The Ruby Rip-Off

Kenya is a land of fabulously unspoiled game preserves, stable government and excellent trade opportunities. Taking advantage of those opportunities, as foreign businessmen have rue fully discovered, sometimes involves entering a twilight world of official corruption. Corporation executives doing business in Kenya are often asked by high government officials for "contributions" to various charities, though some doubt that the money ends up in the coffers of such worthy recipients as hospitals or orphanages. Early this year, James Skane, the American managing director of Esso Standard in Kenya, was declared a "prohibited immigrant" and summarily expelled from the country after he aggressively tried to collect some $70,000 in unpaid fuel bills. Unfortunately for Skane, it turned out that the money was owed by a series of farms reportedly owned under different names by Kenya's lionized President Jomo Kenyatta.

The latest story about scandal in Nairobi involves two American geologists, who claim that they have been euchred out of their ownership of what may be the world's richest ruby mine by some well-connected Kenyans. It all started about a year ago, when John M. Saul, 37, and his partner Elliot ("Tim") Miller discovered in Kenya's Tsavo West National Park a deposit of rubies that was later estimated to be worth at least $5 million. Saul and Miller got a fully legal permit to develop their find. Figuring local participation would ease their way, they shrewdly offered 51% of the deal to a group of high-ranking Kenyans, including Vice President Daniel Arap Moi.

Unfortunately for the two Americans, others got wind of the rich discovery. One of them was Beth Mugo, Kenyatta's niece and unofficial lady in waiting to his vivacious wife, Mama Ngina; another was a wealthy Greek resident of Kenya, George Criticos, a friend of the President's and Mama Ngi-na's partner in running the Kenya Trade Development Corp. Saul and Miller charge that Beth Mugo and Criticos encouraged other leading Kenyans, including Mama Ngina, to demand a bigger share of the take. The two Americans agreed to let the Kenyans' share go up to 72%. Still not satisfied, the Kenyans evidently decided to push the ruby discoverers out of the deal altogether.

Private Pockets. Last June Saul was abruptly declared a "prohibited immigrant" and given 2 1/2 hours to leave the country. At first Miller went into hiding to keep the same thing from happening to him; after a month underground he left the country for London. After Saul's expulsion, Kenyatta, in an apparent reference to the ruby mine, publicly declared that no foreigner should be allowed to exploit Kenya's resources for his own private benefit. That is, no doubt, a valid general principle. But in this case it seems that the wealth of the mine is intended for private pockets, not the public welfare. With the Americans out of the way, the mysterious Criticos began mining rubies at Tsavo, continuing even after a Kenyan court had temporarily enjoined him from doing so. There have been allegations that the claims book at the Kenyan Ministry of Natural Resources, in which the two Americans had originally registered their find, has disappeared. In its place, supposedly, is a new claims book listing Criticos' claim to the Tsavo mine.

U.S. Ambassador Anthony D. Marshall has protested the highhanded treatment of the two Americans. Meanwhile, Saul and Miller are suing in Kenyan courts for recovery of their ruby mine. Few, however, believe that the case will be decided in the Americans' favor. Kenya is sticking to its claim that Saul was expelled because of gemstone and ivory smuggling.

So far, no stories about the big ruby rip-off have appeared in Kenya's press, and the government apparently wants to keep it that way. Without directly mentioning the ruby affair, the Foreign Ministry warned at week's end that it "will not tolerate any section of the press, whether local or overseas, which tends to discredit the image of Kenya abroad." Kenya is a one-party state, and President Kenyatta has already been declared re-elected to another five-year term for lack of opposition. Still, in the parliamentary elections next week, publicity about high-level hanky-panky over the ruby mine could tarnish the government's reputation in the eyes of Kenya's 12 million people.

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