A story connecting diamonds, terrorism and Osama bin Laden - it seemed too good a tale to be true. Unfortunately for the BBC, it was. Now the writs are flying and the hunt is on to find a scapegoat
Matt Wells and Lisa O'Carroll
Monday December 10, 2001
A diamond may be a girl's best friend, but the BBC has quickly discovered she can sometimes be a little too hot to handle. A brief dalliance with a story involving one of the world's major gemstone firms has turned into an affair that could leave the corporation seriously out of pocket, stung by a libel action on a scale it has rarely seen.
Like all dangerous relationships, it began with a seduction that the BBC found too alluring to resist. Dangled in front of it was an allegation that a major diamond firm was channelling cash to the al-Qaida terrorist network run by Osama bin Laden, alleged architect of the World Trade Centre attacks and the west's most wanted man.
The glamour and intrigue of the complex world of diamond dealing, combined with the global implications of fundamentalist terror to make a cocktail that proved irresistible.
But that moment of pleasure seems so distant now: while the story looked good in her sparkling cloak, the reality of what lay underneath simply did not measure up to what was promised.
For the man languishing in an African prison for his part in the 1998 bombings was, quite simply, not the same man who the BBC claimed held shares in the diamond firm. For a start, there is a 35-year age gap between them. They have a similar but not identical name - but then, thousands of people share at least one name. And, most bizarrely of all, had the BBC spoken to the diamond firm it could quite easily have put them straight. So, for that single moment of reckless pleasure, the BBC is now paying a dear price. A major investigation is under way. Greg Dyke is taking a close interest, and Gavyn Davies, the chairman of the board of governors, became directly involved. Someone's head must be brought on a plate - and in time-honoured BBC fashion, the knives are out.
Back on October 31, it all seemed so different. In an edit suite in the corner of Television Centre that is home to the Ten O'Clock News, reporter David Shukman was putting the final touches to his report, laying down a dramatic commentary over a document that would show the connections between diamonds and terror. The document listed Kamal Kal Fhan as a shareholder in a Congolese mine owned by Oryx, a complex group of compannies that is based in the Gulf state of Oman. Leaning forward into the microphone, Shukman stated that Mohamed Khalfan had been jailed two weeks earlier for his involvement in the 1998 attacks. Then, in his best conspiratorial tone, he intoned invitingly: "Look at the list of shareholders in the diamond company and you see someone with a very similar name. Were they the same men?"
Clearly, that wasn't enough. Simply sharing a name was no evidence of a link. So Shukman then played in the commentary of intelligence expert Brian Johnson-Thomas. Shulman said: "We turned to someone who's investigated the diamond trade for the UN security council. Brian Johnson-Thomas obtained proof that the bomber and the shareholder are one and the same."
To add further gravitas to the report, Shukman then inserted a clip of the foreign office minister Peter Hain, who linked Bin Laden to gem dealing. "Diamonds from conflict zones are so small, yet so valuable, and so transportable as a form of currency, that he can move them around the world, he can have a stake in businesses, money launder, all alongside."
It looked as if Hain was endorsing the link between bin Laden and Oryx, whereas he was doing no such thing. His comments were about conflict diamonds in general, and he was not answering a specific question about Oryx.
Nevertheless the report was exactly the sort of story Mark Popescu, who had taken over as editor of the Ten O'Clock News just six months earlier, wanted to run. He has been keen to disprove the sceptics who believed he was imported from the newly airbrushed 6pm bulletin to inject some spice into the grand but rather dusty old bulletin. After accusations that he was "more Madonna than Macedonia" by those who doubted his serious-news credentials - a label that stung - the story of the "conflict diamonds" illustrated that he could cover stories of world importance in a way that was accessible and gripping without being accused of that hanging offence, "dumbing down".
But Popescu, as editor, is not responsible for every single item, and it is not known how closely he was involved in the development of the diamond report. The BBC will not even confirm his whereabouts on that day. This is where another name comes into the frame: Eileen Fitt, daughter of the former SDLP leader Gerry Fitt and an experienced BBC hand. She was "output editor" on October 31, in direct charge of the programme that night. The story was placed near the top of the bulletin.
Just before 10.10pm, Peter Sissons looked into the camera with his most most solemn face, and read a dramatically scripted introduction to the "special report".
Thousands of miles away it was business as usual as Geoffrey White sat down to an evening meal in the company restaurant with 15 senior mining engineers in Mbuji Maya, one of the major diamond towns in the Democratic Republic of Congo. It was an international assembly, with engineers from as far afield as Australia, Canada and the UK. The BBC news came up on the television, which was tuned to BBC World, and one or two of those in the room had half an eye on it. Then came the item on Oryx. "Suddenly the whole place was frozen. We were just sitting there and our name cropped up on TV saying that we had something to do with Bin Laden. It was absolutely devastating," White, deputy managing director of Oryx Natural Resources, says.
Another Oryx employee puts it more colourfully: "It was like someone had sneaked into the BBC newsroom with a sleeping gas and sneaked out again. Most of the news is just factual clips. The tone and manner of this report was completely different. It was as if they confused themselves with 60 Minutes in the US."
Within hours, White's business, which is pumping millions into a brand new mine, including 350km of new roads in the Congo, was in danger of collapse. The Congolese government demanded the mine be shut down, while banks and suppliers withdrew all credit lines. White rushed to London. The next afternoon, the BBC was put on notice of Oryx's intention to sue. The six-page writ arrived later, naming the BBC and Shukman.
The firm, which has uncovered only one attempt to contact it from the BBC, instituted an inquiry into how it was not represented in the Shukman report. At 1.04pm on the day of the broadcast, Katie Pearson, a researcher working with Shukman in the BBC's world affairs unit, sent an email to Global Options LLC, a company in which a non-executive director of Oryx, Frances Cook, was involved.
The email said: "I know this is probably a shot in the dark, but I am trying to get hold of contact details for former ambassador Frances D Cook, who I see is on your advisory panel.
"I realise you will not want to give her home details, but perhaps she has a work number or an email address you might be able to give me? Hope you can help me out with this, it is for a story that one of our top correspondents, David Shukman, is doing for our flagship Ten O'Clock news bulletin."
The email gave no deadline, no indication of the nature of the story, and no indication that it would be broadcast that night. Nevertheless Cook called Shukman, to be told he was "out". She was given a mobile telephone number, which turned out to be wrong.
Over at the BBC, another investigation was under way. After questioning staff that were on duty on October 31, BBC lawyers quickly realised that the game was up. They advised an apology. "Get it out quickly and make it as grovelling as possible", said one.
Inexplicably, it was three weeks before an apology was aired. But, when it came, it was certainly grovelling. It lasted at least a minute, and was placed in the same position in the running order as the original story, and it fell to Sissons to read it. He said: "We stated that Mohammed Khalfan, who was in jail for the 1998 bombing of a US embassy in Africa, was the same man as Kamal Khalfan, a shareholder in Oryx Natural Resources. We were wrong about Oryx Natural Resources and Mr Khalfan." Kamal Khalfan,62, owns 1% of Oryx Natural Resources; while Mohammed Khalfan, 28, is languishing in a US jail for his part in the bombing of the American embassies in Dar-es-Salaam and Nairobi.
No one at BBC News can remember a time when an apology was read out in such a manner. But as far as Oryx was concerned the BBC did not act nearly as quickly as it should to mitigate the damage. "It took them three weeks to apologise," White says. "The problem is, certainly within Africa, the BBC is seen as gospel. That was why there was so much concern. Within eight hours every bit of credit was gone. We are still going round visiting suppliers having to explain to them what happened."
A team of forensic accountants at Lee and Allen submitted an initial claim for between ¡ê5.6m and ¡ê6m to BBC lawyers last week in respect of the immediate commercial damages. And the BBC is facing two more writs - one from the mine's directors, who are suing in respect of damages to their personal reputation and a second one from the Oryx parent group.
Lawyers at Mishcon de Reya, the firm representing the diamond firm, admit that in the eyes of the law companies "have no feelings". But they are determined to prove that linking the group to the world's most wanted terrorist has caused huge damage to its brand.
James Libson, a solicitor at Mishcon, says: "We are still taking statements from the seven directors to help assess the damage. But we think we will proceed probably on behalf of at least three or four of the directors."
Cook, a non-executive director, is the former US ambassador to Oman and has years in the diplomatic service. "She operates in the state department in the US and every conversation she has involves an explanation of what happened. Her reputation has definitely been tarnished," says Libson.
The ultimate claims could run to millions more. Certainly the case has gone to the highest level of the BBC. Cook wrote to the chairman of th