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bridalpearlnecklace-blog · 8 years ago

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The unexpected resignation of Donna Baker, president of the Gemological Institute of America (GIA), has caused many bewilderment and gave rise to endless rumors, writes Chaim Even-Zohar in an article published by the IDEX Online portal . It's strange - or maybe not so strange - quite a few shareholders expressed relief or even joy over her departure. It's no secret that her leadership style was perceived by some as authoritarian, leaving too little room for disagreement or for open dialogue. She was cordial, respectful, but insisted that everything be done the way she demands - honestly, in full accordance with the interests of the GIA. But in the overwhelming majority of the main reaction was deep grief and shock. Donna was - and remains - a man,

During her presidency, the GIA acquired a global scale - something previously hampered, in part, to protect certain external interests. Currently, GIA has laboratories in Mumbai, Botswana, Israel, Tokyo, Johannesburg, Hong Kong - this is in addition to the laboratories in New York and Carlsbad. He provides certification services in Dubai and continues to manage the research unit in Antwerp. In 2005, GIA had only laboratories in the United States and conducted research.

But she was not an indulgent "boss". One person from the organization says: "She was not domineering. She appreciated opinions and listened. There were some questions in which she did not compromise. For violations of ethical norms, even the slightest, dismissal could follow. A leak of confidential information from the building is the second of such questions. She allowed much to be done in politics, but as soon as these aspects of politics were formed, they were strictly obligatory for everyone. "

While ethical issues are Donna's top priority, reducing the timing of certification was almost as important. As soon as she took over as president seven years ago, together with Tom Moses, senior vice president, they immediately abolished the membership system in the laboratory, improved customer service, and in just a few months reduced the work time from 5-6 weeks to 1 week or 10 days. [The time for work was again returned to the deadline of more than 20 days in the last year, but this was due to the extremely large volume and import / export restrictions in Mumbai, and not because of a weakened interest on the part of management.]

In many respects, Donna was the complete opposite of her predecessor. She did not try to win in any competitions on popularity, and did not try to support the cult of a leader of the Chinese or North Korean type that flourished before that.

She was appointed to perform virtually impossible work: to stop falling into the abyss gaping before the GIA - at least in the field of certification - as a corrupt organization, to restore the honest reputation of this important institution and make the GIA certification system and gemological laboratory again the most respected in World that they appreciate. Although the overwhelming majority of workers were moral, honest and professional, those who dishonored (and threatened) the organization, held rather high posts, and did not object to their shadow activities at the top. There were powerful forces, determined to arrange its failure. They failed, and Donna achieved success. At present, there is no certificate in the market better, more trustworthy, more reliable than the GIA certificate.

No, she did not do it alone. She was helped by Tom Moses and many others. But there were those who yearned for "old times and habits." The mere fact that there are people in Facebook profiles this week and online news forums, including those from the GIA itself, who yearn for the restoration of the previous leadership, indicates that some people still do not understand this - or simply forgot. Elective forgetfulness is a comfortable disease. Let's help those who lost memory, remember.

The search for a successor began

We believe in the leadership and independence of the current GIA chairman Susan Jacques, president and CEO of Borsheims. She participated in the meeting of the GIA Governing Council in May 2006, when the angry GIA president Bill Boyajian resigned after a (secret) vote on the approval of a document containing several serious accusations about the actions of the leadership put forward by the vast majority of managers.

A few months earlier, at the end of 2005, Donna was appointed Senior Vice President and Legal Counsel responsible (together with Linda Scholl) for compliance with the law, she was accountable directly to the Board of Governors, since President Bill Boyajan was practically dismissed from business Donna worked with the newly appointed chairman, Ralph Destino, in the most difficult times for GIA, and later in 2006, Donna was appointed acting president, and later in the same year Helen Fortuno f (Helene Fortunoff) became Chairman of the Board of Governors. Syuzan Zhak, the current chairman, was elected to that post in 2009.

Having taken office, Donna did not continue the daily routine and business practice of the GIA. There was no protectionism. There was complete intolerance to bribery. There was no preference for philanthropists. She was an industrious lawyer, who (unfortunately) never experienced immense love or sympathy for gemology as such. She had work to do, and she did it extremely well. In the course of her work, she did not have many friends and maintained a professional distance, but she was deeply respected throughout the industry. Everywhere. And, "by the way," she also saved the GIA. She retired, because her mission was accomplished. Chairman Susan Jacques and the Council headed by her will begin systematic work on the election of the new president. The Council may even decide to appoint an interim acting president. There was also a backstage lobbying related to the dark periods of the past. There are many new international managers who are not familiar with these aspects of the previous time. They - and others - may need a soft reminder, and then, no doubt, Susan and her Council will do the right thing.

Bribery was not a major issue

In those now selectively forgotten days of 2005/2006, every week I wrote many articles about "Certifygate" and exposed corruption associated with the leadership of the GIA. These were specific cases, with sufficient information allowing those who need to know about it to take action. Diamond Intelligence Briefs, IDEX Online and IDEX Magazine were the main publications in which we published articles. Weekly, I fought with Gadi Graus, the lawyer of our publishing company, which imposed a ban on most texts, but we still went ahead. The argument "This is true" was our main journalistic means of defense. But we also had evidences. There are still many documents that I have not disclosed; Some of them will be given later. With others it is necessary to wait a little longer.

At the end of 2005, I concluded in my weekly column: "The problem [in the GIA] is not bribery, but rather an environment that allows bribery. Weak leadership has made the top leaders of the certification community (both in New York and in Carlsbad) extremely vulnerable to outside pressure. "

Cronyism flourished: people moved to the posts of acquaintance, and not by professional merit.

"When the management permits the specialists who conduct certification to take vacation trips (as a courtesy from the clients of the laboratory) and a number of relatively expensive gifts, this gives a bad signal. Weak leadership makes workers and managers vulnerable. This creates an environment that "condones bribery." Those four New York-based GIA traders, dismissed for so-called "violations of ethical standards," did not work in a vacuum. He worked in an environment conducive to this, which was created, supported and allowed by the leadership, "I wrote then.

Cult of leaders

I did not talk to Donna after her sudden resignation earlier this month, and she did not respond to my email (which is quite uncharacteristic for her). But soon I realized that I shared her silence with many others. It seemed that Donna decided that "her work was over" that it was time to move on, which meant moving without looking back. This is the whole Donna.

I got the book "Legacy of Leadership", which sets out the history of the GIA. Whoever adds to the next edition of this book, he just has to add that the seven years of leadership of Donna Baker have restored the historic very important value of the GIA, restored the reputation of the institution, and therefore puts it on a par with Robert Shipley and Richard Liddikout (Richard Liddicoat). They created and formed an institute. Donna stopped his almost inevitable collapse; She saved the institution.

If she sometimes differed, indeed, with an uncompromising or resolute, bordering on authoritarianism, then these were probably the very properties necessary to carry out her work. Let's hope that those shareholders who criticize it, including some members of the current Board of Governors, and her colleagues and staff at heart understand that without seven years of work under the leadership of Donna there would be nothing worthwhile in the legacy of the GIA that could be contributed In the enlarged edition of the book, if it were published at all.

My view was on the bold headline of Chapter 12, covering the years of activity of the previous president of GIA. He emphatically proclaims: "The sign of honesty: 1986-2003" (Hallmark of Integrity) [p. 267]. This was exactly the time when bribery in the field of certification flourished in California and New York. Years when fraud was committed for many billions of dollars, which was closed by eyes, against credulous dealers with diamonds.

Although visibility formed charisma cult personality of the North Korean or Chinese type, loyalty and blind obedience to the leadership, it was during the period of the "Sign of Honesty" organization fell into the deepest abyss. She had no future.

And she did not deserve to have a future. But Ralph Destino, Helen Fortunoff, Susan Jacques and several other worthy people thought otherwise. Donna Baker was instructed to do the impossible - and she did it. No, there was no administration of justice, attention was focused on perestroika.

De Beers discovered "problems" back in 2003

I drew attention to the problems of GIA around 2000, but I had no evidence at that time. In those days, De Beers had a department of diamonds, in particular, for price research. Some American, Belgian and Israeli diamond traders (including sightholders), who purchase large diamonds in Antwerp, have been constantly overpaying for diamonds. De Beers noticed this. This was noticed by the traders. Surprisingly, some companies experienced sudden unexplained growth.

And only later we realized that those diamantaires who had mechanisms for overstating the category by the GIA Institute (that is, bribed) were willing to give a higher price than those who did not have such abilities. Bribery became official in nature. When buying diamonds, you can decide on the final determination of color and purity.

De Beers at the highest level knew that something was wrong, that consumer confidence was in jeopardy, but preferred to sit, doing nothing, and watching. According to the documents I have, De Beers actually discovered in 2002 a widespread "overstatement of the category" in GIA certificates. On 28 March 2003, MANCO (a steering committee chaired by Gareth Penny) of DTC held a meeting on the problem of overstating the category in GIA certificates. It took too wide a scale to be ignored.

Discussion materials at that meeting were prepared by P.A. Selby (PA Selby), a highly skilled diamond expert from the company De Beers, who warned his colleagues about various and very disturbing moments and warned them about the possible consequences. "This kind of [overstatement] scheme, when it has grown to include a full range of color, quality and, to some extent, the size of a diamond obtained from DTC boxes, may be one of the reasons why the premiums that our diamonds received Early this year, were so high. But before making any assumptions or making decisions based on the current situation, we need to understand that if there can be "overstating the category," there may also be "category understatements," Selby warned in this paper for discussion.

De Beers was less concerned about diamond merchants than for the consumer market in the event of an end to overvaluation. "Although the reaction of the market to any regulation towards lowering the category of assortment could be a reduction in the trade discount, there would undoubtedly be a period of considerable confusion, during which there would be a high possibility of a break in business. There is no doubt about the ingenuity of the diamond trade participants, as to the solution of this issue, "Selby wrote.

The main concern was to bring about potential impact in the event that the existing picture was understood by consumers, "the head of De Beers wrote. "If they realized that a gem with the characteristics of the color H and the purity of VS2, which they just bought for $ 6,000, is actually a stone of color I and a Si1 purity with" inflated characteristics ", the value of which is $ 4,500, what the damage was Would the reputation and image of our products be damaged? Selby asked.

There is still no clarity about how the scenario would develop, and this is a difficult question, but now that we begin to understand more fully how the current situation has arisen, we can better understand and outline developments in the future, "Selby said.

A sign of honesty?

From this document it is also clear that this issue was discussed with the GIA at the highest levels. But the question of overstating the characteristics was "rejected", at least in communication with De Beers, as caused by a shortage of labor in the GIA.

Others received less sensitive answers. In a report that we received in real time from a Geneva dealer asking questions to Bill Boyajan about overstating the category around this time, there is confirmation. "The GIA president [with whom I met at the trade show] was enraged, how dare I doubt the impeccable honesty of the certification system," he wrote to me.

Fortunately, the GIA had many decent people who were not indifferent to their organization. Mostly through them, I was able to collect evidence showing that bribery first began in California in the early 1990s, and then spread to New York. The upper echelon in California knew: they saw that the New York Diamantaires, having offices in the same building as the New York GIA lab, nevertheless represented their stones in California. This inconvenience became clear when this lab was joined in New York by copying a model that was formally adopted in California.

Strikingly disconcerting discord between the image of the "Sign of Honesty", which was associated with the relevant period, and reality. It's not yet time to write the whole story about those days - the names of some people involved in this can be found in the photos in the book "The Heritage of the Leadership".

Leadership style of Donna Baker

Let me return to Donna Baker. Some of those who criticize her style of leadership, in fact, hinted that in some cases the situation was such that it remained either to do "in-Bakersky" or you would be fired. I do not know if it's true. I also do not know whether this should make a difference - those who focused on doing "in-Bakerski" conducted a significant "cleaning" in a surprisingly short time. It shook the cozy, comfortable life of many. Of course, this also gave rise to opposition and discontent.

Since I know, at least, about some of the disorders that she inherited, and since I understand what she faced, I deeply admire her and respect her. I remember an email received in October 2005 from a former quality inspector at the GIA. Let me briefly quote it, without a full mention of the names, because it's too early to do it.

"There are several people - former laboratory workers who have left, like me, because we knew that there were so many dirty deeds going on .... If you raise the issue [about strange changes in certification], you will be blacklisted with a salary increase and will be badly treated, forcing you to leave .... I raised several questions [before my superiors] and I was threatened [if], if I continue, I will be fired and turned against me ... .. I was 27, I was scared to death, ... so I left a year later " .

Just imagine what this testimony says: if you refuse to help in a fraudulent overstatement of a category, you run the risk of losing your job. How much management can mean! Donna Baker was a deeply religious person! Chapter 12 of the book GIA "The Legacy of Leadership" was to be entitled "The Unspoken Sin of Sodom and Gomorrah," and not the "Sign of Honesty." The rot was to be completely burned with fire and native sulfur.

Probably the best of all GIA presidents

I believe that no one except me and my staff has so many sources, written testimonies, access to documents about what happened in the GIA. At a meeting of the Governing Council in May 2006, when Bill Boyadzhan resigned, the managers, most of whom - if not all - were appointed by Bill, expressed considerable bewilderment as a reporter far away had access to such internal details that Occurred in the GIA, or, in fact, still had access at the time.

Chairman Ralph Destino did everything possible to reduce the damage, mitigate the undesirable consequences, but did not change the situation in the company. Let's not forget: we are talking about a fairly well-established fraud with an overestimation of the multi-billion dollar category that has been dealt with for over ten years. It was like a huge time bomb that could destroy the diamond markets and destroy the credibility of our product, as Selby of De Beers told his management three years ago.

On the same day that Bill Boyadzhan resigned, in my publications I refrained from the topic "Certifygate." Donna and Tom needed a chance to change the situation. It was time for healing. Therefore, I did not write a word about this - until today, seven years later.

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