FSO Busted in Visa Scam, Jewelry Testimony on 9/11

JunkYardBlog has a great story of visas for sale! As a Former Vice Consul, I must say this sux:

"A U.S. Foreign Service Officer in Canada got busted Friday for an alleged visas-for-jewelry bribe case. 22-year State Department veteran Michael O’Keefe was indicted along with an international jewelry hotshot named Sunil Agarwal, who allegedly
gave O’Keefe jewelry, other gifts and a job reference, the indictment said. In exchange, O’Keefe helped expedite visa requests for employees of Agrawal’s company, STS Jewels Inc. He issued visas to 21 people sponsored by Agrawal.

Junkyard Comments: "Security risk? Oh yeah. I’m just glad it was Americans who found this guy out and not someone else who could blackmail him into granting visas. But what he did is bad enough.

At one point, O’Keefe overruled a co-worker who wanted to deny a visa to an Agrawal employee out of concern that al Qaeda uses the jewelry industry to raise money. "Needless to say I overruled the decision and explained to them that major gem importers such as STS are not being used by al Qaeda," said the e-mail written by O’Keefe to Agrawal.

Well, O’Keefe is DEAD WRONG about Al Qaeda, and about STS Jewelers:

The tanzanite market is suffering due to "bad press" and an oversupply of material. Prices were already weak before the Wall Street Journal and ABC News stories. Tanzanites at this year’s show were being offered at a 30-50% discount from last year… In more bad news for this gemstone, a wrongful death lawsuit has been filed by wives of Cantor Fitzgerald employees, a New York police officer and the father of a New York firefighter against dealers of tanzanite. The suit alleges ties between the trade of the gemstone and Osama Bin Laden. Filed in federal court in Manhattan on February 14, it seeks an injunction banning New York dealer STS Jewelers, Inc. from selling tanzanite and forcing the company to donate past tanzanite proceeds to a September 11 relief fund. The suit also seeks $1 billion in compensatory damages from several other defendants, including the Tanzanite Mineral Dealers Association (TAMIDA).

Surprised the Post didn’t catch that about STS. P.S. Bonus lurid detail:
between 2004 and 2006 Agrawal gave round-trip airline tickets to O’Keefe and two exotic dancers to travel to New York and Las Vegas.
UPDATE: STS Jewels had the 9/11 lawsuit against it dismissed with prejudice in 2002. But now I’m curious about the evidence against it in the first place. (I didn’t see this when I googled STS jewelers the first time, but it appears the business is actually called "STS Jewels."

HOLY SH** FLAMING-SKULL DRUDGE-SIREN UPDATE! Did Mike O’Keefe’s statements help get this lawsuit kicked out of court? And was he involved in the pronouncement that there is no connection between the Tanzanite trade and Al Qaeda?

Because bin Laden masterminded the attacks on the World Trade Center and the Pentagon, the suit also contends the tanzanite dealers are also liable for the attacks.
This is despite the fact that U.S. State Department officer of East African Affairs, Mike O’Keefe stated that while there is no doubt that there was an Al Qaeda operative selling tanzanite to finance the embassy bombing in 1998, there is absolutely no new connection between the tanzanite trade and smuggling in support of the Al Qaeda terrorist network.

"We have seen no evidence that Al Qaeda or any other terrorist group is currently using tanzanite sales to finance its efforts to launder money," O’Keefe said to an audience at the AGTA Gem Fair, Feb. 8. When asked by reporters about the Wall Street Journal’s article (that allegedly linked tanzanite to the terrorist network and which the newspaper cited as the inspiration for the law suit), O’Keefe suggested that while all of WSJ research seemed correct, the State Department and U.S. intelligence came to a much different conclusion. "And we have considerably more investigative power than the Wall Street Journal."

Actually, I suspect that O’Keefe was telling the truth about the Tanzanite industry being clean—if the statement were false, it would draw suspicion from his co-workers. What may have happened is that Agarwal and STS were very grateful for O’Keefe’s help in getting them off the hook for a billion-dollar suit and things just got closer and closer from there—when O’Keefe moved to Canada he kept in contact with Agarwal and did him another favor.

On the other hand, if O’Keefe took a bribe to help Agarwal (who is also under indictment) with his employees’ visas in 2004-2006, he may also have been corrupt in 2002 and helped STS avoid its liability in the 9-11 suit. If O’Keefe was involved in the investigation of Al Qaeda’s links to the Tanzanite industry (which looks likely given his bailiwick in East African Affairs), then that investigation ought to be reopened and the links re-examined.

FINAL UPDATE to this post: O’Keefe was desk officer for Madagascar and Tanzania when the Tanzanite report came down. He was almost certainly involved in its production. What’s more, others in the State Department disagreed with O’Keefe’s assesment, and told the media as much.