Lev Leviev - diamond tycoon, Jewish king of Africa, supporter of Settlements
Leviev with fellow Jews
Here follows four revealing articles on Jewish diamond tycoon Lev Leviev, President of The Association of Jewish Communities in Russia, and "friend" of Russian leaderVladimir Putin.
- The Missionary Mogul
- ISRAEL/SOUTH AFRICA: The Cartel Isn't Forever
- "WE need Judaization" - statements by Leviev in Israeli paper Ha´aretz
- Angolagate - article on how Leviev became "Angola's diamond czar"
Appendix
- Demonstrations against Leviev´s blood diamonds
- Campaign Against Leviev Picks Up Steam
West Bank Villages of Bil'in and Jayyous: |
The Missionary Mogul
By Zev Chafets
New York Times, September 16, 2007
Avner Leviev advised his son to prepare by cutting chicken legs, but young Lev felt no need to practice. “I knew what I was doing,” he told me when I spoke to him recently at his office in Yahud, a suburb of Tel Aviv. “I was a diamond cutter, after all. It’s not all that different.” He extended his hands, palms down, for my inspection and smiled. “I’ve got steady hands.”
In the years since he introduced his son into Israel’s blood covenant with the almighty, Lev Leviev has performed more than a thousand ritual circumcisions — many on the sons of employees in his ever-expanding business empire. In those years, Leviev has gone from impoverished immigrant to the man who broke the De Beers international diamond cartel. His companies build vast shopping malls, housing projects, highways and railways throughout Israel, the former Soviet Union and Western Europe. He owns everything from diamond mines in Angola to a string of 7-Elevens in Texas. Recently he has been buying up iconic American properties, including the former New York Times Building in Manhattan for a reported $525 million.
Lev Leviev is probably Israel’s richest man. Forbes ranks him 210th among the world’s wealthiest people, with an estimated personal net worth of $4.1 billion. (People close to Leviev put that figure closer to $8 billion.) However much Leviev has, he is hungry for more. His business role model is Bill Gates, whom he says he hopes to eventually join in what he calls, in Russian-accented Hebrew, “the world’s starting 10.”
Leviev admires not only Gates’s wealth but also his activist style of philanthropy. “A lot of very rich men wait too long to give their money away,” he told me. “Warren Buffett, for example. He’s in his 70s now, and he should have started earlier. But Bill Gates is a young man, and he’s already giving to help the world. That’s the right way to do it.”
Leviev, who is 51, is a legendary philanthropist, too — he refuses to say how much he gives away each year, but he did not dispute an estimate of $50 million. He does not share Gates’s universalist outlook, however. Leviev is a tribal leader, a benefactor of Jewish causes, particularly in the former Soviet Union, where he underwrites Jewish day schools, synagogues, orphanages, social centers and soup kitchens for more than 500 communities. To make this vast philanthropic enterprise run, Leviev subsidizes an army of some 10,000 Jewish functionaries from Ukraine to Azerbaijan, including 300 rabbis.
Most of the 300 rabbis are Chabadniks, adherents of the Brooklyn-based Hasidic group Chabad — fundamentalist, missionizing, worldly and centered on the personality and teachings of the late Menachem Mendel Schneerson, the Lubavitcher rebbe. Chabad is anti-abortion, regards homosexuality as a sexual perversion and generally finds itself aligned with other fundamentalist religious groups on American domestic issues. In Israel, it has supported right-wing Greater Israel candidates. Most controversially, during Rebbe Schneerson’s lifetime, Chabad entertained the notion that he might be the messiah; a vocal group in the community still does. (This led the ultrapious Rabbi Eliezer Shach to acidly define Chabad as the sect closest to Judaism.)
Lev Leviev’s loyalty to Chabad is unquestioning. “The rebbe is my role model, and my values are his values,” he says.
Lev Leviev arrived in Israel as a teenager in 1971, at a time when Moshe Dayan, hero of the Six Day War, was the legendary embodiment of the Israeli WASP (Well-born/Ashkenazi/Secular/Paratrooper). Immigrants were classified by their potential to attain this ideal. The Leviev family — unconnected, uneducated, not even real Russians but Bukharan Jews, primitives from the steppes of Central Asia — were classified as “bad material” and dispatched by government authorities to the dusty “development town” of Kiryat Malachi.
Avner Leviev enrolled his son in a Chabad yeshiva. It was a match that didn’t take. “I’m not a born yeshiva scholar,” Leviev admits. In Tashkent he had finished 10th grade. He left the yeshiva after a few months, ending his formal education. If Leviev regrets this, he doesn’t show it. “I just wanted to make money,” he told me.
Through a family friend, Leviev found work as an apprentice diamond cutter. It was industry practice not to teach anyone all 11 steps of the diamond-cutting trade, but Leviev paid his fellow workers to show him every facet of the process. By the time he finished an undistinguished stint in the rabbinical corps of the army, he was ready to go into business for himself.
“I never doubted that I would get rich,” Leviev told me. “I knew from the time I was 6 that I was destined to be a millionaire. I’d go with my father to shops, and while he was talking business, my eyes automatically counted the merchandise.”
Leviev chose a tough industry. “The diamond business is usually a family business,” says a Tel Aviv diamond merchant. “People accumulate wealth slowly, over generations. When Leviev started out, all he had was an amazing amount of ambition and the ability to understand the stone. Understanding the stone — that was the key.”
The headquarters of Leviev’s U.S. diamond company, LLD USA, is located at the mouth of the Manhattan diamond district, on the corner of 47th Street and Fifth Avenue. To get up to his office, you need to be both photographed and fingerprinted by a very high tech security system.
People who handle gems are cautious and security-conscious, and Leviev is no exception. Perhaps for that reason, many of his closest associates are relatives or longtime friends, most of them also Bukharan Jews. Paul Raps, the general manager of LLD USA, has known Leviev since they were both young diamond merchants in Ramat Gan. “One day we were sitting there, just chatting, and suddenly Leviev said to me: ‘You know what we need? We need to get our hands on the gelem.’ Uncut diamonds. I thought he was kidding. Nobody could find uncut diamonds back then.”
Before Leviev’s epiphany, the world’s diamond market was strictly regulated by De Beers, a company founded in the 19th century to mine its first shaft of diamond-bearing kimberlite. In 1930, De Beers established a cartel that over the next few decades came to dominate diamond mining in the Soviet Union, Africa and the rest of the world. It regulated the market through a system of “sightholders,” handpicked producers of rough diamonds and dealers of finished diamonds, who were allowed to buy quantities of unfinished diamonds at fixed prices, via De Beers.
When Leviev started out, there were about 100 sightholders around the world. They came to London several times a year and, at syndicate headquarters, were offered diamonds on a take-it-or-leave-it basis. Those who left it too often were decertified, and new sightholders were selected.
Small diamond cutters and merchants like Leviev couldn’t afford to buy from sightholders. They were allowed to buy rough diamonds from “secondary dealers” who managed to get their hands on small, smuggled quantities. It was a limiting arrangement, and Leviev didn’t like limitations. He applied to become a De Beers sightholder.
“There was resistance to him at first,” recalls the Tel Aviv diamond merchant, who knew Leviev at the time. “A lot of people thought he was uncouth, not really civilized. This wasn’t anti-Semitism. Most of the people who rejected him were European Jews themselves. Leviev was an outsider, a Bukharan. But he was so industrious, so ambitious, such a good businessman, that eventually they had no choice. They had to accept him.”
Soon Leviev became a rising star in the De Beers syndicate. He brought his extended family into his business, leveraged their resources and prospered. But he chafed under the control of the syndicate.
In the late ’80s, Leviev saw an opportunity. De Beers had encountered antitrust problems in the United States. In South Africa, the apartheid government that had worked with De Beers was losing political power. At the same time, the Soviet Union, whose leaders had long had a mutually profitable partnership with De Beers, was nearing collapse.
Leviev has a complicated relationship with his former homeland. In our first meeting, when I asked him about his boyhood memories, he surprised me by saying: “Fear. I grew up in fear.”
Tashkent is a Muslim city, and although there wasn’t much overt anti-Jewish violence, there was a climate of mistrust. “Many times I was beaten up in school,” he recalls. But his biggest fear was of the Communist government.
“As a boy, they used to make us stand at attention and salute the statue of Lenin,” he told me. “I’d curse him and the other Communists under my breath. They sent my grandfather to Siberia. They wouldn’t let us keep the Sabbath — we had to go to school on Saturdays. Just being Jewish was dangerous.”
Still, he saw business potential in Russia. He spoke the language, knew the local customs. His father, sensing danger, begged Leviev not to go. So Leviev traveled to Brooklyn, to the headquarters of the Lubavitcher rebbe, for a second opinion.
“I never doubted that I would get rich,” Leviev told me. “I knew from the time I was 6 that I was destined to be a millionaire. I’d go with my father to shops, and while he was talking business, my eyes automatically counted the merchandise.”
Leviev chose a tough industry. “The diamond business is usually a family business,” says a Tel Aviv diamond merchant. “People accumulate wealth slowly, over generations. When Leviev started out, all he had was an amazing amount of ambition and the ability to understand the stone. Understanding the stone — that was the key.”
The headquarters of Leviev’s U.S. diamond company, LLD USA, is located at the mouth of the Manhattan diamond district, on the corner of 47th Street and Fifth Avenue. To get up to his office, you need to be both photographed and fingerprinted by a very high tech security system.
People who handle gems are cautious and security-conscious, and Leviev is no exception. Perhaps for that reason, many of his closest associates are relatives or longtime friends, most of them also Bukharan Jews. Paul Raps, the general manager of LLD USA, has known Leviev since they were both young diamond merchants in Ramat Gan. “One day we were sitting there, just chatting, and suddenly Leviev said to me: ‘You know what we need? We need to get our hands on the gelem.’ Uncut diamonds. I thought he was kidding. Nobody could find uncut diamonds back then.”
Before Leviev’s epiphany, the world’s diamond market was strictly regulated by De Beers, a company founded in the 19th century to mine its first shaft of diamond-bearing kimberlite. In 1930, De Beers established a cartel that over the next few decades came to dominate diamond mining in the Soviet Union, Africa and the rest of the world. It regulated the market through a system of “sightholders,” handpicked producers of rough diamonds and dealers of finished diamonds, who were allowed to buy quantities of unfinished diamonds at fixed prices, via De Beers.
When Leviev started out, there were about 100 sightholders around the world. They came to London several times a year and, at syndicate headquarters, were offered diamonds on a take-it-or-leave-it basis. Those who left it too often were decertified, and new sightholders were selected.
Small diamond cutters and merchants like Leviev couldn’t afford to buy from sightholders. They were allowed to buy rough diamonds from “secondary dealers” who managed to get their hands on small, smuggled quantities. It was a limiting arrangement, and Leviev didn’t like limitations. He applied to become a De Beers sightholder.
“There was resistance to him at first,” recalls the Tel Aviv diamond merchant, who knew Leviev at the time. “A lot of people thought he was uncouth, not really civilized. This wasn’t anti-Semitism. Most of the people who rejected him were European Jews themselves. Leviev was an outsider, a Bukharan. But he was so industrious, so ambitious, such a good businessman, that eventually they had no choice. They had to accept him.”
Soon Leviev became a rising star in the De Beers syndicate. He brought his extended family into his business, leveraged their resources and prospered. But he chafed under the control of the syndicate.
In the late ’80s, Leviev saw an opportunity. De Beers had encountered antitrust problems in the United States. In South Africa, the apartheid government that had worked with De Beers was losing political power. At the same time, the Soviet Union, whose leaders had long had a mutually profitable partnership with De Beers, was nearing collapse.
Leviev has a complicated relationship with his former homeland. In our first meeting, when I asked him about his boyhood memories, he surprised me by saying: “Fear. I grew up in fear.”
Tashkent is a Muslim city, and although there wasn’t much overt anti-Jewish violence, there was a climate of mistrust. “Many times I was beaten up in school,” he recalls. But his biggest fear was of the Communist government.
“As a boy, they used to make us stand at attention and salute the statue of Lenin,” he told me. “I’d curse him and the other Communists under my breath. They sent my grandfather to Siberia. They wouldn’t let us keep the Sabbath — we had to go to school on Saturdays. Just being Jewish was dangerous.”
Still, he saw business potential in Russia. He spoke the language, knew the local customs. His father, sensing danger, begged Leviev not to go. So Leviev traveled to Brooklyn, to the headquarters of the Lubavitcher rebbe, for a second opinion.
It is a meeting that has become folklore, both in Chabad and in the diamond industry. Leviev tells the story with obvious relish: “I spoke to the rebbe in Hebrew. I asked him, Should I go or not? He answered me in a kind of antique Russian. He said: ‘Go. Go to Russia and do business, but don’t forget to help the Jews. Remember your family tradition.’ ”
This was more than good advice. The rebbe’s blessing gave Leviev the keys to the Chabad network in the former Soviet Union at a very dangerous time.
Officially, Leviev was invited by the Soviet minister of energy in 1989, which was exploring ways of ending the De Beers grip on the country’s diamonds. “When I got there, Gorbachev was still in power, but you could sense that things were coming apart,” Leviev says. “Everything was unsettled, and I felt the fear again.”
There were other risks, too. To do business with the Russians, Leviev had to give up his position as a De Beers sightholder. This shook the international diamond business. “It was unbelievable,” says the Tel Aviv merchant. “He was breaking the rules, going after the source. When he succeeded in Russia, and then in Angola, others saw it and were suddenly emboldened. That’s how Leviev cracked the De Beers cartel. With the instincts of a tiger and the balls of a panther.”
There’s no need to cry for De Beers, which still controls a major share of the world’s uncut diamonds. But the syndicate no longer sets the worldwide market value of diamonds or decides who can manufacture and sell them.
Neither can Leviev. But he has become the world’s largest cutter and polisher of diamonds and one of its major sources of rough diamonds — the gelem he dreamed of.
A key to his success is his vertical integration. He mines the diamonds in Angola, Namibia and Russia, cuts and polishes them, ships them and sells them, wholesale and retail. He has a string of high-end shops in Russia and a luxury boutique, Leviev, on Bond Street in London. Next month, Leviev is opening a store on Madison Avenue in Manhattan, which, as the president of Leviev Jewelry, Thierry Chaunu, told a reporter, will cater to “the young hedge-fund professional who just got his bonus.”
One of Leviev’s first moves in Russia was to set up a high-tech cutting and polishing plant. It provided jobs and, more important, showed the Russians how they could gain control of their own industry. In turn, the Russian government helped him gain a foothold in Africa. In 1997, Leviev bought into the Catoca diamond mine, Angola’s largest, in a joint venture with the Russian state diamond company, Alrosa; a Brazilian partner; and the Angola state diamond company. Leviev soon established warm ties with the Angolan president, José Eduardo Dos Santos, who speaks fluent Russian from his days as an engineering student in the U.S.S.R.
When Leviev arrived in Angola, Dos Santos was fighting a civil war against Unita rebels, who were financed by the sale of smuggled “blood diamonds.” Leviev had a suggestion: Why not create a company that would centralize control of all diamonds? The company that grew out of that idea was the Angola Selling Corporation, or Ascorp, jointly owned by the Angolan government, a Belgian partner and Leviev. While Leviev’s plan took aim at the trade in conflict diamonds, critics say that Ascorp took advantage of mounting international pressure to establish and profit from a monopoly.
Unita surrendered in 2002, after the death of its leader, Jonas Savimbi. By then, the Angolan government had effectively pushed De Beers out of the country, and Ascorp had generated great sums for the Dos Santos government (and, it is rumored, the Dos Santos family), created thousands of jobs for Angolans in newly established factories and mines and made Lev Leviev a vast fortune. None of this would have been possible without the Russian connection.
 Dos Santos and Lev Leviev |  Lev Leviev and Ariel Sharon |
“When it comes to contributing to the Jewish people, Lev Leviev is in a class by himself,” says Natan Sharansky, the former Soviet dissident and former Israeli deputy prime minster. “I know a lot of rich people who give money. But Leviev is on a completely different level. He’s building entire communities.”
More than this, he is a power broker and intercessor on behalf of beleaguered Jews throughout the former U.S.S.R. Take, for instance, the case of the Jewish private schools in Baku, Azerbaijan. Three years ago the government, concerned about the influence of neighboring Iran and the spread of local madrassas, decided to close all the private schools in the country. This, of course, included the Jewish school in Baku, Azerbaijan’s capital. The community elders petitioned the government, but to no avail.
“They even tried to get American Jewish organizations to intervene,” Leviev recalled. “But the Jewish organizations couldn’t do a thing.” He smiled thinly. He has a generally low opinion of American Jewish activists, especially his fellow billionaires.
And so Leviev decided to ride to the rescue. He flew to Baku on his private plane, parked at the airport and went straight to the synagogue.
“The Jews were all gathered there,” he recounted in what is obviously a favorite story. “I told them to wait while I talked to the president.” At the time, that was Heydar Aliyev. “There were journalists in his outer office. Everyone was excited to see me there, because they thought I had come to invest money in the country. Heydar thought so, too. He said: ‘Just tell me what you’re interested in — oil? Gas? Tourism? What can I do for you?’
“I asked him, ‘How can I invest in a country that doesn’t like Jews?’ Heydar got very upset when I said that. He began telling me how many Jewish friends he had and how much the Jews had contributed to his culture and the country and so on.
“ ‘But you’re closing down the Jewish school,’ I told him. ‘I’ve come to ask you to allow it to remain open. Right now the Jews of Baku are gathered in the synagogue, awaiting your answer.’ ”
Leviev paused at this point in the story. Dramatic tales of peril and salvation are part of the Chabad oral tradition.
“Heydar consulted his advisers,” Leviev said. “Then he returned to me and said: ‘The school can remain open. All right?’
“I told him: ‘Well, there’s another problem. The Jewish institutions here are in bad shape. Can you arrange for me to acquire a plot of land to rebuild?’
“ ‘Yes,’ said Heydar. ‘Is that all?’
“ ‘Not quite. I’d appreciate it if you would personally open the school next year. That way there will be no misunderstandings about what the government’s position is.’
“Heydar said: ‘I’ll do that. Are you satisfied now?’
“I told him: ‘Just one last thing, sir. Those journalists in your outer office? Would you mind announcing our agreement to them?’ ”
After Aliyev’s press conference, Leviev remembers returning triumphantly to the synagogue to deliver the good news. Shortly thereafter, Aliyev died and was succeeded by his son, with whom Leviev is on friendly terms.
“And did you invest after that?” I asked.
Leviev smiled. “No,” he said. “Azerbaijan has so many natural resources they don’t need my investment. But I told them that they would get a blessing from God.”
Leviev insists that he maintains a strict division between his community leadership and his business dealings. Perhaps this is so, but the republics of the former Soviet Union are not famous for their transparency. At any rate, business depends to a large extent on personal and political access. “A big part of our analytical value depends on the perception that we can get anything approved in Russia,” says Jacques Zimmerman, the vice president for communications of Africa Israel, Leviev’s international holding and investment company.
This perception has been strengthened by public displays of affection between Putin and Leviev. In 2000, the Russian president was the guest of honor at the opening of the Jewish Community Center in the Marina Roscha district of Moscow, which Leviev played a major role in building. It was a gesture widely interpreted as a sign of good will not only toward Russia’s Jews but toward Leviev himself.
Putin also took Leviev’s side in a dispute over the post of chief rabbi of Russia, backing Leviev’s candidate, Berel Lazar, over Adolf Shayevich, who held the position. The Kremlin’s endorsement of Lazar was a final confirmation that Leviev had achieved a typically audacious and improbable victory — putting the fundamentalist Chabad in effective control of the assimilated, mostly irreligious Jewish communities of the former Soviet Union.
Lazar’s selection has been quite controversial not only in Russia but also among Jewish groups in Israel and in the U.S. But Chabad is nothing if not practical, and they have taken a gradualist approach to winning over Russia’s secular Jews. Schools enroll nonreligious students and offer them a full government curriculum, along with some beginner’s Torah studies. Community centers hold coeducational social events. There are even mixed dances.
Such modernity comports with Leviev’s personal style, which is, in its outward aspect, Chabad-lite. He once made headlines by closing his upscale mall in Ramat Aviv — a bastion of WASP Israel — on the Sabbath, and officially his businesses are closed on Saturday. But he maintains a “don’t ask, don’t tell” policy for his Israeli executives, some of whom hold unofficial meetings and phone sessions on the Sabbath. Abroad, some of the businesses Leviev owns an interest in work seven days a week, and his American 7-Elevens sell nonkosher food. Leviev himself strictly observes the Sabbath, but he has been known to interrupt his weekday prayers for important phone calls.
Unlike many Chabad men, Leviev is clean-shaven, wears stylish business suits open at the collar and sometimes lounges in jeans, and his small black skullcap is barely visible. He is also something of a feminist. The women in his office, including his private secretaries, are allowed to wear slacks, a violation of strict Orthodox custom. Leviev’s two eldest daughters have been brought into the business as senior executives. Zvia, a mother of four who runs international marketing and mall businesses for her father, is frequently mentioned in the Israeli press as a potential successor. Leviev is proud to have raised his nine children in B’nai B’rack, Tel Aviv’s ultra-Orthodox suburb, but he is planning to move to an estate in Saviyon, the equivalent of going from Borough Park to Scarsdale.
Leviev’s pragmatism ends, however, at the vexing and fundamental question of who is a Jew. American Reform Judaism recognizes patrilineal descent. The State of Israel grants citizenship under the Law of Return to people with a single Jewish grandparent. But Leviev accepts only the Talmudic rule that a Jew is anyone born to a Jewish mother, or someone who has undergone an Orthodox conversion and agreed to keep all 613 Jewish laws.
There are a great many people who regard themselves as Jews but do not meet these criteria. In Israel alone, there are an estimated 300,000 among Soviet immigrants, and perhaps more than that in the former Soviet Union. “What do you do about all these people?” I asked Leviev. “Just write them off?”
Leviev’s answer: “It’s not a matter of what I do or what I want. I have no choice. The law is the law.”
A few years ago, concerned Bukharan Jewish immigrants in New York reported to Leviev that their children were being corrupted by the public schools of Queens. “The kids were going out with Pakistanis, Puerto Ricans, all sorts of people,” I was told by one of Leviev’s intimates. Leviev would have been equally horrified to learn that the Bukharan Jews of Queens were hooking up with descendants of the Mayflower.
In response, Leviev donated the money for a private school in Elmhurst. He picks up the tuition tab for the entire student body — about 800 kids at an estimated $18,000 a pop. Leviev regards this as a pilot project. His goal, I was told by his assistant, Shlomi Peles, is to make a free Orthodox Jewish education available to every Jewish child in United States.
The educational project is just one part of Leviev’s recent discovery of America. After 9/11, he and a partner bought the JP Morgan building near ground zero at a bargain price (a reported $100 million), converting it into luxury condominiums and clearing a very handsome profit. It made him a believer in New York.
“Every building is half a billion dollars,” he told me. “All you need is a global perspective. I knew New York would come back.”
Jacques Zimmerman, who handles communications for Africa Israel, told me: “Lev’s natural tendency, his home court, is Israel and Russia. But he is constantly looking to expand.”
The engine for this growth is Africa Israel. The company is publicly traded on the Tel Aviv Stock Exchange and handles Leviev’s businesses, not including privately held diamond interests. Leviev personally owns about 75 percent of Africa Israel, which was valued, in mid-July, at approximately $5 billion.
According to Zimmerman, Africa Israel has made a “strategic decision” to think big. “The work involved in large and small projects is about the same, so why not do big projects?” In Moscow, Africa Israel is currently building a million-square-foot mall as well as another 750,000-square-foot mall that is entirely underground. It is the lead partner in a consortium that is building the subway in Tel Aviv. Africa Israel is active in China, India, the Philippines and Latin America as well.
“We’re worldwide, but our emphasis is moving more and more to the United States,” Zimmerman says. “In the last six months, we’ve bought into more than a billion dollars’ worth of projects in Manhattan, and that’s going to grow.”
Africa Israel’s American holdings include not only the former New York Times Building but also a half-share of the Apthorp apartment building on the Upper West Side and the Clock Tower on Madison Avenue, 1,700 Fina gas stations around the country and development projects in Los Angeles, San Francisco, Miami and Phoenix. Recently the company announced it will be opening a giant Hard Rock amusement park in Myrtle Beach, S.C.
“All you need to do business in America is a good name, and banks will lend you all the money you need,” Leviev told me with enthusiasm.
Israel is a society in which successful people are rarely praised. But I encountered very little criticism of Leviev there, even from members of the Jewish WASP business establishment. “He’s still an outsider,” one high-powered Tel Aviv lawyer told me. “We don’t know anything about his personal life. But from what anyone can tell, he’s clean. You read about him in the business pages of the newspaper, not the gossip columns.”
One of Leviev’s greatest admirers is Eitan Raff, chairman of Israel’s Bank Leumi, from which Leviev bought Africa Israel in 1996. The sale was controversial at the time. “He was a Russian,” Raff says. “We didn’t know him or anything about him. We thought he might be some kind of oligarch. I hired two or three investigators to check him out. He came up clean.”
There were a number of foreign suitors for Africa Israel, but after fighting broke out in Jerusalem between Israeli and Palestinian gunmen, they became skittish and withdrew, leaving Leviev as the sole bidder. The asking price was $400 million, and Bank Leumi had to sell; it had been ordered by a court to divest itself of nonfinancial holdings, including Africa Israel, by a certain date. Leviev had the bank over a barrel. “What would you say to $330?” Leviev asked Raff.
“No, it’s worth four, that’s the fair price,” Raff said.
Leviev stuck out his hand, diamond-business style. “Four,” he said.
“He acted with great probity,” Raff says. “He didn’t try to take advantage or squeeze. His word is his bond,” he says. “Look, I’m a kibbutznik. Leviev and I aren’t from the same world at all. But I consider him a friend, and I think he’s an example of what the head of a public company should be.” Leviev’s biggest public-relations problem is his association with Arkady Gaydamak, a mysterious Russian-Israeli billionaire of unsavory reputation, now under indictment in France for a variety of offenses, including gunrunning and money laundering. Gaydamak, who cuts a flamboyant figure and recently established his own political party in Israel, is reputed to have made his fortune selling arms in Angola in partnership with various European, Israeli and African military and government figures.
Leviev says he was first introduced to Gaydamak by the former Mossad chief Danny Yatom. They certainly knew each other. According to the Center for Public Integrity, a nonpartisan journalism group based in Washington, Leviev and Gaydamak jointly acquired a metallurgy plant in Kazakhstan in 1999. A year later, Gaydamak bought a 15 percent share of Africa Israel, which he later sold. Leviev swears they are no longer partners, but the relationship has stained his reputation.
Unlike Gaydamak, Leviev has thus far steered clear of Israeli politics. That doesn’t mean he lacks influence, however. He meets from time to time with the nation’s leaders, mostly to discuss the economy. He owns Israel’s Russian-language television station, which reaches about 15 percent of the population. Despite his allegiance to Chabad, Leviev is considered a moderate. “He’s not one of the crazies,” a former adviser to Ariel Sharon told me. “Certainly not a Greater Israel man.”
Leviev’s global view is Moscow-centric and more than a little Machiavellian. He says he believes, for example, that America’s difficulties in places like Iran, Syria and Venezuela come primarily from George W. Bush’s failure to come to Russia’s economic aid. “If Bush had invested $100 million to help the Russian economy early in his first term, he’d have Putin’s friendship,” he says. “Instead, Bush put the money into a war with Iraq, and he’s been paying for it all over the world ever since.”
The first time I spoke to Leviev, he denied that he had any personal political aspirations. Three days later, he wasn’t so sure. “Would I like to be prime minister?” he mused. “I might. When I turn 60.”
That’s nine years off. At Leviev’s pace, nine years is a lot of time — time enough to make his way into the Forbes “starting 10,” time to complete the Chabadization of Soviet Jewry and time, perhaps, to make a run at becoming Israel’s first Russian-Bukharan-mohel-mogul prime minister.
Zev Chafets is a frequent contributor to the magazine and the author of ‘A Match Made in Heaven: American Jews, Christian Zionists and One Man’s Exploration of the Weird and Wonderful Judeo-Evangelical Alliance.”
ISRAEL/SOUTH AFRICA:
The Cartel Isn't Forever
The Economist, July 15th, 2004
On July 13th in an Ohio court De Beers, the world's largest producer of rough stones, finally pleaded guilty to charges of price-fixing of
industrial diamonds and agreed to pay a $10m fine, thereby ending a 60-year-long impasse. De Beers executives are at last free to visit and work directly in the largest diamond market, America.
A few days earlier, on July 9th, the first case of successful industry self-regulation against trade in so-called "conflict diamonds" took place when Congo-Brazzaville was punished for failing to prove the source of its diamond exports. And on June 28th Lev Leviev, an arch-rival of De Beers, opened Africa's biggest diamond-polishing factory in Namibia.
Behind all these events lies sweeping change in an industry that sells $60-billion-worth of jewellery alone each year. For generations it has been run by De Beers as a cartel. The South African firm dominated the digging and trading of diamonds for most of the 20th century. Yet the system for distributing stones established decades ago by De Beers is curious and anomalous--no other such market exists, nor would anything similar be tolerated in a serious industry.
De Beers runs most of the diamond mines in South Africa, Namibia and Botswana that long produced the bulk of world supply of the best gemstones. It brings all of its rough stones to a clearing house in London and sorts them into thousands of grades, judged by colour, size, shape and value. For decades, if anyone had rough diamonds to sell on the side, De Beers bought these too, adding them to the mix. A huge stockpile helped it to maintain high prices while it successfully peddled the myth that supply was scarce.
De Beers has no interest in polishing stones, only in selling the sorted rough diamonds to invited clients (known in the trade as "sightholders") at non-negotiable prices. Sales take place ten times a year. The favoured clients then cut and polish the stones before selling them to retailers.
With its near monopoly as a trader of rough stones, De Beers has been able to maintain and increase the prices of diamonds by regulating their supply. It has never done much to create jobs or generate skills (beyond standard mining employment) in diamond-producing countries, but it delivered big and stable revenues for their governments. Botswana, Namibia, Tanzania and South Africa are four of Africa's richest and most stable countries, in part because of De Beers.
One family got extremely rich too. The Oppenheimers created the "single-channel marketing" system of shovelling all available stones to the clearing house. They came to dominate De Beers after Ernest Oppenheimer took control of most of Namibia's diamond mines nearly a century ago. He formed a mining conglomerate called Anglo American, before grabbing the chairmanship of De Beers. The family is thought to be worth around $4.5 billion today; Nicky Oppenheimer, Ernest's grandson, is Africa's richest man. The family still owns a more than 40% direct stake in De Beers, and its members--Nicky Oppenheimer and his son, Jonathan--run the firm. It may own more De Beers shares held indirectly through Anglo American's 45% stake.
But this stable, established and monopolistic system is now falling apart. Three things have happened. First, other big miners got hold of their own supplies of diamonds, far away from southern Africa and from De Beers's control. In Canada, Australia and Russia rival mining firms have found huge deposits of lucrative stones: BHP Billiton, Rio Tinto and Alrosa have been chipping away at De Beers's dominance for two decades.
De Beers once controlled (though did not mine directly) some 80% of the world supply of rough stones. As recently as 1998 it accounted for nearly two-thirds of supply. Today production from its own mines gives it a mere 45% share. Only a contract to sell Russian stones lifts its overall market share to around 55%.
That is a painful shift, but De Beers is still the biggest diamond producer. And rival mining firms do share one big interest with it: high prices for the stones they dig from the ground. That is why, although it is under pressure, the central clearing system that sustains high prices could yet survive a bit longer. Rather than controlling a pure monopoly, De Beers might be able to run a quasi-cartel that stops the market from opening fully. De Beers says the price of rough stones is still rising; the price of polished stones has risen by 10% this year, according to polishedprices.com, an independent diamond website that tries to track such things.
WORTH FIGHTING FOR
The next challenge might be manageable too. De Beers's system is highly secretive. Nobody knows the ultimate source of particular diamonds it sells, as all are mixed together in London. But De Beers faced extraordinary public-relations pressure after it emerged that rebel armies in Africa were funding their wars by selling what became known as conflict diamonds.
Since 2000 almost 70 countries and all of the big industry players (under the threat of consumer boycotts and activist campaigns by, among others, a London-based group called Global Witness) have adopted standards designed to prove the origins of their diamonds. The so-called Kimberley Process is now in force: governments must issue certificates of origin for the stones they export, and the stones can then be tracked.
It was under this agreement that Congo-Brazzaville was punished last week by being expelled from the Process (the first country ever to be thus censured). As a result, legal trade in its diamonds should cease. It is a test case for the industry.
The introduction of the Process could have threatened De Beers, which wanted to maintain the right to buy diamonds anywhere it pleased and to keep its purchases secret. Eli Izhakoff of the World Diamond Council, an industry body based in New York, says the new rules mean "the industry is changing--it is nothing like it was four or five years ago."
But although the regulations make it easier to track the flow of rough diamonds, they have not required De Beers to open all its books to public scrutiny. Most of those diamond-fuelled African wars are over. And the firm has a declining interest in buying up any rough stones that appear on the market. It knows that its ability to control world supplies is dwindling.
It is the third challenge that is much more troublesome. This is a threat to break up entirely the way De Beers organises the industry. It can best be summed up in two words: Lev Leviev.
Like the Oppenheimers, Mr Leviev has made himself very rich over the past three decades. An Israeli of Uzbek descent, he is reputedly worth around $2 billion. Though he has interests in transport and property, his real love is diamonds. His Lev Leviev Group is the world's largest cutter and polisher of them. He has mining interests too: his fleet of clanking mining ships began operating off Namibia's coast earlier this year, sucking up diamonds from the sea bed. He boasts it is the world's second-largest fleet; only De Beers has a bigger one.
And Mr Leviev recently moved into diamond retailing. He claims that he is the only tycoon with interests in every stage of production from "mine to mistress" (a canard in the industry holds that men buy more diamonds for their mistresses than for their wives). But his real power lies in the cutting and polishing businesses.
He has factories in Armenia, Ukraine, India, Israel and elsewhere. These give him power to challenge De Beers's central clearing house and seek instead to channel stones directly, and at a lower price, to his own polishers. There is a more personal explanation too. Mr Leviev long worked as one of those De Beers sightholders, buying unseen parcels of stones at non-negotiable prices. Even as recently as last year he was among De Beers's clients in South Africa. Being forced to take or leave the stones granted by the diamond cartel infuriated him. He was eager to strike back.
His breakthrough came in Russia. Mr Leviev has cultivated close ties with Russian politicians, including Vladimir Putin long before he became president. Already well known as a cutter and polisher of diamonds in the 1980s, Mr Leviev was asked to help the Soviet state-owned diamond firm set up local factories 15 years ago.
He agreed and formed a joint-venture with the state firm, now called Alrosa. But he insisted that stones for the factories be supplied directly from Russian mines, rather than diverted through De Beers'scentral system. De Beers was furious at the loss of supply, but the factories got their local stones. When the factories were privatised, Mr Leviev somehow emerged as the exclusive owner.
What happened in Russia set a pattern for clashes elsewhere. Mr Leviev has found that governments welcome factories that create jobs and add value to the diamonds they export; it is a smart way to snipe at De Beers.
CAN LEV LEVITATE?
Angola was next. Angola's diamonds are among the world's best when measured by value per carat (see chart) and promise a lucrative return for anyone who can market them. De Beers has had a long interest there. Mr Leviev first invested $60m in the country in 1996, financing a mine at a time when civil war was raging. And just as he cultivated Russia's governing elite, he struck up warm relations in Angola.
It was a well-timed move. The Angolan government despised De Beers. In the days when its monopoly was secure, De Beers regularly bought up any supply of rough diamonds that appeared on the market. It was accused of helping, indirectly, to fund UNITA, the rebel army in Angola, which sold huge quantities of diamonds. In 2001 De Beers ended a spat with the government by quitting the country. By then Mr Leviev had already moved in, eager for another supply of good stones.
By the time the government won Angola's war in 2002, thereby getting control of all the country's diamond mines, the contracts it had struck with Mr Leviev (ie, those lost by De Beers) were worth $850m a year, a sum greater even than that lost by De Beers in Russia.
Mr Leviev has not had it all his own way. Last year Angola's government abruptly cancelled three-quarters of his deal. Some observers accused Mr Leviev of using underhand means (he is close to the daughter of Jose Eduardo dos Santos, Angola's president) to win them in the first place. Yet, however he did it, Mr Leviev showed in Angola that he could barge aside De Beers in a valuable area near its southern African heartland.
Mr Leviev has been inspired to take another swipe at his rival. On June 28th he took the arm of Sam Nujoma, Namibia's president, and guided him around a sparkling new diamond-polishing factory in Windhoek, Namibia's capital. "For years we have been told this could not be done," commented various Namibian politicians.
Now Mr Leviev, saviour-like, strode around his factory, showing off row upon row of workers, who wore uniform green overalls and fiddled with chrome machines and modern flat-screen computers. Mr Leviev boasts that, with its capacity for 550 workers, the factory is Africa's biggest.
Jonathan Oppenheimer, affable heir to the Oppenheimer dynasty, says he does not understand what Mr Leviev is up to in Namibia: "And when we don't understand, we worry." He is right to be concerned. Mr Leviev's obvious next step in Namibia is to challenge De Beers directly. De Beers's mines are run in a joint venture with the government called Namdeb. A 1999 mining law lets the government force any miner to supply stones locally. If Mr Leviev demands it, the government could tell De Beers to provide stones directly to Mr Leviev's new factory, a repeat of the Russian blow.
CLEARING UP
More important, if Namibia is able to establish a viable cutting and polishing industry using its own stones, then why not every other diamond-producing country too? That would seriously threaten De Beers. Mr Nujoma all but dared his neighbours to follow suit. "To our brothers and sisters of neighbouring states, Angola, Botswana, South Africa, I hope this gives you inspiration to try to imitate what we have here," he said at the factory opening.
Mr Leviev is building another factory in Luanda, Angola, partly hoping to curry favour with the government. More important, he is offering to build a factory in Botswana, the jewel in the crown of De Beers's empire. De Beers has close ties with the Botswana government: they share a joint venture, Debswana, that exclusively mines the country's diamonds; Botswana gets a huge share of its foreign currency and a large part of its national income from diamond revenues. It is a similar arrangement to that in Namibia.
In an interview in Windhoek last month, Mr Leviev said he had offered Botswana's government a factory to employ "tens of thousands" of people, a scale vastly larger than in Namibia. A senior civil servant from Botswana toured the Windhoek factory with Mr Leviev. As Mr Oppenheimer concedes, this is a delicate time for Mr Leviev to be courting in southern Africa. De Beers is still renegotiating the terms of an 18-year lease on the Jwaneng mine, in southern Botswana, which is due to expire at the end of this month. The mine is thought to be worth $1.3 billion a year, producing stones of a quality that would have Mr Leviev salivating.
More broadly, De Beers must renegotiate the terms of all its marketing operations in Botswana and in Namibia every five years. These talks are also due. While no-one expects Mr Leviev to break up De Beers's relationships in these countries--Mr Oppenheimer is confident that the government will not do anything to risk its big revenues--his appearance on the scene puts pressure on De Beers.
The obvious step for De Beers now would be to take on Mr Leviev at his own game. In Botswana and Namibia there have been a few diamond-polishing factories backed by De Beers. But De Beers does not want to be involved in that stage of diamond production.
It is first a miner and only belatedly a retailer of diamonds. But it is blocked from the production steps in between as long as it remains the major supplier of stones to the whole industry, says Mr Oppenheimer. Buyers of its stones would suspect De Beers of holding back the best diamonds for its own manufacture and would revolt.
Nor does Mr Oppenheimer think a polishing industry is viable in many diamond-producing countries, whatever Mr Leviev says. In Namibia just a few hundred people work as polishers and cutters. There are few skilled workers, the scale of production is small and wage costs are roughly ten times that of India, which dominates the world market and where 900,000 people work as basic polishers.
Nor are small countries, such as Namibia, likely to develop the top-level skills needed for the very highest-quality stones. Those skills are concentrated in a few cities, such as Antwerp, Tel Aviv and New York. Within southern Africa, only South Africa has a long-established cutting and polishing industry, to which De Beers supplies some good-quality stones ("specials" in the language of the trade). But Mr Leviev probably does not care. A few factories may be uneconomic, but if they allow him to get hold of direct supplies of diamonds, then so be it.
A POLISHED ACT
That is a risk; but there are opportunities for De Beers too. As it has lost market share, the old goliath has become nimbler. No longer focusing exclusively on defending a cartel, De Beers is freer to make decisions according to commercial interest. For instance, it now buys fewer stones at uneconomic prices; profits matter more than market share. A trimmer De Beers, with a pared down list of clients, might even be able to make bigger profits than the old giant. Last year it produced healthy profits of $676m on sales of $5.5 billion.
But its decision to settle American antitrust charges laid against it in 1994 points to how much it is feeling the pressure. De Beers executives should now be free to travel to America to conduct business without fear of arrest. That should make it easier to promote De Beers LV, a hitherto disappointing partnership with the luxury-goods firm LVMH to market De Beers-branded diamonds.
That venture may prove essential for De Beers's long-term health, as more producers bet on getting a presence in profitable diamond retailing. Already rivals are moving: Canada's Ekati mine markets its stones directly to consumers; Mr Leviev's firm struck a deal in May with Bulgari, an Italian jewellery maker, to market Leviev-branded stones. De Beers's days of market dominance are clearly drawing to a close. But consumers should not get too excited just yet. Whether a duopoly or oligopoly emerges, diamond prices are not going to plummet. Mr Leviev will be among those putting a stop to that.
"WE need Judaization"
By Anshel Pfeffer
Israeli paper Ha´aretz, 08/03/2008
Leviev claims that Jews have to demonstrate their Judaism proudly, and is convinced that most Israelis are ashamed of their Jewishness. He even attributes the rise in anti-Semitism to that.
"We're ashamed of what we are," he says. "That's why we feel that we have to get rid of the values of our glorious history and run to learn from other, new nations. Don't I look to you like a man of the world? Don't I speak to the leading businessmen in the world? And it's no problem that I'm a Jew, and a proud Jew who wears a skullcap everywhere, and that's my symbol and my identity. There were Jews who told people here [in Russia]: Don't wear a tallit (prayer shawl), don't walk around like Jews, keep quiet. But that's what brings anti-Semitism: when a Jew tries to resemble a goy. When a Jew behaves like what he is - a Jew - a goy begins to respect him, too. When he is not ashamed, then he is respected. I come to eat with very important people in the world, and I say 'only kosher,' and always with a skullcap. I don't recall that my business ever suffered from that."
Two months ago the Israeli media were full of reports about Leviev leaving the country. He did, in fact, buy a palace in London for 35 million pounds sterling, and moved his wife Olga and his three youngest children (out of nine) there. But for over a decade it has been hard to say that Leviev was truly living in Israel. At most he's there on weekends. The main "victims" of his family's move to London are a handful of Israeli aides who traveled around the world with him. Now on their way home on Fridays they are forced to fly on scheduled flights instead of in the boss' private plane. For Leviev business is business, and now he has to supervise at first hand the huge Africa-Israel stock issue on the London Stock Exchange.
How did you feel about the media preoccupation with your move to London?
Leviev: "I don't feel anything. I know that I have my own mission and I know that life, unfortunately, is short: I have a limited time and we have to get as much done as possible, and that's that. And we have to preserve our health."
The media have bestowed on Leviev the title of the richest man in Israel: On the Forbes magazine list of billionaires he is located, with $1.4 billion, after Shari Arison and Stef Wertheimer, but that list refers only to his public holdings, in the context of Africa-Israel; the diamond and gold businesses he controls further increase his wealth, which TheMarker estimates at $5.6 billion.
Leviev is not satisfied with just being wealthy, he also has a public role: president of the Association of Jewish Communities in Russia. The offices of the association are located in a place that is still an important center of his life, and where a large part of this interview was conducted: the Moscow headquarters of the educational organization Or Avner, named after his father. At a time when the new Israeli billionaires are discovering philanthropy and are starting to donate money to Israeli society, Leviev focuses his donations and his time on Russia and other countries that have arisen on the ruins of the Soviet Union.
Don't you feel that you are swimming against the tide?
"Our worldview is mistaken. First of all, it is written that 'All Jews are responsible for one another,' and a Jew who lives in Siberia or in Kamchatka is just as good as a Jew who had the good fortune to be born in Jerusalem. The person who was born and grew up in Kamchatka, because Stalin didn't like his father and sent him there, grew up as a child who didn't know he was Jewish. We as Jews are obligated to take care of every one of our own, including him. It is written that all of Israel is part of God above, we are part of the Holy One, blessed be he - so for me there's no difference between a Jew in Israel and a Jew abroad. I give money for which I work very hard, and I believe that as a Jew I am obligated to do so. We have dozens of institutions, associations, areas in which we are active, and it costs us hundreds of millions of shekels of our own money. We did not take public money."
Covering a wall in the room where the interview is taking place, which senior staff at Or Avner call the "war room," is a map of the former Soviet Union. With the pressing of a switch hundreds of green bulbs light up, extending from the island of Sakhalin in the Far East, near Japan: Each represents a place where representatives of the organization live. Red bulbs symbolize the 75 Jewish schools that have already been built. Leviev, a reserved person, has difficulty concealing a smile of satisfaction.
Is it possible that because of your large investment the lives of Jews here are so comfortable now that they have no desire to come to Israel?
"That question reflects a mistaken worldview, because the moment a Jew's Jewish soul is poor, of course he won't come to Israel. We want to give him content. My dream is for that to be the job of the Israeli Education Ministry. If not, we have to call it the Ministry of Knowledge. Because there's a big difference between education and knowledge: The moment we don't invest in educating Jewish children according to the roots that were the basis of our education for thousands of years, we are knowledge-givers rather than educators. My vision is that we will live in a Jewish state where 'the Jewish state' won't be written only on the flag, because soon they'll be saying that we have an Arab majority and it won't be nice to write that we're a Jewish state. Just as a Muslim studies Islam, the Jew has to study Judaism. Everyone has to learn the heritage of his family and the history that dates back thousands of years.
"Arik [former prime minister Ariel] Sharon said to me: 'You're giving the Jews a good life and they won't come to Israel.' I was very surprised. I said to him: 'I didn't come to get a medal for my investment in Diaspora Jewry, when I'm actually doing your job, but at least you should express your gratitude rather than criticizing us.' The fact that he spoke that way shows that Arik Sharon didn't receive a Jewish education either."
But in the 1990s millions of immigrants came here, without any of the Jewish education that you're talking about.
"They came because the gates were closed, and then they opened. And the State of Israel missed the opportunity and didn't absorb them properly, and then they stopped coming even when the gates remained open. There is almost no Jew here who hasn't visited Israel; they saw that the absorption is not good, that there's no work, etc. When the aliyah stopped 10 years ago, and they made such a major effort to bring over non-Jews from here, too, I was opposed."
Don't 300,000 Jews who are not Jews according to halakha [Jewish law] deserve to have a solution found for them?
"Prime minister Sharon asked us at the time to set up conversion institutes. I told him, what are we, a factory? Go to the rabbis. If you need a donation I'm here. But to decide who is a Jew and who isn't a Jew - I'm not qualified for that. Just as I'm not qualified to fly the plane to Russia, even if I think I may have the ability. Who is a Jew? Neither a prime minister nor a president can determine that; for that there are experts in the rabbinate."
In the business world Leviev is described as a creative person, a revolutionary. The man who turned the international diamond industry on its head when he made alliances with the Russian government and with African countries for the mining and polishing of diamonds, to break the monopoly of the De Beers corporation. This is how he made the billions that enabled him to acquire the Africa-Israel company and through it establish an intercontinental real-estate empire. He thinks that we are all losing because we don't follow his Jewish path: "Why aren't we in the State of Israel living in peace? Why do we have problems and wars, and all this mess? If we were to live as Jews, according to the Torah, we would be the wealthiest, the most peaceful people, in the safest country," he says.
And why doesn't that happen?
"Because of our behavior, our assimilation, our denial of our Judaism. Every Jew in Israel or in the Diaspora has to know what our roots are, what his ancestors' tradition is, and anyone who thinks otherwise - I say he's simply unfortunate."
But Jews have always tried to be part of a wider world. You in effect want to combat globalization.
"We have become completely confused. We are discussing something that we don't have to discuss - globalization, democratization. We need Judaization. First of all to know that we're Jews and that Jews have to live. And the moment we understand what our internal values are, everything will work out for us."
But who decides what Jewish values are?
"What do you mean? We have our sacred books. We have our history and our tradition."
And what about secular Jewish culture?
"What is secular Judaism? Are you familiar with such a thing?" An entire encyclopedia, "Zman yehudi hadash" ("New Jewish Time," in Hebrew) has recently been published, about secular Jewish culture.
"As far as I'm concerned, what was now published and what was published in Cuba are the same thing. There a writer wrote and here a writer wrote, I don't pay any attention to it."
Is there a future for the secular version of Zionism?
"The moment you ask a child in Israel what Yom Kippur means to him, and he answers the Yom Kippur War, or a fun day on a bicycle - then I don't know if that is Zionism or whatever you call it, but it has certainly become bankrupt. And for that we are to blame, first and foremost, the moment we try to import the new American religion, and concentrate only on the new things that are being invented in our generation, and shrug off our Judaism."
What is your opinion of the Zionist attempt to create a new Jew who will not arouse anti-Semitism?
"The books left to us by our ancestors tell us exactly how a Jew should live and behave, what kind of insurance we should prepare for ourselves and our families. It says 'And Esau hated Jacob.' The nations of the world don't need a reason. Even if we walk around with a skullcap, without a skullcap, with long hair, if we paint ourselves in different colors - we are Jews, and Esau hated Jacob, that is apparently the way of the world. We're talented, we're good-looking, we're diligent, we're pioneers in everything - and they don't like us, that's a fact. Everywhere in the world Jews arrived last and they are always the first in economics, in education and in everything; it's our genes. We have to understand where these things come from, we don't have to be ashamed. The same younger generation that thinks it will change the face of Judaism - you have to understand that it is destroying Judaism: Anyone who denies faith will not remain a Jew in the coming generations."
Lev Leviev, who considers himself a man of the world, was never involved in the Israeli business community, and expresses uncomplimentary opinions of his colleagues-rivals only after announcing "this is off the record." In London he is not involved either, not even in the Jewish community. The neighborhood of Hampstead, where he lives, is full of synagogues, but he prefers to pray in one that he built inside his new house. Even in Moscow, where he fits into the business community in the most natural way, he does not behave like an oligarch.
Two weeks ago, a bar-mitzvah ceremony was held in the Jewish community center in Moscow, for the son of Russia's chief rabbi, Berel Lazar. One after another, Rolls Royces, Bentleys and Maybachs crowded into the narrow street, each of them accompanied by a black security jeep. One by one, the oligarchs and the "minigarchs" - those worth only a few hundred million dollars - got out, carrying presents in elegant wooden crates, surrounded by black-clad bodyguards. Although Rabbi Lazar is considered his protege, Leviev did not arrive early to rub shoulders. He wears conservative suits and travels on the city streets in a black Mercedes; he also has a pair of bodyguards, but they don't wear dark suits and they manage to blend into the crowd.
He refuses to disclose how much money he has invested to date in his philanthropic activity, or the annual operating cost of his 75 schools in the former Soviet Union, to which additional institutions have been added in recent years in Israel, Eastern Europe, Germany and even in areas in which Russian Jews live in the United States.
"I'm not asking the country to join me," smiles Leviev when asked about it. "I'm not asking for money. Thank God, every year it grows and I'm very happy."
For Leviev, Judaism has one meaning: Chabad. Before he began to develop his diamond business in Russia in the late 1980s, he traveled to New York to ask for the blessing of the Lubavitcher Rebbe. The rebbe gave his blessing, but told him that he also had to take care of the Jews. Since then he sees his business and his philanthropy as intertwined. His most loyal aides are hundreds of Chabad emissaries who are scattered today all over the former Soviet Union, and who operate the educational institutions he funds.
In the ultra-Orthodox community they say that not a single yeshiva student has emerged from all your schools.
"You are confusing two things: You are used to the ultra-Orthodox man in Israel, who never works and studies in yeshiva all the time, and says that one needs only study, from childhood. There is no religious Jew abroad who doesn't work. I support professional training for the ultra-Orthodox, I've given a lot of money for that and I will continue to help establish such programs and to provide work, because in my opinion a Jew has to make a good living and not be in need of donations."
But the ultra-Orthodox rabbis are opposed to letting the yeshiva students go out to work.
"It's not all the rabbis, it's a certain segment; these are not mainly Hasidim, they're Lithuanians. If a Jew thinks that a good Jew can only be an ultra-Orthodox Jew, then he has to repent: He has wasted his time all his life in vain if he hasn't understood that. If a Jew who calls himself ultra-Orthodox thinks that a Jew who is not ultra-Orthodox is not a Jew, then he has to be reborn, because in my opinion he is a damaged Jew." Does the ultra-Orthodox public bear part of the blame for the fact that many Israelis take no interest in their Judaism?
"There are closed Hasidic courts, which have decided to isolate themselves and to concern themselves with the internal growth of their own population. They marry one another, they have their own institutions. That is exactly the opposite of the Lubavitcher Rebbe, who said that we are not permitted to take care only of ourselves, but are responsible for all the Jews everywhere in the world. That's why he sent his finest sons around the world, the young guys that you meet everywhere, who run around and work for the sake of heaven."
Do you feel that you are an emissary of Chabad?
"I feel like a Jew who is obligated to do this and I thank the Lubavitcher Rebbe who told me to do what I'm doing. I didn't believe that it would grow to such dimensions, all the businesses. I'm a very big believer in the idea that if a Jew lives like a Jew and, as it is written, sets aside tithes or a fifth of his income - then the Holy One, blessed be he pays him back. I know that from my personal experience. The more I give every year, the more I have. I give charity, the Holy One blessed be he pays me back. I give 100, I get back 1,000."
Leviev was born in Tashkent, the capital of Uzbekistan. His father, a Chabad Hasid, was a mohel (ritual circumciser) in secret. He himself immigrated to Israel at the age of 15. "It's true that Eretz Israel is acquired through suffering, as it is written. My father of blessed memory used to say that you have to perspire a lot. When they threw us into Kiryat Malakhi, on the fourth floor, and we had to live 11 people in 60 meters, my father would sit and kiss the floor tiles and say, 'Eretz Israel, the holy land.' But that's because he was a devout Jew all his life. What will a professor from Novosibirsk who lands in Israel think, when he has no work and he has to sweep streets?"
The Association of Jewish Communities in Russia, of which Leviev is president, was established 10 years ago and is considered very close to the administration, and particularly to former president and now Prime Minister Vladimir Putin. The chief rabbi of the association, Berel Lazar, has been criticized for this in Jewish circles all over the world. This week presidential elections were conducted in Russia. The success of Dmitry Medvedev, Putin's candidate, was guaranteed in advance.
You have excellent relations with outgoing president Putin, although he is seen in the West as a kind of dictator. How would you sum up his term in office?
"I think that Putin was a wonderful leader when it comes to faith and freedom of religion, for all the nations here. He encouraged Islam and Judaism and Buddhism, and in every statement always said that every nation has to respect its values and its roots, and if it doesn't, that's a sign that it doesn't respect itself. I think we should be happy that the leader of such a big country thinks and speaks in such a way. After all, let's not forget that Putin is a product of a Soviet school, and in spite of the education he received, he speaks like that, and everyone follows his example and helps the Jewish communities."
What is your opinion of his designated successor Medvedev?
"Just as Putin was a wonderful president for the Jews, I think that Medvedev will be one, too. On his own initiative he asked to visit the Jewish center, spent two and a half hours there and showed great interest. And because he was raised on the ideal of democracy, I don't think that we'll feel any difference in attitude, but will continue in the same way."
What do you think of the rumors that he's Jewish?
"If you weren't recording me, I would give you an answer. But he is a creature of God, a wonderful man. By the way, Putin always says: I'm proud of the fact that I have so many Jewish acquaintances. I wish the Jews themselves would appreciate the Jews the way Putin knows how to appreciate them. That's our problem in Israel."
As an Israeli citizen, do you accept with equanimity the way in which elections in Russia are run?
"I don't live in equanimity with the fact that in Israel we don't have a prime minister, because he's under investigation all the time. Not this prime minister, not the previous one and not the next one. That's a result of the fact that we have become somewhat confused in our democracy, we've forgotten that in order to have a prime minister in the country, we have to let him lead the country. When he finishes his term, investigate and try him, he's not running away anywhere. He's a prime minister, you elected him, the people elected him, for good or for ill you have to respect that. He's a king, you have to let him work and not drink his blood day and night in investigations."
If you're so concerned about the way in which the government in Israel is run, why don't you enter the political arena, or contribute to one of the parties or to a candidate who will promote your ideas?
"If I even try to do that, I'll immediately be called in for an investigation for giving bribes to get some business, or some falafel stand. That's why I don't plan to be there."
You have solid political opinions, but you have always refused to spell them out.
"I still refuse. I have no political opinions about how to run a city, or how to run some ministry or other. I'm talking about matters of principle for the Jewish people."
You are accused of making all kinds of deals with local leaders to promote your Jewish education network in the former Soviet Union.
"Of course, if a Jew in any country has a problem, I'm proud to help and to be at the forefront, why not? In Israel you don't have to make deals? Besides, I have long since stopped getting upset about what people say. I know that we have a goal, that our deeds have to be for the sake of heaven, and I don't do it to get a prize. I don't intend, as opposed to what they wrote about me, to be a prime minister or a mayor or a member of the local council in some city or other. It doesn't interest me. I don't want any position, and I don't want any honor. I do what I do and invest a great deal in it, thank God, because I believe that is the right way, that a Jew has to do justice with his money - that's tzedakah (charity). They're always searching for reasons [and asking] why does he help? Why does he act?"
Leviev's anger, among other things, stems from Education Minister Yuli Tamir's refusal to implement an agreement he says was made about introducing into dozens of secular elementary schools a curriculum, developed by his foundation and that of his wife Olga, called Zman Masa (Travel Time). The program includes explanations of prayers and of Jewish history and values, from an Orthodox point of view. The chair of the Education Ministry's pedagogical secretariat, Prof. Anat Zohar, decided that the program is not suitable for state schools, because it does not include pluralistic views of Judaism that are appropriate for students who come from nonobservant homes. In spite of the opposition, the program is being used in state schools in Givatayim and Petah Tikva, and is taught by religious women who are studying to be teachers.
Leviev claims that he has not encountered any opposition to the program. "I saw that 99 percent, even more, of the students and the parents are all happy," he says. "Everything continues to operate as usual. Why reject an act of patriotism? Because we are proud Jews, we didn't ask to introduce Buddhism into the school. Had I asked for that, they would have welcomed it. Nor is it a religious program at all. The goal is to teach each child concepts in Judaism. To make him proud of the fact that he's a Jew, to understand our tradition. To know what to say when they ask what a Jew is. Some people think that our ancestral tradition is like dangerous drugs for a child; there are parents who are simply unfortunate, who think that if a child studies [Jewish] tradition, it drives him crazy. That if the child comes home and says, Mom, let's recite kiddush on Shabbat, let's wash our hands before meals - they're shocked and begin to send letters everywhere, and the journalists encourage them and say that something bad has happened: A child washed his hands before meals."
As a person who considers the Jews in Jerusalem and those in Kamchatka equal, what is your opinion of the proposal by the president of the European Jewish Congress, Moshe Kantor, to give every Jew in the world the right to vote in Israel?
"In my opinion, a Jew who doesn't live in Israel has no right to decide its future. Only Jews who live in Israel do, for good or for ill."
Recently several leading Jewish personalities said that a discussion of basic issues such as the future of Jerusalem is a matter for all the Jews in the world.
The prime minister apparently thinks otherwise.
"Then he has a problem. It's a betrayal of the Jewish people if the prime minister thinks so."
In recent weeks there have been pro-Palestinian demonstrations in New York and London, calling to boycott Leviev's jewelry stores because of the construction being done on the other side of the Green Line by the Danya Sibus firm, which is owned by Africa-Israel. Leviev suspects that financial interests are behind the demonstrations. "I don't know what this is - after all, if they want to demonstrate, why against us? After all Dor Alon, in which Africa-Israel owns 26 percent, is the only company that sells fuel to the Palestinians. I think that it's more groups that are funded by business competitors."
Do you have a problem with building in the territories?
"Not if the State of Israel grants permits legally. But Danya Sibus is only a subcontractor; I didn't even know it was building there."
Angolagate - article on how Leviev became "Angola's diamond czar" PREVIOUS POST
Lev Leviev Blood Diamonds
On Saturday 13th December 2008 a number of ISM activists braved the rain and cold, took to the streets and voiced their opposition to Lev Leviev and his blood diamonds which finance the illegal Israeli settlement expansion into the Palestinian territories.
Nonetheless, activists had successfully deterred potential customers, with no one during the entire time of their presence even entertaining the idea of entering the store.
Activists hope the protest will pave the way for future actions to maintain the pressure against Leviev, and show solidarity with the New York and Dubai activists protesting the Leviev stores there as well as all other activists involved in the anti-Leviev campaign.
Background info:
Campaign Against Leviev Picks Up Steam
Eighteen of twenty-three celebrity women in the book wore Leviev’s diamonds. The New York rights coalition Adalah-NY has contacted many – Susan Sarandon, Tea Leoni, Felicity Huffman, Vanessa Williams, Kate Hudson, Kate Walsh, Molly Sims, Mary-Kate Olsen, and Gina Gershon – and asked them to renounce all connections with Leviev.
Nicole Caruso, a Vice President in New York for WKT Public Relations, which represents Tea Leoni, Kate Walsh, Felicity Huffman, Mary-Kate Olsen, and Melissa George, told a representative of Adalah-NY on Friday by phone that WKT had informed Leviev’s representatives that they cannot use the names of the stars represented by their firm. Adalah-NY also notes that a photo of Oxfam “Ambassador” Kristin Davis wearing Leviev’s jewelry has been removed from Leviev’s website. Susan Sarandon, who was previously embroiled in controversy after attending the opening of Leviev’s New York jewelry store despite a protest, wrote the book’s foreward, but did not wear Leviev’s diamonds in her photo in Hollywood Pinups.
Lubna Ka’aabneh of Adalah-NY explained, “We don’t believe that the stars who wore Leviev’s diamonds knew that the diamonds were tainted by human rights violations in Palestine and Angola. Now that they do, we expect them to follow Oxfam and UNICEF’s lead, by forbidding Leviev from using their names and photos.” In a related development, after contacts from Adalah-NY, Leviev was removed from the list of previously announced sponsors of the Children’s Diabetes Foundation’s (CDF) star-studded Carousel of Hope Ball held last Saturday in Beverly Hills. CDF said this did not represent a judgement on the merits of Adalah-NY’s claims about Leviev (see related press release).
In January, Adalah-NY informed Oxfam that Leviev was touting support for the organization. Oxfam responded by stating that it had not received support from Leviev, and that it does not accept support from individuals who violate international law. But Leviev’s claims of links to Oxfam continued.
In an October 21 statement on Hollywood Pinups, Adrienne Smith, an Oxfam America spokesperson in Boston, explained, “At some point in the process, Leviev Diamonds offered to provide diamonds for some of the photo shoots, but Oxfam was not aware of this. Just a few weeks ago, Adalah-NY tipped us off to the fact that Leviev Diamonds were promoting their inclusion in the book and using this to claim to be Oxfam supporters… Oxfam reiterates our policy that we are not and never will be partners or beneficiaries of Leviev because of both his mining practices and his support of Israeli settlements on Occupied Palestinian Lands which is in contravention of International Law and a major obstacle in the road to peace… Oxfam is disturbed to find ourselves used in this way and we intend to be proactive in informing those in our community about the deliberate strategy of Leviev Diamonds to connect itself with unwitting charities and celebrities.”
Leviev’s LA-based PR firm BluPRint has a case study about Leviev on their website explaining their strategy of “engaging the Hollywood and celebrity community,” and aiding “in Leviev’s charity alliances and event partnerships to maximize the brand recognition and partnering opportunities in the US.” Alexis Stern of Adalah-NY explained that, “The developments with CDF, Oxfam, UNICEF, and various stars signal the collapse of Leviev and BluPRint’s cynical public relations strategy. No amount of deception, branding and PR can make a businesses’ human rights abuses acceptable.”
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