March 9, 1997 in Nation/World

Preacher Rolls Dice, Goes Bust Millions Lost In Robertson’s Deal With Mobutu

Bill Sizemore The Virginian-Pilot
 

It was exciting, exotic and potentially lucrative. It was also risky. But Pat Robertson was no stranger to risk.

Robertson had gambled years before on a down-at-the-heels Portsmouth, Va., TV station and transformed it into a multimillion-dollar religious broadcasting empire.

Now there were diamonds - lots of them, waiting to be plucked from the heart of Africa.

Mining concessions in Zaire, the second-biggest diamond-producing country in the world, were being made available to the Virginia Beach-based evangelist by the government of longtime Zairian dictator Mobutu Sese Seko.

In 1992, Robertson rolled the dice and embarked on an amazing African adventure.

It eventually involved whacking out a big patch of jungle deep in the rugged bush while dodging crocs and hippos. There were the twin plagues of political instability and frustrating equipment failures. There was an improbable cast of characters that included a defrocked Pentecostal preacher, a high-ranking felon from a Reagan-era Washington scandal, and a pair of former Navy SEALs Sea-Air-Land commandos trained in clandestine operations.

For protection, there were guns purchased on a discreet shopping trip to the Chesapeake Wal-Mart.

And overriding everything was money - lots of it.

Robertson embodies the “prosperity gospel” school of evangelical Christianity that blends doing good with doing well. His plan in Zaire was to turn a profit and give some of the proceeds back to help the country.

But as it turned out, virtually all of the cash flow was outgo, not income. For Robertson, the mega-successful televangelist, diamond mining turned out to be a big-time bust.

The venture lost millions, and now the recriminations have begun.

What happened? How did Robertson, operating in a diamond-rich country with the blessing of the dictator, manage to lose it all?

There are conflicting accounts.

To puzzle it out, The Virginian-Pilot consulted legal and regulatory documents as well as published accounts and reports from watchdog and advocacy groups. Dozens of interviews were conducted with people who worked in and with the Robertson organization and others familiar with it through religious, humanitarian, political and diplomatic connections.

In an interview last fall, a Robertson spokesman blamed the business losses on the economic and political chaos engulfing Zaire today. Critics say Mobutu has looted the country, amassing a fortune estimated at $6 billion while letting Zaire’s public infrastructure collapse. Inflation and unemployment are rampant; poverty is unrelenting. There is an armed rebellion raging in the east.

But a different version emerges in a lawsuit filed in late November by Robertson’s African Development Co. in a Norfolk, Va., federal court. In its complaint, the company blames its failure on defective equipment.

The suit against Keene Engineering Inc., a California-based manufacturer of mining equipment, claims that two dredges purchased from Keene for extracting diamonds from riverbeds were “wholly inadequate” for the task. Robertson’s company is seeking relief in excess of $1.25 million, which includes the cost of the dredges and more than $1 million in business losses.

Which explanation for African Development’s failure is correct? Both, Robertson’s spokesmen now say.

“Clearly the defective dredges and the inability to move forward with the mining venture was a contributing factor to ADC’s decision to terminate its operation in Zaire,” Gene Kapp, a vice president for public relations at Robertson’s Christian Broadcasting Network, said recently. “It is still true that the general internal chaos in the country was part of the reason as well.”

Robertson himself declined to comment on the venture.

“There wasn’t enough pre-planning and exploration,” one person with intimate knowledge of the operation said. “They shot from the hip. Plus, every time you drove down the street, you had to pay somebody off. Taxes, licenses - everybody had their hand out. It was a giant fiasco.”

This person’s estimate of the venture’s total losses: somewhere between $2 million and $10 million.

An American businessman and longtime resident of Zaire put the figure at $5 million to $7 million in a report last summer in the San Antonio Express-News.

David Ventker, a Virginia Beach lawyer representing African Development in federal court, declined to put a figure on the losses beyond the $1 million-plus mentioned in the lawsuit. But he said: “Those were all Pat Robertson’s personal funds - his own money.”

When Craig McFarland arrived in Zaire in mid-1994, the hemorrhage of cash was quickly apparent.

McFarland, a free-lance mining consultant from California, had been hired to set up and operate the dredges at the center of the lawsuit.

Soon after McFarland’s arrival, Robertson paid a visit to the remote site.

“They said at that point, over two years and $2 million had already been spent on that project,” McFarland said. “I don’t know where it went. There was nothing physical to show for it.” No camp, airstrip, or other infrastructure was in place.

Up until then, Robertson had been relying chiefly on William Lovick, a former Assemblies of God minister who had spent nearly 35 years in Zaire. Lovick, who died last May, had been dismissed by the church in 1985 for unethical fund raising.

“Dr. Lovick was their direct line to Mobutu,” McFarland said. “He had a couple of little prospecting dredges over there - just for sampling. He was trying to start the operation up for Dr. Robertson. I think that’s where a lot of the $2 million went.”

Lovick was eventually pushed aside and the operation significantly enlarged. And the outflow of money continued.

“They were going to expand,” McFarland said. “They had concessions and documentation to go all over the country.”

The mining company had been registered in mid-1992 in Bermuda, where there is no corporate income tax and business regulations are minimal.

A Zairian headquarters, which seemed lavish by McFarland’s standards, was set up in Kinshasa, the capital.

“They rented two condominiums,” he said. “They also maintained a room at the Intercontinental Hotel. That’s expensive. A lot of money was spent on living really good.”

In contrast to the company’s Kinshasa digs, the mining site was a world away.

The dredges were set up on a river near the village of Kamonia, close to the Angolan border in southern Zaire. An airstrip was built in the village, and 7 kilometers of trail had to be widened into a road so the equipment could be trucked to the site. The nearest town of any size, Tshikapa, was a five-hour drive away.

A swath of jungle was cleared out and a camp constructed. The miners lived in grass huts with thatched roofs. The huts were perched on platforms 4 to 5 feet off the ground. “You wanted to be up on a platform to keep the snakes, crocs and hippos away,” McFarland said.

The miners hired local villagers as laborers. Wages ranged from 50 cents to $1 a day - ridiculously low by U.S. standards, but competitive in a country where the per capita annual income is less than $150.

At one point, it was decided that the mining party needed guns for protection. Someone was quietly dispatched to a local Wal-Mart from African Development’s home office at CBN headquarters in Virginia Beach to buy the weapons, which were shipped to Zaire.

The risks faced by the miners came not so much from other humans as from Zaire’s inhospitable wildlife, said someone familiar with the Wal-Mart mission.

“They’ve got crocs and cobras over there,” this person said. “It’s not a city park. One guy was bitten by a scorpion. Another got malaria and had to be airlifted out. The Medevac bill was $5,000.”

Robertson’s contract with the Mobutu government stipulated that 50 percent of African Development’s profits would be plowed back into humanitarian projects in Zaire, McFarland said.

But there were never any profits.

Once the mine finally got up and running, its output was disappointing. The stones were small and mostly industrial grade - not the clean, pure gemstones that can be cut into jewelry. The difference in value is significant: Industrial diamonds typically bring no more than $5 per carat, while gem diamonds can fetch hundreds per carat.

At its height, McFarland said, the mine produced only about 20 to 25 diamonds a day. One insider estimated the total output at less than $10,000 - a tiny fraction of the millions Robertson had invested.

Still, McFarland told his bosses that he believed the operation could be turned around.

But by early 1995, Robertson decided to pull the plug.

While the diamond mine was struggling, a farming operation run by Operation Blessing - on a large tract of land outside Kinshasa that once belonged to Mobutu’s first wife - was also failing miserably.

By the end of 1995, it was all shut down.

Robertson once had grand plans for becoming a bigger player in the diamond game and expanding into gold mining and timber, one person close to African Development said. But the desire to stanch the cash hemorrhage finally overcame those urges.

“I think he had spent all the money he wanted to,” this person said. “I think he’s terribly embarrassed. He thinks of himself as a shrewd businessman - and he is.

“I think he was trying to do good - trying to make some money and help people, too.”

But in the end, when Robertson took stock of his African adventure, it wasn’t about missionary work or humanitarian aid.

“He’s a businessman,” McFarland said. “He was there to make money.”


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