the Israeli consulate in New York, "but because of inside connections, they took someone else." Nagel remained in London, where his job search foundered. Searching for another source of income, he "fell into" diamonds.

Didn't your father help you out?

"No, I used the Yellow Pages. At the time there were two diamond brokers in London. Through a friend in Tel Aviv I went to one and told them I want to buy diamonds from them. That's how I got my start in the diamond business until I built my own business and cultivated a reputation. Within a few years my firm became well known in London."

In the late 1950s Nagel began working with De Beers of South Africa. At the time, it controlled 80 percent of the global diamond market, but it now has only a 40 percent stake. De Beers is involved in every stage of diamond production, from mining through sales to brokers. When Nagel began, De Beers sold rough diamonds to major clients throughout the world, mostly diamond producers, but none from Israel. Today it has 90 such clients, including Israelis.

De Beers "was an enormous monopoly then, and diamond merchants from Israel came to me asking for help," Nagel says. His ties with De Beers have grown, and he is now one of five brokers who mediate between the concern and customers.

Nagel relates how he used his business to develop personal relationships with British politicians, including the "Iron Lady," then Prime Minister Margaret Thatcher. Nagel was disappointed with her successor, John Major, and switched his support to Tony Blair. In 2002 Queen Elizabeth II made him Companion of the Most Distinguished Order of St. Michael & St. George for for his help in improving Anglo-German relations. He is also proud of honors awarded by the governments of Germany, Belgium and Romania.

In 1993 Nagel expanded into communications, investing in Keshet. It was company founder and broadcaster Alex Giladi who convinced Nagel to make the move. "We met in London, and Alex, who was then looking for investors because he didn't have enough, suggested I invest in Keshet," Nagel recalls. "It was a good opportunity. I was always interested in media, and so I agreed." Nagel does not volunteer details, but there is no doubt the investment was a successful one. He plunked nearly $1 million, and the company has given him tens of millions of shekels in profits.

Are you interested in selling your share?

"No. I'm in no rush. It's an interesting business."

The other key partners in Keshet are Moshe Wertheim, Haim Saban, Bank Leumi and Alex Giladi. Nagel, unlike the others, is not particularly active in running the company. Nor was he involved in recent intrigues, such as the attempt by Keshet and [fellow Channel 2 franchisee] Reshet shareholders to appoint Rafi Ginat to manage the news company.

Nagel holds his shares in Keshet through Punchline, a lobbying and media investment company which operates mainly in Britain and Germany. The main venue through which Nagel directs his businesses is W. Nagel International Diamond Brokers, headquartered in London's diamond district. He also tried to become involved in facilitating the Israeli-Palestinian peace process.

The combination of business activity, political ties and personal interest led Nagel to get deeply involved in crafting the Kimberley Process. Human rights groups believe conflict diamonds accounted for 6 percent of the annual $8 billion global diamond trade until the beginning of this decade. Proceeds from the sale of these diamonds, $500 million a year, lined the pockets of people such as Jonas Savimbi, leader of Angola's Unita rebel faction, and former Liberian president Charles Taylor. Taylor is currently being tried in the Hague for war crimes. This money helped them to buy arms and pay their soldiers' wages, perpetuating the cycle of violence in Africa.

Governments, the international diamond industry and non-governmental organizations began negotiating an end to conflict diamonds in Kimberley, South Africa in 2000. The KPCS was created two years later. It imposes internal controls on diamond exporters and importers; all shipments of rough diamonds must include a Kimberley Process certificate attesting that they did not originate in conflict areas. The scheme thus makes it possible to track a diamond from its mining to its sale. Over 50 countries are KPCS members. Anyone caught falsifying a report is immediately fined and prohibited from further involvement in the diamond industry.

Industry experts believe the Kimberley Process has reduced annual trade in conflict diamonds to only $20 million of an annual turnover of $13 billion.

"Before the Kimberley Process the diamond industry was in a very difficult situation," Nagel says. "The wars in Africa gave the industry a bad name. People said the diamonds we acquired in those states financed wars there, which gave birth to the concept of 'blood diamonds' and 'conflict diamonds.' Human rights organizations attacked us and global public opinion started to turn against us.

"There was a concern a moratorium would be imposed on buying diamonds and the diamond industry would go the way of the fur industry," Nagel continued. "U.S. Congressional Representative Tony Hall (D-Ohio) proposed a bill to keep suspect diamonds out of the country. The diamond industry needed to respond, but De Beers found it difficult, for many reasons, to play a central role. That's why I got involved. I did it with their knowledge.

"The British government approached me because I was known in the business, and they trusted me. I was the contact person between diamond dealers and Peter Hain, who was Britain's Foreign Office Minister for Africa. Similarly, I forged contacts with Canada's Department of Foreign Affairs and International Trade, the European Union and the U.S. State Department."

What were their demands?

"The Americans demanded an absolute halt to the acquisition and sale of blood diamonds. They demanded that every diamond be tagged and labeled. I explained to them that there was no logic in this. It's like trying to end prostitution in the world. No one anywhere in the world has managed to uproot prostitution because there is a demand for it, and it's the same in our industry. It's impossible to completely prevent someone somewhere from selling blood diamonds. So I suggested a different approach, one of damage control. Negotiations had their ups and downs until the idea finally came together."

Is the method working?

"It's clear that anyone can commit forgery if he wants to. But it seems that the method has been working. Moreover, wars and conflicts have either ended or sharply declined in the countries in Africa where the conflicts raged back then: Angola, Sierra Leone and Liberia. Even the situation in the [Democratic Republic of the] Congo has improved."
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