Revisiting the Rihga Hotel
March 30, 06Last week’s column about the absolute imperative for GIA management (President
Let’s take, for example, the Rihga Royal Hotel (since then renamed Marriott) meeting in
The
The reportedly furious and shocked Sightholder, who already harbored suspicions about the integrity of some certificates, attended a meeting with Boyajian and other senior lab people at the Rihga Hotel. Also in attendance were some other leading
Boyajian assured attendees that he had investigated and everything was in order, and that they should not question the integrity of the GIA or its grading system. It became personal, and at the end, one of the participating diamond industry dealers remarked that “he trusts the words of the GIA president:” that was the end of it. The others did not pursue the issue anymore.
The grading incident by itself is not really significant, as there are several similar stories. What is really at stake here is a governance issue. The people involved had a feeling that the GIA wiped it all under the carpet just to protect the integrity of the institution rather than having a full-scale investigation followed by an extensive, detailed report to the board of governors and a full-fledged board discussion. Some board members don’t recall that such a problem had actually been discussed at the board; others say that they recall a brief mention – that there had been a problem but it had been dealt with satisfactorily.
Looking to the future and forgetting the past is the main issue. Does the GIA have responsible management? Do executives make the right decisions? And is the board fully aware of everything that is taking place?
The Rihga Royal meeting has a footnote.
If we carefully trace all the hands the 18 carat stone passed through before it got the D grade, we see names we have become familiar with since reporting on the Certifigate story after the initial lawsuit was filed. This would be a reason for the GIA board to re-investigate the Rihga Royal meeting allegations. How serious was the investigation at that time?
The board ought to review the management’s past policies on those instances when it was discovered that a grader was on the take. If there had been suspicion of fraud in the past, what did management do? We know of at least one instance that the grader was “let go” without any noise, and without the filing of reports to the authorities or to the police. If the GIA – in past years – did involve authorities, I gladly stand corrected. The integrity of the management is not questioned here, but rather their inaction and apparent tolerance of practices that should not have arisen in the first place. Mindful of some of the reactions to our previous column, we will, in the future, be more specific and precise.
Incidentally, we have been asked, even by people associated with the GIA, why we wouldn’t turn the information over to investigators or authorities. Those who ask these questions fail to understand the role of the press. We are grateful that the overwhelming majority of our sparkling industry consists of honest, decent and responsible players. Among them, there are very reliable and trustworthy sources that provide us with information. Most of it is strictly off the record. These sources are giving us the information so that we can constructively use it in articles in the hope that it will help to generate change towards the better. That is their sole motivation for giving us information, and that is exactly what we do – use it to write better articles. We will only and exclusively use such information for articles; we will never reveal our sources (unless they agree), and we will not use such information for any other purpose.
So why don't we report about a documented bribe every week? Why shouldn’t we publish a list of those who received letters from the GIA? The answer is simple: to protect sources. We are not looking for headlines. We are not looking for scoops. From a news writing perspective, we want to inform. As a columnist who editorializes and gives opinions, we are clearly looking for the GIA management to do the right things. We have been giving GIA Chairman
Neither Destino, nor his board, nor the stakeholders should be complacent. This isn’t over yet – on the contrary, only now is starting in earnest. There are claims; people have been hurt; people have lost money; and other people seem to be “getting away with it.” These are all issues on the industry agenda.
No one wants the Internal Revenue Service (IRS) to revoke the non-profit status of the GIA, which is one of the things that still might happen under certain circumstances. Nor do we want the authorities who regulate non-profit associations to step in and appoint a new board from the outside due to a perceived failure of the current board to get to the bottom of this and deal with the situation.
One first step might be to revisit Rihga Royal – and draw the right conclusions.
It isn’t over yet.